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EXHIBIT 10.14
GLOBESPAN TECHNOLOGIES INC.
KEY EMPLOYEE AGREEMENT
for
XXXXXXX XXXXX
This Employment Agreement ("Agreement") is entered into as of the
1st day of April, 1997, by and between XXXXXXX XXXXX ("Executive") and GLOBESPAN
TECHNOLOGIES INC., a Delaware corporation (the "Company").
WHEREAS, the Company desires to employ Executive to provide
personal services to the Company, and wishes to provide Executive with certain
compensation and benefits in return for his services; and
WHEREAS, Executive wishes to be employed by the Company and
provide personal services to the Company in return for certain compensation and
benefits;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, it is hereby agreed by and between the parties
hereto as follows:
1. EMPLOYMENT BY THE COMPANY.
1.1 The Company agrees to employ Executive in the position
of Chief Executive Officer, and Executive hereby accepts such employment
effective as of the date of this Agreement. During the term of his employment
with the Company, Executive will devote substantially all of his business time
and attention (except for vacation periods and reasonable periods of illness or
other incapacities permitted by the Company's general employment policies) to
the business of the Company.
1.2 Executive shall serve in an executive capacity and
shall perform such duties as are customarily associated with the position of
Chief Executive Officer consistent with the provisions of the Bylaws of the
Company and as reasonably required by the Company's Board of Directors (the
"Board"). The Executive will also serve as a member of the Company's Board.
1.3 The employment relationship between the parties shall
also be governed by the general employment policies and practices of the Company
relating to protection of confidential information and assignment of inventions.
1.4 Unless terminated pursuant to its terms, the term of
this Agreement shall be for two years provided however commencing on April 1,
1998, and each day thereafter the term of this Agreement shall automatically be
extended for one additional day so that thereafter the remaining term of this
Agreement shall always be for one year.
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2. COMPENSATION.
2.1 SALARY. Executive shall receive, for services to be
rendered under this Agreement, an annualized base salary of $200,000, payable in
installments consistent with the Company's payroll policies. The base salary
shall be subject to annual review by the Board of Directors, but in no event
shall the base salary be reduced to an amount that is lower than the base salary
for the prior year. In addition to the above salary the Company will pay to
Executive upon commencement of employment a fully taxable signing bonus of
$50,000 which shall be subject to reimbursement should Executive voluntarily
terminate his employment with the Company without Good Reason on or before
December 31, 1997.
2.2 EQUITY PLAN. Executive will be eligible to participate
in the Company's 1996 Equity Incentive Plan (the "Plan") to the full extent
allowed under the terms of the Plan. The Executive is hereby granted an option
for 465,300 shares at an exercise price of one dollar ($1) under the Plan.
Twenty-five percent (25%) of the shares subject to such option grant will vest
on the first anniversary date of this Agreement and six and one quarter percent
(6.25%) of such shares will vest at the end of each three month period
thereafter (for full vesting after four (4) years). Notwithstanding the
foregoing, (a) fifty percent of the remaining unvested options shall vest upon
the transfer to one or more transferees of more than fifty percent of all of the
voting shares of the Company, occurring in a single transaction or series of
related transactions, where the principal shareholders or affiliates thereof of
the Company prior to the first of such transactions own less than fifty-one
percent of the voting power of the Company after such transaction(s) (a transfer
to an affiliated entity or a public offering of the common stock of the Company
shall not cause accelerated vesting or be considered a change of control) and
(b) one hundred percent of the remaining unvested options shall vest upon a
transfer described in (a) if the aggregate value of the Company (based on the
consideration paid for the Company common stock in the transaction and including
the value of the remaining common stock not so purchased) shall be more than
$100,000,000. In addition thereto if, prior to July 1, 1998, (i) such a change
of control occurs and the aggregate value of the transaction including the value
of the remaining common stock not so purchased shall be less than $100,000,000,
and (ii) Executive disagrees with such valuation, and (iii) Executive secures a
written opinion of an independent investment banker that the then current fair
market value of the Company is significantly above such value, then all the
remaining unvested options shall immediately vest upon such change of control.
The provisions of the relevant option plans are incorporated herein by
reference; provided, however that where such terms are inconsistent with the
terms hereof the terms of this Agreement shall prevail. Subject to the prior
sentence and the provisions of Section 5.2, the options shall be evidenced by
the Company's standard Nonstatuatory Stock Option Grant Notice and Agreement.
2.3 INCENTIVE BONUSES. Executive will be eligible for (i)
a quarterly calendar bonus of $50,000 each calendar quarter for achieving
certain goals to be determined in writing by Executive and the Board within
sixty days of the date of this Agreement, and (ii) $100,000 if the Company
achieves $21,000,000 in total revenue for the 1997 fiscal year and an additional
$100,000 if the Company achieves $25,000,000 for such fiscal year. For
subsequent fiscal years the Executive shall be eligible to earn equal or greater
quarterly and two level revenue bonuses based upon goals and revenue targets as
determined by the Board and the Executive. Notwithstanding the above, unless the
Executive shall be terminated for Cause or
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shall terminate his employment without Good Reason prior to October 1, 1997, the
Executive and the Company agree that for fiscal year 1997 the aggregate of the
incentive bonuses specified in this Section 2.3 and the base salary received or
due the Executive for performance in fiscal year 1997 shall not be less than
$500,000. Incentive bonuses and the criteria for payment thereafter shall be
determined by the Board. If Executive shall terminate his employment or shall be
terminated for any reason other than Cause, as hereinafter defined, before the
end of the applicable bonus year or the bonus period if shorter a prorated bonus
shall be paid for the results to the date of termination and for any firm
purchase orders received and accepted by the Company which provide for shipment
during the applicable bonus period.
2.4 STANDARD COMPANY BENEFITS. Except for the Company's
Severance Benefit Plan (if any), Executive shall be entitled to all rights and
benefits for which he is eligible under the terms and conditions of the standard
Company benefits and compensation practices which may be in effect from time to
time and provided by the Company to its employees generally and to its
management and executive employees in specific. In addition to the standard
Company benefits the Company will, subject to any local, state, or federal tax
withholding requirements (i) reimburse Executive for a reasonable number of
trips for Executive and Executive's spouse to look for suitable housing for
Executive and Executive's family in the New York/New Jersey area and for
reasonable temporary housing in that area for a reasonable time until Executive
secures a new residence, (ii) pay for and provide for the packing, moving and
unpacking of Executive's household goods related to Executive and Executive's
family's move from California to the New York/New Jersey area and (iii)
reimburse Executive for all normal and reasonable closing expenses as supported
in the closing statement or other appropriate documentation associated with the
sale of Executive's primary residence in California. Such closing reimbursement
will not include items such a prorata real estate taxes or other costs or
expenses that are or would have been incurred by Executive related to
Executive's occupancy or ownership prior to its sale.
3. PROPRIETARY INFORMATION OBLIGATIONS.
3.1 AGREEMENT. Executive will execute and will abide by
the attached Company's Employee Agreement Regarding Intellectual Property.
3.2 REMEDIES. Executive's duties and obligations under
said Employee Agreement Regarding Intellectual Property shall survive
termination of his employment with the Company. Executive acknowledges that a
remedy at law for any breach or threatened breach by him of the Employee
Agreement Regarding Intellectual Property would be inadequate, and he therefore
agrees that the Company shall be entitled to injunctive relief in case of any
such breach or threatened breach.
4. OUTSIDE ACTIVITIES.
4.1 Except with the prior written consent of the Company's
Board of Directors, Executive will not during the term of his employment by the
Company undertake or engage in any other employment. Executive may engage in
civic and not-for-profit activities so long as such activities do not materially
interfere with the performance of his duties hereunder.
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4.2 Except as permitted by Section 4.3 or with the prior
written consent of the Board, Executive agrees during the term of his employment
by the Company not to acquire, assume, or participate in (directly or
indirectly) any position, investment or interest known by him to be adverse, in
conflict with, or antagonistic to the Company, its business, or its prospects,
financial or otherwise.
4.3 During the term of his employment by the Company,
except on behalf of the Company, Executive will not have any direct or indirect
business connection or interest, in any capacity whatsoever, with any other
person or entity known by him to compete directly with the Company, throughout
the world, in any line of business engaged in (or planned to be engaged in) by
the Company if such relationship does cause a conflict of interest. Nothing in
this paragraph or paragraph 4.2 shall bar Executive from owning securities of
any competitor corporation as a passive investor, so long as his aggregate
direct holdings in any one such corporation shall not constitute more than 1% of
the voting stock of that corporation.
5. TERMINATION OF EMPLOYMENT.
5.1 EMPLOYMENT AT-WILL. Executive and Company each
acknowledge that either party has the right to terminate Executive's employment
with the Company at any time for any reason whatsoever, with or without cause or
advance notice. This at-will employment relationship cannot be changed except in
a writing signed by a duly authorized officer of the Company.
5.2 COMPANY-INITIATED TERMINATION WITHOUT CAUSE OR
EXECUTIVE TERMINATION FOR GOOD REASON.
(a) The Company shall have the right to terminate
Executive's employment with the Company at any time without cause. The Executive
shall have the right to terminate his employment for Good Reason and be entitled
to the provisions of this paragraph 5.2.
(b) If Executive's employment is terminated without
cause by the Company or should the Executive terminate his employment for Good
Reason, upon Executive's providing the Company with a signed general release of
all claims, a form of which is set forth in Exhibit A (the "Release"), then on
the Effective Date of such Release, the Company shall pay to Executive any
amount due under Section 2.3 and an amount not to exceed the equivalent of
twelve months of his then annualized base salary, subject to standard payroll
deductions and withholding and payable in installments consistent with the
Company's payroll policies until the earlier of twelve months from termination
or the date upon which the Executive commences comparable employment. The
aggregate pretax Section 2.3 and base salary payments under the prior sentence
shall be not less than $500,000 prorated for the number of months not to exceed
twelve that Executive is entitled to receive his annualized base salary
hereunder. If a corrective payment is due it shall be paid at the end of such
period. In addition thereto Executive's options that would have vested within
eighteen months of Executive's termination by the Company without cause or by
Executive for Good Reason shall vest upon such termination and, with respect to
all vested options, the Executive shall be entitled to exercise such options
until the tenth anniversary of the date of this Agreement. The provisions of
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Section 4(iv) of Executive's Notice and Agreement of option grant shall provide
for such continued exercisability and the provisions of Section 7 thereof shall
permit the Repurchase Period to commence only upon exercise of the options by
Executive. Executive's compensation and benefits otherwise cease as of his
termination date.
(c) For purposes of this Agreement, "Good Reason"
shall mean the occurrence of the following, without Executive's express written
consent:
(i) the assignment to Executive of any duties
inconsistent with Executive's status as Chief Executive Officer of the Company;
(ii) a material reduction by the Company in
Executive's annual base salary or incentive opportunity in effect on the date
hereof or as the same may be increased from time to time; or
(iii) the Company requiring Executive to be
based anywhere other than its principal executive offices except for required
travel on the Company's business to an extent substantially consistent with
Executive's customary business travel obligations.
(iv) any reduction or change in Executive's
title, or a material change in Executive's duties, job responsibilities or
working conditions without Executive's written consent.
(v) a breach of a material obligation of the
Company hereunder which has not been cured within ten days after written notice
by the Executive.
5.3 COMPANY-INITIATED TERMINATION FOR CAUSE.
(a) The Company shall have the right to terminate
Executive's employment with the Company at any time for cause.
(b) "Cause" for termination shall mean: (a)
indictment or conviction of any felony or of any crime involving dishonesty; (b)
participation in any fraud against the Company; (c) willful misconduct or gross
negligence in the performance of Executive's duties; or (d) intentional damage
to any property of the Company.
(c) If Executive's employment is terminated at
any time for Cause, he will not be eligible for severance pay, pay in lieu of
notice, or any other such compensation.
5.4 EXECUTIVE-INITIATED VOLUNTARY TERMINATION.
(a) Executive may voluntarily terminate his
employment with the Company at any time, after which no further compensation
will be paid to Executive.
(b) If Executive voluntarily terminates his
employment, he will not be eligible for severance pay, pay in lieu of notice,
or, unless otherwise specified in this
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Agreement, any other such compensation. The Company may however elect to make
the payments specified under 5.2 (b) and if so paid the provisions of Section 6
shall apply.
6. NONINTERFERENCE. While employed by the Company, and for twelve
(12) months immediately following the termination of Executive's employment,
Executive agrees not to interfere with the business of the Company by:
(a) intentionally and knowingly soliciting or
inducing any employee of the Company to terminate his or her employment in order
to become an employee, consultant, or independent contractor to or for any
competitor of the Company or any other entity, but only if Executive has become
employed by or affiliated with such competitor or other entity within six months
of his termination; or
(b) using confidential information of the
Company to directly or indirectly solicit the business of any customer, client,
vendor, or distributor of the Company which was a customer, client, vendor, or
distributor of the Company at the time of termination or at any time in the year
immediately preceding that date. Confidential Information shall not include
information which (a) was already known to the receiving party prior to the time
that it is disclosed by Executive; (b) is in or has entered the public domain
through no breach of this Agreement by Executive; (c) has been received from a
third party; or (d) is required to be disclosed pursuant to final binding order
of a governmental agency or court of competent jurisdiction, provided that the
Company has been given reasonable notice of the pendency of such an order and
the opportunity to contest it.
Executive agrees that this restriction is reasonably necessary to
protect the Company's legitimate business interest in its substantial
relationship with specific customers, and its valuable confidential business
information.
7. GENERAL PROVISIONS.
7.1 NOTICES. Any notices provided hereunder must be in
writing and shall be deemed effective upon the earlier of personal delivery
(including personal delivery by fax) or the third day after mailing by
first-class mail to the Company addressed to Corporate Secretary, Globespan
Technologies Inc., 0000 000xx Xxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000 and to
Executive at his address as listed on the Company payroll.
7.2 SEVERABILITY. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal, or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality, or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal, or unenforceable provisions had never been contained herein.
7.3 WAIVER. If either party should waive any breach of any
provisions of this Agreement, that party shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.
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7.4 COMPLETE AGREEMENT. This Agreement and its Exhibits,
together with any agreements governing any equity interests which may become
available to Executive in conjunction with his employment by the Company,
constitute the entire agreement between Executive and the Company and it is the
complete, final, and exclusive embodiment of their agreement with regard to this
subject matter. It is entered into without reliance on any promise or
representation other than those expressly contained herein, and it cannot be
modified or amended except in a writing signed by an officer of the Company.
7.5 COUNTERPARTS. This agreement may be executed in
separate counterparts, any one of which need not contain signatures of more than
one party, but all of which taken together will constitute one and the same
Agreement.
7.6 HEADINGS. The heading of the sections hereof are
inserted for convenience only and shall not be deemed to constitute a part
hereof nor to affect the meaning thereof.
7.7 SUCCESSORS AND ASSIGNS. This Agreement is intended to
bind and inure to the benefit of and be enforceable by Executive and the
Company, and their respective successors, assigns, heirs, executors and
administrators, except that Executive may not assign any of his duties hereunder
and he may not assign any of his rights hereunder without the written consent of
the Company, which shall not be withheld unreasonably.
7.8 CHOICE OF LAW. All questions concerning the
construction, validity and interpretation of this Agreement will be governed by
the law of the State of New Jersey.
7.9 ARBITRATION. At the option of either the Company or
the Executive, any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Red Bank, New
Jersey before a neutral arbitrator in accordance with the rules of the American
Arbitration Association then in effect. The Company and the Executive shall make
every good faith effort to submit any dispute or controversy promptly and to
complete the arbitration within 60 days of the election by either party to seek
arbitration. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. Except as provided in Section 7.10, the expense of such
arbitration shall be borne equally by both parties.
7.10 ATTORNEY'S FEES. The Company will reimburse the
Executive or at his election pay directly the reasonable attorney fees and
expenses related to the negotiation and execution of this Agreement; provided
however that such payment will be "grossed up" for any federal or state taxes.
In the event of a dispute relating to this Agreement which results in judgment
or award in Executive's favor, the Company will reimburse Executive for all
reasonable fees, including legal fees, incurred by Executive in connection with
such dispute.
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IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first above written.
GLOBESPAN TECHNOLOGIES INC.
By:
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Xxxxx X. Xxxxxxxx
Vice President & Secretary
Date: 2 October 1997
Accepted and agreed as of the
1st day of April, 1997.
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Xxxxxxx Xxxxx
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GLOBESPAN(TM)
EMPLOYEE AGREEMENT REGARDING INTELLECTUAL PROPERTY
IN CONSIDERATION of my employment by GlobeSpan Technologies Inc.
or any of its affiliates (hereinafter "GlobeSpan"), and my continued employment
during such time as may be mutually agreeable, and of the opportunity to receive
GlobeSpan private or proprietary information, and other good and valuable
consideration:
A. I hereby assign and agree to assign to my employer all my right, title
and interest in and to all inventions, discoveries, improvements, ideas,
computer, or other apparatus programs and related documentation, and
other works of authorship (hereinafter each designated "Intellectual
Property"), whether or not patentable, copyrightable or subject to other
forms of protection, made created, developed, written or conceived by me
during the period of such employment, whether during or outside of
regular working hours, either solely or jointly with another, in whole
or in part either.
(1) In the course of such employment, or
(2) Relating to the actual or anticipated business or research
or development of GlobeSpan, or
(3) With the use of GlobeSpan's time, material, private or
proprietary information, or facilities;
B. I will, without charge to my employer but at its expense, execute a
specific assignment of title to GlobeSpan and do anything else
reasonably necessary to enable GlobeSpan to secure a patent, copyright
or other form of protection for said Intellectual Property anywhere in
the world.
C. I further agree that I will keep in confidence and will not, except as
required in the conduct of GlobeSpan's business or as authorized in
writing on behalf of GlobeSpan, publish, disclose or use, during and
after the period of my employment, any private or proprietary
information which I may in any way acquire, learn, develop or create by
reason of my employment;
D. I further agree that this Agreement does not constitute a contract of
employment; and
E. I acknowledge that the copyrights in Intellectual Property created
within the scope of my employment, belong to GlobeSpan by operation of
law.
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Employee's Signature Employee's Name (Print) Date
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SSN
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EXHIBIT A
RELEASE AnD WAIVER OF CLAIMS
In exchange for payment to me of amounts pursuant to Section
5.2(b) of my Employment Agreement to which this form is attached, I hereby
furnish Paradyne (the "Company") with the following release and waiver:
I hereby release, and forever discharge the Company, its
officers, directors, agents, employees, stockholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorney's fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed, arising at any time prior
to and including the execution date of this Release with respect to any claims
relating to my employment and the termination of my employment, including but
not limited to, claims pursuant to any federal, state or local law relating to
employment including, but not limited to, discrimination claims, claims under
the Florida Civil Human Rights Act of 1977, as amended, and the federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"), or claims for
wrongful termination, breach of the covenant of good faith, contract claims,
tort claims, and wage or benefit claims, including but not limited to, claims
for salary, bonuses, commissions, stock, stock options, vacation pay, fringe
benefits, severance pay (including benefits available under the Paradyne Staff
Reduction Policy, if any) or any form of compensation.
I also acknowledge that I have read and understand the following
statement, which reads as follows: "A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor." I hereby expressly waive and relinquish all rights
and under that statement and any law of Florida or any other jurisdiction of
similar effect with respect to any claims I may have against the Company.
I acknowledge that, among other rights, I am waiving and
releasing any rights I may have under ADEA, that this waiver and release is
knowing and voluntary, and that the consideration given for this waiver and
release is in addition to anything of value to which I was already entitled as
an employee of the Company. I further acknowledge that I have been advised, as
required by the Older Workers Benefit Protection Act, that: (a) the waiver and
release granted herein does not relate to claims which may arise after this
agreement is executed; (b) I have the right to consult with an attorney prior to
executing this agreement (although I may choose voluntarily not to do so); (c) I
have twenty-one (21) days from the date I receive this agreement, in which to
consider this agreement (although I may choose voluntarily to execute this
agreement earlier); (d) I have seven (7) days following the execution of this
agreement to revoke my consent to the agreement: and (3) following the execution
of this agreement to revoke my consent to the agreement; and (e) this agreement
shall not be effective until the seven (7) day revocation period has expired.
Date: By:
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