Exhibit 10.51
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of February 27, 2003, to
be effective as of January 1, 2003 (the "Effective Date") by and between VODAVI
TECHNOLOGY, INC., a Delaware corporation ("Employer") and ▇▇▇▇▇ ▇. HUSBAND
("Employee").
W I T N E S S E T H:
Employer desires to employ Employee and Employee desires to accept such
employment, all on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth in this Agreement, the parties hereto agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee hereby
accepts such employment, as Vice President -- Finance and Chief Financial
Officer of Employer and in such other executive capacities and for such other
executive duties and services as shall from time to time be mutually agreed upon
by Employer and Employee.
2. FULL TIME OCCUPATION. Employee shall devote Employee's entire business
time, attention, and efforts to the performance of Employee's duties under this
Agreement, and shall serve Employer faithfully and diligently and shall not
engage in any other employment while employed by Employer.
3. COMPENSATION AND OTHER BENEFITS.
(a) SALARY. Employer shall pay to Employee, as compensation for the
services rendered by Employee during Employee's employment under this Agreement,
a base salary at a rate of $135,000 per annum (the "Base Salary"). Employer
shall pay the Base Salary in accordance with Employer's established payroll
procedures.
(b) BONUS. In addition to the Base Salary, Employee shall be eligible
to receive annual bonus compensation (the "Bonus") in an amount to be set by the
Compensation Committee of Employer's Board of Directors, at the committee's sole
and exclusive discretion.
(c) REIMBURSEMENT. Employer shall reimburse Employee for all travel
and entertainment expenses and other ordinary and necessary business expenses
incurred by Employee in connection with the business of Employer and Employee's
duties under this Agreement. The term "business expenses" shall not include any
item not at least partially deductible by Employer for federal income tax
purposes. Reimbursements shall be made by Employer in accordance with Employer's
normal expense policies and procedures.
(d) FRINGE BENEFITS. Employee shall be entitled to participate in any
group insurance, pension, retirement, vacation, expense reimbursement, and other
plans, programs, and benefits approved by the Board of Directors and made
available from time to time to executive employees of Employer generally during
the term of Employee's employment hereunder. The foregoing shall not obligate
Employer to adopt or maintain any particular plan, program, or benefit.
4. TERM OF EMPLOYMENT.
(a) EMPLOYMENT TERM. The term of Employee's employment hereunder shall
commence on the Effective Date and shall continue until December 31, 2003. The
term of Employee's employment hereunder shall automatically renew for successive
one-year terms, unless and until terminated by either party giving written
notice to the other not less than 30 days prior to the end of the then-current
term or as otherwise set forth in Section 4(b).
(b) TERMINATION UNDER CERTAIN CIRCUMSTANCES. Notwithstanding anything
to the contrary herein contained:
(i) DEATH. Employee's employment and this Agreement shall be
automatically terminated, without notice, effective upon the date of Employee's
death.
(ii) DISABILITY. If Employee shall fail to perform any of
Employee's essential job duties under this Agreement as the result of illness or
other incapacity, with or without reasonable accommodation, for a period of more
than 12 consecutive weeks, or for more than 12 weeks within any 12-month period,
as determined by Employer for purposes of compliance with the Family and Medical
Leave Act, Employer may, at its option, and upon notice to Employee, terminate
Employee's employment and this Agreement effective on the date of that notice.
(iii) UNILATERAL DECISION OF EMPLOYER. Employer may, at its
option, upon notice to Employee, terminate Employee's employment and this
Agreement effective on the date of that notice. A reduction in Employee's
responsibilities, as such responsibilities are described in Section 1 of this
Agreement, by Employer shall constitute a termination under this Section
4(b)(iii).
(iv) UNILATERAL DECISION BY EMPLOYEE. Employee may, at his option
and upon notice to Employer, terminate Employee's employment and this Agreement
effective on the date of that notice.
(v) TERMINATION FOR CAUSE. Employer may terminate Employee's
employment under this Agreement at any time, effective upon written notice to
Employee, if the termination of Employee's employment is for Cause. For purposes
of this Section 4(b)(v), for Cause shall mean (A) the failure or refusal of
Employee to perform the duties or render the services reasonably assigned to him
from time to time by the Board of Directors, (B) gross negligence or willful
misconduct by Employee in the performance of his duties as an employee of
Employer, (C) the charging or indictment of Employee in connection with a
felony, (D) the association, directly or indirectly, of Employee, for his profit
or financial benefit, with any person, firm, partnership, association, entity or
corporation that competes, in any material way, with Employer, (E) the
disclosing or using of any material "Confidential Information" (as hereinafter
defined) of Employer at any time by Employee, except as required in connection
with his duties to Employer, (F) the breach by Employee of his fiduciary duty or
duty of trust to Employer, including the commission by Employee of an act of
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fraud or embezzlement against Employer, (G) chronic absenteeism, (H) substance
abuse, or (I) any other material breach by Employee of any of the terms or
provisions of this Agreement, which other material breach is not cured within
ten (10) business days of notice by Employer.
(vi) CHANGE OF CONTROL. In the event of a Change of Control (as
defined below), Employer or Employee may, at their respective option, upon
notice to the other, terminate Employee's employment by providing the other
party with 30 days' written notice after the effective date of the Change of
Control. For the purposes of this Agreement, a "Change in Control" shall mean a
change in control of Employer of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended, as in effect on the date of this
Agreement, or if Item 6(e) is no longer in effect, any regulations issued by the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, which serve similar purposes; provided further that, without
limitation, a Change in Control shall be deemed to have occurred if and when:
(A) TURNOVER OF BOARD. The following individuals no longer
constitute a majority of the members of the Board of Directors of Employer: (1)
the individuals who, as of the date of this Agreement, constitute the Board of
Directors of Employer (the "Current Directors"); (2) the individuals who
thereafter are elected to the Board of Directors of Employer and whose election,
or nomination for election, to the Board of Directors of Employer was approved
by a vote of at least two-thirds (2/3) of the Current Directors then still in
office (such directors becoming "Additional Directors" immediately following
their election); and (3) the individuals who are elected to the Board of
Directors of Employer and whose election, or nomination for election, to the
Board of Directors of Employer was approved by a vote of at least two-thirds
(2/3) of the Current Directors and Additional Directors then still in office
(such directors also becoming "Additional Directors" immediately following their
election);
(B) TENDER OFFER. A tender offer or exchange offer is made
whereby the effect of such offer is to take over and control Employer, and such
offer is consummated for the equity securities of Employer representing twenty
percent (20%) or more of the combined voting power of Employer's then
outstanding voting securities;
(C) MERGER OR CONSOLIDATION. The stockholders of Employer
shall approve a merger, consolidation, recapitalization, or reorganization of
Employer, a reverse stock split of outstanding voting securities, or
consummation of any such transaction if stockholder approval is not obtained,
other than any such transaction that would result in at least seventy-five
percent (75%) of the total voting power represented by the voting securities of
the surviving entity outstanding immediately after such transaction being
beneficially owned by the holders of outstanding voting securities of Employer
immediately prior to the transaction, with the voting power of each such
continuing holder relative to other such continuing holders not substantially
altered in the transaction; or
(D) LIQUIDATION OR SALE OF ASSETS. The stockholders of
Employer shall approve a plan of complete liquidation of Employer or an
agreement for the sale or disposition by Employer of all or a substantial
portion of Employer's assets to another person or entity, which is not a wholly
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owned subsidiary of Employer (i.e., fifty percent (50%) or more of the total
assets of Employer).
(c) RESULT OF TERMINATION. In the event of the termination of
Employee's employment pursuant to SECTIONS 4(B)(I) (IV) or (V) above, Employee
shall receive no further compensation under this Agreement and all of Employee's
unvested Options shall be cancelled. In the event of the termination of
Employee's employment pursuant to SECTION 4(B)(II) or (III) above,
(i) Employee shall continue to receive his Base Salary during the
Severance Period. For purposes of this Agreement, the "Severance Period" shall
be a period commencing on the date of termination and ending on the date that is
six months following the date of termination; PROVIDED HOWEVER, that the
Severance Period shall be extended one month on the last day of each six-month
period following the Effective Date so long as Employee remains employed by
Employer (for the avoidance of doubt, the first extension shall occur on June
30, 2003); PROVIDED, FURTHER, that in no event shall the Severance Period be
greater than nine months; and
(ii) Employee's vested options as of the date of termination
shall remain outstanding through the 120-day period following the then-current
term of this Agreement. All of Employee's unvested options as of the date of
termination shall be cancelled.
(d) RESULT OF CHANGE OF CONTROL. As incentive for Employee to actively
pursue the best interests of Employer's stockholders, in the event of a Change
of Control (as that term is defined in SECTION 4(B)(VI) of this Agreement), then
(i) Employee shall earn the Change of Control Bonus, which shall be paid in one
lump sum payment within ten business days from the effective date of the Change
of Control in the event of a Change of Control, and (ii) any options held by
Employee that remain unvested as of the effective date of the Change of Control
shall become fully vested and exercisable as of such effective date. For
purposes of this Agreement, the "Change of Control Bonus" shall be based on the
value of the transaction resulting in the Change of Control and shall be equal
to an amount according to the following schedule:
Value of Transaction Change of Control Bonus
-------------------- -----------------------
Less than or equal to $13,999,999 $25,000
$14,000,000 - $14,999,999 $31,250
$15,000,000 - $15,999,999 $37,500
$16,000,000 - $16,999,999 $43,750
$17,000,000 - $17,999,999 $50,000
$18,000,000 - $18,999,999 $56,250
$19,000,000 or greater $62,500
The Change of Control Bonus shall be payable in cash, securities, or other
consideration in the same proportions as paid in the transaction resulting in
the Change of Control. In addition, in the event of the termination of
Employee's employment pursuant to Section 4(b)(vi) above Employee shall continue
to receive his Base Salary during the Severance Period.
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5. COMPETITION AND CONFIDENTIAL INFORMATION.
(a) INTERESTS TO BE PROTECTED. For purposes of this SECTION 5, the
term "Employer" shall include Vodavi Technology, Inc. and any entity that is a
direct or indirect subsidiary of Vodavi Technology, Inc. during the term of this
Agreement. The parties acknowledge that Employee will perform essential services
for Employer during the term of Employee's employment with Employer. Employee
will be exposed to, have access to, and be required to work with a considerable
amount of Confidential Information (as defined below). The parties also
expressly recognize and acknowledge that the personnel of Employer have been
trained by and are valuable to Employer and that Employer will incur substantial
expense in recruiting and training personnel if it must hire new personnel or
retrain existing personnel to fill vacancies. The parties also expressly
recognize that it could seriously impair the goodwill and diminish the value of
Employer's business should Employee compete with Employer in any manner
whatsoever. The parties acknowledge that this covenant has an extended duration;
however, they agree that this covenant is reasonable, and it is necessary for
the protection of Employer, its stockholders, and employees. For these and other
reasons, and the fact that there are many other employment opportunities
available to Employee if his employment with Employer is terminated, the parties
are in full and complete agreement that the following restrictive covenants are
fair and reasonable and are entered into freely, voluntarily, and knowingly.
Furthermore, each party was given the opportunity to consult with independent
legal counsel before entering into this Agreement.
(b) NON-COMPETITION. During the term of Employee's employment with
Employer and for the period ending 12 months after the termination of Employee's
employment with Employer, regardless of the reason therefor, Employee shall not
(whether directly or indirectly, as owner, principal, agent, stockholder,
director, officer, manager, employee, partner, participant, or in any other
capacity) engage in or become financially interested in any competitive business
conducted within the Restricted Territory (as defined below). As used herein,
the term "competitive business" shall mean any business that designs, develops,
markets, or supports commercial telephone systems, commercial grade telephones,
voice processing systems (including, but not limited to, automated attendant,
voice mail, or fax mail), computer-telephony integration products, and related
computer software products; and the term "Restricted Territory" shall mean any
area in which Employer conducts its business during Employee's employment
hereunder.
(c) NON-SOLICITATION OF EMPLOYEES. During the term of Employee's
employment and for a period of 12 months after the termination of Employee's
employment with Employer, regardless of the reason therefor, Employee shall not
directly or indirectly, for himself, or on behalf of, or in conjunction with,
any other person, company, partnership, corporation, or other entity, seek to
hire or hire any of Employer's personnel or employees for the purpose of having
such employee engage in services that are the same, similar, or related to the
services that such employee provided for Employer.
(d) CONFIDENTIAL INFORMATION. Employee shall maintain in strict
secrecy all confidential or trade secret information, whether patentable or not,
relating to the business of Employer (the "Confidential Information") obtained
by Employee in the course of Employee's employment, and Employee shall not,
unless first authorized in writing by Employer, disclose to, or use for
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Employee's benefit or for the benefit of any person, firm, or entity at any time
either during or subsequent to the term of Employee's employment, any
Confidential Information, except as required in the performance of Employee's
duties on behalf of Employer. For purposes hereof, Confidential Information
shall include without limitation any technical plans and drawings or other
reproductions or materials of any kind; any financial information with respect
to Employer or its business; any trade secrets, knowledge, or information with
respect to products, processes, inventions, formulae, software, source codes,
object codes, algorithms, and services provided; any operating procedures,
techniques, or know-how; any business methods or forms; any names, addresses, or
data on suppliers or customers; and any business policies or other information
relating to or dealing with the purchasing, sales, advertising, promotional, or
distribution policies or practices of Employer.
(e) RETURN OF BOOKS AND PAPERS. Upon the termination of Employee's
employment with Employer for any reason, Employee shall deliver promptly to
Employer all samples or demonstration models, catalogues, manuals, memoranda,
drawings, software, source or object code, formulae, and specifications, and
operating procedures; all cost, pricing, and other financial data; all supplier
and customer information; all other written or printed materials that are the
property of Employer (and any copies of them); and all other materials which may
contain Confidential Information relating to the business of Employer, which
Employee may then have in his possession whether prepared by Employee or not.
(f) DISCLOSURE OF INFORMATION. Employee shall disclose promptly to
Employer, or its nominee, any and all ideas, designs, processes, and
improvements of any kind relating to the business of Employer, whether
patentable or not, conceived or made by Employee, either alone or jointly with
others, during working hours or otherwise, during the entire period of
Employee's employment with Employer, or within six months thereafter.
(g) ASSIGNMENT. Employee hereby assigns to Employer or its nominee the
entire right, title, and interest in and to all inventions, discoveries, and
improvements, whether patentable or not, that Employee may conceive or make
during Employee's employment with Employer, or within six months thereafter, and
which relate to the business of Employer. Whenever requested to do so by
Employer, whether during the period of Employee's employment or thereafter,
Employee shall execute any and all applications, assignments, and other
instruments that Employer shall deem necessary or appropriate to apply for,
obtain, or maintain Letters Patent of the United States or of any foreign
country, or to protect otherwise the interest of Employer therein.
(h) EQUITABLE RELIEF. In the event a violation of any of the
restrictions contained in this Section is established, Employer shall be
entitled to preliminary and permanent injunctive relief as well as damages and
an equitable accounting of all earnings, profits, and other benefits arising
from such violation, which right shall be cumulative and in addition to any
other rights or remedies to which Employer may be entitled. In the event of a
violation of any provision of SECTIONS 5(B), 5(C), 5(F), or 5(G) of this
Agreement, the period for which those provisions would remain in effect shall be
extended for a period of time equal to that period beginning when such violation
commenced and ending when the activities constituting such violation shall have
been finally terminated in good faith.
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(i) RESTRICTIONS SEPARABLE. If the scope of any provision of this
SECTION 5 is found by a Court to be too broad to permit enforcement to its full
extent, then such provision shall be enforced to the maximum extent permitted by
law. The parties agree that the scope of any provision of this SECTION 5 may be
modified by a judge in any proceeding to enforce this Agreement, so that such
provision can be enforced to the maximum extent permitted by law. Each and every
restriction set forth in this SECTION 5 is independent and severable from the
others, and no such restriction shall be rendered unenforceable by virtue of the
fact that, for any reason, any other or others of them may be unenforceable in
whole or in part.
(j) SURVIVAL. Employer and Employee acknowledge and agree that the
obligations and rights set forth in this SECTION 5 shall survive the termination
of this Agreement and Employee's employment by either Employer or Employee under
SECTION 4 of this Agreement.
6. MISCELLANEOUS.
(a) NOTICES. All notices, requests, demands, and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made, and received (i) if personally delivered,
on the date of delivery, (ii) if by facsimile transmission, 24 hours after
transmitter's confirmation of the receipt of such transmission, (iii) if mailed,
three days after deposit in the United States mail, registered or certified,
return receipt requested, postage prepaid and addressed as provided below, or
(iv) if by a courier delivery service providing overnight or "next-day"
delivery, on the next business day after deposit with such service addressed as
follows:
(1) If to Employer:
Vodavi Technology, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman of the Board
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy given in the manner
prescribed above, to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(2) If to Employee:
▇▇▇▇▇ ▇. Husband
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Either party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this paragraph for the giving of notice.
(b) INDULGENCES; WAIVERS. Neither any failure nor any delay on the
part of either party to exercise any right, remedy, power, or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power, or privilege preclude any other or
further exercise of the same or of any other right, remedy, power, or privilege,
nor shall any waiver of any right, remedy, power, or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power, or
privilege with respect to any other occurrence. No waiver shall be binding
unless executed in writing by the party making the waiver.
(c) CONTROLLING LAW. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement, shall be governed by and
construed in accordance with the laws of the state of Arizona, notwithstanding
any Arizona or other conflict-of-interest provisions to the contrary.
(d) BINDING NATURE OF AGREEMENT; SUCCESSORS AND ASSIGNS. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors, and assigns;
provided that because the obligations of Employee hereunder involve the
performance of personal services, such obligations shall not be delegated by
Employee. For purposes of this Agreement, successors and assigns shall include,
but not be limited to, any individual, corporation, trust, partnership, or other
entity that acquires a majority of the stock or assets of Employer by sale,
merger, consolidation, liquidation, or other form of transfer. Employer will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of Employer to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that Employer would be required to
perform it if no such succession had taken place.
(e) EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of the parties reflected hereon as the signatories.
(f) PROVISIONS SEPARABLE. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
(g) ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, inducements and conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
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course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing.
(h) PARAGRAPH HEADINGS. The paragraph headings in this Agreement are
for convenience only; they form no part of this Agreement and shall not affect
its interpretation.
(i) NUMBER OF DAYS. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays, and
holidays; provided, however, that if the final day of any time period falls on a
Saturday, Sunday, or holiday, then the final day shall be deemed to be the next
day that is not a Saturday, Sunday, or holiday.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
VODAVI TECHNOLOGY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer and President
EMPLOYEE
/s/ ▇▇▇▇▇ ▇. Husband
--------------------------------------------
▇▇▇▇▇ ▇. Husband
