EXHIBIT 10.6
NOVA TELECOMMUNICATIONS, INC.
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
September 30, 1998
▇▇▇▇▇▇▇ Unter
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Employment Agreement
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Dear Dr. Unter:
This will confirm our understanding as to the terms of your employment by
NOVA Telecommunications, Inc. (the "Company"):
1. Positions. You will be employed as the Chief Operating Officer and
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Vice-President, Manufacturing of the Company, effective as of October, 1998 (the
"Effective Date").
2. Salary and Bonus. The Company shall pay you a bonus of $20,000.00
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upon your commencement of employment with the Company. Your initial base salary
shall be at the annual rate of $165,000, subject to increase at the discretion
of the Board of Directors of the Company ("Board"), and will be payable in
accordance with the Company's policies for its senior executives.
3. Benefits.
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(a) General Benefits. The payments provided to you under Paragraph 2,
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except where specifically provided otherwise, are in addition to any other
benefits to which you may be, or may become, entitled under any of the Company's
group hospitalization, health, dental care and/or sick-leave plans; life, other
insurance and/or death benefit plans; travel and/or accident insurance plans;
deferred compensation plans; capital accumulation programs; retirement income
and/or pension plans; supplemental pension plans; excel benefit plans; stock
option, short- and long-term disability programs; and other present and future
group employee benefit plans and programs for which the Company's key employees,
including you, are or shall become eligible. Nothing in this Agreement shall
require the Company to adopt any such plans or programs or to maintain any
benefits thereunder at any specific level.
(b) Relocation Costs. The Company shall pay your standard closing
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costs on your sale of your current house and on your purchase of a new house
within commuting distance of the Company. In addition, the Company shall pay
your costs of moving household goods to your new house. The Company will also
pay your temporary living expenses, including housing, meals, and related costs
for a period of ninety (90) days after your commencement of work with the
Company. The Company will also provide you with an interest-free bridge loan, if
necessary, to meet costs
arising in connection with your commencement of employment with the Company. In
addition, the Company will pay a tax gross up on any payments or benefits
provided you by the Company under this paragraph 3(b) to the extent such items
are not tax deductible in full.
(c) Stock Options. The Company shall grant you an option to purchase
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350,000 shares of NOVA Telecommunications, Inc. common stock exercisable for
$.23 per share under the terms of an Incentive Stock Option Agreement, the form
of which is attached to this Agreement. The options will vest 25% after one year
and 1/36/th/ of the remaining 75% each month thereafter.
4. Severance.
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(a) Termination Other Than for Cause. In the event that the Company shall
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terminate you as an employee other than for "cause" (as such term is hereinafter
defined), you will be entitled to receive an amount equal to your monthly base
salary as of the date of such termination ("Termination Date"), payable monthly
until the earlier to occur of (i) one year from the date of termination and (ii)
your commencing employment, or a substantially full-time consulting position,
with another person or entity other than the Company; but only if you execute
and do not revoke a General Release in the form attached hereto as Exhibit A.
You will also be entitled to continue to receive all medical and life insurance
benefits that you were receiving at the Termination Date, for such period.
(b) Termination for Cause. If you are terminated for cause or if you
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terminate your employment with the Company, you shall only receive your base
salary owing to you through the Termination Date and shall not be entitled to
any additional payments from the Company.
(c) Cause. For purposes of this Agreement, the term "cause" shall mean (i)
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an act of dishonesty with respect to the Company; (ii) your willful misfeasance
or nonfeasance of duty intended to injure or having the effect of injuring the
reputation, business, or business relationships of the Company; (iii) your
conviction upon a charge of any crime involving moral turpitude or upon a charge
that, as determined by the Board in its sole and absolute discretion, could
reflect unfavorable upon the Company; (iv) your willful or prolonged absence
from work (other than by reason of a disability that has been established by an
independent physician) or your failure, neglect, or refusal to perform your
duties and responsibilities; (v) your abuse of alcohol or drugs (legal or
illegal) that, in the Board's sole and absolute judgment, is deemed to
materially impair your ability to perform your duties hereunder; or (vi) your
breach of any of the covenants contained in this letter.
(d) Release. You agree that, in consideration of the severance payment to
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be made to you under Paragraph 4(a) of this letter, you will execute the general
release annexed hereto as Exhibit A, which you understand is a condition to your
receiving such payment.
5. Covenants.
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(a) Restrictions Upon Termination Within Three Years of Effective
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Date. In consideration of the amounts to be paid to you by the Company and
other good and valuable
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consideration, the receipt and sufficiency of which are hereby acknowledged, (i)
for a period of three (3) years following the Effective Date, and (ii) if your
employment with the Company or any of its affiliates or subsidiaries terminates
for any reason (other than death) within three (3) years of the Effective Date,
for a period of one (1) year beyond the "Termination Date" you shall not
directly or indirectly, for yourself or on behalf of or in conjunction with any
other person, company, partnership, business, group, venturer, or other entity
(each, a "Person");
(i) be employed by or otherwise associated, as a technician,
officer, director, shareholder, owner, partner, joint venturer, or in a
managerial capacity, whether as an employee, independent contractor,
consultant, advisor, or sales representative, of the CIENA Corporation
("CIENA");
(ii) employ or solicit any person who is, on the Termination
Date, or has been, within one year prior to the Termination Date, an
employee of the Company or any affiliate or subsidiary; or
(b) Permitted Investments. The foregoing covenants shall not be
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deemed to prohibit you from acquiring as an investment not more than one percent
of the capital stock of CIENA.
(c ) Forms and Examinations. You agree to execute the form
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Proprietary Information, Inventions, and Non-Solicitation Agreement in the form
previously provided to you by the Company. In addition, you agree to undergo,
when requested, a dilated eye examination with fundus photo (both eyes) and to
release the photo to the Company.
(d) Severability. The covenants in this Paragraph 5 are severable and
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separate, and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. If any provisions of this Paragraph 5
relating to the time period of the restrictive covenants shall be declared by a
court of competent jurisdiction to exceed the maximum time period that such
court deems reasonable and enforceable, said time period shall be deemed to be,
and thereafter shall become, the maximum time period that such court deems
reasonable and enforceable and this letter shall automatically be considered to
have been amended and revised to reflect such determination.
(e) Independence. The existence of any claim or cause of action
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against the Company, whether predicated on this letter or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants
contained in this Paragraph 5. It is specifically agreed that the periods of
time stated at the beginning of this Paragraph 5, during which the agreements
and covenants made by you in this Paragraph 5 shall be effective, shall be
computed by excluding from such computation any time during which you are in
violation of any provision of this Paragraph 5.
(f) Your Agreement. You have carefully read and considered the
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provisions of this Paragraph 5 and, having done so, agree that the restrictive
covenants in this Paragraph 5 impose
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a fair and reasonable restraint on you and you are reasonably required to
protect the interests of the Company, and its officers, employees, and
interestholders.
(g) Injunctive Relief. You acknowledge that any remedy at law for
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breach of the provisions of this letter may be inadequate, and that, in the
event of a breach of this Paragraph 5 by you, any remedy at law would be
inadequate in that any such breach would cause irreparable competitive harm to
the Company. Consequently, in addition to any other relief that may be
available, a court may order temporary and permanent injunctive relief,
including, without limitation, specific performance, and other equitable relief,
without the necessity of the enforcing party proving actual damages and without
regard to the adequacy of any remedy at law to prevent or redress the violation
of any of Employee's obligations under this Paragraph 5.
6. Miscellaneous.
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(a) Employee-at-Will Status. You expressly acknowledge that you are
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an employee-at-will of the Company.
(b) No Prior Agreements. You hereby represent and warrant to the
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Company that the execution of this letter by you, your employment by the
Company, and the performance of your duties hereunder will not violate or be a
breach of any agreement with a former employer, client, or any other Person.
Further, you agree to indemnify and hold harmless the Company, its affiliates,
or subsidiaries and each of the officers and representatives of the Company,
each affiliate and each subsidiary for any claim, including, but not limited to,
reasonable attorneys' fees and expenses of investigation, of any such third
party that such third party may now have or may hereafter come to have against
the Company or its subsidiaries or affiliates, based upon or arising out of any
non-competition agreement, secrecy, or other agreement between you and such
Person.
(c) Assignment; Binding Effect. You understand that you have been
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selected for employment by the Company on the basis of your personal
qualifications, experience, and skills. You agree, therefore, that you cannot
assign or delegate all or any portion of your performance hereunder. This
letter may not be assigned or transferred by the Company without your prior
written consent. Subject to the preceding two sentences, this letter shall be
binding upon, inure to the benefit of, and be enforceable by the parties hereto
and their respective heirs, legal representatives, successors, and assigns.
Notwithstanding the foregoing, if you accept employment with a subsidiary or
affiliate of the Company, unless you and your new employer agree otherwise in
writing, this letter shall automatically be deemed to have been assigned to such
new employer (which shall thereafter be an additional beneficiary of the
covenants contained herein, as appropriate), such assignment shall be considered
a condition of employment by such new employer, and references to the "Company"
in this Agreement shall be deemed to refer to such new employer.
(d) Entire Agreement. This Agreement and the Proprietary Information
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and Inventions Agreement between the Company and you contain the entire
understanding between the parties hereto. To the extent that you had any oral
or written employment agreement or understanding with the Company, this letter
shall automatically supersede such agreement or
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understanding, and upon execution of this letter by you and the Company, such
prior agreement or understanding automatically shall be deemed to have been
terminated and shall be null and void.
(e) Waiver. Either you or the Company may by written notice to the
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other (i) extend the time for the performance of any of the obligations or other
actions of the other under this letter; (ii) waive compliance with any of the
conditions or covenants of the other contained in this letter; and (iii) waive
or modify performance of any of the obligations of the other under this letter.
Except as provided in the preceding sentence, no action taken pursuant to this
letter, including, without limitation, any investigation by or on behalf of any
party, shall be deemed to constitute a waiver by the party taking such action of
compliance with any representation, warranty, covenant, or agreement contained
herein. The waiver by any party hereto of a breach of any provision of this
letter shall not operate or be construed as a waiver of any preceding or
succeeding breach, and no failure by either party to exercise any right or
privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise that right or privilege at any subsequent time or times hereunder.
(f) Amendment. This letter may be terminated, amended, modified, or
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supplemented only by a written instrument executed by you and the Company.
(g) Governing Law. The provisions of this letter shall be governed by
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and construed in accordance with the law of the State of Maryland, regardless of
the law that might be applied under principles of conflict of laws.
(h) Consolidation, Merger, or Sale of Assets. Nothing in this letter
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shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation,
corporations, or partnership. Upon such a consolidation, merger, or transfer of
assets and the assumption by the acquirer of the Company's obligations under
this letter, the term "the Company," as used herein, shall mean such other
corporation or corporations, or partnership, and this letter shall continue in
full force and effect and such other corporation or corporations shall be liable
for all obligations of the Company under this letter.
(i) No Duty to Mitigate. Except as otherwise provided herein, you
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shall not be required to mitigate the amount of any payment provided for in this
letter by seeking other employment or otherwise, nor shall any amounts received
from other employment or otherwise by you offset in any manner the obligations
of the Company hereunder.
(j) No Attachment. Except as required by law, no right to receive
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payments under this letter shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
the execution, attachment, levy, or similar process or assignment by operation
of law, and any attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect.
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(k) General Creditor. All payments required hereunder shall be made
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from the Company's general assets and you shall have no rights greater than the
rights of a general creditor of the Company.
(l) Notices. All notices and other communications required or
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permitted to be given under this letter shall be in writing and shall be deemed
to have been duly given if delivered personally or sent by certified mail,
return receipt requested, first-class postage prepaid, to the parties to this
letter at the following addresses:
if to the Company at:
NOVA Telecommunications, Inc.
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
and
if to you at the address set forth at the beginning of this letter
or to such other address as either party to this letter shall have last
designated by notice to the other party. All such notices and communications
shall be deemed to have been received on the earlier of the date of receipt or
the third business day after the date of mailing thereof.
(m) Venue. You irrevocably consent to the jurisdiction of the courts
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located in the State of Maryland to resolve any claim or controversy relating to
this letter. Each proceeding shall be heard by federal or state courts located
in the State of Maryland.
(n) Paragraph and Other Headings. The paragraph and other headings
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contained in this letter are for reference purposes only and shall not affect
the meaning or interpretation of this letter.
(o) Withholding of Taxes. The Company may withhold from amounts
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required to be paid to you hereunder any applicable federal, state, local, and
other taxes with respect thereto; provided, however, that the Company shall
promptly pay over the amounts so withheld to the appropriate taxing bodies and
provide to you appropriate statements on forms prescribed for such purposes on
the amounts so withheld.
(p) Severability. If, for any reason, any provision of this letter is
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held invalid, such invalidity shall not affect any other provision of this
letter not held so invalid, and each such other provision shall, to the full
extent consistent with law, continue in full force and effect. If any provision
of this letter shall be held invalid in part, such invalidity shall in no way
affect the rest of such provision not held so invalid, and the rest of such
provision, together with all other provisions of this letter, shall to the full
extent consistent with law continue in full force and effect.
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(q) Counterparts. This letter may be executed in any number of
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counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
Please acknowledge your understanding of, and agreement with, the foregoing
by signing your name in the space indicated below, whereupon this letter will
become a binding agreement upon the parties.
Very truly yours,
NOVA TELECOMMUNICATIONS, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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By: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: President
Agreed to and acknowledged as of the date first written above:
/s/ ▇▇▇▇▇▇▇▇ Unter
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▇▇▇▇▇▇▇▇ Unter
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EXHIBIT A
FORM OF GENERAL RELEASE
The undersigned (hereinafter the "Terminated Employee") hereby releases,
discharges and acquits NOVA Telecommunications, Inc. (the "Company"), its
subsidiaries and affiliates, and the Company's and its subsidiaries' and
affiliates' agents, employees, stockholders, directors, officers, successors,
attorneys and assigns (collectively, "Releasees") from any and all claims,
demands, liabilities or causes of action, known or unknown, against Releasees or
any of them, which the Terminated Employee now owns or holds or will own or hold
at any time in the future, by reason of any action, matter, cause or thing
whatsoever related to the termination of the Terminated Employee's employment
with the Company or in any way related to the employment relationship between
the Terminated Employee and the Company and/or arising out of the termination of
that employment or relationship, including but not limited to any and all claims
pursuant to the Age Discrimination in Employment Act, Americans with
Disabilities Act of 1992, the Civil Rights Act of 1969, 29 U.S.C. Section 621 et
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seq. and any other applicable law, statute, code or ordinance. It is the
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intention of the Terminated Employee in executing this General Release that the
general release provided for herein shall be effective as a bar to each and
every claim, demand and cause of action hereinabove specified, and shall extend
to claims that the Terminated Employee does not know or suspect to exist in his
or her favor at the time of executing this General Release, which if known by
the Terminated Employee might have materially affected his or her entering into
this General Release.
The Terminated Employee acknowledges that he or she is aware that he or she
may hereafter discover facts different from or in addition to those he or she
now knows or believes to be true with respect to the matters herein released and
the Terminated Employee agrees that this General Release shall be and remain in
effect in all respects as a complete general release notwithstanding any such
different or additional facts.
The Terminated Employee acknowledges that he or she has been advised to
consult with an attorney prior to signing this General Release and that he or
she has in fact consulted with an attorney, that the Terminated Employee
understands that he or she is not waiving any claims that may arise after the
date of this General Release, that the Terminated Employee has been given a
period of at least 21 days in which to consider whether to enter into this
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General Release, and that the Terminated Employee is entering into this General
Release of his or her own free will.
The Terminated Employee further acknowledges and understands that he or she
may revoke this General Release within 7 days from the date it is executed by
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him or her and that this General Release shall not become effective or
enforceable until that 7-day period has expired. Such a revocation will
immediately void all of the promises and obligations set forth in this General
Release and Section 4 of that certain letter agreement dated as of October 1998
between the Company and the Terminated Employee, including but not limited to
any of the Company's obligations to remit the sums set forth therein.
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▇▇▇▇▇▇▇ Unter
