EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of April 1,
2001, between mPhase Technologies, Inc., a New Jersey corporation, with its
principal place of business presently located at 000 Xxxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000 (the "Company"), and Xxxxx Xxxxxx having his
principal residence at 0000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxx (the "Employee").
WHEREAS, the Company is in the business of designing, assembling, selling
and marketing telecommunications products, and in particular, the development of
its proprietary TRAVERSER Digital Video & Data Delivery Systems to enhance the
bandwidth utilization of conventional twisted pair xxxxxx telephone lines;
WHEREAS, the Company desires to set forth herein the terms of employment
between the Company and the Employee, is the current Chief Technology Officer of
the Company.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements set forth in this Agreement, the legal sufficiency of which is hereby
acknowledged, and intending to be legally bound, the Company and the Employee
agree as follows:
1. Incorporation of "Whereas" Clauses
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The representations, terms and undertakings set forth in the WHEREAS
clauses of this Agreement are incorporated herein by reference as though recited
verb atim and at length.
2. Employment
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The Company hereby agrees to employ the Employee, and the Employee hereby
agrees to be employed by the Company, subject to the terms and conditions of
this Agreement
3. Title, Duties and Services
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3.1 Title. The Employee shall be employed by the Company as its
Chief Technology Officer.
3.2 Duties and Services. During his employment under this Agreement,
the Employee shall have such duties and responsibilities and perform such
services as may be properly assigned to him from time to time by the Company's
Chief Executive Officer and shall report to the Chief Executive Officer. The
Employee shall be responsible for engineering and development and deployment of
the Company's Traverser Product in conjunction with Georgia Tech Research
Institute. The Employee may have additional duties assigned to him from time to
time from the Company's Chief Executive Officer.
4. Term
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This Agreement shall be effective from the date hereof and continue through
April 1, 2002 (the "Employment Term"), unless terminated earlier in accordance
with Section 7 of this Agreement. It is the intention of the parties that not
less than one month prior to the expiration of the Employment Term, the Company
and the Employee shall agree to negotiate an extension of this Agreement for one
or more 12-month renewal periods. In the absence of such a written extension,
the Employee shall become an "employee at will" and the Company shall have the
right to terminate the Employee at any time thereafter, with or without cause.
In the event the Company elects to terminate the Employee without cause, after
the Employment Term, the Company shall pay the Employee sixty (60) days of his
then Base Salary.
5. Compensation and Benefits
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5.1 Base Salary. During the Employee's employment under this
Agreement, the Employee shall be entitled to receive a base salary at an annual
rate of not less than $170,000, payable in accordance with the Company's payroll
procedures (the "Base Salary") and relocation expense reimbursement. In
consideration of the receipt of this compensation, the Employee shall provide
his full time, energy and skill in the performance of his employment duties.
Employee shall be eligible, from time to time, for Base Salary increases
pursuant to reviews by the Chief Executive Officer of the Company.
5.2 Bonus
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5.2.1 In General. During the Employee's employment under this
Agreement, the Employee shall be eligible to participate in any bonus plans as
may be maintained by the Company from time to time for its employees. The terms
of the Employee's participation in such bonus plans shall be determined by the
Chief Executive Officer and the Board of Directors and the Compensation
Committee, or by such person or administrative body as designated by Board of
Directors and Compensation Committee.
5.2.2 Eligibility for Bonus. The Employee shall receive a
performance review from the Chief Executive Officer on an annual basis and shall
be eligible for a cash bonus based upon the performance of the Employee for such
period as determined in the sole discretion of the Chief Executive Officer and
the Board of Directors.
5.3 Benefits. During his employment under this Agreement, the
Employee shall be entitled to: (i) participation in employee benefit programs,
policies and arrangements, including a 401K Plan, as maintained by the Company
from time to time, in whole or in part, for similarly situated employees of the
Company; and (ii) paid vacation of a minimum of four weeks per year, holidays,
and leave of absence in accordance with the policies of the Company; and (iii)
perquisites as from time to time provided by the Company to its employees.
Vacation shall accrue commencing upon the Effective Date and ending each June
30/th/ thereafter.
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5.4 Expenses. During the Employee's employment under this Agreement,
the Company shall reimburse the Employee for ordinary and reasonable out-of-
pocket expenses incurred by him in the performance of his duties hereunder,
provided that the Employee shall limit, and account to the Company for, such
expenses in accordance with the employee business expense policies and practices
of the Company.
6. Incentive Stock Compensation
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6.1 In General. During the Employee's employment under this
Agreement, the Employee shall be eligible to participate in any stock incentive
plans as may be maintained by the Company from time to time for employees. The
Employee's awards under such stock incentive plans shall be determined by the
Board of Directors or such person or administrative body as provided under such
plans.
6.2 Golden Parachute. If the Company is acquired by a third party by
way of a Change of Control (as defined below) under circumstances where the
Employee does not vote for the acquisition either as a shareholder or as a
member of the Board of Directors, then in that event, the Employee will be
entitled to purchase 150,000 shares of the common stock of the Company at a
price of $1.00 per share. In addition any stock options of the Employee which
are unvested at the time shall vest immediately upon a Change in Control.
Definition of Change in Control. (i) The acquisition (other than from the
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Company) by any Person as defined in this Section 2(d), of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended) of 50% or more of either (A) the then
outstanding securities of the Company or (B) the combined voting power of the
then outstanding voting securities of Company entitled to vote generally in the
election of members of the Board or the Board of any corporate successor to the
business of Company (the "Company Voting Stock"); (ii) the closing of a sale or
other conveyance of all or substantially all of the then outstanding shares for
the securities of the Company, or (iii) the effective time of any merger, share
exchange consolidation, or other business combination of the Company if
immediately after such transaction persons who hold a majority of the
outstanding voting securities entitled to vote generally in the election of
directors of the surviving entity (or the entity owning 100% of such surviving
entity) are not persons who, immediately prior to such transaction, held the
Company Voting Stock; provided, however, that a Change in Control shall not
include a public offering of capital stock of the Company. For purposes of this
Section 2(d), a "Person" means any individual, entity or group within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended, other than employee benefit plans sponsored or maintained by the
Company and corporations controlled by the Company.
7. Termination of Employment
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7.1 Termination by the Company without Good Cause. The Company may
terminate the Employee's employment under this Agreement without Good Cause at
any time by giving prior notice thereof to the Employee. Upon such termination,
the Employee shall be entitled to such compensation as provided in Section
7.1.2. For purposes of this Agreement,
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"Good Cause" means any of the following, as determined by the Chief Executive
Officer after notice to the Employee:
(i) The Employee's conviction of, or plea of nolo contendere
to, a felony or crime involving moral turpitude;
(ii) The Employee's fraud on, or misappropriation of any funds
or property of, the Company;
(iii) Personal dishonesty, incompetence or gross negligence in
the Employee's performance of his duties;
(iv) Willful misconduct by the Employee in connection with the
performance of his duties, or the Employee's willful
failure to perform his duties and responsibilities in the
best interests of the Company;
(v) The Employee's repeated use of alcohol, drugs or other
similar substances that affect his work performance; or
(vi) Breach by the Employee of any provision of this Agreement
or any provision of any non-disclosure, non-competition,
non-solicitation or other similar agreement executed by
the Employee for the benefit of the Company.
7.1.2 Severance Pay. If the Employee's employment under this
Agreement is terminated during the Term of this Agreement by the Company without
Good Cause, the Employee shall be entitled to continued payment of his Base
Salary following the effective date of termination (as specified by the
Company), at the rate in effect immediately before the date of termination, for
a period equal to the lesser of 12 months or the remainder of the Employment
Term, provided that the Employee (A) honors the restrictive covenants as
provided in Section 8 of this Agreement and (B) executes a release of all claims
arising in connection with his employment by the Company, in such form as may
then be used by the Company respecting termination of employees.
7.2 Termination by the Company for Good Cause; Death or Disability
7.2.1 Termination by the Company for Good Cause. The Company
may terminate the Employee's employment under this Agreement for Good Cause by
giving notice thereof to the Employee specifying in reasonable detail the Good
Cause based upon which the Company terminates his employment. Upon such a
termination for Good Cause, the Company shall have no obligation to the Employee
for salary or bonus payments beyond the date of termination.
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7.2.2 Termination upon Death or Disability. This Agreement
shall terminate upon the Employee's death. If the Company determines in good
faith that the Employee has a Significant Disability as defined in this Section,
the Company may terminate his employment under this Agreement by notifying the
Employee thereof at least 30 days before the effective date of termination. For
purposes of this Agreement, "Significant Disability" means the inability of the
Employee to substantially perform his duties under this Agreement by reason of
any physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not less
than six months. If there is any dispute between the parties as to whether the
Employee suffers from a significant Disability, the Company shall select or
approve a physician whose determination of that issue shall bind the parties
hereto.
7.2.3 Effect of Termination by the Company for Good Cause or
Termination upon Death or Significant Disability. If the Employee's employment
under this Agreement is terminated by the Company for Good Cause or due to the
Employee's death or Significant Disability, all obligations of the Company under
this Agreement shall terminate, except as provided in Section 7.4.
7.3 Termination by the Employee. The Employee may terminate his
employment under this Agreement at any time upon 21 days prior written notice
thereof to the Company. The Company may, in its discretion, waive the 21 day
prior notice requirement, in which case the effective date of termination by the
Employee shall be such earlier date specified by the Company. Upon such
termination, all obligations of the Company under this Agreement shall
terminate, except as provided in Section 7.4.
7.4 Payment of Compensation upon Termination. Upon a termination of
the Employee's employment with the Company for any reason, the Employee shall be
entitled to receive his Base Salary earned but unpaid through the date of such
termination, on or before the day on which the Employee would have been paid
such amount if his employment hereunder had not been terminated. The Company
shall have no obligation to pay a bonus following the effective date of an
employee termination.
8. Restrictive Covenants
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8.1 Non Competition. The Employee shall provide his full time, skill
and attention to the business of the Company during the Employment Term of this
Agreement and shall use his best efforts to further the interests of the
business of the Company at all times. The Employee shall not, unless so approved
in writing by the Chief Executive Officer of the Company, during the Employment
Term engage directly or indirectly, in any business other than that of and on
behalf of the Company. In order to provide reasonable protection for the
business of the Company, the Employee shall not for so long as she is employed
directly or indirectly by the Company, during the Employment Term, have any
interests in any other corporation, partnership or other business entity which
directly or indirectly competes with, or conducts a business that is similar to,
the business being conducted by the Company. Nothing contained in this section
shall prohibit the Employee from investing in common stocks or other securities
of
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publicly held corporations so long as his equity ownership percentage in such
companies does not exceed 1% of the common stock outstanding of any such
corporations.
8.2 Confidential Information. The Employee shall at all times hold
in a fiduciary capacity for the benefit of the Company all secret, confidential
or proprietary information, knowledge or data relating to the Company, and all
of its businesses, which shall have been obtained by the Employee during his
employment by the Company and which shall not be or become public knowledge
(other than by acts by the Employee or his representatives in violation of this
Agreement), including, but not limited to, information regarding the Company's
processes, products, clients, customers, vendors financial data, marketing
strategies, business plans, pricing information etc. (the "Confidential
Information"). During the Employee's employment with the Company and after the
termination of such employment, the Employee shall not, without the prior
written consent of the Company, communicate or divulge any Confidential
Information to any Person (as defined in Section 8.6.3) other than the Company
and those designated by it or use any Confidential Information, except for the
benefit of the Company, provided that the Employee may make disclosures to
comply with the law or legal process. Immediately upon termination of the
Employee's employment with the Company at any time and for any reason, the
Employee shall return to the Company all Confidential Information, including,
but not limited to, any and all copies, reproductions, notes or extracts of all
Confidential Information. Furthermore the Employee agrees to turn over to the
Company all inventions, improvements and concepts developed by his while
employed by the Company. Without limiting the foregoing, the Employee agrees to
the following provisions:
(a) to disclose, grant and assign to the Company as its
exclusive property, all inventions, improvements and technical or business
innovations and suggestions relating in any way to the business of the Company,
or capable of beneficial use by the Company, developed or conceived by the
Employee solely or jointly with others during the course of his employment or
within twelve (12) months after the termination of his employment, (i) which are
along the lines of the business, work or investigations of the Company or its
affiliates, or (ii) which result from or are suggested by any work which the
Employee may do for the Company;
(b) to execute all necessary papers including applications,
assignments, and otherwise provide proper assistance (at the Company's expense),
during and subsequent to employment, to enable the Company to obtain for itself
or its nominees, patents, copyrights, or other legal protection for such
inventions or innovations in any and all countries;
(c) to make and maintain for the Company adequate and current
written records of all such inventions or innovations;
(d) to take affirmative steps to prevent the disclosure of trade
secrets and other Confidential Information by other Persons, including but not
limited to, potential investors or strategic partners by requesting and
obtaining appropriate confidentiality agreements.
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8.3 Solicitation of Employees. During the Employment Term and the
period of any at-will employment following the Employment Term and for two years
after the date of termination for any reason, the Employee shall not: (i)
solicit, participate in or promote the solicitation of any person who was
employed by the Company, at any time during the three-month period prior to the
Employee's termination of employment, to leave the employ of the Company; or
(ii) on behalf of himself or any other Person, hire, employ or engage any such
person. The Employee further agrees that, during such time, if an employee of
the Company contacts the Employee about prospective employment, the Employee
will inform such employee that he cannot discuss the matter further without
informing the Company.
8.4 Solicitation of Clients. During the Employment Term and the
period of any at-will employment following the Employment Term and for two years
after the date of termination for any reason, the Employee shall not, directly
or indirectly, solicit, entice or induce any Client (as defined in Section 8.6)
of the Company to become a Client of any Person other than the Company, or to
modify, curtail or cease its business with the Company, and the Employee will
not assist any Person in taking any such action.
8.5 Remedies for Breach. The Employee agrees that damages in the
event of any breach of Sections 8.1 through 8.4 by the Employee would be
difficult to ascertain. The Employee therefore agrees that, notwithstanding
anything in this Agreement to the contrary, including by not limited to the
provisions of Section 15, the Company, in addition to and without limiting any
other remedy or right it may have, shall have the right to an injunction or
other equitable relief in any court of competent jurisdiction, enjoining any
such breach. The Employee hereby waives any and all defenses she may have on the
ground of lack of jurisdiction or competence of the court to grant such an
injunction or other equitable relief. The existence of this right shall not
preclude any other rights and remedies at law or in equity which the Company may
have.
8.6 Definitions. For purposes of Section 8, the following
definitions shall apply:
8.6.1 "Company." "Company" means mPhase Technologies, Inc. and
all of its subsidiaries and affiliates.
8.6.2 "Client." "Client" means any person, entity (including
but not limited to a corporation, partnership or trust), division, business
unit, department or agency which, at the time of termination of the Employee's
employment hereunder or at any time within two years prior thereto, shall have
purchased goods or services from the Company or shall have contacted the Company
to purchase goods or services in the future.
8.6.3 "Person." "Person" means any individual or entity,
including but not limited to any corporation, trust, sole proprietorship, joint
venture or partnership.
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8.7 Survival of Section 8. The Employee agrees that the
nondisclosure, non-competition, and non-solicitation agreements in this Section
8 each constitute separate agreements independently supported by good and
adequate consideration and, notwithstanding anything in this Agreement to the
contrary, shall be severable from the other provisions of, and shall survive,
this Agreement.
9. Notices. Any notices, requests, demands and other communications
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provided for by this Agreement shall be sufficient if in writing and if sent by
first class or certified mail to the Employee at the last address he has filed
in writing with the Company or, in the case of the Company, to the Company's
principal executive offices. The parties to this Agreement may change the
address to which notices, requests, demands and other communications shall be
sent by sending written notice of such change of address to the other in the
manner set forth in this Section 9.
10. Withholding Taxes. The Company shall have the right, to the extent
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permitted or required by law, to withhold monies from any payment of any kind
due to the Employee under this Agreement in order to satisfy the tax withholding
obligations of the Company under applicable law.
11. Successors and Assigns. The rights, duties and obligations of a party
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hereunder may not be assigned, delegated or assumed without the prior written
consent of the other party, provided that the Company may assign this Agreement
to any subsidiary or successor, without the Employee's consent, and such
assignment shall not constitute, a termination of his employment hereunder.
Nothing herein shall cause a termination of this Agreement upon the acquisition,
reorganization, or merger of the Company. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors or permitted assigns. Nothing herein shall be construed to confer
upon any person not a party hereto any right, remedy or claim under or by reason
of this Agreement.
12. Entire Agreement. This Agreement constitutes the entire understanding
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of the Employee and the Company with respect to the subject matter hereof and
supersedes and voids any and all prior and contemporaneous agreements or
understandings, written or oral, regarding the subject matter hereof.
13. Amendment and Waiver. This Agreement may not be changed, modified, or
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discharged orally, but only by an instrument in writing signed by the parties.
No waiver of any term or condition of this Agreement shall be effective unless
agreed to in writing between the parties.
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14. Governing Law and Severability. This Agreement shall be governed by
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the laws of the State of Connecticut (without giving effect to choice of law
principles or rules thereof that would cause the application of the laws of any
jurisdiction other than the State of Connecticut) and the invalidity or
unenforceability of any provisions hereof shall in no way affect the validity or
enforceability of any other provision. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating or affecting the remaining portion of such provision or the
other provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
15. Arbitration. All disputes regarding the Employee's employment with
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the Company or the termination thereof, including without limitation, all
disputes arising under or related to this Agreement, or the breach or alleged
breach thereof, all claims arising under Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act, the Americans with Disabilities
Act, the Family and Medical Leave Act, all other federal and state employment
discrimination laws, and all claims for wages or other compensation, personal
injury, emotional distress, pain and suffering and any and all other claims or
counterclaims between the Employee and the Company, shall be submitted to, and
solely determined by, final and binding arbitration conducted by and in
accordance with JAMS L.L.C.'s arbitration rules applicable to employment
disputes then in effect, and the parties agree to be bound by the final award of
the arbitrator in any such proceeding. Notwithstanding the foregoing, this
arbitration provision shall not apply to disputes regarding the Employee's
compliance with Section 8 of this Agreement. The arbitrator shall be held in
Stamford, Connecticut or such other place as the parties may mutually agree, and
shall be conducted only by a single arbitrator who either is agreed to by the
parties or selected in accordance with JAMS L.L.C.'s arbitration rules. Judgment
upon the award by the arbitrator may be entered in any court having jurisdiction
thereof.
16. Consultation with Counsel. The Employee acknowledges that prior to
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executing this Agreement she has had the opportunity to consult with independent
counsel of his personal choice.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.
Employee mPhase Technologies, Inc.
______________________________ By ________________________________
Xxxxx Xxxxxx Xxxxxx X. Xxxxxxx
Chief Executive Officer
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