EMPLOYMENT AGREEMENT
OF ▇▇▇▇▇ ▇▇▇▇▇▇
WITH
PHASECOM, INC.
THIS EMPLOYMENT AGREEMENT (this "Agreement"), made and entered into
effective as of the 22nd day of November, 1999, by and between PHASECOM, INC., a
Delaware corporation (hereinafter the "Corporation"), and ▇▇▇▇▇ ▇▇▇▇▇▇
(hereinafter "▇▇▇▇▇▇").
RECITALS
A. The Corporation has offered employment to ▇▇▇▇▇▇ as Senior Vice
President for Business Development.
B. In connection with Kohavi's employment with the Corporation, the
Corporation and ▇▇▇▇▇▇ desire to enter into this Employment Agreement according
to the terms and conditions set forth below.
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree as follows:
a. EMPLOYMENT DUTIES.
a. GENERAL. The Corporation hereby agrees to employ ▇▇▇▇▇▇, and ▇▇▇▇▇▇
hereby agrees to accept employment with the Corporation, on the terms and
conditions hereinafter set forth.
b. CORPORATION'S DUTIES. The Corporation shall allow ▇▇▇▇▇▇ to, and
▇▇▇▇▇▇ shall, perform responsibilities normally incident to the position of
Senior Vice President, Business Development of the Corporation, commensurate
with his background, education, experience and professional standing. The
Corporation shall provide ▇▇▇▇▇▇ with such office equipment, supplies, customary
services and cooperation suitable for the performance of his duties. ▇▇▇▇▇▇ also
shall be responsible for overseeing investor relations.
▇. ▇▇▇▇▇▇'▇ DUTIES. Unless otherwise agreed to by the parties, ▇▇▇▇▇▇
shall serve as Senior Vice President, Business Development of the Corporation.
▇▇▇▇▇▇ shall devote all of his productive time, attention, energy and skill to
the business of the Corporation, and shall not become engaged to render similar
services on behalf of any other entity while employed hereunder which is in any
way competitive to the Corporation, without the consent of the Corporation's
Chairman of the Board. ▇▇▇▇▇▇ shall report directly to the Chairman of the Board
of the Corporation. ▇▇▇▇▇▇ shall inform the Chairman of the Board of any other
positions that he takes with any other entity. Kohavi's duties shall be
performed primarily in Cupertino, California.
a. TERM. The initial term of this employment is eighteen (18) months.
Thereafter, this Agreement may be renewed by ▇▇▇▇▇▇ and the Corporation on such
terms as the parties may agree to in writing. Absent written notice to the
contrary, thirty (30) days prior to the end of the initial eighteen (18) month
employment term, this Agreement will be renewed for consecutive six (6) month
extensions. Should the term of employment not be renewed after the expiration of
the first eighteen (18) month term, ▇▇▇▇▇▇ shall be entitled to six (6) months
salary as severance, in exchange for a release as to any and all claims ▇▇▇▇▇▇
may have against the Corporation.
b. COMPENSATION. ▇▇▇▇▇▇ shall be compensated as follows:
a. FIXED SALARY. ▇▇▇▇▇▇ shall receive a fixed annual salary of One
Hundred Fifty-five Thousand Dollars ($155,000). The Corporation agrees to review
the fixed salary on, or before, January 1, 2001, and thereafter at the end of
each calendar year during the employment term based upon Kohavi's services and
the financial results of the Corporation, and to make such increases as may be
determined appropriate in the sole discretion of the Corporation.
b. PAYMENT. Kohavi's fixed salary shall be payable on a semi-monthly
basis, in accordance with the Corporation's usual payroll practices.
c. BONUS COMPENSATION. During the Employment Term, ▇▇▇▇▇▇ shall
participate in each bonus plan adopted by the Corporation's Board of Directors.
Commencing in 2000, ▇▇▇▇▇▇ shall be entitled to receive an annual bonus equal to
(i) twenty-five percent (25%) of his annual base salary should the Corporation
meet eighty percent (80%) of its plan as presented to the Board in January of
each year, during the term of Kohavi's employment ("Yearly Plan"); (ii)
seventy-five percent (75%) of his annual base salary should the Corporation meet
its Yearly Plan; and (iii) one hundred twenty-five percent (125%) of his annual
base salary should the Corporation meet one hundred twenty percent (120%) of its
Yearly Plan, with the bonus prorated if the Yearly Plan is met between eighty
percent (80%) and one hundred percent (100%); or between one hundred percent
(100%) and one hundred twenty percent (120%). For purposes of this Section, the
meeting of the Yearly Plan shall be based upon the actual revenues and earnings
per share for each applicable year (each weighted fifty percent (50%)) compared
to the revenues and earnings per share projected in the Yearly Plan (with each
item weighted fifty percent (50%)), and no item shall be counted if it is not at
least eighty percent (80%) met. The bonus shall be payable only if Kohavi's
employment extends for the full calendar year. It may be prorated at the
discretion of the Chairman of the Board should Kohavi's employment terminate
prior to the full calendar year.
d. STOCK OPTIONS. ▇▇▇▇▇▇ shall be eligible for certain stock option
that may be awarded by the Corporation, from time to time, in recognition of
Kohavi's contribution to the Corporation's success. The initial option grant
shall vest as follows: 25% immediately; 25% in six (6) months; 25% in twelve
(12) months; and the balance within eighteen (18) months from issuance, subject
to the approval of the Corporation's Board of Directors or Compensation
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Committee, as appropriate.
e. VACATION. ▇▇▇▇▇▇ shall accrue paid vacation at the rate of twenty
(20) days for each twelve (12) months of employment. ▇▇▇▇▇▇ shall be compensated
at his usual rate of compensation during any such vacation. ▇▇▇▇▇▇ shall be
entitled to paid holidays as generally given by the Corporation. ▇▇▇▇▇▇ shall
receive sick leave or disability leave in accordance with the terms of the
Corporation's standard sick leave or disability leave policy.
f. BENEFITS. During the employment term, ▇▇▇▇▇▇ and his dependents
shall be entitled to participate in any group plans or programs maintained by
the Corporation for any employees relating to group health, disability, life
insurance and other related benefits as in effect from time to time.
c. EXPENSES. The Corporation shall reimburse ▇▇▇▇▇▇ for his normal and
reasonable expenses incurred for travel, entertainment and similar items in
promoting and carrying out the business of the Corporation in accordance with
the Corporation's general policy as adopted by the Corporation's management from
time to time. As a condition of payment or reimbursement, ▇▇▇▇▇▇ agrees to
provide the Corporation with copies of all available invoices and receipts, and
otherwise account to the Corporation in sufficient detail to allow the
Corporation to claim an income tax deduction for such paid item, if such item is
deductible. Reimbursements shall be made on a monthly, or more frequent, basis.
d. CONFIDENTIALITY AND COMPETITIVE ACTIVITIES. ▇▇▇▇▇▇ agrees that during the
employment term he is in a position of special trust and confidence and has
access to confidential and proprietary information about the Corporation's
business and plans. ▇▇▇▇▇▇ agrees that he will not directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, or in any similar individual or
representative capacity, engage or participate in any business that is in
competition, in any manner whatsoever, with the Corporation. Notwithstanding
anything in the foregoing to the contrary, ▇▇▇▇▇▇ shall be allowed to invest as
a shareholder in publicly traded companies, or through a venture capital firm or
an investment pool.
e. TRADE SECRETS.
a. SPECIAL TECHNIQUES. It is hereby agreed that the Corporation has
developed or acquired certain products, technology, unique or special methods,
manufacturing and assembly processes and techniques, trade secrets, special
written marketing plans and special customer arrangements, and other proprietary
rights and confidential information and shall during the employment term
continue to develop, compile and acquire said items (all hereinafter
collectively referred to as the "Corporation's Property"). It is expected that
▇▇▇▇▇▇ will gain knowledge of and utilize the Corporation's Property during the
course and scope of his employment with the Corporation, and will be in a
position of trust with respect to the Corporation's Property.
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b. CORPORATION'S PROPERTY. It is hereby stipulated and agreed that the
Corporation's Property shall remain the Corporation's sole property. In the
event that Kohavi's employment is terminated, for whatever reason, ▇▇▇▇▇▇ agrees
not to copy, make known, disclose or use, any of the Corporation's Property
without the Corporation's prior written consent. In such event, ▇▇▇▇▇▇ further
agrees not to endeavor or attempt in any way to interfere with or induce a
breach of any prior proprietary contractual relationship that the Corporation
may have with any employee, customer, contractor, supplier, representative, or
distributor for nine (9) months after any termination of this Agreement. ▇▇▇▇▇▇
agrees upon termination of employment to deliver to the Corporation all
confidential papers, documents, records, lists and notes (whether prepared by
▇▇▇▇▇▇ or others) comprising or containing the Corporation's Property. ▇▇▇▇▇▇
recognizes that violation of covenants and agreements contained in this Section
6 may result in irreparable injury to the Corporation which would not be fully
compensable by way of money damages.
f. TERMINATION.
a. GENERAL. The Corporation may terminate this Agreement without cause,
on sixty (60) days written notice. ▇▇▇▇▇▇ may voluntarily terminate his
employment hereunder upon sixty (60) days' advance written notice to the
Corporation.
b. TERMINATION FOR CAUSE. The Corporation may immediately terminate
Kohavi's employment at any time for cause. Termination for cause shall be
effective from the receipt of written notice thereof to ▇▇▇▇▇▇ specifying the
grounds for termination and all relevant facts. Cause shall be deemed to
include: (i) material neglect of his duties or a significant violation of any of
the provisions of this Agreement, which continues after written notice and a
reasonable opportunity (not to exceed thirty (30) days) in which to cure; (ii)
fraud, embezzlement, defalcation or conviction of any felonious offense; or
(iii) intentionally imparting confidential information relating to the
Corporation, PhaseCom or any of PhaseCom's subsidiaries, or their business, to
competitors or to other third parties other than in the course of carrying out
his duties hereunder. The Corporation's exercise of its rights to terminate with
cause shall be without prejudice to any other remedy it may be entitled at law,
in equity, or under this Agreement.
c. TERMINATION UPON DEATH OR DISABILITY. This Agreement shall
automatically terminate upon Kohavi's death. In addition, if any disability or
incapacity of ▇▇▇▇▇▇ to perform his duties as the result of any injury,
sickness, or physical, mental or emotional condition continues for a period of
thirty (30) business days (excluding any accrued vacation) out of any one
hundred twenty (120) calendar day period, the Corporation may terminate Kohavi's
employment upon written notice. Payment of salary to ▇▇▇▇▇▇ during any sick
leave shall only be to the extent that ▇▇▇▇▇▇ has accrued sick leave or vacation
days. ▇▇▇▇▇▇ shall accrue sick leave at the same rate generally available to the
Corporation's employees.
▇. ▇▇▇▇▇▇▇▇▇ PAY. If this Agreement is terminated by the Corporation
without cause pursuant to Section 7.a. (above), or if after the initial eighteen
(18) month term, the Corporation
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shall pay ▇▇▇▇▇▇ a severance fee equal to the greater of (a) the full amount of
the compensation that he could have expected under this Agreement, as and when
payable under this Agreement, without deduction except for tax withholding
amounts, through the end of the term; or (b) six (6) months of his then-current
salary without bonus, subject to tax withholding amounts. There shall be no
severance in the event that this Agreement is terminated for cause in accordance
with Section 7.b. During the time period that ▇▇▇▇▇▇ is receiving severance pay,
he shall remain as a full-time employee of the Corporation in a non-policy
making role, and his options shall continue to vest. The foregoing sentence
shall be applicable only for the first eighteen (18) months of this Agreement.
g. CORPORATE OPPORTUNITIES.
a. DUTY TO NOTIFY. In the event that ▇▇▇▇▇▇, during the employment
term, shall become aware of any material and significant business opportunity
directly related to any of the Corporation's significant businesses, ▇▇▇▇▇▇
shall promptly notify the Corporation's Chairman of the Board of such
opportunity. ▇▇▇▇▇▇ shall not appropriate for himself or for any other person
other than the Corporation, or any affiliate of the Corporation, any such
opportunity unless, as to any particular opportunity, the Board of Directors of
the Corporation fails to take appropriate action within thirty (30) days.
Kohavi's duty to notify the Corporation and to refrain from appropriating all
such opportunities for thirty (30) days shall neither be limited by, nor shall
such duty limit, the application of the general law of California relating to
the fiduciary duties of an agent or employee.
b. FAILURE TO NOTIFY. In the event that ▇▇▇▇▇▇ fails to notify the
Corporation of, or so appropriates, any such opportunity without the express
written consent of the Corporation, ▇▇▇▇▇▇ shall be deemed to have violated the
provisions of this Section notwithstanding the following:
i. The capacity in which ▇▇▇▇▇▇ shall have acquired such
opportunity; or
ii. The probable success in the Corporation's hands of such
opportunity.
h. MISCELLANEOUS.
a. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties with respect to the subject matters
herein, and supersedes and replaces any prior agreements and understandings,
whether oral or written between them with respect to such matters. The
provisions of this Agreement may be waived, altered, amended or repealed in
whole or in part only upon the written consent of both parties to this
Agreement.
b. NO IMPLIED WAIVERS. The failure of either party at any time to
require performance by the other party of any provision hereof shall not affect
in any way the right to require such performance at any time thereafter, nor
shall the waiver by either party of a breach of any provision hereof be taken or
held to be a waiver of any subsequent breach of the same provision or any other
provision.
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c. PERSONAL SERVICES. It is understood that the services to be
performed by ▇▇▇▇▇▇ hereunder are personal in nature and the obligations to
perform such services and the conditions and covenants of this Agreement cannot
be assigned by ▇▇▇▇▇▇. Subject to the foregoing, and except as otherwise
provided herein, this Agreement shall inure to the benefit of and bind the
successors and assigns of the Corporation.
d. SEVERABILITY. If for any reason any provision of this Agreement
shall be determined to be invalid or inoperative, the validity and effect of the
other provisions hereof shall not be affected thereby, provided that no such
severability shall be effective if it causes a material detriment to any party.
e. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, applicable to contracts
between California residents entered into and to be performed entirely within
the State of California.
f. NOTICES. All notices, requests, demands, instructions or other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given upon delivery, if
delivered personally, or if given by prepaid telegram, or mailed first-class,
postage prepaid, registered or certified mail, return receipt requested, shall
be deemed to have been given seventy-two (72) hours after such delivery, if
addressed to the other party at the addresses as set forth on the signature page
below. Either party hereto may change the address to which such communications
are to be directed by giving written notice to the other party hereto of such
change in the manner above provided.
g. MERGER, TRANSFER OF ASSETS, OR DISSOLUTION OF THE CORPORATION. This
Agreement shall not be terminated by any dissolution of the Corporation
resulting from either merger or consolidation in which the Corporation is not
the consolidated or surviving corporation or a transfer of all or substantially
all of the assets of the Corporation. In such event, the rights, benefits and
obligations herein shall automatically be assigned to the surviving or resulting
corporation or to the transferee of the assets.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PHASECOM, INC. ▇▇▇▇▇ ▇▇▇▇▇▇
a Delaware corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇. ▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ -------------------------------
(Signature)
-------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------- -------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel (Print Address)
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