EMPLOYMENT AGREEMENT
This Employment Agreement (this "AGREEMENT") is entered into as of
January 15, 1996 (the "EFFECTIVE DATE") between HYBRID NETWORKS, INC., a
California corporation (the "COMPANY"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
("▇▇▇▇▇▇▇▇▇").
The parties hereby agree as follows:
1. TERM OF EMPLOYMENT; POSITION. Subject to the terms and conditions
of this Agreement, the Company hereby agrees to employ ▇▇▇▇▇▇▇▇▇ on a full-
time basis as the Company's Chief Executive Officer during the two year period
commencing on the Effective Date and expiring on the second anniversary of the
Effective Date (such time period is hereinafter called the "EMPLOYMENT TERM")
unless ▇▇▇▇▇▇▇▇▇'▇ employment and the Employment Term are sooner terminated in
accordance with the provisions of Section 4 below. ▇▇▇▇▇▇▇▇▇ hereby agrees to
such employment.
2. ▇▇▇▇▇▇▇▇▇'▇ DUTIES; NONCOMPETITION. ▇▇▇▇▇▇▇▇▇ will be responsible
for managing the Company as its Chief Executive Officer in accordance with the
Company's Bylaws and subject to the direction of the Company's Board of
Directors. He will move to the vicinity of the Company's offices in
Cupertino, and his office will be in the Company's headquarters building.
During the Employment Term, ▇▇▇▇▇▇▇▇▇ will not, without the prior written
consent of the Company, engage in, or provide services to, any organization,
association or business that is in competition with or detrimental to the
business of the Company.
3. COMPENSATION AND BENEFITS.
3.1 SALARY AND BONUSES. During the Employment Term, the Company
will pay ▇▇▇▇▇▇▇▇▇, in equal semi-monthly installments, salary at the rate of
$175,000 per year. In addition, ▇▇▇▇▇▇▇▇▇ will be eligible for three bonuses
during the first year of his employment, to be paid as follows:
(a) $25,000 when he has assembled his management team.
(b) $25,000 for meeting the expense target referred to below.
(c) $25,000 for meeting the revenue plan referred to below.
Within the first 90 days of the Employment Term, ▇▇▇▇▇▇▇▇▇ will develop with
the management team an expense target and a revenue plan for the Company, and
he will present such target and plan to the Company's Board of Directors for
approval or modification. Such approval will not be unreasonably withheld,
and any such modification will not be made unreasonably. The final target and
plan, as approved by the Board of Directors, will constitute the expense
target and revenue plan referred to in (b) and (c) above.
3.2 EMPLOYEE BENEFITS. ▇▇▇▇▇▇▇▇▇ will be entitled to participate
in all benefit programs that the Company establishes and makes available to
its employees generally.
3.3 WITHHOLDING. The Company will withhold from all payments of
salary and other compensation to ▇▇▇▇▇▇▇▇▇, payroll withholding taxes and
other amounts that the Company is required to withhold from such payments
under applicable law.
3.4 RELOCATION COSTS. The Company will reimburse ▇▇▇▇▇▇▇▇▇ for up
to $50,000 of actual and reasonable expenses for the relocation of his family
and household goods to California and up to $30,000 of actual and reasonable
expenses for temporary housing while he accomplishes the relocation. In
addition, the Company will pay ▇▇▇▇▇▇▇▇▇ up to $17,500 of actual and
reasonable expenses to purchase tickets for his family to travel to and from
California while he is employed by the Company and in the process of
relocation. The parties anticipate that the relocation will be completed
within six months after the Effective Date. The amount paid by the Company
pursuant to this Section 3.4 will be repaid by ▇▇▇▇▇▇▇▇▇ pro rata if he
voluntarily terminates his employment with the Company before the end of such
six-month period.
3.5 STOCK OPTION. The Company will grant to ▇▇▇▇▇▇▇▇▇ options to
purchase 953,379 shares of the Company's Common Stock pursuant to the
Company's Executive Officer Incentive Plan and the related Stock Option
Agreement, copies of which have been provided to ▇▇▇▇▇▇▇▇▇.
4. TERMINATION. During the Employment Term, the Company will not
terminate ▇▇▇▇▇▇▇▇▇'▇ employment other than for Cause (as defined in Section
4.2). Notwithstanding anything herein to the contrary, the Employment Term,
the employment of ▇▇▇▇▇▇▇▇▇ by the Company and this Agreement may be
terminated in accordance with the following:
4.1 EXPIRATION. Immediately, upon expiration of the Employment
Term in accordance with Section 1 hereof.
4.2 FOR CAUSE. By the Company, immediately for Cause (as defined
in this Section 4.2). For the purposes of this Agreement, the term "CAUSE"
will be deemed to exist upon: (a) a good faith finding by the Company that
▇▇▇▇▇▇▇▇▇ has willfully failed to perform his lawful assigned duties for the
Company or abandoned his employment with the Company in any manner; (b) a good
faith finding by the Company of dishonesty, gross negligence or intentional
misconduct on the part of ▇▇▇▇▇▇▇▇▇ (including but not limited to
misappropriation of intellectual property of the Company or of others); or (c)
the conviction of ▇▇▇▇▇▇▇▇▇ of any felony.
4.3 VOLUNTARY TERMINATION. Immediately, upon ▇▇▇▇▇▇▇▇▇'▇
resignation from the Company or any other voluntary termination by ▇▇▇▇▇▇▇▇▇
of his employment with the Company (a "VOLUNTARY TERMINATION").
4.4 DEATH. Immediately, upon the death of ▇▇▇▇▇▇▇▇▇.
4.5 DISABILITY. By the Company, immediately after 30 days' notice,
upon the disability of ▇▇▇▇▇▇▇▇▇. As used in this Agreement, the term
"DISABILITY" will
-2-
mean the material inability of ▇▇▇▇▇▇▇▇▇, due to a physical or mental
disability, to perform the services and duties of ▇▇▇▇▇▇▇▇▇ contemplated by
this Agreement for a period of at least 90 days (whether or not such 90 days
are consecutive) during any twelve-month period. The Company will promptly
notify ▇▇▇▇▇▇▇▇▇ in writing if it determines that ▇▇▇▇▇▇▇▇▇'▇ employment has
been terminated due to disability.
5. EFFECT OF TERMINATION.
5.1 TERMINATION FOR CAUSE; VOLUNTARY TERMINATION. If ▇▇▇▇▇▇▇▇▇'▇
employment is terminated for any reason, then the Company will pay to
▇▇▇▇▇▇▇▇▇ the salary and benefits accrued and otherwise payable to him under
Section 3.1 and Section 3.2 through the effective date of termination.
5.2 SURVIVAL. Notwithstanding anything to the contrary in this
Agreement, all obligations of the Company and ▇▇▇▇▇▇▇▇▇ under this Agreement
which, according to the terms of this Agreement are required to be performed
after termination or expiration of this Agreement, will survive termination or
expiration of this Agreement, and such surviving obligations of a party will
remain enforceable against that party.
6. PROPRIETARY INFORMATION AGREEMENT. Nothing in this Agreement will
affect or modify the terms of ▇▇▇▇▇▇▇▇▇'▇ Employee Proprietary Information and
Inventions Agreement with the Company, which will remain in full force and
effect.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior or concurrent agreements, understandings, representations
or warranties, whether written or oral, between the Company and ▇▇▇▇▇▇▇▇▇.
7.2 AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by both the Company and ▇▇▇▇▇▇▇▇▇.
7.3 GOVERNING LAW; SEVERABILITY. This Agreement will be construed,
interpreted and enforced in accordance with the laws of the State of
California as applied to agreements entered into in California by California
residents without reference to principles of conflict of laws or choice of
law. In case any provision of this Agreement will be invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions will in no way be affected or impaired thereby.
7.4 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon
and inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business; PROVIDED, HOWEVER, that
the obligations of ▇▇▇▇▇▇▇▇▇ hereunder are personal and will not be assigned
by him.
-3-
7.5 WAIVER. No delay or omission by the Company in exercising any
right under this Agreement will operate as a waiver of that or any other
right. A waiver or consent given by the Company on any one occasion will be
effective only in that instance and will be construed as a bar or waiver of
any right on any other occasion.
7.6 CAPTIONS. The captions of the sections of this Agreement are
for convenience of reference only and in no way define, limit or affect the
scope or substance of any section of this Agreement.
7.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, and all of which
together will be one instrument.
8. ADVICE TO SEEK COUNSEL. ▇▇▇▇▇▇▇▇▇ ACKNOWLEDGES TO THE COMPANY THAT
HE HAS BEEN ADVISED BY THE COMPANY TO RETAIN AN INDEPENDENT ATTORNEY TO ADVISE
HIM REGARDING HIS RIGHTS, OBLIGATIONS AND INTERESTS UNDER THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first set forth above.
HYBRID NETWORKS, INC. ▇▇▇▇▇▇▇▇▇
a California corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ 15 Jan 96 /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 15 Jan 1996
---------------------------------- --------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: CEO
-------------------------------
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
-4-