Exhibit 10.1
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (this
“ Agreement ”), is entered into as of
November 02, 2009 (“ Effective Date ”) by
and between Dialogic Corporation (“Dialogic”) and Jean
Gagnon (“Executive”).
WHEREAS Executive has been employed
by Dialogic since June 26, 2001 (“ Start Date
”) under the terms of an offer letter as has been amended
from time to time (“ Original Employment Agreement
”) and currently occupies the position of Executive Vice
President and Chief Financial Officer.
WHEREAS Dialogic and Executive wish
to more fully set out the terms of Executive’s employment
with Dialogic and therefore desire to replace the Original
Employment Agreement with this Agreement as of the Effective
Date.
WHEREAS, notwithstanding the
foregoing, Dialogic acknowledges that, for all purposes related to
Executive’s employment, including but not limited to
Executive’s rights under this Agreement, rights under law and
rights under Dialogic policies, it shall recognize
Executive’s full term of employment, commencing on the Start
Date.
NOW, THEREFORE, in consideration of
the premises and mutual covenants set forth herein, and other
consideration, the receipt of which is hereby acknowledged,
Dialogic and Executive hereby agree as follows:
1. Preamble . The preamble of
this Agreement forms an integral part of this Agreement as if it
was recited at length herein.
2. Employment . Dialogic
agrees to continue to employ Executive and Executive hereby accepts
such continued employment with Dialogic to serve as Executive Vice
President and Chief Financial Officer for Dialogic and its direct
and indirect subsidiaries (“ Dialogic Group ”),
upon the revised terms and conditions as set forth in this
Agreement for the period beginning on the Effective Date and
continuing until the termination of Executive’s employment
with Dialogic, as permitted under Section 6 of this Agreement
(the “ Employment Period ”).
3. Position and Duties
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(a)
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During the
Employment Period, Executive shall serve as the Executive Vice
President and Chief Financial Officer of the Dialogic Group and
shall have the normal duties, responsibilities and authority of an
individual holding such position, subject to the power of the Board
of Directors of Dialogic, or its successor company, if applicable,
(in either case, the “ Board ”) to reasonably
expand or limit such duties, responsibilities and authority within
the confines of the customary duties, responsibilities and
authority commensurate with Executive’s position.
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(b)
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Executive shall
report to the President and Chief Executive Officer of Dialogic or
such other individual as the Board may designate, and Executive
shall devote his best efforts and his full business time and
attention (except for permitted vacation periods and reasonable
periods of illness or other incapacity) to the business and affairs
of the business of Dialogic and the business and affairs of all the
Dialogic Group. Executive shall perform his duties and
responsibilities to the best of his abilities in a diligent,
trustworthy, businesslike and efficient manner.
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Dialogic
Corporation 9800
Cavendish Blvd 5 th Floor Montreal Quebec Canada H4M 2V9
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www.dialogic.com
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Tel: 514
745-5500 Fax: 514 745-5588
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Page 1 of 9 with
Appendices
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(c)
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Notwithstanding
the foregoing, during the Employment Period, it shall not be a
violation of this Agreement for Executive to (i) run for and
hold public office; (ii) serve on industry trade, civic or
charitable boards or committees; (iii) deliver lectures or
fulfill speaking engagements; or (iv) manage personal
investments, as long as such activities do not negatively impact in
a material way the performance of the Executive’s duties and
responsibilities to Dialogic. During the Employment Period, the
Executive shall be permitted to serve on for-profit corporate
boards of directors and advisory committees if approved in advance
by the Board, which approval shall not be unreasonably withheld or
delayed unless the company concerned is a direct or indirect
competitor of Dialogic, in which case the Board may withhold
approval at its entire discretion.
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(d)
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Dialogic
acknowledges that Executive is required by virtue of his position
to serve as a director and officer of Dialogic and/or many other
companies in the Dialogic Group. Dialogic agrees to maintain
directors and officers insurance that will cover Executive in the
performance of his functions as a director and officer of Dialogic
and any other company in the Dialogic Group. Dialogic and Executive
have executed the indemnity agreement, attached hereto as Annex A
(“Indemnity Agreement”) and agree that the Indemnity
Agreement supercedes any previous indemnity agreements executed by
Dialogic and Executive, including the indemnity agreement executed
January 1, 2003. This Indemnity Agreement remains in effect
during and after the Employment Period.
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4. Base Salary, Bonus and
Benefits .
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(a)
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Base
Salary . During the
Employment Period, Executive’s base salary shall be as set
from time to time by the Board or a Committee of the Board (“
Compensation Committee ”), but under no circumstances
will be less than CAD$255,990 per annum (“ Base Salary
”), unless a reduction in pay is mutually agreed to by both
Executive and Dialogic. The Base Salary shall be payable in regular
installments in accordance with Dialogic’s general payroll
practices and shall be subject to customary withholding taxes and
standard payroll deductions. Notwithstanding this paragraph 4(a),
Executive and Dialogic have entered into a letter agreement dated
April 8, 2009, a copy of which is attached to this Agreement
as Annex B, providing for temporary salary reductions as part of a
company-wide initiative, and which continue in effect until
cancelled pursuant to terms of such letter agreement. However,
Dialogic and Executive agree that, for the purposes of determining
Executive’s entitlements under paragraph 6(c) of this
Agreement, such entitlements shall be calculated using the actual
Base Salary stipulated in this paragraph 4(a) irrespective of any
agreed-to temporary reduction.
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(b)
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Car Allowance
. Executive will continue to receive
an annual car allowance of CAD 7,200, which allowance shall be paid
in 24 roughly equal installments of CAD300 each on approximately
the 15 th
and last day of each calendar
month.
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(c)
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Bonus. Executive will be eligible for any bonus plan
put into place by Dialogic that covers Executive’s position,
and will be advised of the terms and conditions of such a bonus
plan when and if applicable (“Bonus”). Bonus payments
are always subject to the terms of the applicable Dialogic bonus
plan.
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(d)
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Benefits. During the Employment Period, Executive will be
entitled to participate in all of Dialogic’s employee benefit
programs for which senior executive employees of Dialogic are
generally eligible (collectively, the “ Benefits
”).
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Dialogic
Corporation 9800
Cavendish Blvd 5 th Floor Montreal Quebec Canada H4M 2V9
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www.dialogic.com
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Tel: 514
745-5500 Fax: 514 745-5588
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Page 2 of 9 with
Appendices
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(e)
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Paid Time
Off . During the
Employment Period, Executive will be entitled to paid time off,
which paid time off benefits shall accrue and shall otherwise be
administered and taken in accordance with Dialogic’s policy
for paid time off as in effect from time to time. Such paid time
off includes 20 vacation days per year and public holidays
recognized by Dialogic in Quebec, Canada, and as published in
Dialogic’s company policies, from time to time. Furthermore
during the period where the temporary salary reduction referred to
in Section 4A is in effect, Executive is entitled to an
additional two (2) paid days per month, provided that it is
scheduled and taken in accordance with Dialogic’s policy for
paid time off as in effect from time to time. Dialogic acknowledges
that Executive has exceptionally been permitted to carry over
unused vacation days from previous years, such that Executive is
currently credited with 21 days of such carried over vacation as of
April 30, 2009, which are exceeding the vacation amounts
Executive would otherwise be entitled to carry over. (“
Vacation Carry-Over Days ”). It is hereby agreed that
Executive will make reasonable efforts to use a minimum of five
(5) such Vacation Carry-Over Days per year, provided that it
is scheduled and taken in accordance with Dialogic’s policy
for paid time off as in effect from time to time.
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(f)
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Expenses. Executive acknowledges that the position of
Executive Vice President and Chief Financial Officer is one that
will require extensive travel in order to perform the specified job
responsibilities. Dialogic shall reimburse Executive for all
reasonable expenses incurred by him in the course of performing his
duties under this Agreement which are consistent with
Dialogic’s policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject to
Executive’s compliance with Dialogic’s requirements
with respect to reporting and documentation of such
expenses.
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(g)
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RRSP
Contribution . Executive
will continue to receive an RRSP contribution in the amount of a
minimum of CAD 5,400 on an annual basis which shall be directly
deposited December of each calendar year and no later than January
of the following year of each calendar year into the account
designated by Executive.
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5. Stock Options . Executive
was awarded 287,000 options in Dialogic as of January 1, 2004.
Those options have fully vested and are exercisable (“
Existing Options ”). The Existing Options give
Executive the right to subscribe for an equal number of common
shares of the capital of Dialogic (“ Shares ”)
under the terms defined in the Dialogic Amended and Restated Stock
Option Plan (“ Plan ”) at a price of $0.19 cents
CAD per Share. Executive was also awarded 100,000 options on
June 22, 2007 (“ Newer Options ”) some of
which have vested as of the Effective Date and others which shall
continue to vest under the terms of the Plan but which are solely
exercisable under the conditions set out in the Plan. The Newer
Options give Executive the right to subscribe for an equal number
of Shares under the terms defined in the Plan at a price of $1.11
USD per Share. Section 3.6 of the Plan provides for the
circumstances under which options will have an earlier termination
date than the Expiry Date defined in the Plan unless otherwise
determined by the Board. Dialogic agrees that, unless Executive is
terminated under this Agreement for Cause in accordance with
paragraph 6(a)(i), to seek approval from the Board and to recommend
to the Board to waive the early expiration provision in the case of
the Existing Options and Newer Options and any future options
received by Executive under the Plan and allow such options to
remain in full force and effect until the original Expiry Date or
until exercised, whichever is the earlier.
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Dialogic
Corporation 9800
Cavendish Blvd 5 th Floor Montreal Quebec Canada H4M 2V9
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www.dialogic.com
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Tel: 514
745-5500 Fax: 514 745-5588
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Page 3 of 9 with
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6. Termination of Employment.
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(a)
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Dialogic and
Executive agree that Executive’s employment under this
Agreement may be terminated in any of the following ways, subject
only to the terms of this Section 6:
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(i)
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By Dialogic
with Cause (as defined below) on simple notice from Dialogic to
Executive, the whole without further notice, payment in lieu of
notice, severance or any indemnity whatsoever due to
Executive;
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(ii)
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By Dialogic
without Cause upon giving Executive at least sixty (60) days
prior notice in writing of such termination (“ Notice
Period ”). During the Notice Period, and as a condition
of the benefits and payments set out in paragraph 6(c), Executive
will continue to diligently and faithfully exercise his duties and
responsibilities hereunder, including providing a successful
turnover to either his direct manager or to any other person
designated by Dialogic. Notwithstanding the foregoing, Dialogic
may, at its option and sole discretion, choose to waive the benefit
of Executive’s services for all or part of the Notice Period,
in which event, Dialogic will, in addition to its obligations under
paragraph 6(c), continue to pay Executive his Base Salary hereunder
for such remaining part of the Notice Period, up to a maximum of 60
days from the date on which such notice of termination is given.
Without prejudice to the foregoing, Executive and Dialogic may
mutually agree for Executive to take all or part of his accrued and
untaken vacation during the Notice Period;
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(iii)
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As a result of
Executive’s resignation upon Executive’s providing
Dialogic with at least sixty (60) days prior notice in writing
of his intention to resign (“ Notice of Resignation
Period ”). During the Notice of Resignation Period,
Executive will continue to diligently and faithfully exercise his
duties and responsibilities hereunder, including providing a
successful turnover to either his direct manager or to any other
person designated by Dialogic. Notwithstanding the foregoing,
Dialogic may, at its option and sole discretion, choose to waive
all or part of the Notice of Resignation Period, in which event,
Dialogic will, in addition to any obligations it may have under
paragraph 6(b), continue to pay Executive his Base Salary hereunder
for such remaining part of the Notice of Resignation Period, up to
a maximum of 60 days from the date on which such notice of
resignation is given. Without prejudice to the foregoing, Executive
and Dialogic may mutually agree for Executive to take all or part
of his accrued and untaken vacation during the Notice of
Resignation Period.
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(iv)
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As a result of
Executive’s Death or Disability;
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(v)
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As a result of
Executive’s Constructive Dismissal (as defined
below).
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(b)
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In the event
that Executive’s employment is terminated with Cause under
paragraph 6(a)(i) or of Executive’s resignation under
paragraph 6(a)(iii), Executive’s employment hereunder will be
deemed to have ended as of the date on which notice of termination
is given or the last day of the Notice of Resignation Period, as
the case may be, and Executive shall be entitled to receive only
his Base Salary through to such date, as well as all accrued and
untaken vacation including the Vacation Carry- Over Days as per
Dialogic’s policy, subject to all applicable withholding and
other appropriate deductions.
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Dialogic
Corporation 9800
Cavendish Blvd 5 th Floor Montreal Quebec Canada H4M 2V9
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www.dialogic.com
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Tel: 514
745-5500 Fax: 514 745-5588
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Page 4 of 9 with
Appendices
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(c)
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In the event
that Executive’s employment is terminated without Cause under
paragraph 6(a)(ii), as a result of Executive’s Constructive
Dismissal under paragraph 6(a)(v) or as a result of
Executive’s Disability under paragraph 6(a)(iv),
Executive’s employment hereunder will be deemed to have ended
as of (a) the last day of the Notice Period, (b) the date
on which Executive gives notice of his intent to resign as a result
of an event of Constructive Dismissal, or (c) the date on
which Executive is notified of the termination of his employment as
a result of Disability, as the case may be (in each case, the
“ Termination Date ”), and Executive shall be
entitled to receive, in addition to any notice entitlement under
paragraph 6(a)(ii), and subject to all applicable withholding and
other appropriate deductions:
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(i)
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Base Salary
through the Termination Date;
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(ii)
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Any then
accrued and unpaid Bonus for any fiscal year of Dialogic which
ended prior to the Termination Date and to which Executive is
entitled under the terms of the applicable bonus plan, in which
case such Bonus will be paid on the date such Bonus would otherwise
have been payab
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