EXECUTIVE EMPLOYMENT
AGREEMENT
This
Executive Employment
Agreement (the “ Agreement ”),
between Caveo Networks (the “ Company ”)
and Syed Ali (“ Executive ”), is made
this 2 nd day of January 2001.
A. The
Company desires assurance of the association and services of
Executive in order to retain Executive’s experience, skills,
abilities, background and knowledge, and is willing to engage
Executive’s services on the terms and conditions set forth in
this Agreement.
B. Executive
desires to be in the employ of the Company, and is willing to
accept such employment on the terms and conditions set forth in
this Agreement.
C. Company
and Executive wish to enter into an employment relationship with a
written Employment Agreement intended to supersede all other
written and oral representations regarding Executive’s
employment with Company.
Now, Therefore , based on the
foregoing recitals and in consideration of the commitments set
forth below, Executive and Company agree as follows:
1. Position, Duties, Responsibilities
1.1 Position. Effective as of December 4, 2000,
Executive is employed by Company to render services to Company in
the position of President. The duties of this position shall
include full operation and profit and loss responsibility, ultimate
executive management responsibility and the responsibility of
managing Company’s legal, intellectual property, and business
development activities. Additionally, Executive shall serve in such
other capacity or capacities as the Board of Directors of the
Company may from time to time prescribe, subject to the provisions
of Section 5 below. During his employment by the Company,
Executive shall devote his full energies, interest, abilities and
productive time to the proper and efficient performance of his
duties under this Agreement.
1.2 Other Activities. Except upon the prior written consent
of the Company, Executive will not engage, directly or indirectly,
in any other business activity (whether or not pursued for
pecuniary advantage) that is or may be in conflict with, or that
might place Executive in a conflicting position to that of, the
Company.
1.3 Proprietary Information. Executive recognizes that his
employment with the Company will involve contact with information
of substantial value to the Company, which is not generally known
in the trade, and which gives the Company an advantage over its
competitors who do not know or use it. As a condition of this
Agreement, Executive will sign and return a copy of the
Company’s “Proprietary Information and Inventions
Agreement,” attached as Exhibit A.
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2. Compensation of Executive
2.1 Salary. In consideration of the services to be rendered
under this Agreement, while employed by the Company, Company shall
pay Executive an initial base annual salary equivalent to one
hundred seventy-five thousand dollars ($175,000), less standard
deductions and withholdings, payable in regular periodic payments
in accordance with Company policy. Such salary shall be prorated
for any partial month of employment on the basis of a 30-day fiscal
month.
2.2 Benefits. Executive shall be eligible to participate in
the Company’s benefit plans and to receive perquisites of
employment, including ten (10) days per year of paid vacation
and reasonable reimbursement for necessary expenses, as established
by Company, and as may be amended from time to time.
Company or
Executive may terminate Executive’s employment with Company
at any time for any reason, including no reason at all,
notwithstanding anything to the contrary contained in or arising
from any statements, policies, or practices of Company relating to
the employment, discipline, or termination of its Executives. This
at-will employment relationship cannot be changed except in writing
signed by a duly authorized officer of the Company other than
Executive.
4. Outside Activities Limited
Executive shall
not maintain employment, directorships or other positions in other
companies without the prior approval of the Board of Directors.
Executive may engage in business activities separate and apart from
the Company only with the prior approval of the Board of
Directors.
5. Termination of Employment
5.1 Severance Payments and Benefits. If the Company
terminates Executive’s employment Not For Cause (as defined
below), or Executive is constructively terminated (as defined
below), the Company will pay Executive all compensation due and
owing through the last day actually worked, and Executive shall
receive the following severance payments and benefits; provided,
however, that such severance and benefits are conditioned on
Executive’s execution of a release agreement in a form
satisfactory to the Company.
5.1.1 Termination Not For Cause by the Company. The Company
will continue to pay to Executive a sum equal to fourteen thousand
five hundred eighty-three dollars ($14,583) per month for a period
of twelve (12) months.
5.1.2 Health Insurance. Within the time prescribed by law,
upon termination of Executive’s employment, Executive shall
elect under the Federal COBRA law to continue to receive his health
insurance benefits under the Company’s group health insurance
then in effect. The Company shall reimburse Executive for the
payment of such benefits for a period of twelve (12) months
after Executive’s termination, if terminated Not For
Cause
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provided that
Executive makes the appropriate COBRA election. If COBRA or similar
benefits are not available by law, then the Company shall reimburse
Executive up to one thousand dollars ($1,000) per month for twelve
(12) months after termination Not For Cause for health
insurance and/or benefits.
5.1.3 Mitigation of Severance Benefits. If Executive obtains
full time employment, or the equivalent of full-time employment
(e.g. consulting work), (i) the payments under this
Section 5.1 shall be decreased by the amount of salary or fees
paid by such other work; provided, however, that such decrease
shall not exceed the sum of fifty thousand dollars ($50,000), and
(ii) the Company’s reimbursement of Executive’s
health benefits provided under Section 5.1.2 shall cease if
substantially similar health benefits are provided to Executive in
connection with such other work. Within ten (10) business days
of accepting such employment, Executive agrees to notify the
Company arid to provide a summary of relevant terms of such
employment in writing.
5.1.4 Other Compensation or Benefits. Executive acknowledges
that except as expressly provided in this Agreement, he will not
receive any additional compensation, severance or benefits after
Executive’s termination of employment or other
work.
5.2 Termination for Cause by the Company. In the event that
Company terminates Executive’s employment for Cause, Company
shall pay Executive all compensation due and owing through the last
day actually worked and thereafter Company’s obligations
under this Agreement shall terminate. For the purposes of this
Agreement, “ Cause ” shall mean:
(i) any act or failure to act by Executive that was performed
in bad faith and to the material detriment of the Company;
(ii) Executive refuses or fails to act in accordance with any
lawful, reasonable direction or order of the Board of Directors of
the Company and such refusal or failure has a materially adverse
effect on the Company’s business; (iii) Executive
exhibits willful misconduct or dishonesty in the management of the
affairs of the Company; or (iv) Executive is convicted of a
felony and such conviction has a materially adverse effect on the
Company or on Executive’s ability to serve as an employee of
the Company. For purposes of this Agreement, the term “
Not For Cause ” shall mean termination of
Executive’s employment for reasons other than for
“Cause.”
5.3 Termination by Executive. In the event that Executive
voluntarily elects to terminate his employment (and is not
constructively discharged, as defined herein), the Company shall
pay Executive all compensation due and owing through the last day
actually worked and thereafter Company’s obligations under
this Agreement shall terminate. For purposes of this Agreement,
constructive termination or discharge shall mean any of the
following events or conditions unless consented to by Executive:
(i) a material reduction or change of Executive’s job
title, job duties, responsibilities or requirements that is
inconsistent with the position or positions listed in
Section 1.1 hereof; (ii) a material reduction in
Executive’s salary or benefits then in effect; (iii) the
headquarters of the Company are relocated to, or the Company
requires Executive to relocate to, a facility or location more than
100 miles from the Company’s current location; or
(iv) the Company breaches any material provision of this
Agreement, which breach is not cured within thirty (30) days
after written notice thereof to the Board from
Executive.
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6. Termination Obligations
6.1 Return of Company’s Property. Executive hereby
acknowledges and agrees that all books, manuals, records, reports,
notes, contracts, lists, blueprints, and other documents, or
materials, or copies thereof, and equipment furnished to or
prepared by Executive in the course of or incident to
Executive’s employment, belong to Company and shall be
promptly returned to Company upon termination of Executive’s
employment.
6.2 Representations and Warranties Survive Termination of
Employment. The representations and warranties contained
herein, except Executive’s obligations under
Section 1.1, shall survive termination of Executive’s
employment and expiration of this Agreement.
6.3 Cooperation in Pending Work. Following any termination
of Executive’s employment, Executive shall reasonably
cooperate with Company in all matters relating to the winding up of
pending work on behalf of Company and the orderly transfer of work
to other employees of Company. Executive shall also cooperate in
the defense of any action brought by any third party against
Company that relates in any way to Executive’s acts or
omissions while employed by Company. The Company shall reimburse
the Executive for his reasonable out-of-pocket costs incurred to
cooperate and pay Executive an hourly rate based upon his base
salary.
7. Restrictions on Competition After
Termination
7.1 Reasons for Restriction. Executive acknowledges that the
nature of the Company’s business is such that it would be
extremely difficult for Executive to honor and comply with
Executive’s obligation under the Proprietary Information and
Inventions Agreement to keep secret and confidential the
Company’s trade secrets if Executive were to become employed
by or substantially interested in the business of a competitor of
the Company soon following the termination of Executive’s
employment with the Company, and it would also be extremely
difficult to determine in any reasonably available forum the extent
to which Executive was or was not complying with Executive’s
obligations under such circumstances.
7.2 Duration of Restriction. In consideration for the
payments and benefits under this Agreement, Executive agrees that
for a period of eighteen (18) months after the termination of
Executive’s employment, Executive will not directly or
indirectly engage in (whether as an employee, consultant,
proprietor, partner, director or otherwise), or have any ownership
interest in, or participate in the financing operation, management
or control of, any person, firm, corporation or business that
engages in the business of the Company in North America, Asia,
Europe, Australia and any other countries where the Company
conducts business (“ Restricted Territory
”). The parties agree that ownership of no more than I% of
the outstanding voting stock of a publicly traded corporation or
other entity shall not constitute a violation of this provision.
The parties intend that the covenants contained in this section
shall be construed as a series of separate covenants, one for each
county, city, state and other political subdivision of the
Restricted Territory. Except for geographic coverage, each such
separate covenant shall be deemed identical in terms to the
covenant contained in this section. If, in any judicial proceeding,
a court shall refuse to enforce any of the separate covenants (or
any part thereof)
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deemed included
in this section, then such unenforceable covenant (or such part)
shall be deemed eliminated from this Agreement for the purpose of
those proceedings to the extent necessary to permit the remaining
separate covenants (or portions thereof) to be enforced by such
court. it is the intent of the parties that the covenants set forth
herein be enforced to the maximum degree permitted by applicable
law.
8. Restrictions on Solicitation After
Termination
For a period of
eighteen (18) months following the termination of
Executive’s employment hereunder for any reason, Executive
shall not, without the prior written consent of the Company,
directly or indirectly, as a sole proprietor, member of a
partnership, stockholder or investor, officer or director of a
corporation, or as an executive, associate, consultant, independent
contractor or agent of any person, partnership, corporation or
other business organization or entity other than the Company
(i) solicit or endeavor to entice away from the Company any
person or entity who is, or, during the then most recent eighteen
(18) month period, was, employed by, or had served as an agent
or key consultant of the Company, or (ii) solicit or endeavor
to entice away from the Company any person or entity who is, or was
within the then most recent eighteen (18) month period, a
customer or client (or reasonably anticipated (to the general
knowledge of Executive or the public) to become a customer or
client) of the Company, provided, however, that Executive shall not
be prohibited from receiving and responding to unsolicited requests
for employment or career advice from Company’s
employees.
The terms of this
Agreement are intended by the parties to be the final and exclusive
expression of their agreement with respect to the employment of
Executive by Company and may not be contradicted by evidence of any
prior or contemporaneous statements or agreements. The parties
further intend that this Agreement shall constitute the complete
and exclusive statement of its terms and that no extrinsic evidence
whatsoever may be introduced in any judicial, administrative, or
other legal proceeding involving this Agreement. To the extent any
provisions in this Agreement are inconsistent with any provisions
of the Exhibits, the provisions of this Agreement shall supersede
and be controlling. Notwithstanding the foregoing, nothing in this
Agreement is meant to diminish Executive’s rights under his
Founder’s Restricted Stock Purchase Agreement with the
Company, whether in the event of termination of Executive’s
employment or otherwise.
This Agreement may
not be modified, amended, or terminated except by an
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