EXHIBIT
10.8
NETOPIA, INC.
EMPLOYMENT
AGREEMENT
This Agreement is entered into on
December 9, 2005, but shall deemed to be effective as of
October 1, 2005 (the “Effective Date”), by and
between Netopia, Inc. (the “ Company ”) and Alan
B. Lefkof (the “ Employee ”).
RECITALS
A. The Company and the Employee wish
to enter into an employment relationship on the terms and
conditions contained in this Agreement.
B. The Company has spent significant
time, effort and money to develop certain Proprietary Information
(as defined in Section 7 of the Employee’s
“Employee Invention Assignment and Confidentiality
Agreement”), which the Company considers vital to its
business and goodwill after the Effective Date. The Proprietary
Information will necessarily be communicated to or acquired by
Employee in the course of his employment with the Company, and the
Company wishes to employ Employee only if, in doing so, it can
protect its Proprietary Information and goodwill.
NOW, THEREFORE, based on the
foregoing premises and in consideration of the commitments set
forth below, the Employee and the Company agree as
follows:
1. Duties and Scope of
Employment . The Employee will serve as President and Chief
Executive Officer of the Company, reporting to the Company’s
Board of Directors (the “Board”), and assuming and
discharging such responsibilities as are commensurate with
Employee’s position. Employee will also continue to serve as
a member of the Board, subject in all cases to continued election
by the Company’s stockholders at its regular annual
stockholder meetings. The Employee will perform his duties
faithfully and to the best of his ability and will devote his full
business efforts and time to the performance of his duties
hereunder, provided however, that nothing in this Agreement shall
restrict the Employee from (i) managing his personal
investments, personal business affairs and other personal matters,
(ii) serving on the boards of directors of companies that do
not compete directly or indirectly with the Company, or
(iii) serving on civic or charitable boards or committees,
provided that none of such activities, either singly or in the
aggregate, interfere with the performance of his duties under this
Agreement.
2. Employment Term / At-Will
Employment . The initial term of this Agreement shall be for a
period of three years commencing on the Effective Date, which was
the first day of the Company’s fiscal year ending
September 30, 2006. This Agreement shall be automatically
renewed for successive renewal terms of one year each unless either
party provides written notice of non-renewal no later than ninety
(90) days before the expiration of the initial term or then
current renewal term (collectively, the “Employment
Term”). Notwithstanding the foregoing, the parties agree that
the Employee’s employment with the Company will be
“at-will” employment and may be
terminated at any time with or without cause or
notice in accordance with Section 9, hereof. The Employee
understands and agrees that neither his job performance nor
commendations, bonuses or the like from the Company give rise to or
in any way serve as the basis for modification, amendment, or
extension, by implication or otherwise, of his employment with the
Company.
3. Base Salary . For all
services to be rendered by the Employee pursuant to this Agreement,
the Employee shall receive an annualized salary of $350,000 (the
“ Base Salary ”). The Base Salary shall be
payable in accordance with the Company’s normal payroll
practices and be subject to applicable withholding. During the
second and third years of the initial term and during any renewal
terms of this Agreement, the Base Salary shall be adjusted as
determined by the Company’s Compensation Committee of the
Board, at which point the adjusted salary shall be deemed the Base
Salary.
4. Target Bonus . The
Employee will be given the opportunity to earn an annual bonus (the
“Bonus”) in accordance with the Company’s then
current bonus program(s) for senior executives, provided that the
basic parameters of future program(s) will not change from the
parameters of the current program with respect to the Employee
unless the same changes are made with respect to all senior
executives entitled to participate in such program(s); and provided
further, that the target amount of the Bonus that Employee may earn
under such program(s) shall not be less than 50% of the
Employee’s then existing Base Salary. The actual award of any
such Bonus and the timing of payment shall be determined by the
Company’s Compensation Committee of its Board consistent with
the parameters established for such program(s). The Bonus shall be
subject to applicable tax withholding.
5. Employee Benefits
.
(a) The Employee shall be entitled
to participate in, and the Company shall provide, such fringe
benefits of the Company, including, but not limited to, employee
stock purchase and stock option plans, employee health and benefit
plans and the Company’s purchase of health and disability
insurance, which the Company may from time to time generally offer
its senior executive officers. In addition, the Employee shall be
entitled to, and the Company shall provide Employee with a company
car consistent with past practices. In addition, the Employee shall
be entitled to, and the Company shall provide, reimbursement of
amounts paid by him for the annual planning and preparation of his
tax returns and annual financial planning in amounts reasonable and
customary for executives of similar status.
(b) Notwithstanding any other
provision of this Agreement to the contrary, following the end of
the Employment Term, the Company shall, at its expense, ensure that
Employee (including his dependants) continue to receive through
September 30, 2015, all health related benefits for which
Employee was eligible immediately prior to the end of the
Employment Term, including without limitation, medical insurance,
dental insurance, and vision insurance, provided, however, that
Employee shall pay 20% of the cost to the Company of providing such
health related benefits, consistent with the Company’s
current target for employee contributions to the cost of group
health benefits. The parties hereto agree that the reference to
‘health related benefits’ is to be construed broadly.
This provision shall not be applicable during any period that
Employee receives or is eligible to receive comparable health
related benefits from an employer following the end of the
Employment Term.
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6. Award of Options . The
Employee shall be awarded stock options to acquire 300,000 shares
of the Company’s common stock in accordance with the
Company’s current stock option plans. The options shall be
incentive stock options to the maximum extent permissible under the
tax laws, and the balance of the options will be non-qualified
stock options. The options shall be awarded on December 9,
2005, and the exercise price shall equal the closing price of the
Company’s common stock on December 9, 2005. The options
shall vest 3/36 th on December 31, 2005, and
subject to extended vesting as provided in Section 9(g)(ii)(2)
herein, shall vest thereafter at the rate of 1/36
th
per month on the
last day of each calendar month thereafter through
September 30, 2008 (a) as long as the Employee remains an
employee of the Company or member of the Board, or (b) during
the Payment Period (defined in
Section 9(g)(ii)(1)b)).
7. Vacation and Sick Leave .
The Employee will be entitled to paid time off in accordance with
the Company’s vacation and sick leave policy, with the timing
and duration of specific paid time off mutually and reasonably
agreed to by the parties hereto; provided, however, that during
each year of the term of this Agreement, Employee will be provided
no fewer days of vacation and sick leave than he was eligible for,
based on years of service, under the Company’s vacation and
sick leave policy in effect as of September 30,
2005.
8. Expenses . The Company
will reimburse the Employee for reasonable travel or other expenses
incurred by the Employee in connection with the performance of the
Employee’s duties hereunder, in accordance with the
Company’s expense reimbursement policy as in effect from time
to time.
9. Termination
(a) Death . The initial term
or renewal term, as applicable, shall expire in the event of the
Employee’s death during such term, and upon such termination,
the obligations, duties and liabilities of the Company to the
Employee under this Agreement shall be as set forth in
Section 9(g) hereof.
(b) Disability . In the event
of the Employee’s failure to perform his duties by reason of
his becoming Disabled (as defined herein) during the Employment
Term, the Company shall have the option to terminate the Employment
Term, by giving written notice of such termination to the Employee,
which notice shall specify the effective date of termination. Upon
such termination, the Employee shall have no further duties
hereunder and the obligations, duties and liabilities of the
Company to the Employee under this Agreement shall be as set forth
in Section 9(g) hereof. For purposes of this Agreement, the
term “Disabled” shall mean the inability of the
Employee, for medical reason(s) certified by a physician selected
by the Company and reasonably satisfactory to the Employee, to
perform substantially his duties hereunder for an aggregate of at
least 180 days during any period of 365 consecutive
days.
(c) By the Company for Cause
. The Company may, at its option, terminate the Employment Term,
for (i) having knowingly engaged in fraud, acts of dishonesty
or any other illegal or intentional misconduct, in all cases that
adversely affect the business of the Company in a material manner,
(ii) having materially neglected his duties or intentionally
failing to perform his duties after written notice thereof from the
Board, or (iii) having breached a fiduciary duty to the
Company or its stockholders involving a matter in which Employee
has obtained a personal profit
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