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EXHIBIT 10.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYEE AGREEMENT dated as of July 31, 2000, by
and between Unisphere Solutions, Inc. with its principal place of business at
One Executive Drive, Chelmsford, Massachusetts 01824 (the "Company"), and James
A. Dolce, Jr. (the "Executive"),
WHEREAS, the Company and the Executive are parties to an Employment
Agreement dated as of March 14, 1999 (the "Original Agreement");
WHEREAS, the Company and the Executive desire to amend and restate the
Original Agreement upon the terms set forth herein.
Accordingly, the parties hereto agree as follows:
1. TERM. The Company hereby employs the Executive, and the Executive
hereby accepts such employment, for an initial term commencing as of the date
hereof and ending on January 1, 2003, unless sooner terminated in accordance
with the provisions of Section 4 or 5, with such employment to continue for
successive one-year periods in accordance with the terms of this Agreement
(subject to termination as aforesaid) unless either party notifies the other
party in writing prior to 30 days before the expiration of the initial term and
each annual renewal thereof (the period during which the Executive is employed
hereunder being hereinafter referred to as the "Term").
2. DUTIES. During the Term, the Executive shall be employed by the
Company as President and Chief Executive Officer of the Company and its
subsidiaries. As such, the Executive shall faithfully perform for the Company
the duties of said offices and shall perform such other duties of an executive,
managerial or administrative nature consistent with such offices as shall be
specified and designated from time to time by the Board of Directors of the
Company. The Executive shall devote substantially all his business time and
effort to the performance of his duties hereunder.
3. COMPENSATION.
3.1 BASE SALARY. The Company shall pay the Executive during the
Term a base salary at the rate of $270,000 per annum (the "Annual Salary"), in
accordance with the customary payroll practices of the Company applicable to
senior executives. The Annual Salary shall be reviewed at least annually by the
Compensation Committee of the Board of Directors of the Company, but shall not
be decreased.
3.2 BONUS. During the Term, in addition to the Annual Salary, the
Executive shall have the opportunity to receive an additional bonus in an amount
equal to 40% of his Annual Salary (the "Target Bonus").
3.3 BENEFITS - In General. The Executive shall be entitled during
the Term to participate in any group life, hospitalization or disability
insurance plans, health programs,
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retirement plans, fringe benefit programs and similar benefits that may be
available to other senior executives of the Company generally, on the same terms
as such other executives.
3.4 EXPENSES. The Company shall pay or reimburse the Executive for
all ordinary and reasonable out-of-pocket expenses actually incurred (and, in
the case of reimbursement, paid) by the Executive during the Term in the
performance of the Executive's services under this Agreement in accordance with
the ordinary policies of the Company with respect to reimbursement of senior
executives for such expenses.
3.5 RESTRICTED STOCK. On the date hereof, the Company shall issue
and sell to the Executive, under its 1999 Stock Incentive Plan (the "Plan"),
2,500,000 shares (the "Shares") of restricted Common Stock of the Company at a
purchase price of $10.50 per share (which such price is determined by the
Company to equal the current fair market value per share of the Common Stock of
the Company as of the date hereof). The purchase price for the Shares, other
than the par value, shall be paid in the form of a promissory note from the
Executive to the Company, which shall bear interest at the rate of the sixth
month LIBOR index rate plus fifty (50) basis points, which interest shall be
payable semi-annually beginning six (6) months from the effective date of the
promissory note. The promissory note shall be payable in full on January 1, 2003
subject to the requirement that, if the Executive sells any of the Shares before
January 1, 2003, the Executive must repay the Company, at the time of such sale,
a proportionate principal amount equal to the proportion that such sold Shares
bear to 2,500,000. The note may be repaid, at the election of the Executive,
either in cash and/or surrender of shares of Common Stock valued at their fair
market value at the time of surrender. The note shall be recourse as to 25% of
the principal amount, and the Company shall have recourse for payment for the
balance as to only the Shares, which shall be pledged as collateral. The Shares
shall vest quarterly over a three year period, commencing January 1, 2000 The
Executive and the Company shall execute and deliver a Restricted Stock
Agreement, substantially in the form attached hereto as EXHIBIT C, to evidence
the purchase of the Shares. If and when, following an initial public offering of
Common Stock of the Company, the Company files with the Securities and Exchange
Commission a Registration Statement on Form S-8 with respect to the Plan, the
Company shall register for resale all of the Shares pursuant to such
Registration Statement.
4. TERMINATION UPON DEATH OR DISABILITY. If the Executive dies during
the Term, the Term shall terminate as of the date of death, and the obligations
of the Company to or with respect to the Executive shall terminate in their
entirety upon such date except as otherwise provided under this Section 4. If
the Executive becomes disabled for the purposes of the long-term disability plan
of the Company for which the Executive is eligible, the Company shall have the
right, to the extent permitted by law, to terminate the employment of the
Executive upon notice in writing to the Executive. Upon termination of
employment due to death or disability, (i) the Executive (or the Executive's
estate or beneficiaries in the case of the death of the Executive) shall be
entitled to receive any Annual Salary and other benefits earned and accrued
under this Agreement prior to the date of termination (and reimbursement under
this Agreement for expenses incurred prior to the date of termination), (ii) the
Executive shall have a non-forfeitable right to, and shall be entitled to
receive, the consideration payable to the Executive under the Agreement and Plan
of Merger dated as of March 14, 1999 (the "Merger Agreement") among Siemens
Corporation, Wolf Acquisition Corp., and Redstone Communications, Inc., with
respect to which the Executive's rights were not vested at Closing (as defined
in the Merger
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Agreement) and which has not yet been paid as of the date of termination; and
(iii) the Executive (or, in the case of death, his estate and beneficiaries)
shall have no further rights to any compensation or benefits hereunder on or
after the termination of employment, or any other rights hereunder except as
required by law.
5. CERTAIN TERMINATION OF EMPLOYMENT.
5.1 TERMINATION BY THE COMPANY FOR CAUSE.
(a) For purposes of this Agreement, "Cause" shall
mean the Executive's:
(i) commission of a felony, a crime of moral
turpitude, dishonesty, or any crime involving the Company;
(ii) engagement in the performance of his
duties hereunder, or otherwise to the detriment of the Company, in willful
misconduct, willful or gross neglect, fraud, misappropriation or embezzlement;
(iii) failure to use his reasonable best
efforts to follow directions of the Board of Directors or the Company's written
policies and practices, which failure is not cured within 30 days after written
notice thereof is provided to the Executive; or
(iv) breach of either of the agreements
attached hereto as EXHIBITS A and B, which breach is not cured within 30 days
after written notice thereof is provided to the Executive;
(v) breach in any material respect of the
terms and provisions of this Agreement, which breach is not cured within 30 days
after written notice thereof is provided to the Executive; provided that the
Company shall not be permitted to terminate the Executive for Cause pursuant to
Section 5.1(b) except on written notice given to the Executive.
(b) The Company may terminate the Executive's
employment hereunder for Cause. If the Company terminates the Executive for
Cause, (i) the Executive shall receive the portion of his Annual Salary and
other benefits (but, in all events, and without increasing the Executive's
rights under any other provision hereof, excluding any bonuses not yet paid)
earned and accrued under this Agreement prior to the termination of employment
(and reimbursement under this Agreement for expenses incurred prior to the
termination of employment); and (ii) the Executive shall have no further rights
to any other compensation or benefits hereunder on or after termination of
employment, or any other rights hereunder.
5.2 TERMINATION BY THE COMPANY WITHOUT CAUSE; TERMINATION BY THE
EXECUTIVE FOR GOOD REASON.
(a) The Company may terminate the Executive's employment at
any time for any reason or no reason. If the Company terminates the Executive's
employment and the termination is not covered by Section 4 or 5.1 or the
Executive terminates service for "Good Reason", (i) the Executive shall receive
the portion of his Annual Salary and the other benefits
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earned and accrued under this Agreement prior to the termination of employment
(and reimbursement under this Agreement for expenses incurred prior to the
termination of employment); (ii) the Executive shall receive (A) a cash payment
equal to 100% of the Executive's Annual Salary and Target Bonus (as in effect
immediately before such termination) payable no later that 15 days after such
termination and (B) for a period of 12 months after termination of employment
such continuing coverage under the group health plan and basic life insurance
plan as the Executive was receiving at the time of such termination of
employment at the same cost to the Executive as that paid by active
executive-level employees; (iii) the Executive shall have a non-forfeitable
right to, and shall be entitled to receive, the consideration payable to the
Executive under the Merger Agreement with respect to which the Executive's
rights were not vested at Closing (as defined in the Merger Agreement) and which
has not yet been paid as of the date of termination; (iv) all options then held
by the Executive to purchase shares of Common Stock of the Company, and all of
the Shares then held by the Executive, shall become vested and exercisable in
full; (v) the Executive shall have no further rights to any other compensation
or benefits hereunder on or after the termination of employment, or any other
rights hereunder; provided that the Company's obligations with respect to the
payments and benefits provided for in this Section 5.2 are conditioned upon
Executive's execution of the General Release, substantially in the form attached
hereto as EXHIBIT D. It is expressly understood and agreed that any payment made
pursuant to the Section 5.2(a) shall be in lieu of any other payments that may
otherwise be due to the Executive under any severance or separation plan,
program or policy of the Company.
(b) For purpose of the Agreement, "Good Reason" shall mean (i)
a breach by the Company in any material respect of the terms and provisions of
this Agreement, which breach is not cured within 30 days after written notice
thereof is provided by the Executive or (ii) the relocation of the Company's
principal place of business, without the consent of the Executive, by more than
30 miles from such principal place of business on the date hereof or (iii)
following an Acquisition Event (as defined in the Plan, as currently in effect),
a material diminution in the Executive's duties, responsibilities, authority or
position from those in effect six months prior to the Acquisition Event;
provided, however that any change in authority or responsibilities directly
attributable to the change of the Company from a public company prior to the
Acquisition Event to a subsidiary of the acquiring company after the Acquisition
Event shall not constitute "Good Reason" for purposes of this clause (iii).
(c) Notwithstanding clause (ii)(B) of the second sentence of
Section 5.2(a)(i) nothing herein shall restrict the ability of the Company to
amend or terminate the plans and programs referred to in such clause (ii)(B)
with respect to employees of the Company generally from time to time in its sole
discretion, and (ii) the Company shall in no event be required to provide any
benefits otherwise required by such clause (ii)(B) after such time as the
Executive becomes entitled to receive benefits of the same type from another
employer or recipient of the Executive's services (such entitlement being
determined without regard to any individual waivers or other similar
arrangements).
5.3 TERMINATION BY THE EXECUTIVE OTHER THAN FOR GOOD REASON. The
Executive may terminate his employment on at least 30 days' and not more than 60
days' written notice given to the Company. If the Executive terminates his
employment and the termination is not covered by Section 4 or 5.2(a) the
Executive shall receive Annual Salary and other benefits
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(but, in all events, and without increasing the Executive's rights under any
other provision hereof, excluding any bonuses not yet paid) earned and accrued
under this Agreement prior to the termination of employment (and reimbursement
under this Agreement for expenses incurred prior to the termination of
employment); and (ii) the Executive shall have no further rights to any other
compensation or benefits hereunder on or after the termination of employment, or
any other rights hereunder, except as required by law.
6. INTENTIONALLY OMITTED.
7. OTHER PROVISIONS.
7.1 SEVERABILITY. The Executive acknowledges and agrees that
he has had an opportunity to seek advice of counsel in connection with this
Agreement. If it is determined that any of the provisions of this Agreement, or
any part thereof, is invalid or unenforceable, the remainder of the provisions
of this Agreement shall not thereby be affected and shall be given full effect,
without regard to the invalid portions.
7.2 DISPUTE RESOLUTION.
(a) Any and all claims, disputes, and controversies
between the Executive and the Company with respect to interpretation,
construction, breach, enforceability, and/or enforcement of the terms and
provisions of this Agreement (a "Dispute") shall be finally resolved as provided
in this Section 7.2 by binding arbitration. Arbitration shall be the exclusive
means for determination of all matters as above provided, and neither party
shall otherwise institute any action or proceeding in any court of law or
equity, state or federal, other than respecting enforcement of the arbitrator's
decision or award hereunder. The foregoing shall be a bona fide defense in any
action or proceeding where the matter in dispute was to be arbitrated or is
being arbitrated pursuant to this Agreement.
(b) The Company (or its successor in interest) or the
Executive shall have the right to submit a Dispute to arbitration, by delivery
to the other, by certified mail, of a written notice and demand for arbitration
of such Dispute. Arbitration shall be by the American Arbitration Association
(the "AAN") in accordance with its Rules applicable to such Disputes (the
"Rules"), by a neutral and impartial arbitrator acceptable to the Company and
the Executive. If such an arbitrator has not been selected by the Company and
Executive within sixty days after AAA first provides a list of eligible
arbitrators, or within thirty days after the occurrence of a vacancy, a neutral
and impartial arbitrator shall be selected and appointed by the American
Arbitration Association, in accordance with its Rules. Unless otherwise required
under applicable law, the arbitration proceedings shall be conducted in the city
where the principal place of business of the Company is situated at the date of
this Agreement or a city mutually agreed to by the parties, and the procedural
rules of the place or arbitration shall apply. Each party shall be entitled to
be represented by legal counsel.
(c) The arbitration proceedings (including discovery
and the giving of testimony) shall be conducted in strictest confidence pursuant
to a confidentiality agreement signed by the parties and devised to protect the
confidentiality of and valuable rights of the Company in the Confidential
Company Information (as defined in the Employee Patent and
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Secrecy Agreement attached hereto as EXHIBIT B) and trade secrets as well as the
confidentiality of any other confidential information included in such
proceedings. The arbitrator shall have the power and authority to make such
decisions and awards as he or she deems appropriate, consistent with applicable
law. To the extent applicable law sets particular requirements for the conduct
of such arbitration proceedings, such as, any with respect to discovery,
cross-examination, testimony, or availability of rights and remedies, the
arbitration proceedings shall be conducted in compliance with those
requirements.
(d) Subject to applicable law, the arbitrator may
grant compensatory damages and costs to the prevailing party (but not punitive
or exemplary damages and attorneys' fees and costs related to punitive or
exemplary damages) and injunctions that he or she may deem necessary or
advisable directed to or against a party, including a direction or order
requiring specific performance of any covenant, agreement or provision of the
Agreement as a result of breach or threatened breach. Any decision or award of
the arbitrator shall be final, binding, and conclusive upon the parties and said
decision and award may be entered as a final judgement in any court of competent
jurisdiction.
(e) Subject to the foregoing, the costs of such
arbitration shall be home equally by the parties, except that each party shall
bear its own attorneys fees and costs.
7.3 NOTICES. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission or,
if mailed, five days after the date of deposit in the United States mails as
follows:
(i) If to the Company, to:
Unisphere Solutions, Inc.
One Executive Drive
Chelmsford, Massachusetts 01824
Attention: Board of Directors
(ii) If to the Executive, at
9 Stonegate Road
Hopkinton, Massachusetts 01748
Any such person may by notice given in accordance with this Section 7.3 to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.
7.4 ENTIRE AGREEMENT. Other than with respect to the agreements
attached hereto as EXHIBITS A and B, as they may be amended from time to time,
which agreements shall survive in their entirety without regard to this
Agreement, this Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes the Original Agreement and
all prior agreements, written or oral, with respect thereto (other than all
stock option and restricted stock agreements between the Company and the
Executive).
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7.5 WAIVERS AND AMENDMENTS. This agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any such right, power or privilege nor
any single or partial exercise of any such right power or privilege, preclude
any other or further exercise thereof or the exercise of any other such right,
power or privilege.
7.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS WITHOUT REGARD TO
PRINCIPLES OF CONFLECTS OF LAW.
7.7 ASSIGNMENT. This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive; any purported
assignment by the Executive in violation hereof shall be null and void. In the
event of any sale, transfer or other disposition of all or substantially all of
the Company's assets or business, whether by merger, consolidation or otherwise,
the Company may assign this Agreement and its rights hereunder.
7.8 WITHHOLDING. The Company shall be entitled to withhold from any
payments or deemed payments any amount of tax withholding required by law.
7.9 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors, permitted assigns,
heirs, executors and legal representatives.
7.10 COUNTERPARTS. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original but all such counterparts together shall constitute one and the same
instrument. Each counterpart may consist of two copies hereof each signed by one
of the parties hereto.
7.11 SURVIVAL. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Sections 7.2, 7.3, and 7.8, and the other
provisions of Section 7 to the extent necessary to effectuate the survival of
Sections 7.2, 7.3 and 7.8), shall survive termination of this Agreement and any
termination of the Executive's employment hereunder.
7.12 NON-DISPARAGEMENT. While Executive's non-competition obligations
under EXHIBIT A are in effect, the Executive shall not publish any statement or
make any statement under circumstances reasonably likely to become public that
is critical of the Company or any of its affiliates, or in any way adversely
affecting or otherwise maligning the Company's business or the reputation of the
Company or any of its affiliates.
7.13 EXISTING AGREEMENTS. The Executive represents to the Company that
he is not subject or a party to any employment or consulting agreement,
non-competition covenant or other agreement, covenant or understanding which
might prohibit him from executing this Agreement or limit his ability to fulfill
his responsibilities hereunder.
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7.14 HEADINGS. The headings in this Agreement are for reference only
and shall not affect the interpretation of this Agreement.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have signed their names as of the
day and year first above written.
UNISPHERE SOLUTIONS, INC.
By: /s/ Anthony Maher
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Name: Anthony Maher
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Title: Chairman
------------------------
EMPLOYEE
/s/ James A. Dolce, Jr.
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James A. Dolce, Jr.
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EXHIBIT A
AMENDED AND RESTATED NON-COMPETITION AND
NON-SOLICITATION AGREEMENT
AMENDED AND RESTATED AGREEMENT dated as of August 4, 2000, by and
between Unisphere Solutions, Inc. with its principal place of business at One
Executive Drive, Chelmsford, Massachusetts 01824 ("Unisphere"), and James A.
Dolce, Jr. ("the Employee").
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of March
14, 1999 (the Merger Agreement) among Siemens Corporation, a Delaware
corporation ("Siemens"), Wolf Acquisition Corp., a Delaware corporation
("Acquisition"), and Redstone Communications, Inc. ("Redstone"), Acquisition was
merged with and into Redstone (the "Merger") and Redstone was the surviving
corporation in the Merger;
WHEREAS, the Employee's stock and other equity interests in Redstone
were acquired by Siemens in connection with the Merger;
WHEREAS, following the Merger Redstone was owned, directly or
indirectly, by Unisphere;
WHEREAS, Unisphere and its subsidiaries (collectively, the "Company")
are owned, directly or indirectly, by Siemens;
WHEREAS, the Company deems it of significant importance to its Business
(as hereinafter defined) and the Company and Siemens deem it of significant
importance to the Merger to prohibit the Employee from engaging in a business in
competition with the Business, or interfering with the Company's employees
during the Company's period of transition, and, in order to accomplish such
purpose, believes it to be in its best interest to enter into an agreement with
the Employee restricting such actions; and
WHEREAS, Employee is willing to refrain from engaging in certain
activities which would be to the detriment of the Company in consideration of
payments received by the Employee in connection with the Merger and payments and
benefits to be received pursuant to that certain Amended and Restated Employment
Agreement between the Company and the Employee dated as of March 14, 1999, as
amended and restated (the "Employment Agreement").
WHEREAS, the Employee and the Company desire to amend and restate upon
the terms set forth herein, the Non-Competition and Non-Solicitation Agreement
dated as of March 14, 1999 between the parties (the "Original Agreement").
Accordingly, the parties hereto agree as follows:
1. TERM. This Agreement shall be for a term commencing on the date
hereof and ending twelve months following the date on which the Employee shall
cease to be an employee
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of the Company and its affiliates (the "Restricted Period"). Nothing contained
in this Agreement shall confer on the Employee any right to continue in the
employ of the Company or its affiliates.
2. COVENANT AGAINST COMPETITION, OTHER COVENANTS. The Employee
acknowledges that (i) the Employee's work for the Company has given and will
continue to give him access to the confidential affairs and proprietary
information of the Company; (ii) the value of all goodwill resulting from the
operation of the business of the Company and its subsidiaries and other
affiliates should properly belong to the Company; (iii) the covenants and
agreements of the Employee contained in this Section 2 are essential to such
goodwill of the Company; (iv) the highly innovative and proprietary technologies
developed by the Company and its predecessors offer the Company a distinct
competitive advantage, and (v) neither Siemens nor the Company would have
entered into the Merger Agreement or the Employment Agreement but for the
covenants and agreements set forth in this Section 2. Accordingly, the Employee
covenants and agrees that:
2.1. NON-COMPETITION COVENANT. By and in consideration of the
salary and benefits provided and to be provided by the Company, pursuant to the
Merger Agreement and the Employment Agreement, including the severance
arrangements set forth therein, and further in consideration of the Employee's
exposure to the proprietary information of the Company, the Employee covenants
and agrees that, during the Restricted Period, he shall not within any state in
the United States or within any country in which the Company directly or
indirectly conducts, or reasonably expects to conduct, its business, directly or
indirectly, (i) engage in the Business, or (ii) render any services to any
person, corporation, partnership or other entity (other than the Company,
Siemens or the affiliates of either) engaged in the Business or (iii) become
financially interested in any person, corporation, partnership or other entity
engaged in the Business (other than the Company, Siemens or the affiliates of
either) as a partner, shareholder, principal, agent, employee, consultant or in
any other relationship or capacity; provided, however, that, notwithstanding the
foregoing, the Employee may (i) invest in securities of any entity solely for
investment purposes and without participating in the business thereof, if (A)
the Employee does not, directly or indirectly own 5% or more of any class of
securities of such entity, (B) the Employee does not, directly or indirectly,
provide any services to such entity and, (C) except with the express written
permission of the Board of Directors of the Company, the Employee does not
become a member of the board of directors of such entity, and (ii) invest in
venture capital funds solely for investment purposes so long as the Employee is
not a controlling person or manager of, or member of a group which controls or
manages such entity. For purposes hereof, "Business" shall mean: the
development, manufacturing, marketing or sale of any product that is competitive
with any product developed, manufactured, marketed or sold, or under development
(as evidenced by a written development plan), by the Company while the Employee
is employed by the Company.
2.2. NON-SOLICITATION. During the Restricted Period, the
Employee shall not, without the Company's prior written consent, directly or
indirectly, solicit or encourage to leave the employment or other service of the
Company or any of its affiliates, any employee or independent contractor thereof
engaged in any business conducted by or on behalf of the Information &
Communication Division of Siemens AG or any successor thereto. From the date
hereof through the end of the Restricted Period, the Employee will not, whether
for his own account or for the account of any other person, firm, corporation or
other business organization,
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intentionally interfere with the Company's or any of its affiliates'
relationship with, or endeavor to entice away from the Company or any of its
affiliates, any person who during the Term is or was a customer or client of the
Company or any of its affiliates. During the first six months following any
termination of the Employee's employment, the Employee shall not hire (on behalf
of the Employee or any other person or entity) any employee who is employed by
the Company at the time of the Employee's termination of employment or at any
time within the 90-day period which precedes such termination.
3. RIGHTS AND REMEDIES UPON BREACH OF THE AGREEMENT.
3.1. The Employee acknowledges and agrees that any breach by
him of any of the provisions of Section 2 (the "Restrictive Covenants") will
result in irreparable injury and damage for which money damages might not
provide an adequate remedy. Therefore, if the Employee breaches, or threatens to
commit a breach of, any of the provisions of Section 2, the Company and its
affiliates shall have the following rights and remedies, each of which rights
and remedies shall be independent of the other and severally enforceable, and
all of which rights and remedies shall be in addition to, and not in lieu of,
any other rights and remedies available to the Company and its affiliates under
law or in equity (including, without limitation, the recovery of damages): the
right and remedy to seek to have the Restrictive Covenants specifically enforced
(without posting bond and without the need to prove damages) by any court having
equity jurisdiction, including, without limitation, the right to an entry
against the Employee of restraining orders and injunctions (preliminary,
mandatory, temporary and permanent) against violations, threatened or actual,
and whether or not then continuing, of such covenants.
3.2. The Employee acknowledges that any breach of the
Restrictive Covenants will entitle the Company to seek specific performance and
other equitable relief. The existence of any claim or cause of action by the
Employee, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement of the Restrictive Covenants.
4. SEVERABILITY. The Employee acknowledges and agrees that (i) he has
had an opportunity to seek advice of counsel in connection with this Agreement
and (ii) the Restrictive Covenants are reasonable in geographical and temporal
scope and in all other respects. If it is determined that any of the provisions
of this Agreement, including, without limitation, any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of
the provisions of this Agreement shall not thereby be affected and shall be
given full effect, without regard to the invalid portions.
5. DURATION AND SCOPE OF COVENANTS. If any court, arbitrator or other
decision-maker of competent jurisdiction determines that any of Employee's
covenants contained in this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, then, after such determination
has become final and unappealable, the duration or scope of such provision, as
the case may be, shall be reduced so that such provision becomes enforceable
and, in its reduced form, such provision shall then be enforceable and shall be
enforced.
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6. DISPUTE RESOLUTION.
6.1. Any and all claims, disputes, and controversies between
the Employee and the Company with respect to interpretation, construction,
breach, enforceability, and/or enforcement of the terms and provisions of this
Agreement (a "Dispute") shall be finally resolved as provided in this Section 6
by binding arbitration. Arbitration shall be the exclusive means for
determination of all matters as above provided, and neither party shall
otherwise institute any action or proceeding in any court of law or equity,
state or federal, other than respecting enforcement of the arbitrators decision
or award hereunder. The foregoing shall be a bona fide defense in any action or
proceeding where the matter in dispute was to be arbitrated or is being
arbitrated pursuant to this Agreement.
6.2. The Company (or its successor in interest) or the
Employee shall have the right to submit a Dispute to arbitration, by delivery to
the other, by certified mail, of a written notice and demand for arbitration of
such Dispute. Arbitration shall be by the American Arbitration Association in
accordance with its Rules applicable to such Disputes (the "Rules"), by a
neutral and impartial arbitrator acceptable to the Company and the Employee. If
such an arbitrator has not been selected by the Company and the Employee within
60 days after giving of such written notice and demand for arbitration, or
within 30 days after the occurrence of a vacancy, a neutral and impartial
arbitrator shall be selected and appointed by the American Arbitration
Association, in accordance with its Rules. Unless otherwise required under
applicable law, the arbitration proceedings shall be conducted in the city where
the principal place of business of the Company is situated at the date of this
Agreement or a city mutually agreed to by the parties, and the procedural rules
of the place of arbitration shall apply. Each party shall be entitled to be
represented by legal counsel.
6.3. The arbitration proceedings (including discovery and the
giving of testimony) shall be conducted in strictest confidence pursuant to a
confidentiality agreement signed by the parties and devised to protect the
confidentiality of and valuable rights of the Company in the Confidential
Company Information (as defined in the Employee Patent and Secrecy Agreement
referenced in Section 8) and trade secrets as well as the confidentiality of any
other confidential information included in such proceedings. The arbitrator
shall have the power and authority to make such decisions and awards as he or
she deems appropriate, consistent with applicable law. To the extent applicable
law sets particular requirements for the conduct of such arbitration
proceedings, such as, any with respect to discovery, cross-examination,
testimony, or availability of rights and remedies, the arbitration proceedings
shall be conducted in compliance with those requirements.
6.4. Subject to applicable law, the arbitrator may grant
compensatory damages and costs to the prevailing party (but not punitive or
exemplary damages and attorneys' fees and costs related to punitive or exemplary
damages) and injunctions that he or she may deem necessary or advisable directed
to or against a party, including a direction or order requiring specific
performance of any covenant, agreement or provision of this Agreement as a
result of a breach or threatened breach. Any decision or award of the arbitrator
shall be final, binding, and conclusive upon the parties and said decision and
award may be entered as a final judgment in any court of competent jurisdiction.
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6.5. Subject to the foregoing, the costs of such arbitration
shall be borne equally by the parties, except that each party shall bear its own
attorneys fees and costs.
6.6. Notwithstanding the foregoing, the Company or the
Employee shall have the right at any time to apply for and obtain injunctive
relief and/or such other remedies and relief, as may be available in a court of
law or equity, state or federal, including but not limited to restraining orders
and injunctions to protect the legitimate interests of the Company as set forth
in Section 3.1 of this Agreement, preserve the status quo, prevent a breach of
confidence, prevent irreparable damage, injury or loss, protect against actual
or threatened improper or unauthorized disclosure, use or misappropriation of
information or other proprietary rights of the Company, pending the conclusion
of such arbitration proceedings and final decision (award) of the arbitrator.
7. NOTICES. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission or,
if mailed, five days after the date of deposit in the United States mails as
follows:
(i) If to the Company, to:
Unisphere Solutions, Inc.
One Executive Drive
Chelmsford, Massachusetts 01824
Attention: Board of Directors
(ii) If to the Employee, at:
9 Stonegate Road
Hopkinton, Massachusetts 01748
Any such person may by notice given in accordance with this Section 7 to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.
8. ENTIRE AGREEMENT. Other than with respect to the Employment
Agreement, that certain Employee Patent and Secrecy Agreement between the
Company and the Employee dated as of the date hereof and the Merger Agreement
(which agreements shall survive in their entirety without regard to this
Agreement), this Agreement contains the entire agreement between the parties
with respect to the subject matter hereof and supersedes the Original Agreement
and all other prior agreements, written or oral, with respect thereto.
9. WAIVERS AND AMENDMENTS. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any such right power or
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privilege nor any single or partial exercise of any such right, power
or privilege, preclude any other or further exercise thereof or the exercise of
any other such right, power or privilege.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
11. ASSIGNMENT. This Agreement, and the Employee's rights and
obligations hereunder, may not be assigned by the Employee; any purported
assignment by the Employee in violation hereof shall be null and void. In the
event of any sale, transfer or other disposition of all or substantially all of
the Company's assets or business, whether by merger, consolidation or otherwise,
the Company may assign this Agreement and the rights hereunder, provided that
the "Business" shall not include the business of the acquiring company.
12. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors, permitted assigns,
heirs, executors and legal representatives.
13. COUNTERPART. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original but all such counterparts together shall constitute one and the same
instrument. Each counterpart may consist of two copies hereof each signed by one
of the parties hereto.
14. SURVIVAL. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Sections 2, 3 and 6, and the other provisions
of this Agreement (to the extent necessary to effectuate the survival of
Sections 2, 3 and 6), shall survive termination of this Agreement.
15. HEADINGS. The headings in this Agreement are for reference only and
shall not affect the interpretation of this Agreement.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have signed their names as of the
day and year first above written.
UNISPHERE SOLUTIONS, INC.
By: /s/ Anthony Maher
-----------------------------------
Name: Anthony Maher
-----------------------------------
Title: Chairman
-----------------------------------
EMPLOYEE
/s/ James A. Dolce, Jr.
------------------------------------------
James A. Dolce, Jr.
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EXHIBIT B
EMPLOYEE PATENT AND SECRECY AGREEMENT
For valuable consideration, I, the undersigned, agree as follows:
1. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION AND TRADE SECRETS.
1.1. As an employee of Unisphere Solutions, Inc. ("Employer"), I have a
confidential relationship with Employer. In the course of my employment, I may
have access to Confidential Information and Trade Secrets (each as defined
below). I have a duty to maintain in confidence all such Confidential
Information and Trade Secrets to which I may have access in the course of my
employment by Employer.
1.2. During my employment and at all subsequent times, I will keep
secret and maintain in confidence all Confidential Information to which I may
have access at any time. I will not use such Confidential Information and I will
not publish, communicate, divulge or describe any such Confidential Information,
without the prior authorization and consent of the Board of Directors of
Employer.
"Confidential Information" as used in this Agreement means any
information other than Trade Secrets (as defined below) in which Employer has a
legitimate protectible business interest, and which Employer has taken
reasonable steps to protect and maintain in confidence. Such Confidential
Information, for example, may be business information regarding new products or
transactions or relationships with third parties which has not as yet been
released or made generally known to the public by Employer, or compilations of
information compiled at Employer's expense and effort which are informative,
contain information regarding Employer's business (such as customers), which
information is not otherwise readily available and is of economic value to
Employer as well as Employer's competitors or other knowledgeable users.
The foregoing covenant shall cease to apply to any particular
piece of Confidential Information which is no longer maintained in confidence by
Employer and which is made or becomes generally known to the trade or general
public by authorization of Employer or by other lawful means.
If and only if the applicable laws of a particular state or
jurisdiction specifically require that, in order to be enforceable, this
covenant restricting me from disclosing or using the Confidential Information of
Employer after leaving the employ of Employer must set forth a specific term
during which I am restricted from disclosing such Confidential Information, my
obligations with respect to Confidential Information shall expire three (3)
years after termination of my employment with Employer.
1.3. During my employment and at all times subsequent, I will keep
secret and maintain in confidence all Trade Secrets to which I may have access.
I will not use such Trade Secrets and I will not publish, communicate, or
disclose any such Trade Secrets at any time without the prior authorization and
consent of Employer.
A "Trade Secret" as used in this Agreement means any confidential
(secret) information (other than Confidential Information described above) which
is recognized under applicable laws as being a valuable trade secret, in which
Employer has a legitimate protectible business interest, to which Employer has
made a reasonable effort to restrict and limit access, and which Employer (and
its successors in interest) protect and maintain as a trade secret. Examples of
Trade Secrets are inventions,
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know-how, processes, special techniques and methods, new developments, results
of research projects, unique applications of scientific or technical
information, formulas, computer software designs or techniques, maintained as
trade secrets.
The foregoing covenant shall cease to apply to any particular
Trade Secret when it ceases to be, no longer qualifies as, and is no longer
maintained by Employer (or its successors in interest) as a Trade Secret. Such
Trade Secret may however continue to be Confidential Information as defined in
Section (B) above.
If and only if the applicable laws of any particular state or
jurisdiction specifically require that, in order to be enforceable, this
covenant restricting me from disclosing or using the Trade Secrets or Employer
after leaving the employ of Employer must set forth a specific term during which
I am restricted from disclosing or using such Trade Secrets, my obligations
under this covenant with respect to Trade Secrets of Employer shall expire seven
(7) years after termination of my employment with Employer.
1.4. If and only if the applicable laws of any particular state or
jurisdiction specifically require that, in order to be enforceable, the
respective covenant set forth above restricting me from disclosing or using the
Confidential Information or Trade Secrets or Employer after leaving the employ
of Employer must specifically set forth a geographical area in which such
restrictions apply, the obligations and restrictions with respect to
non-disclosure and use of Confidential Information or Trade Secrets shall apply
in those states and geographical areas (a) to which I was assigned, (b) which
were in my geographical area of responsibility, and (c) where I performed or
conducted business, as an employee of or on behalf of Employer.
1.5. All Confidential Information and Trade Secrets shall at all times
be and remain the sole property of Employer.
1.6. I will use all reasonable precautions to assure that Confidential
Information and Trade Secrets (including written materials, models, mechanisms,
devices, drawings), regardless of form or media, are protected and kept from
unauthorized persons and unauthorized disclosure and use.
1.7. I will disclose, deliver, and return promptly to Employer all
Confidential Information and Trade Secrets (regardless of form or media) at any
time Employer may request but no later than the termination of my employment.
1.8. If I am uncertain whether any particular material or information
is Confidential Information or a Trade Secret, or neither, I will consult my
immediate supervisor for resolution.
2. INVENTIONS, PATENTS, COPYRIGHTS, AND MASK WORKS.
2.1. I agree that all "Inventions" (which word shall mean and include
improvements, ideas, or discoveries, whether patentable or not and whether
reduced to practice or not), "Copyright Works" (which word shall mean and
include materials for which copyright protection may be obtained, including but
not limited to computer programs, artistic works such as graphs, drawings,
blueprints, and articles) and "Mask Works" (which word shall mean and include
but not be limited to a series of related images, however fixed or encoded
having or representing the predetermined, three dimensional pattern of metallic,
insulating or semiconductor material present or removed from the layers of a
semiconductor chip product; and in which series the relation of the images to
one another is that each image has the pattern of the surface of one form of the
semiconductor chip product and is fixed in a semiconductor chip product) which
are conceived or made by me alone or with others, whether or not during usual
business
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hours, during the period of my employment by Employer, shall belong to Employer,
unless specifically disclaimed by Employer, in writing, provided that such are
related to my work with Employer or are related in any manner to any aspect of
the Employer's business in which I am involved and in which Employer is actually
engaged or planned to become engaged, at the time of termination of my
employment by Employer, any parent of Employer, or any associated or affiliated
corporation or subsidiary of Employer, and I agree that I will:
(a) promptly and fully disclose such Inventions, Copyright Works
and Mask Works to Employer,
(b) assign to Employer, its successors, assigns, or nominees for
its/their sole use and benefit, all of my right, title, and
interest in and to such Inventions, Copyright Works, and Mask
Works for the United States and all foreign countries.
I hereby assign, sell transfer and release to Employer all of
my right, title and interest in and to each and every Invention, Copyright
Works, and Mask Works (and improvements therein and thereto) required to be
disclosed by the terms of this Agreement.
2.2. My obligations under this Agreement shall continue beyond the
termination of my employment with respect to such Inventions, Copyright Works
and Mask Works made or conceived by me during the period of my employment and
belonging to Employer.
3. INVENTIONS, PATENTS, COPYRIGHT WORKS AND MASK WORKS PRIOR TO EMPLOYMENT
WITH EMPLOYER.
Except as I have previously disclosed to Employer in writing, I am not
an owner of any right, title or interest, nor am I the holder of any beneficial
interest in, to or under any unpatented Inventions, patent applications,
patents, Mask Works, works in which a copyright right is claimed, applications
for copyright registration, copyright registration, or trade secrets.
4. EXECUTION OF DOCUMENTS.
At any time Employer (or its successor in interest) requests, either
during my employment or after termination thereof, and without charge, but at
Employer's (or its successor's) expense, I agree to execute, acknowledge and
deliver all such further papers, including applications for patents, copyright
registration, or other statutory protections, and to perform such other lawful
acts as, in the reasonable opinion of Employer, may be necessary to obtain or
maintain patents, copyright rights, rights in Mask Works, registrations or
statutory protections for such in any and all countries and to vest title
thereto in Employer, its successors, assigns or nominees.
5. COMPLIANCE NOT CONTINGENT UPON ADDITIONAL CONSIDERATION.
I have not been promised, and I shall not claim any additional or
special payment for compliance with any of the provisions of this Agreement.
6. OTHER AGREEMENTS.
This Agreement supersedes and replaces any prior written or oral
undertakings or agreements made between myself and the Employer relating
generally to the subject matter of this Agreement.
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7. NOTICE OF RIGHTS UNDER STATE STATUTES WHERE APPLICABLE.
No provision of this Agreement is intended to require assignment of any
of my rights in any Invention if: no equipment, supplies, facilities,
Confidential Information, or Trade Secret of Employer or its associated or
affiliated corporations or subsidiaries were used with respect thereto; the
Invention was developed entirely on my own time; and the Invention does not
relate to the business of Employer or to the actual or demonstrable anticipated
research and development or business of Employer; or the Invention does not
result from any work performed by me for Employer.
8. SEVERABILITY.
8.1. This Agreement shall be subject to, and shall be interpreted and
construed in accordance with applicable law and public policy. If and to the
extent any provision is deemed to be void, invalid, and unenforceable, in whole
or in part, in any particular jurisdiction, by reason of being contrary to the
applicable law or public policy of such particular jurisdiction, it shall be
disregarded and deemed excluded from this Agreement. Such void, invalid, and
unenforceable provision shall not affect the remaining provisions, paragraphs,
and subparagraphs of this Agreement which shall be enforceable and which shall
continue to be binding.
8.2. This Agreement shall be interpreted and construed so as to be
enforceable to the furthest extent consistent with and permitted under
applicable law and public policy.
8.3. Each provision, paragraph, and subparagraph, is separable from
every other provision, paragraph, and subparagraph, and constitutes a separate
and distinct covenant.
9. GOVERNING LAW.
This Agreement shall be interpreted and construed in accordance with and
governed by the laws of the State of Massachusetts.
10. TRANSFERABILITY.
10.1. I agree that all Inventions, patents, Copyright Works,
copyrights, and Mask Works, described in Section 2 above, are the sole property
of Employer, and Employer is free to use them in any way, in its discretion. The
rights of Employer may be assigned, transferred, licensed, or sold, in whole or
in part, subject to applicable law, without my consent, upon such terms as may
be determined by Employer, including without limitation to any successor in
interest to Employer, successor in interest to any of the assets or business of
Employer, any direct or indirect parent, associated or affiliated corporation or
subsidiary of Employer, or any third party.
10.2. This Agreement shall inure to the benefit of and be binding upon
Employer, its successors and assigns, including without limitation any entity
into which Employer may be consolidated or merged.
10.3. This Agreement may not be assigned or transferred by me, and I
may not delegate, assign, or transfer, or attempt to delegate, assign or
transfer, any obligation I may have pursuant to this Agreement, without the
prior consent and agreement of Employer.
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11. DISPUTE RESOLUTION.
Any and all claims, disputes, and controversies between Employer and
myself with respect to interpretation, construction, breach, enforceability,
and/or enforcement of the terms and provisions of this Agreement ("Dispute")
shall be finally resolved as provided in this Section 11 by binding arbitration.
Arbitration shall be the exclusive means for determination of all
matters as above provided, and neither party shall otherwise institute any
action or proceeding in any court of law or equity, state or federal, other than
respecting enforcement of the arbitrator's decision or award hereunder. The
foregoing shall be a bona fide defense in any action or proceeding where the
matter in dispute was to be arbitrated or is being arbitrated pursuant to this
Agreement.
Employer (or its successor in interest) or I shall have the right to
submit a Dispute to arbitration, by delivery to the other, by certified mail, of
a written notice and demand for arbitration of such Dispute ("Notice").
Arbitration shall be by the American Arbitration Association in accordance with
its Rules applicable to such Disputes ("Rules"), by a neutral and impartial
arbitrator acceptable to Employer and myself. If such an arbitrator has not been
selected by Employer and myself within sixty days after giving of such written
notice and demand for arbitration, or within thirty days after the occurrence of
a vacancy, a neutral and impartial arbitrator shall be selected and appointed by
the American Arbitration Association, in accordance with its Rules. Unless
otherwise required under applicable law, the arbitration proceedings shall be
conducted in the city where the principal place of business of Employer is
situated at the date of this Agreement or a city mutually agreed to by the
parties, and the procedural rules of the place of arbitration shall apply. Each
party shall be entitled to be represented by legal counsel.
The arbitration proceedings (including discovery and the giving of
testimony) shall be conducted in strictest confidence pursuant to a
confidentiality agreement signed by the parties and devised to protect the
confidentiality of and valuable rights of Employer in the Confidential
Information and Trade Secrets as well as the confidentiality of any other
confidential information included in such proceedings.
The arbitrator shall have the power and authority to make such decisions
and awards as he or she deems appropriate, consistent with applicable law.
To the extent applicable law sets particular requirements for the
conduct of such arbitration proceedings, such as, any with respect to discovery,
cross-examination, testimony, or availability of rights and remedies, the
arbitration proceedings shall be conducted in compliance with those
requirements.
Subject to applicable law, the arbitrator may grant compensatory damages
and costs to the prevailing party (but not punitive or exemplary damages and
attorneys' fees and costs related to punitive or exemplary damages) and
injunctions that he or she may deem necessary or advisable directed to or
against a party, including a direction or order requiring specific performance
of any covenant, agreement or provision of this Agreement as a result of a
breach or threatened breach. Any decision or award of the arbitrator shall be
final, binding, and conclusive upon the parties and said decision and award may
be entered as a final judgment in any court of competent jurisdiction.
Subject to the foregoing, the costs of such arbitration shall be borne
equally by the parties, except that each party shall bear its own attorneys fees
and costs.
Notwithstanding the foregoing, Employer or I shall have the right at any
time to apply for and obtain injunctive relief and/or such other remedies and
relief, as may be available in a court of law or equity, state or federal,
including but not limited to restraining orders to protect the legitimate
interest of Employer, preserve the status quo, prevent a breach of confidence,
prevent irreparable damage, injury or
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loss, protect against actual or threatened improper or unauthorized disclosure,
use or misappropriation of inventions, information or other proprietary rights
of Employer, pending the conclusion of such arbitration proceedings and final
decision (award) of the arbitrator.
12. EFFECTIVENESS.
This Agreement shall be binding upon my heirs, executors, administrators
and assigns.
13. CHANGES IN APPLICABLE LAW.
The law relating to the matters which are the subject of this Agreement,
including the restrictions and rights provided for in this Agreement and
enforcement thereof, has been evolving and may continue to evolve. To the extent
amendment of this Agreement is advisable to meet the requirements of or any
changes in applicable law, I will, upon the request of Employer, and without
further compensation to myself, amend this Agreement accordingly.
14. SUCCESSOR EMPLOYERS.
I hereby authorize Employer to disclose the terms or provide a copy of
this Agreement as well as any information Employer deems advisable or relevant
regarding my duties and responsibilities and access to Confidential Information
and Trade Secrets while employed with Employer, to any future employer by whom I
may be employed or third parties with whom I may do business, and to notify such
employers or third parties of the legal rights of Employer arising out of or in
conjunction with this Agreement including without limitation any breach or
inducement of breach of it.
[SIGNATURES ON NEXT PAGE]
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James A. Dolce, Jr.
- -----------------------------
Employee Name (Print)
/s/ James A. Dolce Jr. 3-14-99
- ----------------------------- -------
Employee Signature Date
Accepted by Unisphere Solutions, Inc.
By /s/ Martin C. Clague 3-14-99
- ----------------------------- -------
Date
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EXHIBIT C
UNISPHERE SOLUTIONS, INC.
Restricted Stock Agreement
Granted Under 1999 Stock Incentive Plan
AGREEMENT made this 4th day of August, 2000, between Unisphere
Solutions, Inc., a Delaware corporation (the "Company"), and James A. Dolce, Jr.
(the "Participant").
For valuable consideration, receipt of which is acknowledged, the
parties hereto agree as follows:
1. PURCHASE OF SHARES.
The Company shall issue and sell to the Participant, and the Participant
shall purchase from the Company, subject to the terms and conditions set forth
in this Agreement and in the Company's 1999 Stock Incentive Plan (the "Plan"),
2,500,000 shares (the "Shares") of common stock, $0.01 par value, of the Company
("Common Stock"), at a purchase price of $10.50 per share. Of the aggregate
purchase price for the Shares, $25,000 shall be paid by the Participant by check
payable to the order of the Company and the balance shall be paid by delivery by
the Participant of a promissory note in the form attached hereto as EXHIBIT A
(the "Note"). Upon receipt by the Company of payment for the Shares, the Company
shall issue to the Participant one or more certificates in the name of the
Participant for that number of Shares purchased by the Participant. The
Participant agrees that the Shares shall be subject to the Purchase Option set
forth in Section 2 of this Agreement, the Company's right of first refusal set
forth in Section 5 of this Agreement and the restrictions on transfer set forth
in Section 4 of this Agreement.
2. PURCHASE OPTION.
(a) Except as otherwise set forth in the Plan or in the Amended and
Restated Employment Agreement of even date herewith between the Participant and
the Company (the "Employment Agreement"), in the event that the Participant
ceases to be employed by the Company prior to December 31, 2002, the Company
shall have the right and option (the "Purchase Option") to purchase from the
Participant, for a sum of $10.50 per share (the "Option Price"), some or all of
the Unvested Shares (as defined below).
"Unvested Shares" means the total number of Shares multiplied by the
Applicable Percentage at the time the Purchase Option becomes exercisable by the
Company. The "Applicable Percentage" shall be (i) 100% less 8.333% for each
three months of employment completed by the Participant with the Company from
and after January 1, 2000, and (ii) zero on or after December 31, 2002.
(b) For purposes of this Agreement, employment with the Company shall
include employment with a parent or subsidiary of the Company.
3. EXERCISE OF PURCHASE OPTION AND CLOSING.
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(a) The Company may exercise the Purchase Option by delivering
or mailing to the Participant (or his estate), within 60 days after the
termination of the employment of the Participant with the Company, a written
notice of exercise of the Purchase Option. Such notice shall specify the number
of Shares to be purchased. If and to the extent the Purchase Option is not so
exercised by the giving of such a notice within such 60-day period, the Purchase
Option shall automatically expire and terminate effective upon the expiration of
such 60-day period.
(b) Within 10 days after delivery to the Participant of the
Company's notice of the exercise of the Purchase Option pursuant to subsection
(a) above, the Participant (or his estate) shall, pursuant to the provisions of
the Joint Escrow Instructions referred to in Section 7, tender to the Company at
its principal offices the certificate or certificates representing the Shares
which the Company has elected to purchase in accordance with the terms of this
Agreement and the notice of exercise of the Purchase Option, duly endorsed in
blank or with duly endorsed stock powers attached thereto, all in form suitable
for the transfer of such Shares to the Company. Promptly following its receipt
of such certificate or certificates, the Company shall pay to the Participant
the aggregate Option Price for such Shares.
(c) After the time at which any Shares are required to be
delivered to the Company for transfer to the Company pursuant to subsection (b)
above, the Company shall not pay any dividend to the Participant on account of
such Shares or permit the Participant to exercise any of the privileges or
rights of a stockholder with respect to such Shares, but shall, in so far as
permitted by law, treat the Company as the owner of such Shares.
(d) The Option Price may be payable, at the option of the
Company, in cancellation of all or a portion of any outstanding balance of the
Note or in cash (by check) or both.
(e) The Company shall not purchase any fraction of a Share
upon exercise of the Purchase Option, and any fraction of a Share resulting from
a computation made pursuant to Section 2 of this Agreement shall be rounded to
the nearest whole Share.
(f) The Company may assign its Purchase Option to one or more
persons or entities.
4. RESTRICTIONS ON TRANSFER.
The Participant shall not sell, assign, transfer, pledge, hypothecate or
otherwise dispose of, by operation of law or otherwise (collectively
"transfer"):
(a) any Shares, or any interest therein, that are subject to
the Purchase Option, except that the Participant may transfer such Shares (i) to
or for the benefit of any parent, sibling, spouse, child or grandchild of the
Participant, or to a trust, partnership or limited liability company for their
benefit, PROVIDED that such Shares shall remain subject to this Agreement
(including without limitation the restrictions on transfer set forth in this
Section 4, the Purchase Option and the right of first refusal set forth in
Section 5) and such permitted transferee shall, as a condition to such transfer,
deliver to the Company a written instrument confirming that such transferee
shall be bound by all of the terms and conditions of this Agreement or (ii) as
part of the sale of all or substantially all of the business of the Company (by
merger, sale of assets or
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otherwise), PROVIDED that, in accordance with the Plan, the securities or other
property received by the Employee in connection with such transaction shall
remain subject to this Agreement; or
(b) any Shares, or any interest therein, that are no longer
subject to the Purchase Option, except in accordance with Section 5 below.
5. RIGHT OF FIRST REFUSAL.
(a) If the Participant proposes to transfer any Shares that
are no longer subject to the Purchase Option (either because they are no longer
Unvested Shares or because the Purchase Option expired unexercised), other than
to the Company, then the Participant shall first give written notice of the
proposed transfer (the "Transfer Notice") to the Company. The Transfer Notice
shall name the proposed transferee and state the number of such Shares he
proposes to transfer (the "Offered Shares"), the price per share and all other
material terms and conditions of the transfer.
(b) For 30 days following delivery to the Company of such
Transfer Notice, the Company shall have the option to purchase all (but not less
than all) of the Offered Shares at the price and upon the terms set forth in the
Transfer Notice. In the event the Company elects to purchase all of the Offered
Shares, it shall give written notice of such election to the Participant within
such 30-day period. Within 10 days after delivery to the Participant of such
notice, the Participant shall tender to the Company at its principal offices the
certificate or certificates representing the Offered Shares, duly endorsed in
blank by the Participant or with duly endorsed stock powers attached thereto,
all in form suitable for transfer of the Offered Shares to the Company. Promptly
following receipt of such certificate or certificates, the Company shall deliver
or mail to the Participant a check in payment of the purchase price for the
Offered Shares; PROVIDED THAT if the terms of payment set forth in the Transfer
Notice were other than cash against delivery, the Company may pay for the
Offered Shares on the same terms and conditions as were set forth in the
Transfer Notice.
(c) If the Company does not elect to acquire all of the
Offered Shares, the Participant may, within the 30-day period following the
expiration of the option granted to the Company under subsection (b) above,
transfer the Offered Shares to the proposed transferee, PROVIDED THAT such
transfer shall not be on terms and conditions more favorable to the transferee
than those contained in the Transfer Notice. Notwithstanding any of the above,
all Offered Shares transferred pursuant to this Section 5 shall remain subject
to this Agreement (including without limitation the restrictions on transfer set
forth in Section 4 and the right of first refusal set forth in this Section 5)
and such transferee shall, as a condition to such transfer, deliver to the
Company a written instrument confirming that such transferee shall be bound by
all of the terms and conditions of this Agreement.
(d) After the time at which the Offered Shares are required to
be delivered to the Company for transfer to the Company pursuant to subsection
(b) above, the Company shall not pay any dividend to the Participant on account
of such Offered Shares or permit the Participant to exercise any of the
privileges or rights of a stockholder with respect to such Shares, but shall, in
so far as permitted by law, treat the Company as the owner of such Offered
Shares.
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(e) The following transactions shall be exempt from the
provisions of this Section 5:
(1) a transfer of Shares to or for the benefit of any
parent, sibling, spouse, child or grandchild of the Participant, or to a trust,
partnership or limited liability company for their benefit;
(2) any transfer pursuant to an effective
registration statement filed by the Company under the Securities Act of 1933, as
amended (the "Securities Act"); and
(3) the sale of all or substantially all of the
business of the Company (by merger, sale of assets or otherwise);
PROVIDED, HOWEVER, that in the case of a transfer pursuant to clause (1) above,
such Shares shall remain subject to this Agreement (including without limitation
the restrictions on transfer set forth in Section 4 and the right of first
refusal set forth in this Section 5) and such transferee shall, as a condition
to such transfer, deliver to the Company a written instrument confirming that
such transferee shall be bound by all of the terms and conditions of this
Agreement.
(f) The Company may assign its rights to purchase Offered
Shares in any particular transaction under this Section 5 to one or more persons
or entities.
(g) The provisions of this Section 5 shall terminate upon the
earlier of the following events:
(1) the closing of the sale of shares of Common Stock
in an underwritten public offering pursuant to an effective registration
statement filed by the Company under the Securities Act; or
(2) the sale of all or substantially all of the
business of the Company, by merger, sale of assets or otherwise.
(h) The Company shall not be required (i) to transfer on its
books any of the Shares which shall have been sold or transferred in violation
of any of the provisions set forth in this Agreement, or (ii) to treat as owner
of such Shares or to pay dividends to any transferee to whom any such Shares
shall have been so sold or transferred.
6. AGREEMENT IN CONNECTION WITH PUBLIC OFFERING.
The Participant agrees, in connection with the initial underwritten
public offering of the Company's securities pursuant to a registration statement
under the Securities Act, (i) not to sell, make short sale of, loan, grant any
options for the purchase of, or otherwise dispose of any shares of Common Stock
held by the Participant (other than those shares included in the offering),
other than to the Company, without the prior written consent of the Company or
the underwriters managing such initial underwritten public offering of the
Company's securities for a period of 180 days from the effective date of such
registration statement, and (ii) to execute any agreement reflecting clause (i)
above as may be requested by the Company or the managing underwriters at the
time of such initial offering.
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7. ESCROW.
The Participant shall, upon the execution of this Agreement, execute
Joint Escrow Instructions in the form attached to this Agreement as EXHIBIT B.
The Joint Escrow Instructions shall be delivered to the Secretary of the
Company, as escrow agent thereunder. The Participant shall deliver to such
escrow agent a stock assignment duly endorsed in blank and hereby instructs the
Company to deliver to such escrow agent, on behalf of the Participant, the
certificate(s) evidencing the Shares issued hereunder. Such materials shall be
held by such escrow agent pursuant to the terms of such Joint Escrow
Instructions.
8. RESTRICTIVE LEGENDS.
All certificates representing Shares shall have affixed thereto legends
in substantially the following form, in addition to any other legends that may
be required under federal or state securities laws:
"The shares of stock represented by this certificate are subject
to restrictions on transfer and an option to purchase set forth
in a certain Restricted Stock Agreement between the corporation
and the registered owner of these shares (or his predecessor in
interest), and such Agreement is available for inspection without
charge at the office of the Secretary of the corporation."
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may
not be sold, transferred or otherwise disposed of in the absence
of an effective registration statement under such Act or an
opinion of counsel satisfactory to the corporation to the effect
that such registration is not required."
9. PROVISIONS OF THE PLAN.
(a) This Agreement is subject to the provisions of the Plan, a
copy of which is furnished to the Participant with this Agreement.
(b) As provided in the Plan, upon the occurrence of an
Acquisition Event (as defined in the Plan), the repurchase and other rights of
the Company hereunder shall inure to the benefit of the Company's successor and
shall apply to the cash, securities or other property which the Common Stock was
converted into or exchanged for pursuant to such Acquisition Event in the same
manner and to the same extent as they applied to the Common Stock hereunder. If,
in connection with a Acquisition Event, a portion of the cash, securities and/or
other property received upon the conversion or exchange of the Common Stock
subject hereto is to be placed into escrow to secure indemnification or similar
obligations, the mix between the vested and unvested portion of such cash,
securities and/or other property that is placed into escrow shall be the same as
the mix between the vested and unvested portion of such cash, securities and/or
other property that is not subject to escrow.
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10. INVESTMENT REPRESENTATIONS.
The Participant represents, warrants and covenants as follows:
(a) The Participant is purchasing the Shares for his own
account for investment only, and not with a view to, or for sale in connection
with, any distribution of the Shares in violation of the Securities Act, or any
rule or regulation under the Securities Act.
(b) The Participant has had such opportunity as he has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit him to evaluate the merits and risks of his investment in
the Company.
(c) The Participant has sufficient experience in business,
financial and investment matters to be able to evaluate the risks involved in
the purchase of the Shares and to make an informed investment decision with
respect to such purchase.
(d) The Participant can afford a complete loss of the value of
the Shares and is able to bear the economic risk of holding such Shares for an
indefinite period.
(e) The Participant understands that (i) the Shares have not
been registered under the Securities Act and are "restricted securities" within
the meaning of Rule 144 under the Securities Act; (ii) the Shares cannot be
sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from registration is then
available; (iii) in any event, the exemption from registration under Rule 144
will not be available for at least one year and even then will not be available
unless a public market then exists for the Common Stock, adequate information
concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and (iv) there is now no registration
statement on file with the Securities and Exchange Commission with respect to
any stock of the Company and the Company has no obligation or current intention
to register the Shares under the Securities Act.
11. WITHHOLDING TAXES.
The Participant acknowledges and agrees that the Company has the right
to deduct from payments of any kind otherwise due to the Participant any
federal, state or local taxes of any kind required by law to be withheld with
respect to the purchase of the Shares by the Participant or the lapse of the
Purchase Option.
12. NO RIGHTS TO EMPLOYMENT.
The Participant acknowledges and agrees that the vesting of the Shares
pursuant to Section 2 hereof is earned only by continuing service as an employee
at the will of the Company (not through the act of being hired or purchasing
shares hereunder). The Participant further acknowledges and agrees that, except
as set forth in the Employment Agreement, the transactions contemplated
hereunder and the vesting schedule set forth herein do not constitute an express
or implied promise of continued engagement as an employee or consultant for the
vesting period, for any period, or at all.
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13. SEVERABILITY.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, and each other provision of this Agreement shall be severable and
enforceable to the extent permitted by law.
14. WAIVER.
Any provision for the benefit of the Company contained in this
Agreement may be waived, either generally or in any particular instance, by the
Board of Directors of the Company.
15. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
Company and the Participant and their respective heirs, executors,
administrators, legal representatives, successors and assigns, subject to the
restrictions on transfer set forth in Sections 4 and 5 of this Agreement.
16. NOTICE.
All notices required or permitted hereunder shall be in writing and
deemed effectively given upon personal delivery or five days after deposit in
the United States Post Office, by registered or certified mail, postage prepaid,
addressed to the other party hereto at the address shown beneath his or its
respective signature to this Agreement, or at such other address or addresses as
either party shall designate to the other in accordance with this Section 16.
17. PRONOUNS.
Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns and pronouns shall include the plural, and vice versa.
18. ENTIRE AGREEMENT.
This Agreement and the Plan, together with the Employment Agreement and
the exhibits hereto, constitute the entire agreement between the parties, and
supersedes all prior agreements and understandings, relating to the subject
matter of this Agreement.
19. AMENDMENT.
This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Participant.
20. GOVERNING LAW.
This Agreement shall be construed, interpreted and enforced in
accordance with the internal laws of the State of Delaware without regard to any
applicable conflicts of laws.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
UNISPHERE SOLUTIONS, INC.
By: /s/ Anthony Maher
----------------------------------------------
Name: Anthony Maher
----------------------------------------------
Title: Chairman
----------------------------------------------
Address: One Executive Drive
Chelmsford, MA 01824
/s/ James A. Dolce, Jr.
---------------------------------------------------
James A. Dolce, Jr.
Address: 9 Stonegate Road
Hopkinton, MA 01748
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EXHIBIT A
[TO EXHIBIT C]
PROMISSORY NOTE
$26,225,000.00 August 4, 2000
FOR VALUE RECEIVED, James A. Dolce, Jr. (the "Maker"), promises to pay
to Unisphere Solutions, Inc., a Delaware corporation (the "Company"), or order,
at its principal executive offices, the principal sum of Twenty Six Million Two
Hundred Twenty-Five Thousand Dollars ($26,225,000.00), together with interest on
the unpaid principal balance of this Note from time to time outstanding at a
rate per annum equal to the Floating Rate (as defined below), which interest
shall be payable in arrears semi-annually beginning six (6) months from the date
of this note, until paid in full. Principal and interest on this Note shall be
paid in full on January 1, 2003.
"Floating Rate" shall mean a rate per annum equal to the six month
LIBOR index rate, plus fifty (50) basis points, which such rate shall be
redetermined and changed on each six month anniversary of this Note (or if any
such six month anniversary is not a business day, on the next succeeding
Business Day). "Business Day" shall mean any day other than Saturday, Sunday or
any other day on which commercial banks in the State of New York are authorized
or required to close under the laws of the State of New York. Interest on this
Note shall be computed on the basis of a year of 365 days for the actual number
of days elapsed.
Payment of this Note is secured by a security interest in shares of
Common Stock of the Company acquired by the Maker pursuant to the Restricted
Stock Agreement between the Maker and the Company of even date herewith (the
"Restricted Stock Agreement"), pursuant to a pledge agreement of even date
herewith between the Maker and the Company (the "Pledge Agreement").
The Company shall have (i) full recourse against the Collateral under
the Pledge Agreement in connection with the repayment of the principal of the
Note and accrued interest thereon and (ii) recourse up to the Recourse Amount
(as hereinafter defined) against any other assets of the Maker. The Recourse
Amount as of any time shall mean (i) 25% of the principal amount hereof reduced
by 25% of each payment of principal made by or on behalf of the Maker from any
source and (ii) the full amount of accrued interest under this Note.
The Maker may at any time and from time to time prepay, in whole or in
part, any of the principal balance hereof or accrued interest thereon.
The Maker may make any payment under this Note in cash and/or by
surrender to the Company of shares of Common Stock of the Company held by the
Maker ("Shares") having a Fair Market Value equal to the amount being paid;
provided any such Shares shall have been held by the Maker and free of the
Purchase Option set forth in the Restricted Stock Agreement for a period of at
least six months prior to such surrender. "Fair Market Value" shall mean: (i) if
the Common Stock is then listed on the Nasdaq National Market or a national
securities exchange, the last reported sale price of the Common Stock of the
Company on the date of payment or (ii) if the Common Stock is not so listed, the
then fair market value of the Common Stock as agreed upon by the Maker and the
Board of Directors of the Company or, absent such
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agreement, the then fair market value as determined by an investment banking
firm of national standing mutually selected by the Maker and the Company (such
fair market value to be determined on a going concern basis without discount for
illiquidity or minority interest). The cost of any such investment banking firm
shall be shared equally by the Maker and the Company. If the Shares are
exchanged for securities of another company pursuant to an Acquisition Event (as
defined in the Restricted Stock Agreement), the Maker may make payment under
this Note by surrender of such securities, valued in accordance with the
foregoing. Any surrendered shares or securities shall be free of all liens and
encumbrances and shall be duly endorsed for transfer to the Company.
This Note shall become immediately due and payable without notice or
demand upon the occurrence at any time of any of the following events of default
(individually, "an Event of Default" and collectively, "Events of Default"):
1. default in the payment when due of any principal or interest
under this Note which is not cured within 10 days after
written notice thereof (provided that any delay in payment
attributable to a delay in the determination of the fair
market value of Shares to be surrendered in payment of
principal or interest shall not be considered a default);
2. the occurrence of any Event of Default under the Pledge
Agreement; or
3. the institution by or against the Maker of any proceedings
under the United States Bankruptcy Code or any other federal
or state bankruptcy, reorganization, receivership, insolvency
or other similar law affecting the rights of creditors
generally or the making by the Maker of a composition or an
assignment or trust mortgage for the benefit of creditors.
Upon the occurrence of an Event of Default, the holder shall have then,
or at any time thereafter, all of the rights and remedies afforded the secured
creditor by the Uniform Commercial Code as from time to time in effect in the
Commonwealth of Massachusetts or afforded by other applicable law.
No delay or omission on the part of the holder in exercising any right
under this Note or the Pledge Agreement shall operate as a waiver of such right
or of any other right of such holder, nor shall any delay, omission or waiver on
any one occasion be deemed a bar to or waiver of the same or any other right on
any future occasion. The Maker regardless of the time, order or place of signing
waives presentment, demand, protest and notices of every kind.
All rights and obligations hereunder shall be governed by the laws of
the Commonwealth of Massachusetts and this Note is executed as an instrument
under seal.
----------------------------------
James A. Dolce, Jr.
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PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as amended from time to time, this "Agreement"),
dated as of August 4, 2000, is made by James A. Dolce, Jr. ("Pledgor"), in favor
of Unisphere Solutions, Inc., a Delaware corporation ("Secured Party").
In order to induce Secured Party to make the loan contemplated by the
promissory note of even date herewith in the amount of $26,225,000 as the same
may be amended, replaced, restated or otherwise modified from time to time (the
"Note"), Pledgor hereby agrees as follows:
ARTICLE 1. THE PLEDGE.
Section 1.1. PLEDGE. Pledgor hereby pledges to Secured Party, and grants to
Secured Party a security interest in, the following (the "Pledged Collateral"):
(a) 2,500,000 shares of Common Stock of the Secured Party now owned
by the Pledgor (the "Pledged Securities"), and all stock dividends and other
property and proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Securities; and
(b) all additional securities or other consideration from time to
time acquired by Pledgor in substitution for or in respect of the Pledged
Securities, and the certificates representing such additional securities, and
all stock dividends and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
securities.
Section 1.2. SECURITY FOR OBLIGATIONS. This Agreement secures the payment of all
obligations of the Pledgor now or hereafter existing under the Note (all such
obligations being the "Obligations").
Section 1.3. DELIVERY OF PLEDGED COLLATERAL. All certificates or instruments
representing or evidencing the Pledged Collateral shall be delivered to Secured
Party to be held by Secured Party (or to the Escrow Agent under the Company's
1999 Stock Incentive Plan (the "Escrow Agent")) and shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance satisfactory to
Secured Party. Secured Party shall have the right, at any time following an
Event of Default, in its discretion and without notice to Pledgor, to transfer
to or to register in the name of Secured Party, or any of Secured Party's
nominees (or to direct the Escrow Agent to so transfer) any or all of the
Pledged Collateral, subject only to the revocable rights specified in Section
4.2(a). Secured Party shall send notice to Pledgor of any such transfer,
registration or exchange of the Pledged Collateral promptly after such event.
Section 1.4. CONTINUING AGREEMENT. This Agreement shall create a continuing
security interest in the Pledged Collateral and shall remain in full force and
effect until payment in full of the Obligations. Upon the payment in full of the
Obligations, in cash or as otherwise expressly provided by the Note, Pledgor
shall be entitled to the return and re-transfer to him, upon his request and at
his expense, of such of the Pledged Collateral as shall not have
35
been sold or otherwise applied pursuant to the terms hereof.
Section 1.5. SECURITY INTEREST ABSOLUTE. All rights of Secured Party and
security interests hereunder, and all obligations of Pledgor hereunder shall be
absolute and unconditional, irrespective of any defenses whatsoever available to
the Pledgor.
Section 1.6. RELEASE OF COLLATERAL. Notwithstanding anything to the contrary
herein, Secured Party shall from time to time release from the lien of this
Agreement, and shall deliver to Pledgor, such number of the Pledged Securities
as equals 2,500,000 multiplied by a fraction, the numerator which is the
principal amount of the Note repaid, or directed to be repaid pursuant to the
following sentence, and the denominator of which is $26,225,000. For purposes
solely of this Section 1.6, a portion of the Note shall be deemed to have been
"directed to be repaid" if the Pledgor provides to the Secured Party (i) a copy
of a written notice from the Maker to a creditworthy broker directing that the
Pledged Securities be sold on the Nasdaq National Market at a price sufficient
to repay such portion of the Note and (ii) an unconditional and irrevocable
undertaking by such broker to deliver promptly to the Company proceeds of such
sale sufficient to repay such portion of the Note.
ARTICLE 2. COVENANTS.
Section 2.1. FURTHER ASSURANCES. Pledgor agrees that at any time and from time
to time, at Pledgor's expense, Pledgor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted
hereby or under the Note or to enable Secured Party to exercise and enforce
Secured Party's rights and remedies hereunder or under the Note with respect to
any Pledged Collateral.
ARTICLE 3. SECURED PARTY.
Section 3.1. ATTORNEY-IN-FACT. Pledgor hereby irrevocably appoints Secured Party
Pledgor's attorney-in-fact with full power of substitution and with full
authority in the place and stead of Pledgor and in the name of Pledgor or
otherwise, from time to time in Secured Party's discretion to take any action
and to execute any instrument which Secured Party may reasonably deem necessary
or advisable to accomplish the purposes of this Agreement, including without
limitation to receive, endorse and collect all instruments made payable to
Pledgor representing any dividend, interest payment or other distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same.
Section 3.2. RIGHT TO PERFORM. If Pledgor fails to perform any agreement
contained herein, Secured Party may perform, or cause performance of, such
agreement.
ARTICLE 4. DEFAULT.
Section 4.1. DEFAULT; EVENT OF DEFAULT.
For purposes of this Agreement the terms "Default" and "Event of
Default" shall have the following meanings:
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(a) "Default" means the occurrence of any event or condition that
with the passage of time or giving of notice, or both, would constitute an Event
of Default.
(b) The occurrence of any one or more of the following events or
conditions shall constitute an "Event of Default" under this Agreement:
(i) Failure of the Pledgor to make any payment of principal
or interest when due under the Note, or
(ii) Breach of or failure in the due observance or
performance of any covenant, condition or agreement on the part of Pledgor to be
observed or performed pursuant to this Agreement or the Note, which such breach
or failure is not cured within 30 days after written notice thereof.
Section 4.2. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Default or Event of Default shall have occurred
which has not been expressly waived:
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this Agreement
or the Note; and
(ii) Pledgor shall be entitled to receive and retain any and
all cash dividends paid in respect of the Pledged Collateral.
(b) Upon the occurrence of a Default or Event of Default and
thereafter unless expressly waived:
(i) All rights of Pledgor to exercise the voting and
other consensual rights which Pledgor would otherwise be entitled to exercise
pursuant to Section 4.2.(a)(i) and to receive the dividends which Pledgor would
otherwise be authorized to receive and retain pursuant to Section 4.2.(a)(ii)
shall cease, and all such rights shall thereupon become vested in Secured Party
who shall thereupon have the sole right to exercise such voting and other
consensual rights and to receive and hold as Pledged Collateral such dividends.
(ii) All dividends which are received by Pledgor contrary to
the provisions of Section 4.2.(b)(i) shall be received in trust for the benefit
of Secured Party, shall be segregated from other funds of Pledgor, and shall be
forthwith paid over to Secured Party as Pledged Collateral in the same form as
so received (with any necessary endorsement).
Section 4.3. REMEDIES UPON DEFAULT. If any Event of Default shall have occurred
which has not been expressly waived:
(a) Secured Party may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to Secured Party, all the rights and remedies of a secured
party on default under the Uniform Commercial Code (the "UCC") in effect in the
Commonwealth of Massachusetts at that time.
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(b) Any cash held by Secured Party as Pledged Collateral and all
cash proceeds received by Secured Party in respect of any sale of, collection
from or other realization upon all or any part of the Pledged Collateral may, in
the discretion of Secured Party be held by Secured Party as collateral for,
and/or then or at any time thereafter applied in whole or in part by Secured
Party against, all or any part of the Obligations in such order as Secured Party
shall elect. Any surplus of such cash or cash proceeds held by Secured Party and
remaining after payment in full of all the Obligations shall be paid over to
Pledgor or to whomsoever may be lawfully entitled to receive such surplus.
ARTICLE 5. MISCELLANEOUS.
Section 5.1. AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement nor consent to any departure by Pledgor herefrom, shall in any event
be effective unless the same shall be in writing and signed by Secured Party,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No failure on the part of Secured
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof or preclude any other or further exercise thereof or the
exercise of any other right. The remedies provided herein are cumulative and not
exclusive of any remedies provided at law.
Section 5.2. NOTICES. All notices to be given hereunder shall be given in the
manner provided under the Amended and Restated Employment Agreement of even date
herewith between Pledgor and Secured Party.
Section 5.3. BINDING NATURE. This Agreement shall (a) be binding upon Pledgor,
his heirs, executors, personal representatives and assigns, and (b) inure,
together with the rights and remedies of Secured Party hereunder, to the benefit
of Secured Party's successors, transferees and assigns.
Section 5.4. GOVERNING LAW; TERMS. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Massachusetts. Unless otherwise defined herein, terms defined in Article 9 of
the Uniform Commercial Code in the Commonwealth of Massachusetts are used herein
as therein defined.
Section 5.5. HEADINGS FOR CONVENIENCE. The underlined or capitalized captions of
this Agreement are for convenience of reference only and shall not be deemed to
define or limit the provisions hereof or to affect their construction or
application.
Section 5.6. TERMINATION. This Agreement shall terminate on the payment in full
of the Obligations.
[Signature Page to Follow]
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IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered as of the date first above written.
PLEDGOR
---------------------------------
James A. Dolce, Jr.
UNISPHERE SOLUTIONS, INC.
By:
------------------------------
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EXHIBIT B
[TO EXHIBIT C]
UNISPHERE SOLUTIONS, INC.
Joint Escrow Instructions
August 4, 2000
Secretary
Unisphere Solutions, Inc.
One Executive Drive
Chelmsford, MA 01824
Dear Sir:
As Escrow Agent for Unisphere Solutions, Inc., a Delaware corporation,
and its successors in interest under the Restricted Stock Agreement (the
"Agreement") of even date herewith, to which a copy of these Joint Escrow
Instructions is attached (the "Company"), and the undersigned person ("Holder"),
you are hereby authorized and directed to hold the documents delivered to you
pursuant to the terms of the Agreement in accordance with the following
instructions:
1. APPOINTMENT. Holder irrevocably authorizes the Company to deposit
with you any certificates evidencing Shares (as defined in the Agreement) to be
held by you hereunder and any additions and substitutions to said Shares. For
purposes of these Joint Escrow Instructions, "Shares" shall be deemed to include
any additional or substitute property. Holder does hereby irrevocably constitute
and appoint you as his attorney-in-fact and agent for the term of this escrow to
execute with respect to such Shares all documents necessary or appropriate to
make such Shares negotiable and to complete any transaction herein contemplated.
Subject to the provisions of this paragraph 1 and the terms of the Agreement,
Holder shall exercise all rights and privileges of a stockholder of the Company
while the Shares are held by you.
2. CLOSING OF PURCHASE.
(a) Upon any purchase by the Company of the Shares pursuant to the
Agreement, the Company shall give to Holder and you a written notice specifying
the purchase price for the Shares, as determined pursuant to the Agreement, and
the time for a closing hereunder (the "Closing") at the principal office of the
Company. Holder and the Company hereby irrevocably authorize and direct you to
close the transaction contemplated by such notice in accordance with the terms
of said notice.
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(b) At the Closing, you are directed (a) to date the stock assignment
form or forms necessary for the transfer of the Shares, (b) to fill in on such
form or forms the number of Shares being transferred, and (c) to deliver same,
together with the certificate or certificates evidencing the Shares to be
transferred, to the Company against the simultaneous delivery to you of the
purchase price for the Shares being purchased pursuant to the Agreement.
3. WITHDRAWAL. The Holder shall have the right to withdraw from this
escrow any Shares as to which the Purchase Option (as defined in the Agreement)
has terminated or expired.
4. DUTIES OF ESCROW AGENT.
(a) Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
(b) You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact of Holder while acting in good faith and in
the exercise of your own good judgment, and any act done or omitted by you
pursuant to the advice of your own attorneys shall be conclusive evidence of
such good faith.
(c) You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or Company,
excepting only orders or process of courts of law, and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case you obey or comply with any such order, judgment or decree of any court,
you shall not be liable to any of the parties hereto or to any other person,
firm or Company by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
(d) You shall not be liable in any respect on account of the identity,
authority or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
(e) You shall be entitled to employ such legal counsel and other
experts as you may deem necessary properly to advise you in connection with your
obligations hereunder and may rely upon the advice of such counsel.
(f) Your rights and responsibilities as Escrow Agent hereunder shall
terminate if (i) you cease to be Secretary of the Company or (ii) you resign by
written notice to each party. In the event of a termination under clause (i),
your successor as Secretary shall become Escrow Agent hereunder; in the event of
a termination under clause (ii), the Company shall appoint a successor Escrow
Agent hereunder.
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(g) If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
(h) It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such dispute shall have been settled either by mutual written agreement of
the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
(i) These Joint Escrow Instructions set forth your sole duties with
respect to any and all matters pertinent hereto and no implied duties or
obligations shall be read into these Joint Escrow Instructions against you.
(j) The Company shall indemnify you and hold you harmless against any
and all damages, losses, liabilities, costs, and expenses, including attorneys'
fees and disbursements, for anything done or omitted to be done by you as Escrow
Agent in connection with this Agreement or the performance of your duties
hereunder, except such as shall result from your gross negligence or willful
misconduct.
5. NOTICE. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses, or at such other addresses as a party may
designate by ten days' advance written notice to each of the other parties
hereto.
COMPANY: Unisphere Solutions, Inc.
One Executive Drive
Chelmsford, MA 01824
HOLDER: Notices to Holder shall be sent to the address set forth
below Holder's signature below.
ESCROW AGENT: Secretary
Unisphere Solutions, Inc.
One Executive Drive
Chelmsford, MA 01824
6. MISCELLANEOUS.
(a) By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions, and you do not
become a party to the Agreement.
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(b) This instrument shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
UNISPHERE SOLUTIONS, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
Address: One Executive Drive
Chelmsford, MA 01824
---------------------------------------------
James A. Dolce, Jr.
Address: 9 Stonegate Road
Hopkinton, MA 01748
Date Signed:
---------------------------------
ESCROW AGENT:
- ------------------------------
Secretary
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EXHIBIT D
DRAFT
SEPARATION AGREEMENT AND GENERAL RELEASE ("AGREEMENT")
CONSULT WITH A LAWYER BEFORE SIGNING THIS AGREEMENT, BY SIGNING THIS AGREEMENT
YOU GIVE UP AND WAIVE IMPORTANT LEGAL RIGHTS.
AGREEMENT made as of this ___ day of ____, ____, by and between James
A. Dolce ("Dolce"), residing at __________________________, and Unisphere
Solutions, Inc. ("USI"), located at One Executive Drive, Chelmsford,
Massachusetts 01824.
USI and Dolce, based upon good and valuable mutual consideration,
including the execution by Dolce of this AGREEMENT, hereby mutually consent to
and agree to the following:
1. Dolce shall terminate his employment from USI on _________.
2. Dolce shall be paid no later than 15 days after his termination of
employment from USI a lump sum separation benefit of $________, which
represents 12 months of his current annual salary and one year short
term target incentive plan bonus. This payment will be less applicable
federal, state and local withholding and FICA taxes and is in lieu of
any separation or severance benefit Dolce would otherwise be eligible
to receive from USI or from any affiliate of USI. In addition, Dolce
shall be paid all accrued but unpaid salary through ____________, and
will be reimbursed for all expenses incurred by him in accordance with
the terms of the Employment Agreement between Dolce and the Company.
3. Dolce shall have a nonforfeitable right to, and shall be eligible to
receive, the consideration payable to him under the Agreement and Plan
of Merger dated as of March 14, 1999 among Siemens Corporation, Wolf
Acquisition Corp., and Redstone Communications Inc. ("Merger
Agreement") with respect to which Dolce's rights were not vested at
Closing (as defined in the Merger Agreement) and which has not yet been
paid as of the date of his termination of employment from USI.
4. All of the options held by Dolce to purchase shares of Common Stock of
USI and all shares of restricted Common Stock held by Dolce as of the
date of his termination of employment from USI shall become vested and
exercisable in full.
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5. Dolce's participation as an active employee in the Group Insurance
Plans of USI will cease as of the date of his termination of employment
from USI. Thereafter, Dolce and his covered dependents shall be
eligible for continuation coverage under the health plans of USI
pursuant to the federal Consolidated Omnibus Budget Reconciliation Act.
For the 12 month period following Dolce's termination of employment
from USI, Dolce shall only be responsible for paying for the cost of
such continued health coverage at the rate he would have paid as an
active employee. For the next six months, Dolce may continue such
health continuation coverage provided he pays the full cost for such
coverage at the rate charged to other former employees who elect such
coverage. Dolce shall also continue to be provided with the basic life
insurance coverage that he had at the time of his termination of
employment from USI for the 12 month period following his termination
of employment at the cost he would have paid for such coverage as an
active employee.
6. Dolce agrees to resign any corporate office, directorship, manager
position or official position of any kind which he holds with USI or
any affiliate of USI effective _________.
7. Except as provided herein, Dolce agrees that neither USI, nor any
affiliate of USI have any obligation to Dolce for any other money or
benefits, including, but not limited to, salary, benefits, bonus,
vacation, severance, pension, medical, life or other insurance.
8. This AGREEMENT sets forth the entire AGREEMENT between the parties and
supersedes any and all prior AGREEMENTS or understanding between the
parties, other than the Employment Agreement. However, nothing
contained in this AGREEMENT shall be deemed to in any way reduce the
obligations of Dolce under any employee patent and secrecy agreement,
confidentiality agreement or non-competition and non-solicitation
agreement which Dolce has signed, including, but not limited to, the
Amended and Restated Non-Competition and Non-Solicitation Agreement
dated as of August 1, 2000, between USI and Dolce.
9. Dolce understands USI will not be required to provide any payments or
benefits set forth in Paragraphs 2 through 7 of this AGREEMENT until
this AGREEMENT becomes effective.
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10. Dolce acknowledges that there are many laws and regulations
prohibiting employment discrimination pursuant to which he may have
rights or claims, including but not limited to, the Age Discrimination
in Employment Act of 1967, as amended, Americans with Disabilities Act
of 1990, Title VII of the Civil Rights Acts of 1964 and 1991, and the
Older Workers Benefit Protection Act. Dolce also understands that there
are other statutes and laws of contract and tort otherwise relating to
his employment, including, without limitation, claims for wrongful
discharge, discrimination, defamation, and negligent or intentional
infliction of emotional distress. In consideration of the payments and
benefits set forth in Paragraphs 2 through 7 of this AGREEMENT, Dolce
waives and releases any rights he may have against USI or any affiliate
of USI under these and other laws, but he does not intend to, nor is he
waiving any rights or claims that may arise after the date that he
signs this AGREEMENT.
11. In exchange for the payments and benefits set forth in Paragraphs 2
through 7 of this AGREEMENT, upon reasonable notice, Dolce also
promises to make himself reasonably available to USI and affiliates of
USI regarding any current or future litigation of matters or claims of
which Dolce may have factual knowledge. In this regard, Dolce agrees to
provide information to USI or affiliates of USI, assist in and provide
information for responses to pleadings and discovery, and assist in,
prepare for and provide testimony at depositions, trials or at any
other proceeding, whether requested by USI or an affiliate of USI or
subpoenaed by another party. USI agrees to compensate Dolce for any
reasonable expenses he may incur in connection with making himself
available to assist USI or an affiliate of USI, such as travel, hotel
and meal expenses.
12. (a) In consideration of the payments and benefits set forth in
Paragraphs 2 through 7 of this AGREEMENT, on behalf of himself, his
heirs and personal representatives, Dolce releases and discharges 9 the
COMPANY from any and all charges, claims and actions, including but not
limited to those arising out of his employment or the cessation of his
employment with the COMPANY and Covenants Not to Sue the COMPANY for
such charges, claims and actions. Dolce will not bring any such
charges, claims or actions against the COMPANY in the future, except a
charge, claim or action based upon rights or claims that may arise
after the date that he signs this AGREEMENT. Notwithstanding the
foregoing, this Paragraph 12(a) shall not apply to any claim for
indemnification that Dolce may have under the Certificate of
Incorporation or By-laws of the Company, or otherwise.
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(b) As referred to in this paragraph, the COMPANY includes USI and its
partners, parents, subsidiaries, affiliates and divisions and all of
their respective successors and assigns, and their directors, officers,
representatives, shareholders, agents, attorneys, employees and former
employees, whether as individuals or in their official capacity, and
their respective heirs and personal representatives.
13. Apart from any decisions or awards made under Paragraph 15 of this
AGREEMENT, neither USI nor Dolce is to be regarded as a prevailing
party for any purpose by reason of this AGREEMENT.
14. Dolce acknowledges that he does not possess any rights or claims to any
future employment with USI or any affiliate of USI, and will not apply
for, seek or attempt to gain employment at any time with USI or any
affiliate of USI.
15. Any and all material disputes, complaints, controversies, claims and
grievances (excluding those specifically excepted herein) arising
under, out of, in connection with, or in any manner related to this
AGREEMENT or the relation of the parties hereunder shall be submitted
to final and binding arbitration to be conducted by the American
Arbitration Association in accordance with its rules and regulations.
Arbitration proceedings hereunder may be commenced by written notice
from either party hereto to the other party. Such proceedings and
evidence shall be confidential. The arbitrator shall have the power and
the authority to make such decisions and awards as he shall deem
appropriate, including granting compensatory damages and costs to the
prevailing party (including fees of the arbitrator, but excluding
punitive, exemplary, consequential or special damages, and attorneys'
fees), and granting or issuance of such mandatory directions,
prohibitions, orders, restraints and other injunctions (other than any
of the foregoing that
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would reestablish the employment relationship formerly existing between
Dolce and USI or an affiliate of USI) that he may deem necessary or
advisable directed to or against any of the parties, including a
direction or order requiring specific performance of any covenant,
agreement or provision of this AGREEMENT as a result of a breach or
threatened breach thereof. The cost of such arbitration shall be borne
equally by the parties except that each party shall bear its own cost
of attorneys' fees and expenses. Any decision and award of the
arbitrator shall be final, binding and conclusive upon all of the
parties hereto and said decision and award may be entered as a final
judgment in any court of competent jurisdiction. It is expressly agreed
that arbitration as provided herein shall be the exclusive means for
determination of all matters as above provided and neither of the
parties hereto shall institute any action or proceeding in any court of
law or equity, state or federal, other than respecting enforcement of
the arbitrator's award hereunder. The foregoing sentence shall be a
bona fide defense in any action or proceeding instituted contrary to
this AGREEMENT. Notwithstanding the foregoing, nothing contained herein
shall prevent or restrain in any manner USI or an affiliate of USI from
instituting an action or claim in any court, or such other forum as may
be appropriate to enforce the terms of any employee patent and secrecy
agreement or non-competition and non-solicitation agreement, (or
similar agreement relating to USI's or an affiliate of USI's
confidential or proprietary business information or trade secrets) to
protect USI's or an affiliate of USI's proprietary or confidential
business information or trade secrets, to enforce or protect USI's or
an affiliate of USI's patent, copyright trademark, trade name or trade
dress rights, to redress claims for product disparagement or trade
libel, or to protect USI's or an affiliate of USI's reasonable business
expectations or relations with third parties.
16. Dolce acknowledges and agrees that the payments and benefits under this
AGREEMENT fully satisfy any or all requirements to make payments to him
upon his termination of employment from USI under any employment
agreement, including, but not limited to the Amended and Restated
Employment Agreement dated as of August 1, 2000, between Dolce and USI.
17. This AGREEMENT shall be deemed to have been made within the
Commonwealth of Massachusetts and shall be interpreted and construed
and enforced in accordance with the laws of the Commonwealth of
Massachusetts and before the Courts of the Commonwealth of
Massachusetts, without regard to its conflict of laws provisions.
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18. (a) The terms and provisions (collectively "provisions") of this
AGREEMENT are severable.
(b) If one or more provisions or terms of this AGREEMENT shall be ruled
unenforceable or void, the provisions so affected shall be deemed
amended and shall be construed so as to enable the provision(s) to be
applied and enforced to the maximum lawful extent.
19. Dolce understands that this AGREEMENT may not affect the rights and
responsibilities of the Equal Employment Opportunity Commission
("Commission") to enforce the Age Discrimination in Employment Act
("ADEA") or be used to prevent an employee from filing a charge under
the ADEA.
20. Dolce acknowledges that he received this AGREEMENT on the ______ day of
____________, _______, has had an opportunity to consult an attorney
before signing it, and was given a period of at least twenty-one (21)
days to consider this AGREEMENT. Dolce acknowledges that in signing
this AGREEMENT, he has relied only on the promises written in this
AGREEMENT and not on any other promise made by USI or any affiliate of
USI.
21. Dolce has seven (7) days to revoke this AGREEMENT after he signs it.
This AGREEMENT will not become effective or enforceable until ten (10)
days after USI has received his signed copy of this AGREEMENT. Notice
of revocation, as well as any other notices under this AGREEMENT, must
be delivered in writing to __________________________________________.
22. This AGREEMENT may not be modified or changed orally.
By:
-------------------------------------- ------------------------
James A. Dolce Date
UNISPHERE SOLUTIONS, INC.
By:
-------------------------------------- ------------------------
Date
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PLEASE WRITE THIS SENTENCE IN THE SPACE PROVIDED IF IT IS TRUE:
I have read this SEPARATION AGREEMENT AND GENERAL RELEASE and I
understand all of its terms. I enter into and sign the AGREEMENT knowingly and
voluntarily, with full knowledge of what it means.
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James A. Dolce Date
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