UNITECH TELECOM, INC.
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This EMPLOYMENT AND NON-COMPETITION AGREEMENT ('Agreement'), dated as of
the 6th day of October, 1995, is entered into by and between Unitech Telecom,
Inc., a Delaware corporation ('Unitech'), and Hong Lu ('Employee').
A. Employee has been employed as an employee of Unitech Telecom, Inc., a
Delaware corporation ('Unitech'); and
B. Unitech, StarCom and certain other parties have entered into an
Agreement and Plan of Reorganization, dated as of September 28, 1995, (the
'Reorganization Agreement'), which requires, among other things, that Employee
enter into this Agreement in connection with the merger of a wholly owned
subsidiary of Unitech into StarCom (the 'Merger') pursuant to which StarCom will
be the surviving corporation in the Merger and a wholly owned subsidiary of
Unitech (such surviving corporation being hereinafter referred to as 'StarCom'),
all as more fully described in the Reorganization Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED by and between the parties hereto as
(a) EMPLOYMENT. During the Employment Term (as hereinafter defined)
Unitech hereby employs Employee as its President and Chief Executive Officer,
Unitech upon and subject to the terms and conditions set forth in this
Agreement. Employee hereby agrees to accept such employment, upon and subject
to the terms and conditions set forth in this Agreement. In addition, Unitech
shall, subject to the Employee's consent, cause Employee to be nominated and
elected to Unitech's Board of Directors.
(b) DUTIES. Effective upon the date hereof, Employee will perform all of
the services customarily associated with the position of President and Chief
Executive Officer, Unitech during the Employment Term, subject to the policies
established by and the direction of the Board of Directors. Employee also
agrees to perform such other duties and responsibilities consistent with such
position as the Board of Directors of Unitech may assign to him from time to
time during the Employment Term. During his Employment Term (as defined in
subsection (c) below), Employee shall carry out his duties and responsibilities
hereunder in a diligent and competent manner and shall devote substantially all
of his business time, attention and energy thereto.
(c) EMPLOYMENT TERM. Employee's employment hereunder (the 'Employment
Term') shall commence on the date hereof. Such employment shall be 'at will'
employment pursuant to applicable law. If Employee's employment terminates for
any reason other than (i) voluntary termination by Employee, (ii) termination as
a result of death or disability, or (iii) termination for Cause (as defined in
Section 5(a)), Employee shall be entitled to sixty (60) days notice of
(d) PLACE OF EMPLOYMENT. During the Employment Term, Employee shall
render his services at the principal executive offices of Unitech. Employee
shall do such traveling as shall be reasonably necessary in connection with his
duties and responsibilities hereunder.
(e) Employee agrees to devote substantially all of his business time,
attention and energy to the performance of his duties under this Agreement
during the Employment Term and shall perform such duties diligently, in good
faith and consistent with the best interests of Unitech.
(a) SALARY. During the Employment Term, Employee will receive a salary of
not less than $12,500 per month ($150,000 per annum), which shall be paid in
accordance with Unitech's normal payroll practice and shall be subject to review
based upon Unitech's normal performance review practices. Unless otherwise
specified herein, Unitech will make such deductions, withholdings and other
payments from all sums payable pursuant to this Agreement which Employee
requests or which are required by applicable law for taxes and other charges.
Unitech shall, in addition to Employee's salary, reimburse Employee for all
ordinary and necessary out-of-pocket expenses incurred by him in the performance
of his services under this Agreement, subject to and upon receipt by Unitech of
invoices or other documentation in support thereof in accordance with Unitech's
policies regarding reimbursement of expenses. Employee shall be entitled to
receive such bonus as shall be approved by the Board of Directors of Unitech in
each year during the Employment Term.
(b) BENEFIT PLANS. Employee will be entitled to participate in or receive
benefits under Unitech's employee benefit plans and policies as in effect from
time to time in which Employee is eligible to participate, subject to the
applicable terms and conditions of the particular benefit plan. These benefit
plans may include health care, life insurance, accidental death and disability,
short- and long-term disability, stock options, savings and/or bonus plans
provided by, through or on behalf of Unitech. Unitech may change, amend, modify
or terminate any benefit or bonus plan from time to time.
3. CONFIDENTIALITY AND PROPRIETARY INFORMATION AGREEMENT. Concurrently
with the execution of this Agreement, Unitech and Employee will execute the
Confidentiality and Proprietary Information Agreement ('Confidentiality
Agreement') in the form attached hereto as Attachment 1.
4. COVENANT NOT TO COMPETE.
(a) NON-COMPETE. In consideration of his employment, Employee agrees
that so long as he is an Employee of Unitech and, in the case of Employee's
termination of employment with Unitech or StarCom, two (2) years from the date
of termination, Employee will not directly or indirectly engage in (whether as
an employee, consultant, proprietor, partner, director or otherwise), or have
any ownership interest in, or participate in the financing, operation,
management or control of, any person, firm, corporation or business that engages
in a 'Restricted Business' in a 'Restricted Territory' (as such terms are herein
defined). It is agreed that ownership of no more than 1% of the outstanding
voting stock of a publicly traded corporation shall not constitute a violation
of this provision. It is also agreed that this provision shall not apply if the
Employee's termination of employment with Unitech is due to (i) a breach by
Unitech of the terms of this Agreement as adjudicated by a court of competent
jurisdiction (except for a failure of Unitech to pay Employee's salary as
provided in Section 2(a) hereof which, for these purposes, will not require such
adjudication) or (ii) a final adjudication of Unitech as a bankrupt under any
federal or state law.
(b) NON-SOLICIT. Employee agrees that until the later to occur of
(i) the termination of Employee's agreement not to compete pursuant to
Section 4(a) above (ii) 2 years following the termination of Employee's
employment with Unitech, Employee shall not solicit, encourage, or take any
other action which is intended to induce any other employee of Unitech to
terminate his employment with Unitech.
(c) SEVERABILITY. The parties intend that the covenants contained in
the preceding paragraphs shall be construed as a series of separate covenants,
one for each county, city, state and other political subdivision of the
Restricted Territory. Except for geographic coverage, each such separate
covenant shall be deemed identical in terms to the covenant contained in the
preceding paragraphs. If, in any judicial proceeding, a court shall refuse to
enforce any of the separate covenants (or any part thereof) deemed included in
said paragraphs, then such unenforceable covenant (or such part) shall be deemed
eliminated from this Agreement for the purpose of those proceedings to the
extent necessary to permit the remaining separate covenants (or portions
thereof) to be enforced by such court. It is the intent of the parties that the
covenants set forth herein be enforced to the maximum degree permitted by
(d) REFORMATION. In the event that the provisions of this Section 4
should ever be deemed to exceed the scope, time or geographic limitations of
applicable law regarding covenants not to compete, then such provisions shall be
reformed to the maximum scope, time or geographic limitations, as the case may
be, permitted by applicable laws.
(e) REMEDIES. The Employee hereby acknowledges that the covenants
and restrictions contained in this Section 4 are necessary for the protection
of Unitech's business and goodwill and are considered by the Employee to be
reasonable. Accordingly, the Employee hereby
acknowledges and agrees that any actual or threatened breach of any of the
provisions of such Paragraph 4 may cause irreparable harm to Unitech and may
not be remediable by an action at law for damages and, therefore, Unitech
shall be entitled to seek, as a non-exclusive remedy, in any court of
competent jurisdiction, all equitable remedies therefor, including, without
limitation, a temporary or permanent injunction or specific performance of
the provisions hereof, without the necessity of showing any actual damage or
that monetary damages would not provide an adequate remedy at law or posting
a bond therefor.
The Employee covenants and agrees that, if the Employee shall
violate the foregoing non-compete covenant, Unitech shall be entitled to an
accounting and repayment of all profits, compensation, commissions,
remunerations, benefits or other payments which the Employee directly or
indirectly has realized and/or may realize as a result of, growing out of or in
connection with any such violation. Such remedy shall be in addition to and not
in limitation of any injunctive relief or other rights or remedies to which
Unitech may be entitled at law or in equity or under this Agreement.
5. Employee agrees that he shall not knowingly and intentionally
interfere in any manner with the contractual or employment relationship between
Unitech and any employee, supplier or customer of Unitech.
6. DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
(a) 'Cause' shall mean:
(i) Employee's continued failure to perform his duties
and responsibilities in good faith to the best of his ability after notice
thereof from Unitech to Employee;
(ii) Employee personally engaging in knowing and
intentional illegal conduct;
(iii) Employee being convicted of a felony, or
committing an act of dishonesty or fraud or misappropriating property;
(iv) Employee knowingly and intentionally breaching in
any material respect the terms of this Agreement or the Confidentiality
(v) Employee's commencement of employment with another
employer while he is an employee of Unitech.
(b) 'Restricted Business' shall mean PHS-based wireless local loop,
optical multiplexers, and the intelligent networking business, including
products and/or services related to
the StarCom Network Systems intelligent services platform. Notwithstanding
the foregoing, the Restricted Business shall apply only to products and
services in direct competition with Unitech and/or StarCom.
(c) 'Restricted Territory' shall mean the counties, cities and states
of the United States of America and the country of and each political
subdivision of Canada, Australia, Japan, Taiwan, People's Republic of China,
Hong Kong, Korea, Singapore, Thailand, each member nation of the European
Community or the European Free Trade Association, and all other geographic areas
throughout the world.
7. REPRESENTATIONS OF EMPLOYEE. Employee represents that:
(a) he (i) is familiar with the covenants not to compete and not to
solicit set forth in this Agreement, (ii) is fully aware of his obligations
hereunder, including, without limitation, the length of time, scope and
geographic coverage of these covenants, (iii) finds the length of time, scope
and geographic coverage of these covenants to be reasonable, and (iv) is
receiving specific, bargained-for consideration for his covenants not to compete
and not to solicit;
(b) the execution of this Agreement and the Confidentiality and
Proprietary Information Agreement, and the performance of Employee's obligations
hereunder and thereunder, will not conflict with, or result in a violation or
breach of, any other agreement to which Employee is a party or any judgment,
order or decree to which Employee is subject.
8. ASSIGNMENT. This Agreement may not be assigned by Employee without
the written consent of Unitech. This Agreement may not be assigned by Unitech
without the written consent of Employee, except to an assignee who acquires all
or substantially all of the business of Unitech, whether by merger,
consolidation, sale of assets or otherwise. Unitech will require, as a
condition of any such assignment, that any such assignee assume and agree in
writing to perform this Agreement in the same manner and to the same extent that
Unitech would be required to perform if no such succession had taken place.
9. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding between Employee and Unitech with respect to the subject matter
hereof, and supersedes any other negotiations, agreements, understandings,
representations or past or future practices, whether written or oral.
10. NOTICES. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing to both parties and shall be
deemed given on the date of delivery, if delivered, or five days after mailing,
if mailed first-class mail, certified, postage prepaid, to the following
(a) If to Unitech:
Unitech Telecom, Inc.
333 Hegenberger Road, Suite 328
Oakland, CA 94621
with a copy to:
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
Attention: Marcia K. Sterling, Esq.
(b) If to Employee:
(c) With a copy to:
(or to such other address as any party hereto may designate by notice given as
11. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California without giving
effect to principles regarding conflict of laws.
12. AMENDMENTS. This Agreement shall not be changed or modified in whole
or in part except by an instrument in writing signed by each party hereto, nor
shall any covenant or provision of this Agreement be waived except by an
instrument in writing signed by the party against whom enforcement of such
waiver is sought.
13. EFFECTIVE DATE. This Agreement shall become effective upon the
Effective Time of the Merger.
14. ATTORNEYS' FEES. In the event of any legal action or proceeding to
enforce or interpret the provisions hereof, the prevailing party shall be
entitled to reasonable attorneys' fees, whether or not the proceeding results in
a final judgment.
15. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
16. EFFECT OF HEADINGS. The section headings herein are for convenience
only and shall not affect the construction or interpretation of this Agreement.
17. DEFINITIONS. All capitalized terms used herein shall have the meaning
defined in the Reorganization Agreement, unless otherwise defined herein.
18. DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to either party upon any breach or default of the other
party hereto shall impair any such right, power or remedy of such non-defaulting
party, nor shall it be construed to be a waiver of any such breach or default,
nor an acquiescence therein, nor of nor in any similar breach or default
thereafter occurring; nor shall any waiver, single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring.
19. INDEMNIFICATION. During and after the Employment Term, Unitech shall
defend, indemnify and hold Employee harmless from any claims, causes of action,
liabilities, damages, costs or expenses incurred by Employee based upon or in
connection with the performance of his services under this Agreement to the
fullest extent permitted by the laws of the State of Delaware and of the By-Laws
of Unitech (and of any such subsidiary). This provision will survive the
expiration or termination of the Employment Term.
20. BINDING EFFECT AND ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, heirs, personal representatives and
permitted assigns, but, except as otherwise specifically provided herein,
neither this Agreement nor any of the rights, interests or obligations of the
parties hereto may be assigned by any of the parties hereto without prior
written consent of the other.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
EMPLOYEE UNITECH TELECOM, INC.
By: /s/ Hong Liang Lu By: /s/ Hong Liang Lu