8x8 2001 Annual Report Download

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8X8 INC /DE/
FORM 10-K
(Annual Report)
Filed 05/24/01 for the Period Ending 03/31/01
Address 3151 JAY STREET
SANTA CLARA, CA 95054
Telephone 4087271885
CIK 0001023731
Symbol EGHT
SIC Code
4813 - Telephone Communications, Except Radiotelephone
Industry Communications Services
Sector Services
Fiscal Year 03/31
http://www.edgar-online.com
© Copyright 2009, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    8X8 INC /DE/ FORM 10-K (Annual Report) Filed 05/24/01 for the Period Ending 03/31/01 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 3151 JAY STREET SANTA CLARA, CA 95054 4087271885 0001023731 EGHT 4813 - Telephone Communications, Except Radiotelephone Communications Services ...

  • Page 2
    ...0142404 (IRS EMPLOYER IDENTIFICATION NO.) 2445 MISSION COLLEGE BLVD. SANTA CLARA, CA 95054 (408) 727-1885 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES...

  • Page 3

  • Page 4
    ... Disclosures...PART III Directors and Executive Officers of the Registrant...Executive Compensation...Security Ownership of Certain Beneficial Owners and Management...Certain Relationships and Related Transactions...PART IV Exhibits, Financial Statement Schedules and Reports on Form 8-K...1 12 12 12...

  • Page 5
    ...Internet Protocol (IP) telephony and video applications. The Company has three product lines: voice and video semiconductors and related software, hosted Internet Private Branch Exchange (iPBX) solutions, and Voice-over-IP (VoIP) service creation software. During the fiscal year ended March 31, 2001...

  • Page 6
    ... can be built in a variety of configurations to suit the number of users, client/server application requirements and desired availability of bandwidth. Furthermore, many terminals can share the same connection to the network. The exponential growth of the Internet in recent years has proven the...

  • Page 7
    ...the Audacity-T2 semiconductor also contains an extended instruction set to execute specialized DSP instructions. NME's DSP core architecture is a SIMD processor that implements computationally intensive video, audio, and graphics processing routines as well as certain digital communication protocols...

  • Page 8
    ..., port to other semiconductor architectures. Call signaling protocol stacks are complex software programs required to make voice calls over IP networks, including the Internet. Vocoders format and compress digital audio signals and serve as the interface between the old phone networks and new VoIP...

  • Page 9
    ... VoIP gateway based on the Audacity-T2 processor. It supports two analog telephone interfaces, a 10/100 Mbps Ethernet port, and a simple LCD display. - The IP phone reference design includes plastics, keypad, display, and handset and is based on the Audacity-T2 processor. NME's reference design kits...

  • Page 10
    ... a graphical user interface to make it easier to transfer calls or initiate conference calls, or they might connect a company's customer relationship management software directly to the phone system, displaying customer information on a computer screen when that customer calls for support. Running...

  • Page 11
    ... configure the iPBX server software via a Web interface, allowing the system administrator to manage the iPBX from any location using any workstation with a browser. Centile also offers a Network Operations Center (NOC) service (discussed below) to provide service provisioning and network monitoring...

  • Page 12
    ...provides Caller ID, call transfers, conference call setup, on-screen directories, contact management, and call logging. It also lets users set up and control their voicemail, set forwarding numbers and filters, and set up personal speed dial numbers. The Centile Switchboard software (Switchboard) is...

  • Page 13
    ... UM software was designed to allow a user to receive and retrieve messages of different data types from a single telephony access point. For example, a user is assigned a telephone number that can be used to leave or retrieve voice messages, FAX messages or e-mail (FAX and e-mail messages are sent...

  • Page 14
    ... products to meet the advanced feature requirements of end customers; the lower costs of IP-based solutions; and a general trend toward the replacement of circuit-switched networks with packet-switched ones. SERVICE CREATION SOFTWARE CUSTOMERS -- In May 2001, the Company announced the first customer...

  • Page 15
    ...telephony device support, and new graphical user interface and web-based applications; and enhanced versions of the SCE to offer additional editor features and a performance-enhanced version of the service logic execution environment, specifically tailored for high volume call switching environments...

  • Page 16
    ...application developers to design innovative new services for converged voice and data networks...software, licensed from third parties. EMPLOYEES As of March 31, 2001...located in an approximately 45,000 square foot facility in Santa Clara, California that is leased through May 2003. Design...The lawsuit ...

  • Page 17
    ...public offering on July 2, 1997 under the name 8x8, Inc. From that date through April 3,...sets forth the range of high and low closing prices for each period indicated: PERIOD -----Fiscal 2001... $1.1 million charge for the cumulative effect of a change in accounting principle. (3) Net loss and net loss ...

  • Page 18
    ...for Internet Protocol (IP) telephony and video applications. We have three product lines: voice and video semiconductors and related software, hosted Internet Private Branch Exchange (iPBX) solutions, and Voice-over-IP (VoIP) service creation software. During the fiscal year ended March 31, 2001, we...

  • Page 19
    ......Provision for income taxes...Net loss before cumulative effect of change in accounting principle...Cumulative effect of change in accounting principle...Net loss... Revenues The following table illustrates net revenues by groupings of similar products (in thousands): YEAR ENDED MARCH 31 2001...

  • Page 20
    ..., semiconductor wafer fabrication, system and semiconductor assembly and testing performed by third-party vendors, and direct and indirect...video monitoring and consumer videophone products due to our exit from those businesses. Gross profit in fiscal 2001 was also impacted by lower average selling ...

  • Page 21
    ... expenses associated with the development of a graphical user interface for the hosted iPBX product, higher depreciation and maintenance expenses as a result of additional lab equipment and computer aided design tools, and increased stock compensation charges of approximately $325,000 related to...

  • Page 22
    ... life of the technology. Projected annual revenues for the in-process research and development projects ...2001. Odisei S.A. In May 1999, we acquired Odisei, a privately held, development stage company based in Sophia Antipolis, France, that was developing software for managing voice-over IP networks...

  • Page 23
    ... technology, and the anticipated life of the technology. Projected annual revenues for the in-process research and development projects were assumed to ramp up... charge of $33.3 million in the quarter ended March 31, 2001. The restructuring charges consisted of the following (in thousands): Employee...

  • Page 24
    ...was measured based on expected salvage value, less costs to sell. These assets are expected to be sold or abandoned, ... future net cash flows related to the acquired products necessitated an impairment charge to write-...31, 2001. As of March 31, 2001, the remaining estimated cash requirements of ...

  • Page 25
    ... of Change in Accounting Principle In November 2000, the Financial Accounting Standards Board (FASB) Emerging Issues Task Force reached several conclusions regarding the accounting for debt and equity securities with beneficial conversion features, including a consensus requiring the application of...

  • Page 26
    ... effect of a change in accounting principle of $1.1 million, and stock compensation charges of $753,000. Cash provided by investing activities in fiscal 2001 is primarily attributable to net proceeds from the sale of assets and the license of technology associated with our video monitoring line of...

  • Page 27
    ...SUPPORT OUR GROWTH, AND FAILURE TO DO SO IN A TIMELY MANNER MAY CAUSE US TO DELAY OUR PLANS FOR GROWTH OR CAUSE US TO IMPLEMENT ADDITIONAL COST REDUCTION STRATEGIES As of March 31, 2001...all, which may require us to reduce ...speed broadband networks to residential and commercial customers. IP networks...

  • Page 28
    ...to fall. On an annual and a quarterly basis...selling prices (ASPs) realized to date for our IP...changes in specific customer requirements... or international economic conditions. The adverse impact of a shortfall in our revenues may be magnified by our inability to adjust spending to compensate...

  • Page 29
    ...building ...selling... 2001,...IP telephony software products that provide increasingly higher levels of performance and reliability at lower cost. These new and enhanced products must take advantage of technological advancements and changes, and respond to new customer requirements. Our success in designing...

  • Page 30
    ... OR CANCELED AND SUBSTANTIAL PRODUCT RETURNS COULD OCCUR, WHICH COULD HARM OUR BUSINESS Many of the potential customers for our hosted iPBX and unified messaging products have requested that our products be designed to interoperate with their existing networks, each of which may have different...

  • Page 31
    ... in the United States and internationally. As of March 31, 2001, we held forty (40) United States patents, including patents relating to programmable integrated circuit architectures, telephone control arrangements, software structures, and memory architecture technology, and had a number of United...

  • Page 32
    ..., financial condition, and results of operations. THE FAILURE OF IP NETWORKS TO MEET THE RELIABILITY AND QUALITY STANDARDS REQUIRED FOR VOICE COMMUNICATIONS COULD RENDER OUR PRODUCTS OBSOLETE Circuit-switched telephony networks feature very high reliability, with a guaranteed quality of service...

  • Page 33
    ...broadband IP telephony market and popularity of broadband IP telephony products and services heighten the risk that governments will seek to regulate broadband IP telephony and the Internet... such problems may require significant expenditures of capital and resources by us. Despite our testing, our...

  • Page 34
    ...regions such as Asia, changes in foreign government regulations and telecommunication standards, export license requirements, tariffs and taxes, ...NEED TO HIRE AND RETAIN KEY PERSONNEL TO SUPPORT OUR PRODUCTS The development and marketing of our IP telephony products will continue to place a ...

  • Page 35
    ...patents or proprietary rights, general market conditions, changes...LOCATION OF OUR HEADQUARTERS FACILITY SUBJECTS US TO THE RISK OF EARTHQUAKES Our corporate headquarters is located... We invest our surplus cash and cash ...Report of Independent Accountants...Consolidated Balance Sheets at March 31, 2001...

  • Page 36
    ... To the Board of Directors and Stockholders of Netergy Networks, Inc. In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Netergy Networks, Inc. and its subsidiaries at March 31, 2001 and March...

  • Page 37
    NETERGY NETWORKS, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) ASSETS MARCH 31 2001 2000 Current assets: ... 2001 and 22,958,921 shares of common stock at March 31, 2000...Additional paid-in capital...Notes receivable from stockholders...Deferred compensation......

  • Page 38
    ...NETWORKS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) YEAR ENDED MARCH 31 2001...development...Selling, ...provision for income taxes...Provision for income taxes...Net loss before cumulative effect of change in accounting principle...Cumulative effect of change...

  • Page 39
    ... stockholders...Repurchase of unvested common stock...Deferred compensation related to stock options...Change in unrealized loss on investments...Net loss......Change in unrealized loss on investments...Cumulative translation adjustment...Net loss...Total comprehensive loss...Balance at March 31, 2001...

  • Page 40
    ...compensation related to stock options...Value of beneficial conversion feature associated with the convertible subordinated debentures...Change... in unrealized loss on investments...Cumulative translation adjustment...Net loss...Total comprehensive loss...Balance at March 31, 2001......

  • Page 41
    ...2001 2000 1999 Cash flows from operating activities: Net loss...Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization...Stock compensation expense...Cumulative effect of change...Proceeds from the sale of video monitoring assets, net...Other...Net ...

  • Page 42
    ...Internet Protocol (IP) telephony and video applications. The Company has three product lines: voice and video semiconductors and related software, hosted Internet Private Branch Exchange (iPBX) solutions, and Voice-over-IP (VoIP) service creation software. During the fiscal year ended March 31, 2001...

  • Page 43
    ...requiring that the Company provide significant customization of the software... from consulting, training, and development services...an original ...reporting date. The cost of the Company's investments is determined based upon specific identification. At March 31, 2001...useful lives, ranging from three to...

  • Page 44
    ... for possible impairment, the Company uses an estimate of undiscounted future net cash flows over the remaining life of the asset to determine if impairment has occurred. Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent from other asset...

  • Page 45
    ...March 2000, the Financial Accounting Standards Board (FASB) issued Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation (an Interpretation of APB Opinion No. 25)," (FIN 44), which became effective July 1, 2000. The adoption of the provisions of FIN 44 did not have...

  • Page 46
    ...NETWORKS... for each period presented are equal to the reported net loss. Additionally, due to... calculations would be anti-dilutive (in thousands): MARCH 31 2001 2000 1999 7,732 4,174 3,430 701 701 -638 ... as other hedging activities. The Company is required to adopt SFAS 133 in its first quarter...

  • Page 47
    NETERGY NETWORKS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 2 -- BALANCE SHEET COMPONENTS MARCH 31 2001 2000 IN...IP-based software applications and a provider of professional services. U/Force was also developing a Java-based service creation environment (SCE) that is designed...

  • Page 48
    ...for the business as a whole, characteristics of the potential market for the technology, and the anticipated life of the technology. Projected annual revenues for the in-process research and development projects were assumed to ramp up initially and decline significantly at the end of the in-process...

  • Page 49
    ..., that was developing software for managing voice-over IP networks. The consolidated financial... subject to repurchase as of March 31, 2001 if the employee departs prior to vesting. ...anticipated life of the technology. Projected annual revenues for the in-process research and development projects were...

  • Page 50
    ...NETWORKS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Company recorded a one-time charge of $33.3 million in the quarter ended March 31, 2001... software....sell. Assets to be disposed of consist of computer equipment with a fair value of $57,000 at March 31, 2001...acquired...VIDEO MONITORING...

  • Page 51
    ...NETWORKS... obligations related to video monitoring products manufactured prior to...of $6.4 million to Selling, General, and Administrative ...executive of Sanyo served on the Company's Board of Directors through July 15, 1999. During fiscal 2001, 2000, and 1999, the Company paid a member of the Board...

  • Page 52
    ... provision for income taxes. In addition, at March 31, 2001, the Company had research and development credit carryforwards for federal and state tax reporting...indefinitely. Under applicable tax laws, the amount of and benefits from net operating losses and credits that can be carried forward may be ...

  • Page 53
    ...NETWORKS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) A reconciliation of the tax provision to the amounts computed using the statutory U.S. federal income tax rate of 34% is as follows (in thousands): YEAR ENDED MARCH 31 2001... debentures equal to ...requiring the application...

  • Page 54
    ...leases its primary facility in Santa Clara, California under a noncancelable operating lease agreement that expires in May 2003. The Company also has leased facilities in Canada, France, and the United Kingdom. The facility leases include rent escalation clauses, and require the Company to pay taxes...

  • Page 55
    NETERGY NETWORKS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) number of shares of the Company's common stock in the fourth quarter of fiscal 2001. There were 260,807 Exchangeable Shares issued and outstanding at March 31, 2001. 1992 Stock Option Plan The Board of Directors has ...

  • Page 56
    ... option groups outstanding at March 31, 2001 and related weighted average exercise price and contractual life information ...Board of Directors approved a proposal under which employees elected to cancel approximately 2,107,000 options in exchange for grants of new options with an exercise price equal...

  • Page 57
    ... the weighted average remaining contractual life was approximately 9.8 years, and the weighted average exercise price was $0.50 per share. Centile, Inc. 2001 Stock Option Plan Centile's 2001 Stock Option Plan (the Centile Plan) was adopted in March 2001 by the Centile Board of Directors. The Centile...

  • Page 58
    ...,000 ========== SHARES SUBJECT TO OPTIONS OUTSTANDING 4,107,000 --------4,107,000 ========= $0.43 ===== As of March 31, 2001, no options were exercisable, the weighted average remaining contractual life was approximately 10 years, and the weighted average exercise price was $0.43 per share. 1996...

  • Page 59
    NETERGY NETWORKS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Certain pro forma disclosures The Company accounts for its stock plans in accordance with the provisions of APB Opinion No. 25. Had compensation cost for the Company's stock plans been determined based on the fair value of...

  • Page 60
    NETERGY NETWORKS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 13 -- SEGMENT REPORTING During the fourth quarter of fiscal year 2001, the Company changed its internal reporting processes and determined that it had two new reportable segments, NME and Centile. NME and Centile were...

  • Page 61
    ...telephony semiconductors...Consumer videophone systems...Video monitoring systems...Media hub systems...Product revenues...Videoconferencing licenses and royalties...IP telephony licenses and royalties...Nonrecurring engineering fees...Hosted iPBX licenses...Professional services...License and other...

  • Page 62
    NETERGY NETWORKS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) totaling in excess ...against the claims alleged by Milinx and intends to defend this lawsuit vigorously. However, due to the nature of litigation and because the lawsuit is in the very early pre-discovery stages, the Company...

  • Page 63
    NETERGY NETWORKS, INC. SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS (IN THOUSANDS) ADDITIONS CHARGED TO ... ----------Allowance for doubtful accounts: March 31, 1999...March 31, 2000...March 31, 2001... BALANCE AT BEGINNING OF PERIOD 610 686 442 BALANCE AT END OF PERIOD 686 442 389 58

  • Page 64
    ... 31, SEPT. 30, JUNE 30, MARCH 31, DEC. 31, SEPT. 30, JUNE 30, 2001 2000 2000 2000 2000 1999 1999 1999 4,409 $ 4,104 $ 3,892 $ 5,823 $ 6,542...and development...Selling, general...Provision for income taxes...Net loss before cumulative effect of change in accounting principle...Cumulative effect of change...

  • Page 65
    ITEM 9. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES None. PART III Certain information required by Part III is omitted from this Report on Form 10-K in that the Registrant will file its definitive Proxy Statement for its Annual Meeting of Stockholders (the 2001 Proxy ...

  • Page 66
    ... the appointments of Joe Parkinson as Interim Chief Executive Officer and Bryan Martin as Chief Operating Officer and member of the Board of Directors. The Company reported its results for the three and nine month periods ending December 31, 2000. January 3, 2001 The Company reported a change in its...

  • Page 67
    ..., has duly caused this Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Santa Clara, State of California, on May 24, 2001. NETERGY NETWORKS, INC. By: /s/ JOE PARKINSON Joe Parkinson, Chairman & Chief Executive Officer POWER OF ATTORNEY...

  • Page 68
    ...10.16(b) EXHIBIT TITLE Stock Exchange Agreement, dated as of May 13, 1999, by and among 8x8, Inc., Odisei S.A. and the Security Holders named therein and ...Buyers) and 8x8, Inc. dated December 15, 1999, with Schedule and Exhibits. Registration Rights Agreement by and among 8x8, Inc. and the Buyers...

  • Page 69
    ...8x8, Inc. and Keith Barraclough dated July 10, 2000. Severance Agreement and Mutual Release by and between Netergy Networks, Inc., Netergy Networks...Incorporated by reference to identically numbered exhibits filed in response to Item 14 (a), "Exhibits," of the Registrant's Report on Form 10-K for the ...

  • Page 70
    ... setting forth the proposed amendments are as follows: WHEREAS, it is deemed to be advisable and in the best interest of the Corporation and its stockholders that the Corporation's Amended and Restated Certificate of Incorporation be amended to change the name of the Corporation to Netergy Networks...

  • Page 71
    ...Incorporation, to file or cause to be filed said Certificate of Amendment with the Delaware Secretary of State, and to execute such other ...of shares required by statute were voted in favor of the amendment. THIRD: That said amendment was duly adopted in accordance with the provisions of Section...

  • Page 72
    IN WITNESS WHEREOF, 8X8, INC. has caused this certificate to be signed by David M. Stoll, its Chief Financial Officer, Vice President and Secretary this 14th day of August, 2000. 8X8, Inc. By: /s/ David M. Stoll David M. Stoll Chief Financial Officer, Vice President and Secretary

  • Page 73
    ... CORRECT COPY OF THE RESTATED CERTIFICATE OF "8X8, INC.", CHANGING ITS NAME FROM "8X8, INC." TO "NETERGY NETWORKS, INC.", FILED IN THIS OFFICE ON THE FIFTEENTH DAY OF AUGUST, A.D. 2000, AT 9 O'CLOCK A.M. A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS...

  • Page 74
    ... Company's Board of Directors effective June 19, 2000. 2. Consideration. (a) Severance. Immediately following the date on which the parties execute this Agreement...Employee's agreement not to accept employment with any company listed on Exhibit A for a period expiring one year following the date of ...

  • Page 75
    ... remained employed with the Company through and until January 31, 2001 (the "Vested Option Shares"). Said vesting shall include vesting under the May 16, 2000 Stock Option Agreement, notwithstanding any vesting requirements or cliff provisions to the contrary. The Parties agree that the total number...

  • Page 76
    ...life insurance, through and including June 20, 2001, to the extent Employee converts his group policy to an individual policy. (e) Voicemail and E-mail. The Company agrees, for a period of (3) months following the Effective Date, to provide an autoresponse on Employee's e-mail address...shall return to...

  • Page 77
    ... of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under ... Fair Employment and Housing Act, and Labor Code section 201, et seq. and section 970, et seq.; (e) any... and costs. The Parties agree that the release set forth in this section shall be and remain in...

  • Page 78
    ...each other of which, at the time of the execution of this Agreement, they have no knowledge or ...Parties acknowledge that they are familiar with the provisions of California Civil Code Section 1542, which...counsel or assist any attorneys or their clients in the presentation or prosecution of any...

  • Page 79
    ...subject to binding arbitration in Santa Clara County before the American Arbitration ...scope and effect of the provisions of this Agreement. Neither party... which are not specifically set forth in this Agreement.... aid in any suit or proceeding (or to execute, seek to impose, collect or recover upon, ...

  • Page 80
    ...compensation... the provisions of ...changed in any respect or particular except by a writing signed by Employee and the Chief Executive Officer of the Company. Any such writing must be ratified by the Board...executed in counterparts, and each counterpart shall have the same force and effect as an original...

  • Page 81
    8 x 8, INC. Dated: July 10,2000 By: /s/ DAVID STOLL David Stoll Chief Financial Officer KEITH BARRACLOUGH, an individual Dated: July 10, 2000 By: /s/ KEITH BARRACLOUGH Keith Barraclough -8-

  • Page 82
    EXHIBIT A Analog Devices Audiocodes Broadcom Broadsoft Clarent IPVerse Komodo Lucent Microelectronics Mediatrix Mitel PingTel Radvision Sylantro Syndeo TI/Telogy Trillium Tundo Vocaldata VocalTec

  • Page 83
    KEITH BARRACLOUGH OPTIONS EXERCISABLE AS OF JANUARY 31, 2001 GRANT DATE ----1/27/1995 12/11/1995 6/24/1996 9/21/1998 9/21/1998 9/21/1998 9/21/1998 9/21/1998 9/21/1998 9/21/1998 10/19/...

  • Page 84
    ... seven hundred and fifty U.S. Dollars ($13,750.00) per month, less applicable withholding, in accordance with the Company's payroll practices. If Employee is still unemployed and residing in Montreal, Canada as of April 14, 2001, Company will continue to pay Employee at the rate of thirteen thousand...

  • Page 85
    ... severance payments from April 14, 2001 to June 30, 2001, if applicable, Employee shall be required to notify the Company of his employment and residential status each month on the first day of the month preceding the scheduled severance payment. Required notifications shall be directed to Anne...

  • Page 86
    ...Tax Equalization. The Company shall pay the tax equalization amount for the Employee's 2000 and 2001 ... returns for Fiscal Year 2000 and 2001....return all the Company property and confidential and proprietary information in his possession to the Company on the Effective Date, except for cellular phone...

  • Page 87
    ... Act; the California Fair Employment and Housing Act, and Labor Code section 201, et seq. and section 970, et seq.; (f) any and all claims ...fees and costs. The Company, Netergy Canada and Employee agree that the release set forth in this section shall be and remain in effect in all respects as ...

  • Page 88
    ...provisions of California Civil Code Section 1542, or any similar state or federal statute, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING...lawsuits, claims, or actions pending in its name...

  • Page 89
    ... party hereto which are not specifically set forth in this Agreement. 16. Severability. In the event that any provision hereof becomes or is declared by...concerning Employee's relationship with the Company and/or Netergy Canada, his compensation by the Company and assignment to Netergy Canada. 18. No ...

  • Page 90
    ... This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an ...IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below. Netergy Networks, Inc. Dated: October 13, 2000...

  • Page 91
    Dated: October 13, 2000 By /s/ Jean-Luc Calonne Jean-Luc Calonne Sr. Vice-President, Business Operations Dominique Pitteloud, an individual Dated: October 13, 2000 By /s/ Dominique Pitteloud Dominique Pitteloud -8-

  • Page 92
    ... Jurisdiction of Incorporation Name 3044007 Nova Scotia Company Nova Scotia, Canada 3044869 Nova Scotia Company Nova Scotia, Canada Centile, Inc. Delaware, USA Netergy Microelectronics, Inc. California, USA Netergy Microelectronics, Ltd. United Kingdom Netergy Networks Canada Company Nova...

  • Page 93
    ..., 333-49414 and 333-80379) and Form S-8 (Nos. 333-30943, 333-50519, 333-41594, and 333-49410) of Netergy Networks, Inc. of our report dated May 4, 2001 relating to the consolidated financial statements and financial statement schedule, which appears in this Form 10-K. PricewaterhouseCoopers LLP San...