Exhibit 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of the 20th day of January,
2003 between MICROWAVE CONCEPTS, INC., a Delaware corporation
(hereinafter called the "Company") with offices at 00 Xxxx Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000, and XXXXXXX XXXXXXXXX, residing at
the address set forth on Schedule A attached hereto (hereinafter
called the "Executive").
W I T N E S S E T H
WHEREAS, the Company is a wholly-owned subsidiary of
Micronetics, Inc. ("Micronetics"), a Delaware corporation;
WHEREAS, the Company manufactures and markets microwave
products; and
WHEREAS, the Company and the Executive desire to enter into
an agreement to memorialize their understandings with regard to
the employment of the Executive by the Company.
NOW, THEREFORE, in consideration of the mutual covenants,
conditions and promises contained herein, the parties hereby
agree as follows:
1. Employment Term. The Company hereby agrees to
employ the Executive and the Executive agrees to enter the employ
of the Company on the terms and conditions set forth below for a
term commencing on the date hereof (the "Commencement Date"), and
terminating three years from the date hereof unless sooner
terminated as herein provided or extended by mutual consent of
the parties hereto (such term of this Agreement is herein
referred to as the "Term"). During the Term, except with the
consent of the Executive, the Company agrees to maintain an
office of the Company at 00 Xxxx Xxxx, Xxxxxxxxx, XX, or within a
50 mile radius of the address set forth on Schedule A attached
hereto, so as to not force any relocation of the Executive.
2. Duties. Subject to the authority, control and
direction of the Board of Directors of the Company or President
of the Company, the Executive shall be appointed Vice President
and General Manager of the Company, and the Executive shall
perform such duties and services commensurate with his position
as Vice President and General Manager of the Company, including
such duties as may from time to time be assigned to him by the
President or the Board of Directors.
3. Time Requirements. The Executive agrees that he
will devote substantially all of his business time and attention
to the business affairs of the Company and that during the period
of such employment the Executive will not, without the prior
permission of the President or the Board of Directors of the
Company, engage in any other business enterprise or enterprises
which require more than a nominal amount of the Executive's
business time or attention. The foregoing shall not prevent the
purchase or ownership by the Executive of investments or
securities of publicly-held companies representing less than 2%
of any such companies and any other business which is not
competitive and does not have any business relations with the
Company or any subsidiary of the Company, provided the time or
attention devoted by the Executive to such activities does not
interfere with the performance of his duties hereunder.
4. Compensation. For the full, prompt and faithful
performance of all of the duties and services to be performed by
Executive hereunder, the Company agrees to pay, and the Executive
agrees to accept, the amounts set forth below.
(a) As base compensation, the Executive shall be
paid at a rate set forth on paragraph (a) of Schedule B per annum
(the "Base Compensation"), payable at such regular times and
intervals as the Company customarily pays its employees.
(b) As bonus compensation, the Company agrees to
pay the Executive (the "Bonus Compensation"):
(i) Regular Bonus. For the period from
January 1, 2003 to December 31, 2003, the Executive shall be
entitled to a bonus at a rate set forth on paragraph (b) of
Schedule B attached hereto for such period. In any dispute over
this amount, the determination by the independent auditors of
Micronetics shall be determinative.
For each year thereafter that the Agreement is effective,
the Board of Directors or President of the Company agrees to
review the Executive's and Company's performance. Based on such
review, they or he will develop a new Regular Bonus Plan for the
Executive. In establishing the new Regular Bonus Plan, the
threshold of the Company's pre-tax profits may be increased,
however the new Regular Bonus Plan will be no less than as set
forth in this Section 4(b)(i).
(ii) One-time Bonuses. The Executive shall
be entitled to the following as one-time bonuses:
(A) The percent set forth on paragraph
(c) of Schedule B from the sale of MMICs in the inventory of
Microwave Concepts, Inc., a New Jersey Corporation ("MCI") (as
defined in the Asset Purchase Agreement defined below) existing
on the date of the closing of Micronetics' acquisition of the
assets of MCI (the "Closing"), pursuant to the Asset Purchase
Agreement between Micronetics and MCI dated December 24, 2002
(the "Asset Purchase Agreement"), payable within 30 days of
payment for any such sales; and
(B) The percent set forth on paragraph
(d) of Schedule B of any negotiated reductions in liabilities
assumed by the Company at the Closing as set forth in Schedule
1.2 of the Asset Purchase Agreement, payable within 30 days of
written confirmation of any such reductions.
(iii) Option. The Company shall cause
Micronetics to grant to the Executive a three year incentive
stock option for 40,000 (15,000 exercisable after year one and
two, 10,000 exercisable after year three) shares of Common Stock
of Micronetics exercisable at the fair market value thereof on
the date hereof pursuant to the standard option agreement of
Micronetics (the "Option").
(c) The Company shall provide the Executive with
health benefits on the same terms as provided to other similarly
situated employees of the Company.
(d) The compensation provided for herein shall be
in additional to any retirement, profit sharing, insurance
(including medical) or similar benefit which may at any time be
payable to the Executive pursuant to any plan or policy of the
Company relating to such benefits, which benefits shall be made
available to the Executive on the same basis as they are made
available to other similarly situated executives of the Company.
5. Vacation. The Executive shall be entitled to three
weeks of paid vacation per year during the Term, which shall be
taken at such time or times as shall be mutually determined by
the Company and the Executive.
6. Death. In the event of the death of the
Executive during the Term or any extension thereof, the
employment of the Executive hereunder shall terminate and come to
an end on the last day of the month following the death of the
Executive. The estate of the Executive (or such persons as the
Executive shall designate in writing) shall be entitled to
receive, and the Company agrees to pay, the Base Compensation of
the Executive up to the end of the month in which such death
occurs. The Company and the Executive agree to negotiate the
amount of Bonus Compensation for such year and pay that as
directed by the estate of the Executive. In addition, the vested
portion of the Option will be exercisable to the estate of the
Executive for 90 days following the death of the Executive.
7. Disability. In the event that the Executive
shall, because of illness or incapacity, physical or mental, be
unable to perform the duties and services to be performed by him
hereunder for a consecutive period of three months, or six months
during any twelve month period, the Company may terminate the
employment of the Executive hereunder after the expiration of
such period. The Executive shall be entitled to receive his Base
Compensation and Bonus Compensation (including the vested portion
of the Option for 90 days after such termination) earned through
the date of such termination.
8. Administration; Expenses. The Executive shall
report to the President and the Board of Directors of the
Company, or to a person designated by the Board of Directors, at
such intervals as may be determined from time to time. The
Executive shall be reimbursed by the Company for all expenses
reasonably incurred by him on behalf of the Company in accordance
with the Company's standard policies with respect thereto.
9. Restrictive Covenants.
9.1 Inventions. Any program, discovery, process,
design, invention or improvement which the Executive makes or
develops during his employment by the Company, whether or not
during regular working hours or in connection with the Company's
business or research activities as then conducted or
contemplated, shall belong to the Company and shall be promptly
disclosed to the Company. During the Executive's employment and
for a period of two years thereafter, the Executive shall,
without additional compensation, execute and deliver to the
Company any instruments of transfer and take such other action as
the Company may request to carry out the provisions of this
Section 9.1, including without limitation, filing, at the
Company's expense, patent applications for anything covered by
this Section 9.1 and the prompt assignment of the same to the
Company.
9.2 Covenant Not to Compete. The Executive
covenants and agrees that for a period of twelve (12) months
following the termination of his employment with the Company
other than as a result of a breach of this Agreement by the
Company, he shall not, without the prior written consent of the
Company which shall not be unreasonably withheld in the sole
discretion of the Company, directly or indirectly compete with
the Company in the microwave control components marketplace or in
any other business in which the Company may at such time be
engaged, nor induce any person associated with or employed by the
Company or any subsidiary of the Company, to leave the employ of
or terminate his association with the Company, or any subsidiary
of the Company, or solicit the employment of any such person on
his own behalf or on behalf of any other business enterprise. In
the event of termination of this Agreement by virtue of a breach
by the Company pursuant to a final judgment by a court of
competent jurisdiction, the aforesaid covenant will not be
applicable. The Company designates Xxxxx Xxxxxxx to make the
decisions as to whether the Company should consent pursuant to
this paragraph.
9.3 Nondisclosure. The Executive covenants and
agrees for a period of two years following the termination of his
employment with the Company, he will not, directly or indirectly,
during or after the term of employment disclose to any person not
authorized by the Company to receive or use such information,
except for the sole benefit of the Company, any of the Company's
confidential or proprietary data, information, designs, styles,
or techniques, including customer lists. Notwithstanding the
foregoing, this applies solely to information that is not
generally known to anyone other than the Company, its Board of
Directors or its employees.
9.4 If any term of this Article 9 is found by
any court having jurisdiction to be too broad, then and in that
case, such term shall nevertheless remain effective, but shall be
considered amended (as to the time or area or otherwise, as the
case may be) to a point considered by said court as reasonable,
and as so amended shall be fully enforceable.
9.5 In the event that the Executive shall violate
any provision of this Agreement (including but not limited to the
provisions of this Article 9) the Executive hereby consents to
the granting of a temporary or permanent injunction against him
by any court of competent jurisdiction prohibiting him from
violating any provision of this Agreement. In any proceeding for
an injunction, the Executive agrees that his ability to answer in
damages shall not be a bar or interposed as a defense to the
granting of such temporary or permanent injunction against the
Executive. The Executive further agrees that the Company will
not have an adequate remedy at law in the event of any breach by
Executive hereunder and that the Company will suffer irreparable
damage and injury if the Executive breaches any of the provisions
of this Agreement.
10. Termination for Cause. The Company may terminate
the Executive's employment without liability (other than for
payments accrued to the date of termination) if the Executive's
employment is terminated "for cause". The term "for cause"
shall, for the purposes of this Agreement, mean (i) a material
breach by the Executive of the provisions of this Agreement, (ii)
the commission by the Executive of a fraud against the Company or
the conviction of the Executive for aiding or abetting, or the
commission of, a felony or of a fraud or a crime involving moral
turpitude or a business crime, (iii) the knowing possession or
use of illegal drugs or prohibited substances, the excessive
drinking of alcoholic beverages which impairs the Executive's
ability to perform his duties hereunder, (iv) being under the
influence of such drugs, substances or alcohol during the
Executive's hours of employment (except for Company functions at
which alcohol use is tolerated), or (v) any material violation of
the Company's corporate policies described in the Company's
employee handbook, which handbook may supplemented or amended by
the Company from time to time, a copy of which has been provided
to the Executive. In the event of such termination for cause,
Executive shall be entitled to receive his Base Compensation and
Bonus Compensation earned through the date of such termination.
11. No Impediments. The Executive warrants and
represents that he is free to enter into this Agreement and to
perform the services contemplated thereby and that such actions
will not constitute a breach of, or default under, any existing
agreement.
12. No Waiver. The failure of any of the parties
hereto to enforce any provision hereof on any occasion shall not
be deemed to be a waiver of any preceding or succeeding breach of
such provision or of any other provision.
13. Entire Agreement. This Agreement constitutes the
entire agreement and understanding of the parties hereto and no
amendment, modification or waiver of any provision herein shall
be effective unless in writing, executed by the party charged
therewith.
14. Governing Law. This Agreement shall be construed,
interpreted and enforced in accordance with and shall be governed
by the laws of the State of New Jersey applicable to agreements
to be wholly performed therein.
15. Binding Effect. This Agreement shall bind and
inure to the benefit of the parties, their successors and
assigns.
16. Assignment and Delegation of Duties. This Agreement
may not be assigned by the parties hereto except that the Company
shall have the right to assign this Agreement in connection with
a sale or transfer of all or substantially all of its assets, a
merger or consolidation. This Agreement is in the nature of a
personal services contract and the duties imposed hereby are non-
delegable.
17. Ratifies Obligations of Asset Purchase Agreement.
The Executive is aware of, understands, agrees and consents to
his obligations under the Asset Purchase Agreement, especially
Section 2.14 of the Asset Purchase Agreement.
18. Paragraph Headings. The paragraph headings herein
have been inserted for convenience of reference only and shall in
no way modify or restrict any of the terms or provisions hereof.
19. Notices. Any notice under the provisions of this
Agreement shall be given by registered or certified mail, return
receipt requested, directed to the addresses set forth above,
unless notice of a new address has been sent pursuant to the
terms of this paragraph.
20. Unenforceability; Severability. If any provision
of this Agreement is found to be void or unenforceable by a court
of competent jurisdiction, the remaining provisions of this
Agreement, shall, nevertheless, be binding upon the parties with
the same force and effect as though the unenforceable part has
been severed and deleted.
21. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be deemed to be
duplicate originals.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
MICROWAVE CONCEPTS, INC.
By:/s/Xxxxxxx X. Xxxxx
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(Authorized Officer)
/s/Xxxxxxx Xxxxxxxxx
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XXXXXXX XXXXXXXXX
