EXHIBIT 10.44
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made by and between XXXXXX
XXXXXXX ("Employee") and TRANSCRYPT INTERNATIONAL, INC., a Delaware
corporation ("Company") this 1st day of April, 1999.
The Company wishes to employ Employee as Senior Vice President on the
terms set forth in this Agreement, and Employee desires to be employed by
Company in this capacity. Company and Employee desire to set forth in
writing the terms and conditions of their agreements and understandings.
THEREFORE, in consideration of the mutual promises set forth herein, it is
mutually agreed between the parties as follows:
SECTION 1. EMPLOYMENT TERM. The Company hereby employs the Employee
and the Employee hereby accepts employment as Senior Vice President on the
terms of this Agreement, commencing as of the date hereof and continuing for
a period of two (2) years, until April 1, 2001, unless terminated earlier in
accordance with the provisions set forth herein. Following the initial term
of employment, this Agreement may be renewed for additional one (1) year
terms. At the expiration of each term (the initial two year term or each one
year extension period), employment shall be automatically renewed for an
additional one (1) year term unless written notice to the contrary is given
by the Company or the Employee sixty (60) days preceding the April 1st
termination date. The provisions of the Agreement shall apply during the
initial term and any renewals of the term.
SECTION 2. DUTIES AND AUTHORITY. The Employee's duties shall be as
determined by the Chief Executive Officer. The duties of Senior Vice President
are generally set forth in the job description for such position, and such
duties may change from time to time.
SECTION 3. COMPENSATION.
A. BASE SALARY. Employee will receive a minimum base salary of One
Hundred Seventy-Five Thousand Dollars ($175,000.00) per year, paid
biweekly, as long as Employee is employed with the Company. Such
base salary will be subject to annual review, taking into
consideration employee's performance during the preceding year,
base salary adjustments for the executive staff and other internal
and external factors as described in the corporate bylaws and
public document filings.
B. BONUS. Employee will receive a signing bonus of fifty Thousand
Dollars ($50,000.00), $25,000.00 upon signing employment agreement
and $25,000.00 on the one year anniversary of signing his
employment agreement. If the Company meets or exceeds the annual
objectives set forth for Employee by the Chief Executive Officer,
then the Employee will receive an annual bonus at the discretion of
the Board of Directors, in line with the Company's bonus program
for executives. The bonus, if awarded, will be paid annually in
February.
C. STOCK INCENTIVE OPTIONS. The Company grants to Employee an option
to purchase One Hundred Thousand (100,000) Shares of Common Stock
at a strike price to be set at the closing price of TRII stock on
the first day of employment (April 1, 1999). The terms of said
Option Agreement is set forth in the Non-Qualified Stock Option
Agreement, attached as Exhibit A. In the event of any
inconsistencies or conflict between the Agreement and Exhibit A,
then the terms of this Agreement shall control. The Company will
take all steps necessary to ensure that all shares are freely
transferable, subject to any volume restrictions imposed by federal
law on the transfer of Employee's shares. Fifty thousand (50,000)
of the shares will vest upon Employee's first day of employment.
Fifty thousand (50,000) of the shares will vest through the vesting
period set forth in the Non-Qualified Stock Option Agreement.
D. ADDITIONAL BENEFITS. Employee also will receive such additional
employee benefits commensurate with his position, including those
that the Company may from time to time make available to its
executive officers, including 4 weeks paid vacation, qualified
profit-sharing plans, employee group insurance and disability
insurance.
E. WITHHOLDINGS. All payments made to Employee pursuant to this
Agreement shall be reduced by all required federal, state and local
withholdings for taxes and similar charges and by all contributions
or payments required to be made by Employee in connection with any
employee benefit plan maintained by the Company.
SECTION 4. RELOCATION REIMBURSEMENT. Employee will be provided a
relocation package pursuant to the Relocation Policy for Officers, attached as
Exhibit B.
Employee is expected to permanently relocate to Lincoln, Nebraska
within a reasonable period.
SECTION 5. REIMBURSEMENT FOR EXPENSES. Employee is expected to incur
certain expenses on behalf of the Company for travel, promotion, telephone,
entertainment and similar items. The Company will reimburse the Employee for
all ordinary, necessary and reasonable amounts of such expenses, as determined
by the Board of Directors, incurred by Employee. Such amounts shall be payable
promptly upon receipt of reasonable written documentation signed by the Employee
itemizing such expenses.
SECTION 6. INDEMNIFICATION. Employee shall be indemnified and held
harmless by the Company to the fullest extent authorized by the General
Corporation Law of the State of Delaware, as the same exists or may hereafter
be amended (however, in the case of any such amendment, only to the extent
that such amendment permits the Company to provide broader indemnification
rights than such law permitted the Company to provide prior to such
amendment). The Company's bylaws, attached as Exhibit C, contain an
indemnification procedure for directors and officers of the Company.
Generally, if Employee is made or is threatened to be made a party to any
action, suit or proceeding relating to his employment or service as a
director of the Company, he shall have the right to select individual counsel
and he shall be indemnified and held harmless by the Company against all
expenses, liability and loss reasonably incurred in connection with such
action. Employee has the right to bring suit against the Company if a claim
made in accordance with the Company's bylaws is not paid in full within sixty
(60) days after a written claim has been received, except in the case of a
claim for an advancement of expenses, in which case the applicable period is
twenty (20) days. The Company shall also maintain directors' and officers'
liability insurance in an amount sufficient to cover any claims made against
Employee.
SECTION 7. TERMINATION / SEVERANCE
A. The Company shall have the right to terminate this Agreement, upon
thirty (30) days written notice, if the following events occur:
1. The reasonable determination by the Chief Executive Officer
that the Employee has become disabled, and cannot complete
the essential functions of the position with reasonable
accommodation and is unable to continue his service to the
Company; or
2. The Employee's death; or
3. The reasonable determination by the Chief Executive Officer
that there is "good cause" for termination of this
Agreement. For purposes of the Agreement, "good cause"
means the Employee's willful neglect of his duties under
this Agreement and the job duties as assigned by the Chief
Executive Officer, theft or misappropriation of the
Company's assets by the Employee, fraud of the Employee or
gross insubordination. The Company shall provide Employee
written notice of and a reasonable opportunity to cure
anything that the Company believes constitutes willful
neglect of duties or gross insubordination.
B. Either party may terminate this Agreement upon (60) days' prior
written notice without good cause. In the event of a termination
by the Company without good cause the Company shall continue to
provide all benefits for one year after termination and shall pay
Employee a lump sum severance payment equal to the greater of: 1)
his annual base salary (at the time of termination) or, 2) his base
salary (at the time of termination) for the remaining term of the
then current Agreement. If the employee terminates the Agreement
within the first twelve (12) months, he must repay the $25,000
signing bonus he receives and cancel any vested options. Upon
commencement of full time employment with a different company as
described in the attached non-compete agreement, or full time self
employment, all benefits shall cease. Employee's COBRA termination
date shall be the date all benefits cease.
All cash severance amounts described in sections 7A through 7B shall be paid
to Employee upon the termination of his employment.
C. Change in Control. For the purposes of this Agreement, "change in
control" means: 1) A change in the ownership of the shares of the
Company that results in a change in a majority of the board of
directors; or, 2) a sale, assignment or transfer of all or substantially
all of the assets of the Company. If there is a change in control, then
the Company may terminate this Agreement upon thirty (30) days written
notice. If there is a change in control and a material diminishment in
the employee's position, duties, or responsibilities, that is not
mutually agreed among the parties, then Employee may terminate this
Agreement upon thirty (30) days written notice. Upon
notice of termination by either party pursuant to this section 7C,
all of Employee's stock options shall vest immediately. Upon termination
by either party pursuant to this section 7C, the Company shall pay to
Employee a lump sum severance payment equal to two years of base salary
(at the time of termination), and shall consider providing a transaction
bonus. In addition, the Company shall continue to provide all benefits
for one year after termination.
SECTION 8. AUTOMOBILE ALLOWANCE. The Company shall pay a car allowance
of $550.00 per month during the term of this Agreement.
SECTION 9. ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement between the Company and the Employee and
supersedes any prior agreements and negotiations between them pertaining to
the Employee's terms and conditions of employment with the Company. There
are no representations, warranties, promises, covenants or understandings
between the Company and the Employee with respect to such employment other
than those expressly set forth in this Agreement. This Agreement takes
precedence over other conflicting agreements with the Employee.
SECTION 10. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Nebraska.
SECTION 11. NON-ASSIGNABILITY; SUCCESSORS. The obligations of the
Employee under this Agreement are not assignable by him. This Agreement is
personal in nature and may not be assigned by the Company without the written
consent of the Employee, except that the consent of the Employee shall not be
reasonably withheld in connection with the sale to any person, partnership,
corporation or other entity of substantially all the assets of the company,
provided that the assignee assumes all the liabilities of the Company
hereunder. Except as provided in the immediately preceding sentence, this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their successors.
SECTION 12. NOTICES. Any notice required to be given in writing by any
party to this Agreement may be personally delivered or mailed by registered
or certified mail to the last known address of the party to be notified. Any
such notice personally delivered shall be effective upon delivery and any
such notice mailed shall be effective four (4) business days after the date
of mailing by registered or certified mail with postage prepaid to the last
known address of the party to be notified.
SECTION 13. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
of this Agreement, and this Agreement shall be construed in all respects as
if such invalid or unenforceable provision were omitted.
SECTION 14. HEADINGS. The Section and other headings contained in this
Agreement are for reference purposes only and shall not affect the
interpretation of this Agreement.
SECTION 15. CONSTRUCTION. Whenever required by the context, references
to the singular shall include the plural, and the masculine gender shall
include the feminine gender.
SECTION 16. RESTRICTIVE COVENANTS. Employee shall execute, concurrently
with this Agreement, a Confidentiality and Non Compete Agreement in the form
attached as Exhibit D.
SECTION 17. AMENDMENTS. No changes, modifications, waivers, discharges,
amendments or additions to this Employment Agreement shall be binding unless
it is in writing and signed by the Company and the Employee.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
on its behalf and the Employee has signed his name hereto, effective as of
the date first written above.
TRANSCRYPT INTERNATIONAL, INC., a
Delaware corporation
BY: /s/ Xxxxxxx X. Xxxxxxx
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Its Chairman and Chief Executive Officer
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx