EXHIBIT 10.15
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into on February 2,
2004, by and between Xxxxx X. Xxxxx, an individual ("Executive"), and California
Amplifier, Inc., a Delaware corporation (the "Company").
RECITALS:
A. It is the desire of the Company to assure itself of the continued
services of the Executive by engaging the Executive to perform such services
under the terms hereof.
B. The Executive desires to commit himself to serve the Company on the
terms herein provided.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below the parties hereto agree as follows:
1. EMPLOYMENT BY THE COMPANY AND TERM.
(a) Full Time and Best Efforts. Subject to the terms set forth
herein, the Company agrees to employ Executive as President, Vytek Solutions
Division of the Company, and in such other executive capacities as may be
requested from time to time by the Board of Directors of the Company or a duly
authorized committee thereof, and Executive hereby accepts such employment.
Executive shall render such other services for the Company and corporations
controlled by, under common control with or controlling, directly or indirectly,
the Company, and to successor entities and assignees of the Company ("Company's
Affiliates") as the Company may from time to time reasonably request and as
shall be consistent with the duties Executive is to perform for the Company and
with Executive's experience. During the term of his employment with the Company,
Executive will devote his full time and use his best efforts to advance the
business and welfare of the Company, and will not engage in any other employment
or business activities for any direct or indirect remuneration that would be
directly harmful or detrimental to, or that may compete with, the business and
affairs of the Company, or that would interfere with his duties hereunder.
(b) Duties. Executive shall serve in an executive capacity and shall
perform such duties as are customarily associated with his position, consistent
with the Bylaws of the Company and as reasonably required by the Company's Board
of Directors (the "Board") or by the Company's Chief Executive Officer.
(c) Company Policies. The employment relationship between the
parties shall be governed by the general employment policies and practices of
the Company, including but not limited to those relating to protection of
confidential information and assignment of inventions, except that when the
terms of this Agreement differ from or are in conflict with the Company's
general employment policies or practices, this Agreement shall control.
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(d) Term. The initial term of employment of Executive under this
Agreement shall begin as of the Closing Date as defined in that certain
Agreement and Plan of Merger and Reorganization by and between the Company,
Mobile Acquisition Sub, Inc., a Delaware corporation and Vytek Corporation, a
Delaware corporation, for an initial term ending eighteen months from the
Closing Date (such period, the "Initial Term"), subject to the provisions for
termination set forth herein and renewal as provided in Section 1(e) below.
(e) Renewal. Unless either party shall have given the other notice
that this Agreement shall not be renewed at least thirty (30) days prior to the
end of the Initial Term, the term of this Agreement shall be automatically
extended for a period of one (1) year, such procedure to be followed in each
such successive year. Each extended term shall continue to be subject to the
provisions for termination set forth herein. Failure by the company to renew the
agreement shall constitute termination without cause or disability and the
Executive shall be eligible for severance in accordance with section 6 (d) and
(f) or if applicable 6 (e) and 6 (f).
2. COMPENSATION AND BENEFITS.
(a) Salary. Executive shall receive for services to be rendered
hereunder a salary at the rate of two hundred and fifty thousand dollars
($250,000) per year payable at least as frequently as monthly and subject to
payroll deductions as may be necessary or customary in respect of the Company's
salaried employees (the "Base Salary"). The Base Salary will be reviewed by and
shall be subject to adjustment at the sole discretion of the Board of Directors
of the Company each year during the term of this Agreement.
(b) Participation in Benefit Plans. During the term hereof,
Executive shall be entitled to participate in any group insurance,
hospitalization, medical, dental, health, accident, disability or similar plan
or program of the Company now existing or established hereafter to the extent
that he is eligible under the general provisions thereof. The Company may, in
its sole discretion and from time to time, amend, eliminate or establish
additional benefit programs as it deems appropriate. Executive shall also
participate in all standard fringe benefits offered by the Company to any of its
Executive Officers.
(c) Vacation. Executive shall be entitled to a period of annual
vacation time in accordance with the company's vacation policy, to accrue pro
rata during the course of each such twelve-month period. The days selected for
Executive's vacation must be mutually and reasonably agreeable to Company and
Executive.
3. BONUSES.
The Executive shall be eligible to participate in the Company's employee
bonus program in accordance with the terms of such program (as it may exist from
time to time) and in the discretion of the committee administering such program.
4. STOCK AWARDS.
The Executive shall be eligible to participate in the Company's employee
stock award plans and shall be eligible for award of stock options or other
stock incentive awards in
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accordance with the terms of the Company's stock award plans and in the
discretion of the Committee of the Board administering such plans.
5. REASONABLE BUSINESS EXPENSES AND SUPPORT.
Executive shall be reimbursed for documented and reasonable business
expenses in connection with the performance of his duties hereunder. Executive
shall be furnished reasonable office space, assistance and facilities.
6. TERMINATION OF EMPLOYMENT.
The date, on which Executive's employment by the Company ceases, under any
of the following circumstances, shall be defined herein as the "Termination
Date."
(a) Termination Upon Death. If Executive dies prior to the
expiration of the term of this Agreement, the Company shall (i) continue
coverage of Executive's dependents (if any) under all benefit plans or programs
of the type listed above in paragraph 2(b) herein for a period of six (6)
months, and (ii) pay to Executive's estate the accrued portion of any salary and
vacation earned as of the Termination Date, less standard withholdings for tax
and social security purposes.
(b) Termination Upon Disability. The Company may terminate
Executive's employment in the event Executive suffers a disability that renders
Executive unable to perform the essential functions of his position, even with
reasonable accommodation, as determined by competent medical authority. After
the Termination Date, which in this event shall be the date upon which notice of
termination is given, no further compensation will be payable under this
Agreement except that Executive shall be paid the accrued portion of any salary
and vacation earned as of the Termination Date, less standard withholdings for
tax and social security purposes.
(c) Termination for Cause.
(i) Termination; Payment of Accrued Salary and Vacation. The
Board may terminate Executive's employment with the Company at any time for
Cause, immediately upon notice to Executive of the circumstances leading to such
termination for Cause. In the event that Executive's employment is terminated
for Cause, Executive shall receive payment for all accrued salary and vacation
earned through the Termination Date, which in this event shall be the date upon
which notice of termination is given. The Company shall have no further
obligation to pay severance of any kind whether under this Agreement or
otherwise nor to make any payment in lieu of giving notice of such termination.
(ii) Definition of Cause. "Cause" means the occurrence or
existence of any of the following with respect to Executive, as determined by a
majority of the directors of the Board: (a) unsatisfactory performance of
Executive's duties or responsibilities, provided that the Company has given
Executive written notice specifying the unsatisfactory performance of his duties
and responsibilities and afforded the Executive reasonable opportunity for cure,
all as determined by a majority of the directors of the Board; (b) a material
breach by Executive of any
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of his material obligations hereunder that the Company has given Executive
written notice thereof; (c) willful failure to follow any lawful directive of
the Company consistent with the Executive's position and duties, after written
notice and reasonable opportunity to cure, all as determined by the Board; (d) a
material breach by the Executive of his duty not to engage in any transaction
that represents, directly or indirectly, self-dealing with the Company or any of
its Affiliates which has not been approved by a majority of the disinterested
directors of the Board or of the terms of his employment; (e) commission of any
willful or intentional act which could reasonably be expected to injure
materially the property, reputation, business or business relationships of the
Company or its customers; or (f) the conviction or the plea of nolo contendere
or the equivalent in respect of a felony involving moral turpitude.
(d) Termination Without Cause or Disability. The Company may
terminate Executive's employment at any time for other than Cause or disability,
by providing written notice to the Executive. In such event (unless such
termination would be covered by Section 6(e) below), the Company shall pay
Executive as severance (i) an amount equal to 12 MONTHS of his then Base Salary,
less standard withholdings for tax and social security purposes, payable over
such 12 month term in monthly pro rata payments commencing as of the Termination
Date and (ii) the accrued portion of any vacation earned, less standard
withholdings for tax and social security purposes. Notwithstanding the
foregoing, the Company shall not be obligated to pay any termination payments
under this Section 6(d) above if Executive breaches the provisions of Sections
7, 8 or 9 below.
(e) Termination following a Change of Control. If, within the
12-MONTH period following a Change of Control (as defined below), the Company
terminates the Executive's employment for other than Cause or disability or the
Executive terminates his employment for Good Reason (as defined below), then the
termination payments provided for under Section 6(d) shall extend for a period
of 12 months. In order to terminate his employment for Good Reason the Executive
must give the Company notice of termination within sixty (60) days of the
occurrence of one of the events included in the definition of Good Reason. In
all other respects Section 6(d) shall remain applicable. The following
definitions shall apply:
(i) "Change of Control" shall mean the consummation of the
first to occur of (i) the sale, lease or other transfer of all or substantially
all of the assets of the Company to any person or group (as such term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended); (ii) the
adoption by the stockholders of the Company of a plan relating to the
liquidation or dissolution of the Company; (iii) the merger or consolidation of
the Company with or into another entity or the merger of another entity into the
Company or any subsidiary thereof with the effect that immediately after such
transaction the stockholders of the Company immediately prior to such
transaction (or their Related parties) hold less than 50% of the total voting
power of all securities generally entitled to vote in the election of directors,
managers or trustees of the entity surviving such merger of consolidation; or
(iv) the acquisition by any person or group of more than 50% of the voting power
of all securities of the Company generally entitled to vote in the election of
directors of the Company.
(ii) "Good Reason" shall mean the occurrence of any one or
more of the following without the Executive's express written consent: (1) the
assignment of the
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Executive to duties materially inconsistent with the Executive's authority,
duties, responsibilities and status (including offices, titles and reporting
requirements) as an officer of the Company or a material reduction in or
alteration to the nature or status of the Executive's authority, duties or
responsibilities, in each case from those in effect at the date of the
occurrence of the Change of Control; (2) the Company requiring the Executive to
be based at a location which is more than fifty (50) miles further from the
Executive's then current primary residence than such residence is from the
Company location at which the Executive is then working; or (3) a reduction in
the Executive's base salary.
(f) Benefits Upon Termination. All benefits provided under paragraph
2(b) hereof shall be extended, at Executive's election and cost, to the extent
permitted by the Company's insurance policies and benefit plans, for 12 MONTHS
after Executive's Termination Date, except (a) as required by law (e.g., COBRA
health insurance continuation election) or (b) in the event of a termination
described in paragraph 6(a).
(g) Termination by Executive. Executive shall have the right, at his
election, to terminate his employment with the Company upon two months advance
written notice to the Company to that effect; provided, however, that the
Company may in its discretion waive the advance notice period.
(h) Reduction in Payments. Notwithstanding anything contained in
this Agreement to the contrary, in the event that the payments to the Executive
under this Section 6, either alone or together with other payments the Executive
has a right to receive from the Company, would not be deductible (in whole or in
part) by the Company as a result of such payments constituting a "parachute
payment" (as defined in Section 280G of the Internal Revenue Code, as amended
(the "Code")), such payments shall be reduced to the largest amount as will
result in no portion of the payments under this Section 6 not being fully
deductible by the Company as the result of Section 280G of the Code. The
determination of any reduction in the payments under this Section 6 pursuant to
the foregoing sentence shall be made exclusively by the firm of independent
public accountants serving as the Company's principal auditors immediately prior
to the Termination Date (whose fees and expenses shall be borne by the Company),
and such determination shall be conclusive and binding on the Company and the
Executive.
7. PROPRIETARY INFORMATION OBLIGATIONS.
During the term of employment under this Agreement, Executive will have
access to and become acquainted with the Company's and the Company's Affiliates'
confidential and proprietary information, including, but not limited to,
information or plans regarding the Company's and the Company's Affiliates'
customer relationships, personnel, or sales, marketing, and financial operations
and methods; trade secrets; formulas; devices; secret inventions; processes; and
other compilations of information, records, and specifications (collectively
"Proprietary Information"). Executive shall not disclose any of the Company's or
the Company's Affiliates' Proprietary Information directly or indirectly, or use
it in any way, either during the term of this Agreement or at any time
thereafter, except as required in the course of his employment for the Company
or as authorized in writing by the Company. All files, records,
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documents, computer-recorded information, drawings, specifications, equipment
and similar items relating to the business of the Company or the Company's
Affiliates, whether prepared by Executive or otherwise coming into his
possession, shall remain the exclusive property of the Company or the Company's
Affiliates, as the case may be, and shall not be removed from the premises of
the Company under any circumstances whatsoever without the prior written consent
of the Company, except when (and only for the period) necessary to carry out
Executive's duties hereunder, and if removed shall be immediately returned to
the Company upon any termination of his employment; provided, however, that
Executive may retain copies of documents reasonably related to his interest as a
shareholder and any documents that were personally owned, which copies and the
information contained therein Executive agrees not to use for any business
purpose. Notwithstanding the foregoing, Proprietary Information shall not
include (i) information which is or becomes generally public knowledge except
through disclosure by the Executive in violation of this Agreement and (ii)
information that may be required to be disclosed by applicable law.
8. NONINTERFERENCE.
While employed by the Company and for a period of one (1) years after
termination of this Agreement, Executive agrees not to interfere with the
business of the Company or any Company Affiliate by directly or indirectly
soliciting, attempting to solicit, inducing, or otherwise causing any employee
of the Company or any Company Affiliate to terminate his or her employment in
order to become an employee, consultant or independent contractor to or for any
other employer.
9. MISCELLANEOUS.
(a) Notices. Any notices provided hereunder must be in writing and
shall be deemed effective upon the earlier of two days following personal
delivery (including personal delivery by telecopy or telex), or the fourth day
after mailing by first class mail to the recipient at the address indicated
below:
TO THE COMPANY:
California Amplifier, Inc.
000 Xxxxx Xxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx, President
Telecopier: (000) 000-0000
TO EXECUTIVE:
Xxxxx X. Xxxxx
0000 Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Telecopier No: 000-000-0000
or to such other address or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending
party.
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(b) Severability. Any provision of this Agreement which is deemed
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this paragraph be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provisions of this Agreement invalid, illegal, or unenforceable in any other
jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable
because its scope is considered excessive, such covenant shall be modified so
that the scope of the covenant is reduced only to the minimum extent necessary
to render the modified covenant valid, legal and enforceable.
(c) Entire Agreement. This document constitutes the final, complete,
and exclusive embodiment of the entire agreement and understanding between the
parties related to the subject matter hereof and supersedes and preempts any
prior or contemporaneous understandings, agreements, or representations by or
between the parties, written or oral.
(d) Counterparts. This Agreement may be executed on separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
agreement.
(e) Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors and assigns, except that Executive may not assign
any of his duties hereunder and he may not assign any of his rights hereunder
without the prior written consent of the Company.
(f) Amendments. No amendments or other modifications to this
Agreement may be made except by a writing signed by both parties. No amendment
or waiver of this Agreement requires the consent of any individual, partnership,
corporation or other entity not a party to this Agreement. Nothing in this
Agreement, express or implied, is intended to confer upon any third person any
rights or remedies under or by reason of this Agreement.
(g) Choice of Law. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the laws of
the State of Delaware without giving effect to principles of conflicts of law.
10. ATTORNEY'S FEES.
In the event of litigation arising under this Agreement or out of or
concerning the Executive's employment or termination by the Company, the
prevailing party shall, in addition to all costs of suit, be entitled to recover
his or her reasonable attorney's fees from the other party.
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IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date it is last executed below by either party.
EXECUTIVE
/s/ Xxxxx Xxxxx
--------------------------------------
Xxxxx X. Xxxxx
CALIFORNIA AMPLIFIER, INC.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx
President and CEO
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