EXECUTIVE EMPLOYMENT AGREEMENT - XXXXXX X. XXXXXXX
AGREEMENT made as of the 1st day of February, 1996 by and
between MicroEnergy, Inc., a Delaware corporation with offices at 000
Xxxxx Xxxx, Xxxxx Xxxxxx, Xxxxxxxx 00000 (the "Company"), and Xxxxxx
X. Xxxxxxx, residing at 000 Xxxxxx, Xxxx Xxxxx, Xxxxxxxx 00000
("Executive").
WHEREAS, the Executive has served the Company as an
executive officer for over eleven years and has performed good and
valuable services, and the continued services of the Executive are
essential to the future prosperity of the Company; and
WHEREAS, the Company desires to assure the continued
services of the Executive, and to provide the Executive with
assurance of compensation and terms of employment which will retain,
and competitively motivate the Executive.
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, the parties hereto, intending to be
legally bound, agree as follows:
1. Revocation of Prior Employment Agreement. That certain
Executive Employment Agreement dated as of December 2, 1991 between
the Company and Executive, together with all modifications and
extensions thereof, is hereby revoked.
2. Employment. The Company hereby employs Executive to
perform those duties generally described in this Agreement, and
Executive hereby accepts such employment upon the terms and
conditions hereinafter set forth.
3. Term.
(a) The term of this Agreement shall commence on the date
hereof and continue for a period of four (4) years. The period
during which Executive is employed hereunder is referred to herein as
the "Employment Period".
(b) Within sixty (60) days after each anniversary of the
date of this Agreement, the Company's Board of Directors shall
consider and act upon a proposal to offer to the Executive a
modification of this Agreement extending the term of the Agreement by
one (1) year.
4. Duties. Executive is hereby employed as Executive Vice
President and Chief Financial Officer of the Company. Executive's
powers and duties shall be determined by the Board of Directors
("Board"), in accordance with the Company's By-Laws and consistent
with the capacity in which Executive serves. Executive agrees to
serve as a member of the Board of Directors of the Company for no
additional compensation. During the Employment Period, Executive
shall devote substantially all of Executive's normal business time,
attention and energies to the performance of Executive's duties, and
faithfully and diligently serve and further the interests of the
Company according to the best of Executive's ability.
5. Compensation.
(a) Salary. For all services rendered to the Company by
Executive during the term of this Agreement, the Company shall pay
Executive an annual salary at a rate which will be determined by the
Board of Directors from time to time but which shall be no less in
any fiscal year than the average of the salaries paid to the
Executive during the two preceding fiscal years. Executive's salary
shall be payable in equal installments and at the same time and
frequency as other employees of the Company are paid. All salary
payments shall be subject to withholding and other applicable taxes.
(b) Benefits. Executive shall be entitled to receive such
health, medical, disability and life insurance benefits as are made
available to executive employees of the Company.
(c) Vacations. Executive shall be entitled to four weeks
paid vacation and three weeks paid sick leave during each calendar
year of the Employment Period.
(d) Reimbursement of Expenses. Executive shall be entitled
to reimbursement of all reasonable business expenses actually
incurred by Executive in the discharge of Executive's duties
hereunder, including expenses for entertainment, travel, attendance
at conventions, employee training and similar items, upon submission
to the Company with satisfactory documentation thereof.
(e) Automobile. The Company acknowledges that Executive
will require the use of an automobile to effectively discharge his
duties hereunder. Accordingly, the Company agrees to provide
Executive with an automobile suitable for the performance of such
duties and to pay all maintenance, repair, insurance and other costs
and charges in connection therewith. Alternatively, at the option of
the Company, it may provide Executive with an automobile allowance in
an amount of up to $800 per month as required to compensate Executive
for the use of his personal automobile for business purposes.
6. Termination of Employment.
(a) Termination for Cause. The Company may terminate this
Agreement, without liability, for "Cause" (as defined below) by
delivering to Executive fourteen (14) days' advance written notice of
termination setting forth the reasons for such termination. As used
herein, the term "Cause" shall mean only the following: (i)
material, willful or gross misconduct by Executive in the performance
of his duties hereunder; (ii) the failure by Executive to perform or
observe any substantial lawful obligation of such employment (which
failure is likely to have a material adverse effect on the Company)
that is not remedied within fifteen (15) days after the receipt of
written notice thereof from the Board of Directors (provided such
neglect or failure is unrelated to disability); or (iii) a final
non-appealable conviction of or a plea of guilty or nolo contendere by
Executive to any felony or misdemeanor involving fraud, embezzlement,
theft or dishonesty. Upon delivery of such notice of termination,
all obligations of the Company hereunder shall cease. Executive
shall have the right to purchase from the Company any life or other
insurance policies carried by the Company for the benefit of
Executive at a price equal to the interpolated terminal reserve value
of such policies. In addition, the Company shall provide Executive
with the same insurance coverage, or access to insurance coverage,
required by "COBRA" regardless of whether the Company is legally
required to provide such coverage on the termination date of
Executive's employment.
(b) By Death. This Agreement shall terminate automatically
upon the death of Executive, and all obligations of the Company
hereunder, other than those set forth in Section 6(d) below, shall
cease.
(c) By Disability. If, in the discretion of the Company's
Board of Directors, Executive shall be prevented from properly
performing his duties hereunder by reason of any physical or mental
incapacity for a period of more than one hundred twenty (120)
consecutive calendar days in any twelve-month period, then, to the
extent permitted by law, the Board of Directors may terminate this
Agreement by delivery of thirty (30) days' advance written notice of
termination. Thirty (30) days' following delivery of such notice of
termination, all obligations of the Company hereunder, other than
those set forth in Section 6(d) below, shall cease.
(d) In the event of a termination of this Agreement by
reason of the death or disability of the Executive, the Company will
pay to the Executive or his estate an amount equal to the product of
(i) the aggregate compensation paid to the Executive during the
twelve months preceding termination multiplied by (ii) the number of
full and partial years remaining in the term of this Agreement.
Payment shall be made in equal installments through the term which
would have remained in the Agreement but for the termination, and at
the same time and frequency as employees of the Company are paid.
7. Proprietary Information/Covenant Not to Compete.
(a) Defined. "Proprietary Information" is all information
and any ideas in whatever form, tangible or intangible, pertaining in
any manner to the business of the Company, its parents or
subsidiaries unless (i) the information is or becomes publicly known
through lawful means, or (ii) the information is disclosed to Execu-
tive without confidential or proprietary restriction by a third party
who rightfully possesses the information (without confidential or
proprietary restriction) and did not learn of it, directly or
indirectly, from the Company.
(b) General Restrictions On Use. Executive agrees to hold
all Proprietary Information in confidence and not to, directly or
indirectly, disclose, use, copy, publish, summarize or remove from
the Company's premises any Proprietary Information (or remove from
the Company's premises any other property of the Company), except (i)
during the term of this Agreement to the extent necessary to carry
out Executive's responsibilities under this Agreement, and (ii) after
termination of this Agreement as specifically authorized in writing
by the Board of Directors.
(c) Interference with Business: Competitive Activities.
Executive acknowledges that the pursuit of the activities forbidden
by this Section 7(c) would necessarily involve the use or disclosure
of Proprietary Information in breach of Section 7(b), but that proof
of such breach would be extremely difficult. To forestall such
disclosure, use, or breach, and in consideration of the employment
under this Agreement, Executive agrees that for a period of one (1)
year after termination of this Agreement, Executive shall not, for
Executive or any third party, directly or indirectly divert or
attempt to divert from the Company any business of any kind in which
it is engaged, including, without limitation, the solicitation of or
interference with any of its suppliers or customers, unless Executive
can prove that any action taken in contravention of this Section 7(c)
was done without the use in any way of Proprietary Information.
(d) Covenant Not to Compete. Executive agrees that for a
period of one year subsequent to the termination of this Agreement,
he will not, directly or indirectly, provide services to any
business, corporation or other entity that:
(i) provides services or products which are competitive
with the services or products provided by the Company to past,
present or prospective customers of the Company;
(ii) competes with the services or products provided by
the Company in any geographic market; or
(iii) is undertaking entry into a geographic market that
is competitive with the markets of the Company.
The covenants contained in this paragraph shall be
construed as a series of separate covenants, one for each state in
the United States of America and one for each country outside the
United States of America. Except for geographical coverage, each
separate covenant shall be deemed identical in its terms. If in any
judicial proceeding, a court shall refuse to enforce any of the
separate covenants deemed included in this paragraph, the
unenforceable covenant shall be deemed eliminated from this paragraph
for the purpose of that proceeding and to the extent necessary to
permit the remaining separate covenants (meaning the covenants with
respect to the remaining geographical areas) to be enforced. The
provisions of this paragraph shall not be construed as restricting
Executive's right to own shares or other equity interests in any
corporation or association provided that Executive does not perform
services for, or participate in any way in the management of such
entity in violation of the provisions of this paragraph and that
Executive owns five percent (5%) or less of the equity of any such
business or association. The provisions of this paragraph shall
survive the termination of this Agreement for a period of one year.
(e) Remedies. Nothing in this Section 7 is intended to
limit any remedy of the Company otherwise available under law.
8. Consent to Injunctive Relief. Executive hereby
specifically acknowledges that monetary damages to the Company for
the breach of Section 7 hereof may be difficult to determine and/or
inadequate to compensate the Company for a breach thereof and hereby
agrees that in the event of any breach by Executive of such
provisions, the Company, in addition to any other remedies it may
have under the terms of this Agreement or at law, shall have the
right to bring an action in equity for an injunction against the
breach or threatened breach of such obligations. The provisions of
this paragraph shall survive the termination of this Agreement.
9. Indemnification. The Company shall indemnify Executive
to the fullest extent authorized by the Delaware Corporation Law.
The Company shall use its best efforts to obtain coverage for
Executive under any insurance policy now in force or hereinafter
obtained during the term of this Agreement insuring officers and
directors of the Company against such liability; provided that the
Company shall not be required to obtain such coverage in the event
the Board of Directors determines that the cost of such insurance is
prohibitive in relation to the Company's available working capital.
10. Notices. Any notice or other written instrument
required or permitted to be given, made or sent hereunder shall be in
writing, signed by the party giving or making the same, and shall be
sent by registered or certified mail or through courier delivery
service to the other party hereto at his or its respective address
hereinabove set forth. Any party hereto shall have the right to
change the place to which any such notice or writing shall be sent by
a similar notice sent in like manner to the other party hereto.
11. Waiver of Breach. The waiver by the Company of a
breach by Executive of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach by
Executive. No waiver shall be valid unless in writing and signed by
an authorized officer of the Company.
12. Assignment. The Company and Executive acknowledge
that the relationship established hereby is unique and personal and
that neither the Company nor Executive may assign or delegate any of
their respective rights and/or obligations hereunder without the
prior written consent of the other party except as follows:
In the event of a future disposition of (or including) the
properties and business of the Company, substantially as an entirety,
by merger, consolidation, sale of assets, or otherwise, then the
Company shall be obligated to assign this Agreement and all of its
rights and obligations hereunder to the acquiring or surviving
corporation, and such acquiring or surviving corporation shall assume
in writing all of the obligations of the Company hereunder; provided,
however, that the Company (in the event and so long as it remains in
business as an independent going enterprise) shall remain liable for
the performance of its obligations hereunder in the event of a
failure of the acquiring corporation to perform its obligations under
this Agreement.
13. Severability. The invalidity or unenforceability of
any provision hereof shall in no way affect the validity or enforce-
ability of any other provision.
14. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original.
15. Governing Law. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of Illinois.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
MICROENERGY, INC.
By:
Xxxxxx X. Xxxxx
President
EXECUTIVE:
XXXXXX X. XXXXXXX
