Exhibit 10.1
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is entered into as of,
September 18, 1997, by and between FieldWorks, Incorporated, a Minnesota
corporation (the "Company"), and Xxxxxx X. Xxxxx, an individual resident of the
State of Minnesota ("Executive").
WHEREAS, the Company wishes to employ Executive to render services for the
Company on the terms and conditions set forth in this Agreement, and Executive
wishes to be retained and employed by the Company on such terms and conditions.
NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the Company and Executive set forth below, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as follows:
1. Employment. The Company hereby employs Executive, and Executive
accepts such employment and agrees to perform services for the Company, for the
period and upon the other terms and conditions set forth in this Agreement.
2. Term. Unless terminated at an earlier date in accordance with Section
9 of this Agreement, the term of Executive's employment hereunder shall be for a
period of one year, commencing on the date on which Executive begins employment
with the Company (the "Effective Date"). Thereafter, the term of this Agreement
shall be automatically extended for successive one (1) year periods unless
either party objects to such extension by written notice to the other party at
least thirty (30) days prior to the end of the initial term or any extension
term.
3. Position and Duties.
3.01 Service with Company. During the term of this Agreement,
Executive agrees to perform such reasonable employment duties consistent with
the position of President as the Board of Directors of the Company shall assign
to him from time to time.
3.02 Performance of Duties. Executive agrees to serve the Company
faithfully and to the best of his ability and to devote his full time, attention
and efforts to the business and affairs of the Company during the term of this
Agreement. Executive represents to the Company that he is under no contractual
commitments inconsistent with his obligations set forth in this Agreement, and
that during the term of this Agreement, he will not render or perform services
for any other corporation, firm, entity or person which are inconsistent with
the provisions of this Agreement. The Company hereby acknowledges that
Executive may continue to serve as the Chief Executive Officer of PanAm
Systems, Inc. and that neither such service nor Executive's service as a
director of other companies shall be deemed inconsistent with the
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provisions of this Agreement; provided, however, that no such service
interferes with Executive's performance of his duties under this Agreement and
provided, further, that Executive shall not serve as a director of any entity
that is a direct competitor of the Company.
4. Compensation.
4.01 Base Salary. As base compensation for all services to be
rendered by Executive under this Agreement during the first year of the term of
this Agreement, the Company shall pay to Executive a base salary of $140,000 ,
which salary shall be paid on a bi-weekly basis in accordance with the Company's
normal payroll procedures and policies. The salary payable to Executive during
each subsequent year during the term of this Agreement shall be established by
the Company's Board of Directors following an annual performance review;
provided, however, that such base salary shall not be decreased.
4.02 Incentive Compensation. In addition to the base salary described
in Section 4.01, Executive shall be eligible to participate in any incentive
compensation plans which may be established by the Board of Directors of the
Company from time to time.
4.03 Participation in Benefit Plans. Executive shall also be entitled
to participate in all employee benefit plans or programs (including vacation
time) of the Company to the extent that his position, title, tenure, salary,
age, health and other qualifications make him eligible to participate. The
Company does not guarantee the adoption or continuance of any particular
employee benefit plan or program during the term of this Agreement, and
Executive's participation in any such plan or program shall be subject to the
provisions, rules and regulations applicable thereto.
4.04 Expenses. The Company will pay or reimburse Executive for all
reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the presentment of
appropriate vouchers in accordance with the Company's normal policies for
expense verification.
4.05 Issuance of Stock Option. Concurrently with the execution of
this Agreement, the Company shall issue to Executive two options to purchase
shares of the Company's common stock pursuant to the Company's 1994 Stock Option
Plan (the "Plan") having substantially the following terms:
(a) an option (the "First Option") to purchase an aggregate of
150,000 shares of Common Stock, which shall be effective on the
Effective Date, shall have an exercise price per share equal to
the closing price per share of the Common Stock on the Effective
Date, shall have a term of ten years, shall be an incentive stock
option to the
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extent permitted by law and shall vest as to 50,000 shares on
each of the first, second and third anniversaries of the
Effective Date, and subject to accelerated vesting in the event
of a change in control of the Company; and
(b) an option (the "Second Option") under the Plan to purchase an
aggregate of 100,000 shares of Common Stock, which shall be
effective on the Effective Date, shall have an exercise price per
share equal to the closing price per share of the Common Stock on
the Effective Date, shall have a term of ten years, shall be an
incentive stock option to the extent permitted by law and shall
vest as to all 100,000 shares on the date 9 years and 6 months
after the Effective Date, and subject to accelerated vesting in
the event of a change in control of the Company; provided,
however, that the vesting of the shares subject to the Second
Option shall accelerate in cumulative 25,000 share installments
on the last day of the quarter in which the company first
achieves each of the following:
i. Revenues of $7.5 million for the quarter together with no
net loss for such quarter;
ii. Revenues of $12.5 million for the quarter together with
a net profit of 5% for such quarter;
iii. Revenues of $15 million for the quarter together with a net
profit of 6% for such quarter; and
iv. Revenues of $20 million for the quarter together with a net
profit of 7% for such quarter.
5. Confidential Information. Except as permitted or directed by the
Company's Board of Directors, during the term of this Agreement or at any time
thereafter, Executive shall not divulge, furnish or make accessible to anyone or
use in any way (other than in the ordinary course of the business of the
Company) any confidential or secret knowledge or information of the Company
which Executive has acquired or become acquainted with or will acquire or become
acquainted with prior to the termination of the period of his employment by the
Company (including employment by the Company or any affiliated companies prior
to the date of this Agreement), whether developed by Executive or by others,
concerning any trade secrets, confidential or secret designs, processes,
formulae, plans, devices or material (whether or not patented or patentable)
directly or indirectly useful in any aspect of the business of the Company, any
customer or supplier lists of the Company, any confidential or secret
development or research work of the Company, or any other confidential
information or secret aspects of the business of the Company. Executive
acknowledges that the above-described knowledge or information constitutes a
unique and valuable asset of the Company and represents a substantial investment
of time and expense by the Company and its predecessors, and that any disclosure
or other use of
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such knowledge or information other than for the sole benefit of the Company
would be wrongful and would cause irreparable harm to the Company. Both during
and after the term of this Agreement, Executive will refrain from any acts or
omissions that would reduce the value of such knowledge or information to the
Company. The foregoing obligations of confidentiality, however, shall not apply
to any knowledge or information which is now published or which subsequently
becomes generally publicly known in the form in which it was obtained from the
Company, other than as a direct or indirect result of the breach of this
Agreement by Executive.
6. Ventures. If, during the term of this Agreement, Executive is engaged
in or associated with the planning or implementing of any project, program or
venture involving the Company and a third party or parties, all rights in such
project, program or venture shall belong to the Company. Except as formally
approved by the Company's Board of Directors, Executive shall not be entitled to
any interest in such project, program or venture or to any commission, finder's
fee or other compensation in connection therewith other than the salary to be
paid to Executive as provided in this Agreement.
7. Noncompetition Covenant.
7.01 Agreement Not to Compete. Executive agrees that, during the
period of his employment by the Company and for a period of two (2) years after
the termination of such employment (whether such termination is with or without
cause, or whether such termination is occasioned by Executive or the Company),
he shall not, directly or indirectly, engage in competition with the Company in
any manner or capacity (e.g., as an advisor, principal, agent, partner, officer,
director, stockholder, employee, member of any association, or otherwise) in any
phase of the business which the Company is conducting during the term of this
Agreement
7.02 Geographic Extent of Covenant. The obligations of Executive
under Section 7.01 shall apply to any geographic area in which the Company:
(a) has engaged in business during the term of this Agreement through
production, promotional, sales or marketing activity, or
otherwise, or
(b) has otherwise established its goodwill, business reputation, or
any customer or supplier relations.
7.03 Limitation on Covenant. Ownership by Executive, as a passive
investment, of less than two percent (2%) of the outstanding shares of capital
stock of any corporation listed on a national securities exchange or publicly
traded in the over-the-counter market shall not constitute a breach of this
Article 7.
7.04 Indirect Competition. Executive further agrees that, during the
term of this Agreement, he will not, directly or indirectly, assist or encourage
any other
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person in carrying out, directly or indirectly, any activity that would be
prohibited by the above provisions of this Article 7 if such activity were
carried out by Executive, either directly or indirectly; and in particular
Executive agrees that he will not, directly or indirectly, induce any employee
of the Company to carry out, directly or indirectly, any such activity.
8. Patent and Related Matters.
8.01 Disclosure and Assignment. Executive will promptly disclose in
writing to the Company complete information concerning each and every invention,
discovery, improvement, device, design, apparatus, practice, process, method or
product, whether patentable or not, made, developed, perfected, devised,
conceived or first reduced to practice by Executive, either solely or in
collaboration with others, during the term of this Agreement, or within six
months thereafter, whether or not during regular working hours, relating either
directly or indirectly to the business, products, practices or techniques of the
Company (hereinafter referred to as "Developments"). Executive, to the extent
that he has the legal right to do so, hereby acknowledges that any and all of
said Developments are the property of the Company and hereby assigns and agrees
to assign to the Company any and all of Executive's right, title and interest in
and to any and all of such Developments.
8.02 Future Developments. As to any future Developments made by
Executive which relate to the business, products or practices of the Company and
which are first conceived or reduced to practice during the term of this
Agreement, or within six months thereafter, but which are claimed for any reason
to belong to an entity or person other than the Company, Executive will promptly
disclose the same in writing to the Company and shall not disclose the same to
others if the Company, within twenty (20) days thereafter, shall claim ownership
of such Developments under the terms of this Agreement. If the Company makes
such claim, Executive agrees that, insofar as the rights (if any) of Executive
are involved, it will be settled by arbitration in accordance with the rules
then obtaining of the American Arbitration Association. The locale of the
arbitration shall be Minneapolis, Minnesota (or other locale convenient to the
Company's principal executive offices). If the Company makes no such claim,
Executive hereby acknowledges that the Company has made no promise to receive
and hold in confidence any such information disclosed by Executive.
8.03 Limitation on Sections 8.01 and 8.02. The provisions of Sections
8.01 and 8.02 shall not apply to any Development meeting the following
conditions:
(a) such Development was developed entirely on Executive's own time;
and
(b) such Development was made without the use of any Company
equipment, supplies, facility or trade secret information; and
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(c) such Development does not relate (i) directly to the business of
the Company, or (ii) to the Company's actual or demonstratably
anticipated research or development; and
(d) such Development does not result from any work performed by
Executive for the Company.
8.04 Assistance of Executive. Upon request and without further
compensation, but at no expense to Executive, and whether during the term of
this Agreement or thereafter, Executive will do all lawful acts, including, but
not limited to, the execution of papers and lawful oaths and the giving of
testimony, that in the opinion of the Company, its successors and assigns, may
be necessary or desirable in obtaining, sustaining, reissuing, extending and
enforcing United States and foreign patents, including, but not limited to,
design patents, on any and all of such Developments, and for perfecting,
affirming and recording the Company's complete ownership and title thereto, and
to cooperate otherwise in all proceedings and matters relating thereto.
8.05 Records. Executive will keep complete, accurate and authentic
accounts, notes, data and records of all Developments in the manner and form
requested by the Company. Such accounts, notes, data and records shall be the
property of the Company, and, upon its request, Executive will promptly
surrender same to it or, if not previously surrendered upon its request or
otherwise, Executive will surrender the same, and all copies thereof, to the
Company upon the conclusion of his employment.
8.06 Obligations, Restrictions and Limitations. Executive understands
that the Company may enter into agreements or arrangements with agencies of the
United States Government, and that the Company may be subject to laws and
regulations which impose obligations, restrictions and limitations on it with
respect to inventions and patents which may be acquired by it or which may be
conceived or developed by employees, consultants or other agents rendering
services to it. Executive agrees that he shall be bound by all such
obligations, restrictions and limitations applicable to any such invention
conceived or developed by him during the term of this Agreement and shall take
any and all further action which may be required to discharge such obligations
and to comply with such restrictions and limitations.
9. Termination.
9.01 Grounds for Termination. This Agreement shall terminate prior to
the expiration of the initial term set forth in Section 2 or any extension
thereof in the event that at any time during such initial term or any extension
thereof:
(a) Executive dies, or
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(b) Executive becomes disabled (as defined below), so that he cannot
perform the essential functions of his position with or without
reasonable accommodation, or
(c) The Board of Directors of the Company elects to terminate this
Agreement for "cause" and notifies Executive in writing of such
election, or
(d) The Board of Directors of the Company elects to terminate this
Agreement (including an election not to renew this Agreement
under Section 2) without "cause" and notifies Executive in
writing of such election, or
(e) Executive elects to terminate this Agreement and notifies the
Company in writing of such election.
If this Agreement is terminated pursuant to subsection (a), (b) or (c) of
this Section 9.01, such termination shall be effective immediately. If this
Agreement is terminated pursuant to subsection (d) or (e) of this Section 9.01,
such termination shall be effective thirty (30) days after delivery of the
notice of termination.
9.02 "Cause" Defined.
(a) Executive has breached the provision of Article 5, 7 or 8 of this
Agreement in any material respect, or
(b) Executive has, in the performance of his duties as an officer or
employee of the Company, engaged in willful and material
misconduct, including willful and material failure to perform
Executive's duties and has failed to "cure" such default within
thirty (30) days after receipt of written notice of default from
the Company, or
(c) Executive has committed fraud, misappropriation or embezzlement
in connection with the Company's business, or
(d) Executive has been convicted or has pleaded nolo contendere to
criminal felony charges.
(e) Executive's use of narcotics, liquor or illicit drugs has a
detrimental effect on the performance of his employment
responsibilities, as determined by the Company's Board of
Directors after consultation with an appropriate physician.
In the event that the Company terminates Executive's employment for
"cause" pursuant to subsection 9.01(c) and Executive objects in writing to the
Board's
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determination that there was proper "cause" for such termination within twenty
(20) days after Executive is notified of such termination, the matter shall be
resolved by arbitration in accordance with the provisions of Section 10.01. If
Executive fails to object to any such determination of "cause" in writing within
such twenty (20) day period, he shall be deemed to have waived his right to
object to that determination. If such arbitration determines that there was not
proper "cause" for termination, such termination shall be deemed to be a
termination pursuant to subsection 9.01(d) and Executive's sole remedy shall be
to receive the wage continuation benefits contemplated by Section 9.06.
9.03 Effect of Termination Notwithstanding any termination of this
Agreement, Executive, in consideration of his employment hereunder to the date
of such termination, shall remain bound by the provisions of this Agreement
which specifically relate to periods, activities or obligations upon or
subsequent to the termination of Executive's employment.
9.04 "Disability" Defined. As used in this Agreement, the term
"disabled" means any mental or physical condition which renders Executive unable
to perform the essential functions of his position, with or without reasonable
accommodation, for an aggregate of ninety (90) days during any consecutive one
hundred and twenty (120) day period
9.05 Surrender of Records and Property. Upon termination of his
employment with the Company, Executive shall deliver promptly to the Company all
records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations or copies thereof, which are the
property of the Company or which relate in any way to the business, products,
practices or techniques of the Company, and all other property, trade secrets
and confidential information of the Company, including, but not limited to, all
documents which in whole or in part contain any trade secrets or confidential
information of the Company, which in any of these cases are in his possession or
under his control.
9.06 Wage Continuation. If Executive's employment by the Company is
terminated by the Company pursuant to subsection 9.01(b) or 9.01(d), the Company
shall continue to pay to Executive his base salary (less any payments received
by Executive from any disability income insurance policy provided to him by the
Company) and shall continue to provide health insurance benefits for Executive
through the earlier of (a) the date that Executive has obtained other full-time
employment (provided that, if Executive obtains other employment where
Executive's base salary is less than his base salary as in effect under this
Agreement prior to termination, then the Company shall continue to pay Executive
the difference), or (b)six months from the date of termination of employment.
Executive shall also be entitled to receive a pro rata portion (based on the
number of days of employment during that fiscal year) of any bonus payment that
would have been payable to him for the current fiscal year pursuant to Section
4.02 if Executive had been in the employ of the Company for the full fiscal
year. No bonus will be payable to Executive with respect to any fiscal
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year after the fiscal year in which Executive's employment terminated. If this
Agreement is terminated pursuant to subsection 9.01(a), 9.01(c) or 9.01(e),
Executive's right to base salary and benefits shall immediately terminate,
except as may otherwise be required by applicable law.
10. Settlement of Disputes.
10.01 Arbitration. Except as provided in Section 10.02, any claims
or disputes of any nature between the Company and Executive arising from or
related to the performance, breach, termination, expiration, application, or
meaning of this Agreement or any matter relating to Executive's employment and
the termination of that employment by the Company shall be resolved exclusively
by arbitration in Minneapolis, Minnesota, in accordance with the applicable
rules then obtaining of the American Arbitration Association. Each party shall
bear half of the fees of the arbitrator(s) and all of its own other costs
incurred in connection with such arbitration.
The decision of the arbitrator(s) shall be final and binding upon
both parties. Judgment of the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. In the event of submission
of any dispute to arbitration, each party shall, not later than thirty (30)
days prior to the date set for hearing, provide to the other party and to the
arbitrator(s) a copy of all exhibits upon which the party intends to rely at
the hearing and a list of all persons each party intends to call at the
hearing.
10.02 Resolution of Certain Claims - Injunctive Relief. Section
10.01 shall have no application to claims by the Company asserting a violation
of Article 5, 7 or 8 or Section 9.05 or seeking to enforce, by injunction or
otherwise, the terms of Article 5, 7 or 8 or Section 9.05. Such claims may be
maintained by the Company in a lawsuit subject to the terms of Section 10.03.
Executive agrees that, in addition to, but not to the exclusion of any other
available remedy, the Company shall have the right to enforce the provisions of
Articles 5, 7 and 8 and Section 9.05 by applying for and obtaining temporary and
permanent restraining orders or injunctions from a court of competent
jurisdiction without the necessity of filing a bond therefor, and the Company
shall be entitled to recover from the Employee its reasonable attorneys' fees
and costs in enforcing the provisions of Articles 5, 7 and 8 and Section 9.05;
provided, that if the Company is ultimately denied the right to enforce such
terms, Employee shall be entitled to recover from the Company his reasonable
attorney's fees and costs in defending such action.
10.03 Venue. Any action at law, suit in equity, or judicial
proceeding arising directly, indirectly, or otherwise in connection with, out
of, related to or from this Agreement or any provision hereof, shall be
litigated only in the courts of the state of Minnesota, County of Hennepin.
Executive waives any right the Executive may have to transfer or change the
venue of any litigation brought against Executive by the Company.
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10.04 Severability. To the extent any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect. In furtherance and not in limitation
of the foregoing, should the duration or geographical extent of, or business
activities covered by, any provision of this Agreement be in excess of that
which is valid and enforceable under applicable law, then such provision shall
be construed to cover only that duration, extent or activities which may validly
and enforceably be covered. Executive acknowledges the uncertainty of the law
in this respect and expressly stipulates that this Agreement be given the
construction which renders its provisions valid and enforceable to the maximum
extent (not exceeding its express terms) possible under applicable law.
11. Miscellaneous.
11.01 Governing Law. This Agreement is made under and shall be
governed by and construed in accordance with the laws of the state of Minnesota.
11.02 Prior Agreements. This Agreement contains the entire agreement
of the parties relating to the employment of Executive by the Company and the
ancillary matters discussed herein and supersedes all prior agreements and
understandings with respect to such matters, and the parties hereto have made no
agreements, representations or warranties relating to such employment or
ancillary matters which are not set forth herein.
11.03 Withholding Taxes. The Company may withhold from any benefits
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
11.04 Amendments. No amendment or modification of this Agreement
shall be deemed effective unless made in writing and signed by both the
Executive and the Company.
11.05 No Waiver. No term or condition of this Agreement shall be
deemed to have been waived, nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
11.06 Assignment. This Agreement shall not be assignable, in whole
or in part, by either party without the written consent of the other party,
except that the Company may, without the consent of Executive, assign its rights
and obligations under this Agreement to any corporation, firm or other business
entity with or into which the Company may merge or consolidate, or to which the
Company may sell or transfer all or substantially all of its assets, or of which
50% or more of the equity
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investment and of the voting control is owned, directly or indirectly, by, or
is under common ownership with, the Company. After any such assignment by the
Company, the Company shall be discharged from all further liability hereunder
and such assignee shall thereafter be deemed to be the Company for the
purposes of all provisions of this Agreement including this Section 11.
11.07 Counterparts. This Agreement may be simultaneously executed in
any number of counterparts, and such counterparts executed and delivered, each
as an original, shall constitute but one and the same instrument.
11.08 Captions and Headings. The captions and paragraph headings
used in this Agreement are for convenience of reference only, and shall not
affect the construction or interpretation of this Agreement or any of the
provisions hereof.
IN WITNESS WHEREOF, Executive and the Company have executed this Agreement
as of the date set forth in the first paragraph.
FieldWorks, Incorporated
By /s/ Xxxxx X. Xxxxxxxx
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Xxxxx Xxxxxxxx, Chairman of
the Board of Directors
By /s/ Xxxx X. Xxxxxx
--------------------------------
Xxxx Xxxxxx, Chief Executive
Officer
/s/ Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx Xxxxx
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