Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, by and between Xxxxx X. Xxxxx (the "Employee") and Apropos
Technology, Inc., an Illinois corporation (the "Company"), is made as of
January 1, 2000.
In consideration of the mutual covenants herein contained, and in
consideration of the employment of Employee by the Company, the parties agree as
follows:
1. Duties and Scope of Employment.
(a) Position. The Company agrees to employ the Employee under the
terms of this Agreement in the position of President and Chief Executive
Officer. As President and Chief Executive Officer, Employee shall report to the
Board of Directors of the Company.
(b) Obligations. During the term of this Agreement, the Employee
shall devote his full business efforts and time to the Company during normal
working hours.
(c) Director. As long as the Employee serves as Chief Executive
Officer, Employee shall be nominated to serve on the Company's Board of
Directors. Employee agrees to submit his resignation from the Board immediately
if Employee ceases to be Chief Executive Officer.
2. Compensation.
(a) Base Salary and Bonus. Beginning on the effective date of this
Agreement, the Employee shall be paid a base salary (the "Base Compensation") of
$150,000, per year, payable in accordance with the Company's standard payroll
policies. The Board of Directors shall review Employee's performance and the
Company's financial and operating results on at least an annual basis and shall
adjust Employee's base salary as it deems appropriate based on such review.
(b) Bonus. Employee shall also be eligible for a bonus of up to
$60,000 for fiscal year 2000, based on the criteria set forth in Exhibit A. The
bonus will be due and payable on the 15th day of February, 2001. The Board of
Directors shall set bonus levels and targets for years after fiscal year 2000 as
it deems appropriate. In the event Employee's employment with the Company
terminates for any reason other than pursuant to Section 6(c) hereof (voluntary
termination by the Employee) or 6(b)(ii) hereof (Termination for Cause),
Employee shall be entitled to receive a pro rated bonus for such year,
determined by dividing the aggregate bonus that he would have earned for the
entire year (assuming he had remained employed for the entire year and the
original revenue/milestone targets established for such year continued to apply)
by the number of days (including weekends) during which he was employed by the
Company during such year by 365. Such bonus shall be paid on February 15 of the
following year. If Employee's employment with the
Company terminates pursuant to Section 6(c) hereof or Section 6(b)(ii) hereof,
Employee shall be deemed to have forfeited his entire bonus for such year and no
such bonus shall be due or payable by the Company.
(c) Stock. Employee shall be eligible to be granted stock options to
purchase the Common Stock of the Company under and subject to all terms and
conditions of the Company's Stock Option Plan. The number of stock options and
terms and conditions of the stock options shall be determined by the
administrator of the Stock Option Plan, or by the Board of Directors of the
Company, in its discretion and pursuant to the Stock Option Plan.
(d) Vacation. Employee shall be entitled to three (3) weeks paid
vacation during each year of employment. Such vacation shall be taken at a time
mutually convenient for both the Company and the Employee. Unused vacation time
may not be accrued from year to year during the term of this Agreement without
the Company's prior written approval. In the event this Agreement is terminated
by either the Company or the Employee, the Employee shall be paid for any
unused, accrued vacation time.
3. Definitions. As used herein, the following definitions shall apply:
(a) "Termination for Cause" shall mean the termination of employment
of Employee as a result of (i) act or acts of dishonesty undertaken by Employee
and intended to result in substantial gain or personal enrichment of Employee at
the expense of the Company, (ii) persistent failure by Employee to perform the
duties and obligations of Employee's employment which are not remedied in a
reasonable period of time after receipt of written notice from the Company;
(iii) the conviction of Employee of a felony; or (iv) Employee's continued
breach of any material term of this Agreement or a breach of the Noncompetition,
Nondisclosure and Developments Agreement between the Company and Employee.
(b) "Constructive Termination" shall mean (i) a material reduction in
Employee's salary or benefits not agreed to by Employee (except in connection
with a decrease to be applied because the Company's performance has decreased
and which is also applied to other officers, and excluding the substitution of
substantially equivalent compensation and benefits), or (ii) a material change
in Employee's responsibilities (other than as contemplated by, and consistent
with the spirit of, Section 1(a)) not agreed to by Employee.
(c) "Disability" shall mean that the Employee, at the time notice is
given, has been unable to perform his duties under this Agreement for a period
of not less than six (6) consecutive months or for a period of two hundred
seventy (270) days in any three hundred sixty-five (365) day period as the
result of his incapacity due to physical or mental illness. In the event that
the Employee resumes the performance of substantially all of his duties
hereunder before the termination of his employment under Section 6 (b) (iii)
becomes effective, the notice of termination shall automatically be deemed to
have been revoked.
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(d) "Voluntary Termination of Employment" shall mean Employee
voluntarily terminates his employment with the Company, unless such termination
occurs within three (3) months following a Constructive Termination.
(e) "Change in Control" shall mean the occurrence of the following
event: The stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than as merger or consolidation that
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition of the
Company of all or substantially all the Company's assets.
4. Employee Benefits.
(a) General. During the term of his employment under this Agreement,
the Employee shall be entitled to the full benefits for which Employee is
eligible under the employee benefit plans and including (without limitation)
pension plans, savings or profit-sharing plans, deferred compensation plans,
supplemental retirement plans, stock option, incentive or other bonus plans,
life, disability, health, accident and other insurance programs, paid vacations
and sabbatical, and similar plans or programs, subject in reach case to the
generally applicable terms and conditions of the plan or program in question
and to the determination of any committee or the Board of Directors
administering such plan or program.
5. Business Expense and Travel. During the term of his employment under
this Agreement, the Employee shall be authorized to incur necessary and
reasonable travel, entertainment and other business expenses in connection with
his duties hereunder. The Company shall reimburse the Employee for such expenses
upon presentation of an itemized accounting and appropriate supporting
documentation, all in accordance with the Company's generally applicable
policies.
6. Term of Employment.
(a) Basic Rule. The Company agrees to continue the Employee's
employment, and the Employee agrees to remain in the employ of the Company, from
the effective date of this Agreement until the date when the Employee's
employment terminates pursuant to the provisions of this Agreement.
(b) Termination by the Company. The Company may terminate
Employee's employment at any time, for any reason or for no reason.
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(i) Termination Without Cause. If the Company terminates
Employee's employment during the term of this Agreement for any reason
whatsoever, other than Voluntary Termination of Employment, Termination for
Cause, or termination as a result of Employee's Death or Disability, the
provisions of Section 7(a) shall apply.
(ii) Termination for Cause. If the Company terminates Employee's
employment for Cause during the term of this Agreement, the provisions of
Section 7(b) shall apply.
(iii) Termination on Death or Disability. If the Company
terminates Employee's employment as a result of Employee's Death or Disability,
the provisions of Section 7(c) shall apply.
(c) Voluntary Termination by the Employee. The Employee may
terminate his employment voluntarily by giving the Company sixty (60) days'
advance notice in writing, at which time the provisions of Section 7(b) shall
apply. However, if the Employee terminates his employment within three (3)
months following a Constructive Termination or within six (6) months following a
Change in Control, the provisions of Section 7(a) shall apply.
(d) Waiver of Notice. Any waiver of notice shall be valid only if it
is made in writing and expressly refers to the applicable notice requirement in
this Section 6.
7. Payments Upon Termination of Employment.
(a) Payments Upon Termination Pursuant to Section 6(b)(i) and
Constructive Termination. If, during the term of this Agreement, the Employee's
employment is terminated by the Company pursuant to Section 6(b)(i) or
voluntarily by Employee within three (3) months following a Constructive
Termination or within six (6) months of a Change in Control, the Employee shall
be entitled to receive the following:
(i) Severance Payment. The Company shall continue to pay to
the Employee his Base Compensation for six (6) months following the date of
Employee's actual termination of employment (the "Severance Payment"). Such Base
Compensation amount shall be the Base Compensation determined as of the
commencement date of this Agreement, and as is agreed to in future years by the
Board of Directors.
(ii) Method of Payment. The Severance Payment shall be made in
monthly installments.
(iii) Payment in Lieu of Contract Damages. The Severance Payment
shall be in lieu of any further payments to the Employee and any further accrual
of benefits with respect to periods subsequent to the date of the employment
termination. Notwithstanding the preceding sentence, neither the Severance
Payment nor any other payments under this Section 7(a) shall reduce
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or offset any benefits the Employee may be entitled to under the specific terms
of the benefit plans of the Company.
(b) Termination By Company for Cause or Voluntary Termination. If
the Employee's employment is terminated pursuant to Section 6(b) (ii) or
voluntarily (other than within three (3) months following a Constructive
Termination) pursuant to Section 6(c), no compensation or payments will be paid
or provided to the Employee for the periods following the date when such a
termination of employment is effective. Notwithstanding the preceding sentence,
the Employee's rights under the benefit plans and any stock option agreement
shall be determined under the provisions of those plans and agreement.
(c) Termination on Death or Disability. If the Employee's employment
is terminated because of Employee's Death or Disability (as defined in Section
3(d) herein), then the Company shall continue to pay to the Employee or his
estate, as the case may be, his Base Compensation for six (6) months following
the date of Employee's actual termination of employment. Employee shall also
receive any severance and disability payments that are provided in the Company's
standard benefit plans, which amounts shall offset and reduce the Base
Compensation otherwise payable under the preceding sentence.
8. Successors.
(a) Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets shall assume this Agreement and agree expressly to perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform it in the absence of a succession. For all purposes under
this Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by this Agreement by
operation of law.
(b) Employee's Successors. This Agreement and all rights of the
Employee hereunder shall be binding upon, inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, devises and
legatees. Any purported or attempted assignment or transfer by the Employee of
any of the Employee's duties, responsibilities or obligations hereunder shall be
void.
9. Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or three (3) days after being mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. In the case of the
Employee, mailed notices shall be addressed to him at the home address which he
most recently communicated to the Company in writing in accordance herewith
(provided that no such change shall be effective until actually received by the
Company). In the case of the
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Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its Vice President - Human
Resources.
10. Termination of this Agreement. This Agreement shall terminate upon
the earlier of (i) the date that all obligations of the parties hereunder have
been satisfied, (ii) four (4) years from the date of this Agreement. A
termination of this Agreement pursuant to the preceding sentence shall be
effective for all purposes, except that such termination shall not affect (A)
the payment or provision of compensation or benefits on account of a termination
of employment occurring prior to the termination of this Agreement as
contemplated herein, or (B) the rights and obligations of the parties contained
in ancillary agreements hereto or set forth in the Exhibits. No payments under
this Agreement shall be required for any termination of employment occurring
after four (4) years from the date of this Agreement.
11. Miscellaneous Provisions.
(a) Waiver. No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by the Chief Executive Officer. No waiver
by either party of any breach of, or of compliance with, any condition or
provision of this Agreement by the other party shall be considered a waiver of
any other condition or provision or of the same condition or provision at
another time.
(b) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) that are
not expressly set forth in this Agreement or the Exhibits hereto have been made
or entered into by either party with respect to the subject matter hereof. This
Agreement shall not supersede any vesting provisions contained in any stock
option agreement between the Company and Employee. This Agreement shall
supersede and control in the event of any conflict between this Agreement and
any other correspondence with the Company. Employee's prior Employment Agreement
dated as of March 19, 1996 shall be deemed to be superceded by this Agreement,
provided that Employee shall be entitled to receive Employee's bonus for the
1999 fiscal year of the Company in accordance with such Employment Agreement.
(c) Choice of Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Illinois. Any dispute or
claim by one party against the other arising out of the interpretation, making,
performance, breach or termination of this Agreement shall be governed by the
laws of the State of Illinois and shall be finally settled by binding
arbitration commenced and maintained in Xxxx County, Illinois under the
Commercial Arbitration Rules of the American Arbitration Association by one
arbitrator appointed in accordance with said Rules. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall apply Illinois law to the merits of any dispute or
claim, without reference to rules of conflict of law. The arbitration
proceedings shall be governed by federal arbitration law and by the Rules,
without reference to the state arbitration law.
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(d) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(e) No Assignment of Benefits. To the extent permitted by law, the
rights of any person to payments or benefits under this Agreement shall not be
made subject to option or assignment, either by voluntary or involuntary
assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor's process, and any action in violation
of this subsection (e) shall be void.
(f) Employment At Will; Limitation of Remedies. The Company and the
Employee acknowledge that the Employee's employment is at will, as defined under
applicable law. If the Employee's employment terminates for any reason, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement.
(g) Employment Taxes. All payments made pursuant to this Agreement
will be subject to withholding of applicable taxes.
(h) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
[signature page follows]
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IN WITNESS THEREOF, each of the parties has executed this Agreement, in the
case of the Company by its President, as of the day and year first above
written.
"COMPANY"
APROPOS TECHNOLOGY, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------
Xxxxx X. Xxxxx
Title: CEO, President
----------------------
"EMPLOYEE"
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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EXHIBIT A
2000 BONUS CRITERIA
To be determined by the Company's Compensation Committee
