Exhibit 10.20
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made as of December 10, 1998, by and
between CHADMOORE WIRELESS GROUP, INC., a Colorado corporation (the
"Corporation"), and Xxxx X. Xxxxxx (the "Employee").
W I T N E S S E T H
WHEREAS, the Employee has been serving the Corporation in the capacity of Senior
Vice President and Chief Regulatory Officer, and both the Corporation and the
Employee desire to continue their relationship, subject to the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, agree to the following terms and conditions, which shall be effective
from and after the date hereof:
1. RETENTION, TERM AND DUTIES
1.1 Retention. The Company hereby employs the Employee as Senior Vice
President and Chief Regulatory Officer and the Employee hereby accepts such
employment, upon the terms and subject to the conditions of this Agreement.
1.2 Term. The term of employment of the Employee by the Company shall
be for the period commencing on September 15, 1998 (the "Commencement Date") and
ending on September 15, 2000, (the "Term"), unless this Agreement is sooner
terminated pursuant to Section 5 herein. Notwithstanding anything contained
herein to the contrary, the term of employment will be automatically extended
for successive one (1) year periods commencing September 15, 2000 (referred to
below as an "Extended Term"), unless either party to this Agreement elects to
terminate this agreement by providing notice pursuant to Section 12 hereof of
such election to the other party during the thirty (30) day period commencing
prior to the expiration of the then applicable Term or Extended Term.
1.3 Duties. The Employee shall be Senior Vice President and Chief
Regulatory Officer of the Corporation, with duties and responsibilities
commensurate with such positions. The Employee shall report to the Corporation's
President and Chief Executive Officer. The Employee shall perform the duties
regularly associated with this position at the Corporation's corporate
headquarters in Las Vegas, Nevada. Any change in Employee duties or work
location shall be mutually agreed upon by Corporation and Employee.
2. SCOPE OF SERVICES
Services. The Employee agrees that he or she shall perform
their services to the best of their ability. During the term of this Agreement
the Employee shall not render any services for others in any line of business in
which the Corporation or its subsidiaries are significantly engaged without
first obtaining the Corporation's written consent; and they shall devote their
full business time, care, attention and best efforts to the Corporation's
business.
3. COMPENSATION
3.1 Base. The Corporation shall pay to the Employee an annual base
salary of $110,000.00 (the "Base Compensation"), payable in equal installments
(in accordance with the Corporation's standard practices, but no less often than
semi-monthly) subject to all withholding for income, FICA and other similar
taxes, to the extent required by applicable law. Salary for a portion of any
period will be prorated. The Company agrees to provide an annual written
performance review of the Employee by the Employee's direct supervisor, and to
subsequently review the then current Base Salary of the Employee. Said Base
Salary may be adjusted by the supervisor, subject to the concurrence of the
President and/or the Board of the Company or the Compensation Committee (if
any), at the sole discretion of the Company.
3.2 Bonus. In addition to the Base Compensation payable to the Employee
pursuant to Section 3.1 hereof, the Corporation (i) shall pay to the Employee as
a result of the Employee's services the amount set forth in Exhibit A hereto in
accordance with the performance standards set forth in such Exhibit A, and (ii)
may pay any additional amounts as, in the discretion of the Corporation's Board
of Directors or the Compensation Committee (if any), it may desire as a result
of the Employee's services.
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3.3 Employee Stock Option Plan. In addition to the Base Compensation
payable to the Employee pursuant to Section 3.1 hereof, and the Bonus payable to
the Employee pursuant Section 3.2 hereof, the Corporation shall issue to the
Employee 250,000 stock options as per their original employment offer. The
Corporation may issue additional stock options as, in the discretion of the
Corporation's Board of Directors or the Compensation Committee, (if any), it may
desire as a result of the Employee's services.
4. OTHER BENEFITS
4.1 Insurance Benefits. The Employee shall be entitled to participate
in all other employee benefit programs of the Company in effect from time to
time, on the same availability and basis as other employees of a similar level
of employment, as determined at the sole discretion of the Company or as
required by applicable laws, subject to a determination of eligibility under the
terms of said plan in accordance with its respective terms. The Company
maintains the exclusive right, at its sole discretion, to change, alter, modify,
or eliminate any or all of said employee benefits at any time. Upon termination
of Employment for any reason, the Employee may, at the Employee's discretion,
elect to acquire any desired benefit plans which are convertible to the Employee
as per the terms and conditions of the particular benefit plan(s), consistent
with applicable Company policies, and all federal, state, and local laws,
including COBRA.
4.2 Expenses. To the extent not otherwise reimbursed under this
Agreement, the Corporation shall reimburse the Employee for all reasonable and
customary expenses which the Employee shall incur in connection with the
Employee's services to the Corporation or any subsidiary pursuant to this
Agreement. All additional benefits are to be authorized by and subject to
approval by the Corporation's Board of Directors.
4.3 Vacation; Sick Leave. The Corporation shall provide to the Employee
such paid vacation and paid sick leave as outlined in the Corporation's
Associate Managed Time Off (AMTO) Policy which do not materially interfere with
the Employee's performance of his obligations hereunder.
5. TERMINATION
This Agreement may be terminated prior to the Expiration Date only in accordance
with the following provisions:
5.1 Death. In the event of the Employee's death, the Employee's
employment with the Company shall be deemed to be terminated as of the date of
death. Upon death, the Employee's estate or other legal representative shall be
entitled to receive any Base Salary installments which are accrued and unpaid at
that time. All other compensation or benefits shall cease at the date of death,
except for any prior vested amount due the Employee under any benefit program of
the Company in which the Employee was enrolled, and such other benefits as may
be maintained by the spouse and/or dependents of the Employee as per the terms
and conditions of the particular benefit plan(s), consistent with applicable
Company policies, and all federal, state, and local laws, including COBRA.
5.2 Termination by the Company. Company may terminate the Employee's
employment hereunder, by delivering to the Employee a Notice of Termination
(defined hereinafter), as follows:
i) At will, without cause, during the first ninety (90) days of
continuous employment with the corporation, without additional
employment or severance remuneration. ii) At will, without cause, at
any time after the first ninety (90) days of continuous employment,
with payment of twelve (12) months of Base Salary as severance
remuneration. All Employee Options granted to employee shall
immediately vest upon the date of termination at will, without cause.
iii) For cause, at any time during employment, without additional
remuneration or severance, with cause having any of the following
meanings:
(a) the Employee having been convicted of any felony or other
crime involving moral turpitude;
(b) the use of narcotics or alcohol to the extent which
materially impairs the Employee's performance of his or her
duties;
(c) malfeasance or gross negligence by the Employee in the
performance of his or her duties;
(d) a material violation by the Employee of any provision of
this Agreement;
(e) willful or gross misconduct by the Employee materially
injurious to the Company.
5.3 Voluntary Termination. Employee may voluntarily terminate his or
her employment with the Company at any time, with a minimum of thirty (30) days
of notice, by giving the Company a Notice of Termination (defined hereinafter).
If the Employee voluntarily terminates his or her Employment with the Company
under this Agreement, the Employee shall not receive additional remuneration,
but shall receive pay only for days worked, but not yet paid through the last
day worked. In the event Employee voluntarily terminates
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employment due to inability of Company to meet payroll obligations for 31
consecutive days, all employee stock options and/or stock appreciation rights
granted to employee will vest at date of termination. Also, the Employee may, in
his or her discretion, elect to acquire or assume any desired benefit plans
which are convertible to the Employee, as per the terms and conditions of the
benefit plan, consistent with applicable Company policies, and as per all
applicable federal, state and local laws, statutes, or ordinances, including
COBRA.
5.4 Termination Following Change of Ownership. If this Agreement is
terminated by either party within one year following a "change in the ownership"
(as defined below) of the Corporation, and in lieu of the benefits provided for
in Section 5.2(ii), Corporation shall pay to Employee a lump sum payment equal
to 2.99 times the average annual compensation paid by the Corporation and
includable by Employee in his gross income during the lesser of (i) the period
of time employed by the Corporation or (ii) the five tax years ended prior to
the tax year in which such change of ownership or control occurs, and all
Employee Stock Options shall immediately and irrevocably vest . For purposes of
this Section 5.4, a "change in the ownership" of the Corporation will be deemed
to have occurred upon: (i) completion of a transaction resulting in a
consolidation, merger, combination or other transaction in which the common
stock of the Corporation is exchanged for or changed into other stock or
securities, cash and/or any other property and the holders of the Corporation's
common stock immediately prior to completion of such transaction are not,
immediately following completion of such transaction, the owners of at least a
majority of the voting power of the surviving entity, (ii) a tender or exchange
offer by any person or entity other than Employee and/or his affiliates for
fifty percent (50%) of the outstanding shares of common stock of the Corporation
is successfully completed, (iii) the Corporation has sold all or substantially
all of the Corporation's assets, (iv) during any period of twenty-four (24)
consecutive months, individuals who at the beginning of such period constituted
the board of directors of the Corporation (together with any new or replacement
directors whose election by the board of directors, or whose nomination for
election, was approved by a vote of at least a majority of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for reelection was previously so approved) cease
for any reason to constitute a majority of the directors then in office, and (v)
any other event resulting in a change in the ownership of the Corporation.
Notwithstanding anything contained herein to the contrary, the payment by
Corporation to Employee pursuant to this Section 5.4 shall be reduced to the
extent necessary to prevent any portion of such payment to be characterized as
an excess parachute payment under Section 280G of the Internal Revenue Code of
1986, as amended, or any successor provision thereof, which may be applicable to
a payment pursuant to this Section 5.4.
5.5 Notice of Termination. For purposes of this Agreement, the term
"Notice of Termination" shall mean a written document delivered to the Employee
(if termination is by the Company) or to the Company (if a voluntary termination
by the Employee), which shall specify the section of this Agreement under which
the termination occurs. Termination shall be effective on the date that the
Notice of Termination is effective, or any date specified by the Company (if
termination is by the Company). Notwithstanding the foregoing, the Notice of
Termination shall be effective immediately upon termination for "cause."
6. INDEMNIFICATION AND INSURANCE
6.1 Obligation. The Corporation shall indemnify and hold harmless, and
in any action, suit or proceeding, defend the Employee (with the Employee having
the right to use counsel of his choice) against all expenses, costs, liabilities
and losses (including attorneys' fees, judgments and fines, and amounts paid or
to be paid in any settlement) (collectively "Indemnified Amounts") reasonably
incurred or suffered by the Employee in connection with the Employee's service
as an employee of the Corporation or any affiliate to the full extent permitted
by the By-laws of the Corporation as in effect on the date of this Agreement,
or, if greater, as permitted by the general corporation law of the jurisdiction
of the Corporation's incorporation (the "GCL"), provided that the indemnity
afforded by the Corporation's By-laws shall never be greater than permitted by
the GCL. The Company shall advance on behalf of Employee all Indemnified Amounts
as they are incurred. To the extent a change in the GCL (whether by statute or
judicial decision) permits greater indemnification than is now afforded by the
By-laws and a corresponding amendment shall not be made in said By-laws, it is
the intent of the parties hereto that the Employee shall enjoy the greater
benefits so afforded by such change.
6.2 Determination. A determination that indemnification with respect to
any claims by the Employee pursuant to this Section 6 is proper shall be made by
independent legal counsel selected by the Board of Directors of the Corporation
and set forth in a written opinion furnished by such counsel to the Board of
Directors, the Corporation and the Employee. In the event it is determined by
such counsel that Employee is not entitled to indemnification pursuant to this
Section 7 (and if contested by Employee, such determination is confirmed by the
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final non-appealable order of a court of competent jurisdiction), or if a court
of competent jurisdiction determines in a final non-appealable order that
Employee is not entitled to indemnification pursuant to this Section 6, Employee
hereby undertakes that he or she shall promptly reimburse the Company for all
such advances of Indemnified Amounts made by the Company on Employee's behalf.
6.3 Notice of Claims. The Employee shall advise promptly the
Corporation in writing of the institution of any action, suit or proceeding
which is or may be subject to this Section 6, provided that Employee's failure
to so advise the Corporation shall not affect the indemnification provided for
herein, except to the extent such failure has a material and adverse effect on
the Corporation's ability to defend such action, suit or proceeding.
6.4 Indemnification Insurance. The Employee shall be covered by
insurance, to the same extent as other employees of the Corporation are covered
by insurance, with respect to (a) directors and officers liability, (b) errors
and omissions, and (c) general liability insurance. The Corporation shall
maintain reasonable and customary insurance of the type specified in parts (b)
and (c) in the preceding sentence. The Employee shall be a named insured or
additional insured, without right of subrogation against him or her, under any
policies of insurance carried by the Corporation. The Corporation will, in good
faith, make efforts to maintain insurance coverage of the type specified in part
(a) above at commercially reasonable rates, but the failure to obtain such
coverage shall not constitute a breach of the Corporation's obligations
hereunder.
7. CONFIDENTIAL INFORMATION: NONDISCLOSURE, ETC.
7.1 Confidentiality. Except as may be in furtherance of the Employee's
performance of his functions as the Corporation's Chief Regulatory Officer
(including, without limitation, in connection with acquisitions, dispositions,
financings and other significant corporate transactions, developments or
planning which involve the participation of third parties) or otherwise with the
consent of the Board of Directors, the Employee shall not, throughout the Term
of this Agreement and thereafter, disclose to any third party, or use or
authorize any third party to use, any material information relating to the
material business or interests of the Corporation (or any of its subsidiaries)
which Employee knows to be confidential and valuable to the Corporation or any
of its subsidiaries (the "Confidential Information"). The Confidential
Information is and will remain the sole and exclusive property of the
Corporation, and, during the Term of this Agreement, the Confidential
Information, when entrusted to the Employee's custody, shall be deemed to remain
at all times in the Corporation's sole possession and control.
7.2 Return of Documents. Upon termination of this Agreement for any
reason whatsoever, or whenever requested by the Board of Directors of the
Corporation, the Employee shall return or cause to be returned to the
Corporation all of the Confidential Information or any other property of the
Corporation in the Employee's possession or custody or at his or her disposal,
which he or she has obtained or been furnished, without retaining any copies
thereof.
8. NON-COMPETITION
8.1 Restriction. Subject to Section 2 hereof, the Employee shall not,
(i) throughout the Term or Extended Term of this Agreement, as the case may be,
and (ii) for a period of 12 months thereafter, in each case without the
Corporation's prior written consent, render services to a business, or plan for
or organize a business, which is materially competitive with the Corporation or
of any of its subsidiaries by becoming an owner, officer, director, shareholder
(owning more than 4.9% of such business' equity interests), partner, associate,
employee, agent or representative or consultant or serve in any other capacity
in any such business.
8.2 Trade Secrets. Subject to Section 2 hereof, all ideas and
improvements which are protectable by patent or copyright or as trade secrets,
conceived or reduced to practice (actually or constructively) during the Term of
this Agreement by the Employee, shall be the property of the Corporation;
provided, however, that the provisions of this Section 8.2 shall not apply to an
invention for which no equipment, supplies, facility or trade secret information
of the Corporation was used and which was developed entirely on the Employee's
own time, and (a) which does not relate to (i) the business of the Corporation
or any of its subsidiaries or (ii) the actual or demonstrably anticipated
research or development by the Corporation of any of its subsidiaries or (b)
which does not result from any work performed by the Employee pursuant to this
Agreement.
9. REMEDIES
9.1 Arbitration. In the event of any dispute or controversy
arising under, out of or relating to this Agreement or the breach hereof other
than under Section 7 or 8 hereunder for which the Corporation may seek
injunctive relief, it shall be determined by arbitration in Las Vegas, Nevada to
be heard by a single arbitrator
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chosen by the Corporation and the Employee, provided that if the Corporation and
the Employee cannot agree on a single arbitrator, each shall select one
arbitrator and the arbitrators so selected shall select a third arbitrator, and
the panel of three arbitrators shall determine the dispute. The arbitration is
to commence within four (4) weeks after service of demand for arbitration by
either party, and each party shall have the right to make one document request
on the other party prior to commencement of the arbitration proceeding, but no
other discovery shall be conducted other than that which is agreed upon in
writing by both parties. Such arbitration and any award made therein shall be
binding upon the Corporation and the Employee.
9.2 Injunctive Relief. The Employee acknowledges and agrees that any
material breach which occurs or which is threatened of Section 7 or 8 hereof
shall cause substantial and irreparable damage to the Corporation in an amount
and of a character difficult to ascertain. Accordingly, in addition to any other
relief to which the Corporation may otherwise be entitled at law, in equity or
by statute, or under this Agreement, the Corporation shall also be entitled to
seek such immediate temporary, preliminary and permanent injunctive relief on
such breach or threatened breach of Section 7 or 8 hereof as may be granted
through appropriate proceedings.
9.3 Fees. If any action at law or in equity or arbitration is necessary
to enforce or interpret the terms and conditions of this Agreement, the
prevailing party shall be entitled to reasonable attorney's, accountant's and
expert's fees, costs and necessary disbursements in addition to any other relief
to which it or he may be entitled. As used in this Section 9.3, the term
prevailing party shall include, but not be limited to, any party against whom a
cause of action, demand for arbitration, complaint, cross-complaint,
counterclaim, cross-claim or third party complaint is voluntarily dismissed,
with or without prejudice.
10. NOTICES
All notices required or permitted hereunder shall be in writing and
shall be delivered in person, by facsimile, telex or equivalent form of written
communication, or sent by certified or registered mail, return receipt
requested, postage prepaid, as follows:
To Corporation:
Chadmoore Wireless Group, Inc.
0000 X. Xxxxxxx Xxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000
Attention: President
Fax: 000-000-0000
To the Employee:
Xxxx X. Xxxxxx
00 Xxxxx Xxxxx
Xxxxxxxxx, XX. 00000
or such other party and/or address as either party may designate in a written
notice delivered to the other party in the manner provided herein. All notices
required or permitted hereunder shall be deemed duly given and received on the
date of delivery, if delivered in person or by facsimile, telex or other
equivalent written telecommunication, or on the seventh day next succeeding the
date of mailing if sent by certified or registered mail.
11. FURTHER ACTION
The Corporation and the Employee each agrees to execute and deliver
such further documents as may be reasonably necessary by the other in order to
give effect to the intentions expressed in this Agreement.
12. HEADING; INTERPRETATIONS
The headings and captions used in this Agreement are for convenience
only and shall not be construed in interpreting this Agreement.
13. ASSIGNABILITY
a) By Company. This Agreement is binding upon, and shall inure to the
benefit of the Company, and any successors or assigns, and may be assigned in
whole or in part by the Company, its successors and assigns.
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b) By Employee. This Agreement is a personal services contract, and the
Employee may not assign this Agreement, or any part hereof, without the prior,
written consent of the Company, which consent may be withheld for any reason.
14. ENTIRE AGREEMENT
This Agreement contains the entire agreement and understanding of the
parties with respect to the matters herein, and supersedes all existing
negotiations, representations or agreements and all other oral, written and
other communications between them concerning the subject matter of this
Agreement, except in the event of change in control.
15. AMENDMENTS
This Agreement may be amended or modified in whole or in part only by
an agreement in writing signed by the Corporation and the Employee.
16. WAIVER AND SEVERABILITY
The waiver by either party of a breach of any terms or conditions of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach by such party. In the event that one or more provisions of this Agreement
shall be declared to be invalid, illegal or unenforceable under any law, rule or
regulation, such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of the other provisions of this Agreement.
17. GOVERNING LAW
This Agreement and the rights of the parties under it shall be governed
by and construed in accordance with laws of the State of Nevada, including all
matters of construction, validity, performance and enforcement and without
giving effect to the principles of conflict of laws, except that matters of
corporate law and governance shall be governed by and construed in accordance
with the laws of the State of Nevada.
18. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be an original, and all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties have executed Agreement as of the day and year
first above written.
EMPLOYEE
/s/Xxxx X. Xxxxxx
-------------------
Xxxx X. Xxxxxx
CHADMOORE COMMUNICATIONS, INC.
By: /s/Xxxxxx X. Xxxxx
----------------------
Xxxxxx X. Xxxxx
Title: President
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EXHIBIT "A"
Other Provisions to Employment Agreement
As per the original offer letter, annual bonus shall equate to $40,000.00 at
100% achievement
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