Exhibit 10.9
EMPLOYMENT AND NON-COMPETE AGREEMENT
Amended and Restated as of June 10, 1999
This Employment and Non-Compete Agreement ("Employment Agreement") is
made this 2, day of June, 1999 by and between Applied Cellular Technology of
Missouri, Inc., a Missouri corporation, with its principal office located 0000
Xxxxx Xxxxxx Xxxxx, Xxxx, Xxxxxxxx 00000 (the "Employer") and Xxxx X. Xxxx (the
"Employee").
WHEREAS, Employer is in the business of design, development, and sale
of software and consulting services and
WHEREAS, Employer desires to retain the services of the Employee; and
WHEREAS, the parties wish to amend and restate the previous Employment
Agreement dated December 18, 1998.
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Term of Employment. Subject to the provisions of Section 5 of this
Employment Agreement, Employer hereby agrees to employ Employee for a period of
three (3) years (the "Employment Term") commencing as of December 18, 1998.
2. Office and Duties.
(a) During the Employment Term, Employee shall serve as a President of
Employer. In such position, Employee shall have such duties and authority as
shall be determined from time to time by the Chairman of the Board or his
designee. During the Employment Term, Employee's employment by Employer shall be
Employee's exclusive full time employment.
(b) During the Employment Term, Employee shall devote his best efforts
to performance of his duties hereunder and shall not directly or indirectly
engage in any other business, profession or occupation for compensation or
otherwise which would conflict with the limitation of such duties without the
prior written consent of the Board of Directors (the "Board"), which consent
shall not reasonably be withheld, delayed or conditioned.
3. Compensation of Employee.
(a) As compensation for the services provided by Employee under this
Employment Agreement, Employer will pay Employee the greater of (i) One Hundred
and Thirty Thousand Dollars ($130,000.00) a year on an annualized basis with
Employer's in accordance with Employer's usual payroll procedures, or (ii) a
"Sales Commission" paid as follows: for sales directly attributable to
Employee's efforts, Employee shall receive a commission of ten percent (10%)
based upon the gross sales revenues. In the event that such order does not meet
a gross margin of thirty-five percent (35%), the commission amount will be
adjusted in accordance with the attached schedule. For sales not the result of
the direct efforts of Employee, Employee shall receive an "Override Commission"
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of three percent (3%). All commission payments will be paid in two equal
payments, the first half upon receipt of the order and the customer deposit, the
balance upon receipt by Employer of the remaining balance from the customer. The
Employer shall as soon as practicable but in no event later than forty five (45)
days from the end of each fiscal year during the Term of the Employment
Agreement reconcile the amount of commissions paid and, if necessary true up to
the amount so as to equal One Hundred Thirty Thousand Dollars ($130,000.00) in
base compensation.
(c) The Employer shall maintain and make available for review and all
sales records so that Employee may, upon his reasonable request, confirm the
accuracy of commission payments due and payable hereunder.
(d) In no event shall Employee receive less than of One Hundred and
Thirty Thousand Dollars ($130,000.00) in compensation in any year of this
Employment Agreement.
(e) The Employee shall also be entitled to participate in any and all
employee benefit plans, medical insurance plans, life insurance plans,
disability income plans and other benefit plans, from time to time, in effect
for employees of Employer. Such participation shall be subject to the terms of
the applicable plan documents, generally applicable Employer policies and the
discretion of the Board or any administrative or other committee provided for
in, or contemplated by, such plan, except any waiting periods shall be waived if
such waiver is allowable under such plan and would not prejudice the rights of
any other participant. In addition, the Employee shall be entitled to receive
benefits which are the same or substantially similar to those which are
currently being provided to the other employees of Employer.
4. Reimbursement for Expenses. In accordance with Employer's policy,
the Employee will be reimbursed for all "out-of-pocket" and other direct
business expenses (exclusive of commuting costs), upon presentation of
appropriate receipts and documentation.
5. Termination.
(a) For Cause by Employer. Notwithstanding any other provision of this
Employment Agreement, Employee's employment hereunder may be terminated by
Employer at any time for Cause. For purposes of this Employment Agreement,
"Cause" shall mean (i) Employee's willful and continued failure to perform his
duties hereunder (other than as a result of total or partial incapacity due to
physical or mental illness) for ten (10) days after a written demand is
delivered to Employee on behalf of Employer, which specifically identifies the
manner in which it is alleged that Employee has not substantially performed his
duties, (ii) Employee's dishonesty in the performance of his duties hereunder,
(iii) an act or acts on Employee's part involving moral turpitude or
constituting a felony under the laws of the United States or any state thereof,
(iv) any other act or omission which materially injuries the financial condition
or business reputation of Employer or any of its subsidiaries or affiliates, or
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(v) Employee's material breach of his obligations under Section 6 and 8 hereof
which breach shall remain uncured by Employee within ten (10) days following
receipt of notice from Employer specifying such breach.
(b) Permanent Disability. For the purposes of this Employment
Agreement, the term "permanent disability" shall mean the Employee's inability
to perform his duties as prescribed in this Employment Agreement, which,
following a written request by either Employer or the Employee, shall be
determined by agreement between the parties and, if they cannot agree, by a
panel of three (3) physicians, one of whom will be selected by Employer, one by
the Employee and the third by the first two so selected. Said panel shall also
fix the date of the occurrence of the "permanent disability". Said panel's
determination shall be conclusive. Notwithstanding anything to the contrary set
forth herein, the Employee shall be presumed to be permanently disabled thus
terminating this Employment Agreement, as of the date he is receiving payments
for permanent disability under any disability insurance policies or under the
Social Security Act.
(c) Temporary Disability. If, due to physical or mental illness,
disability or injury, the Employee shall be disabled so as to be unable to
perform substantially all of his duties and responsibilities hereunder, the
Board may designate another person to act in his place during the period of such
disability. Notwithstanding any such designation, the Employee shall continue to
receive his full salary and benefits under Section 3 of this Employment
Agreement until he becomes eligible for disability income under Employer
disability income plan. In the absence of a disability income plan at the time
of such disability, Employer shall pay the Employee benefits equal to those the
Employee would have received if Employer's current disability income plan were
in effect at such time; provided however, that Employer's obligations hereunder
shall cease twelve (12) months from the onset of such disability.
(d) Death. Employee's employment hereunder shall terminate immediately
in the event of the Employee's death. If Employee's employment is terminated by
the death of Employee, Employer shall pay to Employer's estate or his legal
representative all amounts due through the date of Employee's death. The payment
to Employee of any other benefits following the termination of Employee's
employment pursuant to this Section 5(d) shall be determined by the Board in
accordance with the plans, policies and practices of Employer.
(e) Without Cause by Employer. The Employee's employment hereunder may
be terminated by Employer at any time, without Cause. If Employee's employment
is terminated by Employer without Cause (other than by reason of disability or
death), Employer shall continue to pay Employee the compensation to which he is
entitled pursuant to Section 3 hereof for the balance of the Employment Term as
if such termination had not occurred. The payment to Employee of any other
benefits following the termination of Employee's employment pursuant to this
Section 5(e) shall be determined by the Board in accordance with the plans,
policies and practices of Employer.
Employment and Non-Compete
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(f) Termination by Employee. Employee's employment hereunder may be
terminated by Employee at any time upon not less than sixty (60) days prior
written notice from Employee to Employer. If Employee terminates his employment
with Employer pursuant to this Section 5(f), Employer shall pay Employee any
amounts due through the date of termination.
(g) Notice of Termination. Any purported termination of employment by
Employer or by Employee shall be communicated by written "Notice of Termination"
to the other party hereto in accordance with Section 15 hereof. For purposes of
this Employment Agreement, a Notice of Termination shall mean a notice which
shall indicate the specific termination provision in this Employment Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of employment under the provision so
indicated.
6. Non-Competition.
(a) Employee acknowledges and recognizes the highly competitive nature
of the businesses of Employer and its affiliates and accordingly agrees that
during the period commencing on the date hereof and continuing until the later
of (i) the date that Employee ceases to receive payments pursuant to Section 5
of this Employment Agreement or (ii) one (1) year from the date of the
termination of Employee's employment:
(i) Employee will not engage in any activity which is competitive
with any business now, or at any time during the Employment Term, conducted by
Employer, its subsidiaries or its affiliates, including without limitation
becoming an employee, investor (except for passive investments of not more than
one percent (1%) of the outstanding shares of, or any other equity
over-the-counter securities market), officer, agent, partner or director of, or
other participant in, any firm, person or other entity in any geographic area
which either directly competes with a line or lines of business of Employer, its
subsidiaries or its affiliates. Notwithstanding any provision of this Employment
Agreement to the contrary, upon the occurrence of any breach of this Section
6(a)(i), if Employee is employed by Employer, Employer may immediately terminate
the employment of Employee for Cause in accordance with the provisions contained
in Sections 5 and 16, whether or not Employee is employed by Employer, Employer
shall immediately cease to have any obligations to make payments to Employee
under this Employment Agreement.
(ii) Employee will not directly or indirectly assist others in
engaging in any of the activities in which Employee is prohibited to engage by
clause (i) above.
(iii) Employee will not directly or indirectly (A) induce any
employee of Employer, its subsidiaries or its affiliates to engage in any
activity in which Employee is prohibited from engaging by clause (i) above or to
terminate his employment with Employer, its subsidiaries or its affiliates, or
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(B) employ or offer employment to any person who was employed by Employer, its
subsidiaries or its affiliates unless such person shall have ceased to be
employed by Employer, its subsidiaries or its affiliates for a period of at
least twelve (12) months.
(b) It is expressly understood and agreed that (i) although Employee
and Employer consider the restrictions contained in this Section 6 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Employment Agreement is unenforceable, this Employment Agreement shall not
be rendered void but rather shall be deemed to be enforceable to such maximum
extent as such court may judicially determine or indicate to be enforceable, and
(ii) if any restriction contained in this Employment Agreement is determined to
be unenforceable and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
7. Resignation as Officer and/or Director. In the event that
Employee's employment is terminated for any reason whatsoever, the Employee
agrees to, as the case may be, resign immediately as an Officer and/or Director
of Employer.
8. Confidentiality. Employee will not at any time (whether during or
after his employment with Employer) disclose or use for his own benefit or
purposes or the benefit or purposes of any other person, firm, partnership,
joint venture, association, corporation or other organization, entity or
enterprise other than Employer and any of its subsidiaries or affiliates, any
Confidential Information. As used herein, the term "Confidential Information"
shall mean any trade secrets, information, data, or other confidential
information (excluding information which is not unique to Employer or which is
generally known to the industry or development programs, costs, marketing,
trading, investment, sales activities, promotion, credit processes, formulas,
data, software, drawings, specifications, source and object code, financial and
pricing information, marketing information and business and development plans or
the business and affairs of Employer generally, or of any subsidiary or
affiliate of Employer, Employee agrees that upon termination of his employment
with Employer for any reason, he will return to Employer immediately all copies
of any Confidential Information, together with any memoranda, books, papers,
plans, information, letters and other data, and all copies thereof or therefrom,
in any way relating to the business of Employer, its subsidiaries and its
affiliates, except that he may retain personal notes, notebooks and diaries.
Employee further agrees that he will not retain or use for his account at any
time any trade name, trademark or other proprietary business designation used or
owned in connection with the business of Employer, its subsidiaries or its
affiliates.
9. Specific Performance. Employee acknowledges and agrees that
Employer's remedies at law for a breach or threatened breach of any of the
provisions of Section 6 or Section 8 would be inadequate and, in recognition of
this fact, Employee agrees that, in the event of such a breach or threatened
breach, in addition to any remedies at law, Employer without posting any bond,
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shall be entitled to obtain equitable relief in the form of specific
performance, temporary restraining orders, temporary or permanent injunctions or
any other equitable remedy which may then be available.
10. Vacation. The Employee shall be entitled to four (4) weeks of paid
vacation. Such vacation shall be taken at a time mutually convenient to Employer
and Employee. Vacation days may not be accumulated.
11. Sick Days/Personal Business. The Employee shall be entitled to
paid sick or personal days due to illness pursuant to the policies and
procedures of the then current disability policies that may be in place. In no
event shall it be determined that Employee shall have more paid sick days than
those disclosed in such policies.
12. Change in Control. Notwithstanding any other provision of this
Employment Agreement, should a "change of control" occur, Employee, at his sole
option and discretion, may terminate his employment under this Employment
Agreement at any time within one (1) year after such change of control upon
fifteen (15) days written notice. In the event of such termination, Company
shall pay to Employee a severance payment ("Severance Payment") equal to three
(3) times the base amount as defined in Section 280G(b)(3) of the Internal
Revenue Code of 1986, as amended ("Code") minus $1.00. Notwithstanding the
foregoing, (a) if the Severance Payment and any other amounts payable by Company
to Employee are parachute payments under Code Section 280b (collectively,
"Parachute Payments") and, (b), if reducing the Severance Payment would
eliminate the tax provided for in Code Section 4999 ("Section 4999 Tax") which
would otherwise be applicable to the Parachute Payments, and (c) if, because of
such elimination, the net amount of the Parachute Payments (total payments minus
Section 4999 Tax) would be greater than such net amount without reduction, then
the Severance Payment shall be reduced by the smallest amount required to
eliminate the imposition of the Section 4999 Tax. The foregoing determination
shall be made by Employer's general counsel, and his determination shall be
binding upon Employer and Employee. The amount determined under the foregoing
provisions of this paragraph 12 shall be payable no later than one (1) month
after the effective date of the Employee's termination of employment. A change
in control means: the acquisition, without the approval of Employer's board of
directors by any person or entity, other than Employer or a "related entity," of
more than twenty percent (20%) of the outstanding shares of Employer's voting
common stock through a tender offer, exchange offer or otherwise; the
liquidation or dissolution of Employer following a sale or other disposition of
all or substantially all of its assets; a merger of consolidation involving
Employer which results in Employer not being the surviving parent corporation;
or any time during any two-year period in which individuals who constituted the
board of directors of Employer at the start of such period (or whose election
was approved by at least two-third of the then members of the board of directors
of Employer who were members at the start of the two-year period) do not
constitute at least fifty percent (50%) of the board of directors for any
reason. A related entity is the parent, a subsidiary or any employee benefit
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plan (including a trust forming a part of such a plan) maintained by Employer,
its parent or a subsidiary.
13. Holidays. The Employee shall be entitled to the standard company
holidays.
14. Restriction on Authority of Employee. Notwithstanding anything set
forth in this Employment Agreement to the contrary, the Employee, in the
performance of his duties hereunder, shall not take any of the following actions
without the written consent of the Board:
a. Enter into negotiations or execute documents that would materially
affect the existing debt and/or structure or alter, modify or change any banking
relations.
15. Representations and Warranties. The Employee hereby represents and
warrants that he is free to enter this Employment Agreement and to render his
services pursuant hereto and that neither the execution and delivery of this
Employment Agreement, nor the performance of his duties hereunder, violates the
provisions of any other agreement to which he is a party or by which he is
bound.
16. Notices. All notices required or permitted under this Employment
Agreement shall be in writing and shall be deemed delivered when delivered in
person or deposited in the United States mail, postage paid, addressed as
follows:
Employer: Applied Cellular Technology, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Employee: Xxxx X. Xxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Such addresses may be changed from time to time by either party by
providing written notice in the manner set forth above.
17. Entire Agreement. This Employment Agreement contains the entire
agreement of the parties and there are no other promises or conditions in any
other agreement, whether oral or written. This Employment Agreement supersedes
any prior written or oral agreements between the parties.
18. Expenses. Each party shall pay its own expenses incident to the
performance or enforcement of this Employment Agreement, including all fees and
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expenses of its counsel for all activities of such counsel undertaken pursuant
to this Employment Agreement, except as otherwise herein specifically provided.
19. Waivers and Further Agreements. Any waiver of any terms or
conditions of this Employment Agreement shall not operate as a waiver of any
other breach of such terms or conditions or any other term or condition, nor
shall any failure to enforce any provision hereof operate as a waiver of such
provision or of any other provision hereof; provided, however, that no such
written waiver, unless it, by its own terms, explicitly provides to the
contrary, shall be construed to effect a continuing waiver of the provision
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision. Each of the parties hereto agrees
to execute all such further instruments and documents and to take all such
further action as the other party may reasonably require in order to effectuate
the terms and purposes of this Employment Agreement.
20. Amendments. This Employment Agreement may not be amended, nor
shall any waiver, change, modification, consent or discharge be effected except
by an instrument in writing executed by or on behalf of the party against whom
enforcement of any waiver, change, modification, consent or discharge is sought.
21. Severability. If any provision of this Employment Agreement shall
be held or deemed to be, or shall in fact be, invalid, inoperative or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the conflict
of any provision with any constitution or statute or rule of public policy or
for any other reason, such circumstance shall not have the effect of rendering
the provision or provisions in question invalid, inoperative or unenforceable in
any other jurisdiction or in any other case or circumstance or of rendering any
other provision or provisions herein contained invalid, inoperative or
unenforceable to the extent that such other provisions are not themselves
actually in conflict with such constitution, statute or rule of public policy,
but this Employment Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative or unenforceable provision
had never been contained herein and such provision reformed so that it would be
valid, operative and enforceable to the maximum extent permitted in such
jurisdiction or in such case.
22. Counterparts. This Employment Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in pleading or
proving any provision of this Employment Agreement, it shall not be necessary to
produce more than one of such counterparts.
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23. Section Headings. The headings contained in this Employment
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Employment Agreement.
24. Gender. Whenever used herein, the singular number shall include
the plural, the plural shall include the singular, and the use of any gender
shall include all genders.
25. Governing Law. This Employment Agreement shall be governed by and
construed and enforced in accordance with the law (other than the law governing
conflict of law questions) of the Missouri.
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The parties have executed this Employment Agreement the day and year
first above written.
EMPLOYER
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxx
Chairman of the Board
EMPLOYEE
By: /s/ Xxxx X. Xxxx
---------------------------
Xxxx X. Xxxx
