Exhibit 10.4
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") by and between YDI Wireless, Inc., a
Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxxxx (the
"Executive"), is dated and entered into as of February 9, 2005 (the "Signing
Date") but is effective (except as otherwise specifically noted) as of the
Effective Date defined below in Section 4 hereof.
RECITALS
WHEREAS: The Company is duly incorporated and organized under the laws of
the State Delaware and is authorized to engage in any lawful business;
WHEREAS: The Company desires to continue the Executive's employment and to
have him render full-time services for it and to prevent the services of
Executive from being used by its competitors; and
WHEREAS: The Executive is willing to continue rendering his full-time
services for the Company in accordance with and subject to the terms and
conditions of this Agreement,
ACCORDINGLY, the parties hereby agree as follows:
AGREEMENT
1. Position. The Company will continue to employ Executive and Executive will
continue to accept employment by the Company as Chief Executive Officer of
the Company under the terms of this Agreement. Executive shall continue to
be a member of the Board of Directors of the Company (the "Board").
2. Devotion of Time and Energies. Executive will devote substantially all of
his business time and attention to the performance of services to the
Company under this Agreement; provided, however, that Executive may, (a)
upon receipt of prior permission from the Board, which will not be
unreasonably withheld (or unreasonably revoked once it is initially
given), devote reasonable periods of time to serving on boards as a
director of other corporations or to miscellaneous management and
technical advisory services for other non-competitive companies, (b)
engage in charitable or community service activities, and, (c) manage his
own personal affairs and investments, in each case as long as none of the
foregoing additional activities materially interferes with Executive's
duties under this Agreement. The Company acknowledges that it has
previously given Executive permission to continue certain of his business
relationships.
3. Duties and Authority. As Chief Executive Officer, Executive shall have
responsibility for overall management and administration of the Company
including, without limitation, financial performance, strategic direction,
promotional and technical services, and such other tasks in connection
with the affairs and overall operation of the Company as are customary for
a chief executive officer of a public company in the wireless
communications and equipment business. Subject to the provisions of this
Section 3, Executive agrees to act in accordance with the Company's
business plan, as it may be amended from time to time by the Board.
Executive shall
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report solely and directly to the Board. All other employees of the
Company or any of its' controlled subsidiaries shall report solely and
directly to Executive or his designee(s).
4. Effective Date and Term. This Agreement shall be effective as of January
1, 2005 (the "Effective Date"). As of the Effective Date, this Agreement
replaces and supersedes, in its entirety, the Employment Agreement dated
March 1, 1999, between Executive and Young Design, Inc., which Employment
Agreement shall be of no further force or effect. The term of Executive's
employment pursuant to this Agreement will begin on the Effective Date and
will continue for a period of five (5) years after that date (the "Term"),
unless otherwise sooner terminated. Thereafter this Agreement may be
renewed for additional periods, provided that the Company gives the
Executive at least ninety (90) days notice prior to the expiration of the
Term, of its intent to renew this Agreement or negotiate a new agreement.
5. Salary and Other Compensation.
5.1. Base Salary. For services rendered by Executive under this
Agreement, Executive will be paid an annual salary equal to two
hundred and ninety five thousand dollars ($295,000), starting from
the Signing Date of this Agreement (the "Initial Base Salary"), and
payable in accordance with the Company's normal payroll practices.
Such Initial Base Salary will be reviewed at least once during each
full performance period or annually, which ever is greater, and will
be subject to increase, but not decrease, in accordance with such
review, except in the event that all of the Company's officers and
senior managers receive a similar and proportionate reduction in
salary. The Initial Base Salary, as may be modified from time to
time during the Term of this Agreement, is hereinafter referred to
as the "Base Salary."
5.2. Annual Bonus. Executive will be granted cash bonus payouts each year
based on the percentages of actual attainment of performance targets
approved by the Board of Directors prior to the commencement of each
year. At target performance levels, the Executive shall be granted a
cash bonus equal to 100% of his actual Base Salary during the
previous year. Executive may be awarded all, some, more than, or
none of this potential cash bonus based on the Board's assessment of
the Executive's actual performance as measured against the
previously approved performance targets, and relative weighting of
the performance targets. Performance targets for each year shall
establish the minimal level of bonus to be paid to Executive based
on the performance level achieved. The Board may determine to
provide the Executive with additional annual bonuses based on other
considerations but has no obligation to do so. Any annual bonus
shall be paid within 70 days after the end of the year.
5.3. Stock Option Bonus:
(a) On the Signing Date of this Agreement, the Executive shall be
granted options to purchase five hundred thousand (500,000)
shares of the Company's common stock. All options shall be
Non-Qualified Stock Options with an exercise price equal to
the closing stock price on the date of the grant.
(b) The actual grant and the specific terms of the grant will be
set forth in a specific stock option agreement, which terms at
a minimum, shall establish the vesting schedule for these
options to be: forty percent (40%) at time of grant, and an
additional twenty percent (20%) on each of the next three (3)
annual anniversaries of the Effective Date.
(c) Executive acknowledges that this grant will be in lieu of all
future annual option grants of shares of the Company to the
Executive during the initial term of this Agreement.
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5.4. Spot Awards. Executive has the opportunity to receive certain bonus
payments at any time during the Term of the Agreement, in addition
to those set forth hereinabove at the sole discretion of the Board,
in the event that agreed upon milestones are significantly exceeded
as a result of the execution of one or more material and strategic
initiatives that clearly result in a significant increase in
shareholder value, and further that such strategic initiatives are
directly attributable to the Executive's leadership and personal
efforts. For example, but not limited to certain: acquisitions,
mergers, business combinations, joint ventures, etc.
5.5. Other Compensation.
(a) Subject to the provisions of Subsection 5.3(c) above,
Executive shall be entitled to participate on the same basis
as other executives of the Company in any incentive or
supplemental compensation plan maintained or made available by
the Company for any of its senior executives.
(b) Not withstanding the provisions of Subsection 5.3(c) above,
when events or transactions result in the formation of
subsidiaries or the acquisition of controlled entities,
whereby shares or options to buy shares of such subsidiary or
controlled entity are granted to employees of the Company or
its subsidiary or controlled entity, the Executive shall be
granted no less than an equal amount of shares or options in
any subsidiary or controlled entity of the Company, as may be
granted to the largest grantee of such subsidiary or
controlled entity, with no less favorable terms.
(c) In addition, Executive may receive further compensation from
the Company in such form and to such extent as the Board
and/or its compensation committee may in its discretion
determine from time to time.
5.6. Expenses. Executive shall be entitled to reimbursement of all
reasonable travel, entertainment, and other out-of-pocket business
expenses incurred by Executive in the course of his duties and in
accordance with any policies adopted from time to time by the Board,
upon submission of reasonable documentation therefore.
5.7. Benefits. During the Term of the Agreement, but subject Subsection
5.3(c) above, Executive shall be entitled to participate in, and
receive the benefits of any and all of the Company's benefit plans
such as but not limited to: life and disability insurance, pension
or other retirement benefit plan, the 401(k) plan, profit sharing,
stock option, employee stock ownership, or other plans, benefits and
privileges given to employees and executives of the Company, to the
extent commensurate with his then duties and responsibilities.
Further, the Company shall directly pay the full premium cost for
the following benefits, or make payment to the Executive of the
economic equivalent of the premium cost for the following benefits
in the event that any one or more of the following benefit plan(s)
are not continued by the Company, or the Executive's continued
participation in such benefit plan(s) is not possible:
(a) to the extent not otherwise covered under another plan,
insurance premiums for Executive and his eligible dependents
under the Company's existing or equivalent medical insurance
plan; and
(b) life insurance providing a death benefit of at least two times
(2X) the Executive's Base Salary;
(c) disability benefits, in accordance with the Company's then
standard disability insurance coverage;
(d) accidental death and dismemberment insurance providing a
benefit of up to two times the Executive's then current Base
Salary; and
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(e) five (5) weeks paid vacation each year, subject to the terms
of the Company's existing vacation policy.
6 Termination. Employment of Executive pursuant to this Agreement may be
terminated as follows, but in any case the provisions of noncompetition,
nondisclosure and assignment of Intellectual Property set forth in
Sections 9, 10 and 11 of this Agreement will survive the termination of
Executive's employment:
6.1. By Company. The Company may terminate the employment of Executive,
with or without Good Cause at any time during the term of employment
upon giving Notice of Termination.
6.2. By Executive. Executive may terminate his employment with or without
Good Reason at any time during the term of employment upon giving
Notice of Termination.
6.3. Automatic Termination. Executive's employment will terminate upon
his death or Total Disability. The term "Total Disability" as used
in this Agreement will mean an inability to perform the duties set
forth for Executive under this Agreement because of illness or
physical or mental disability (as determined by a medical doctor
chosen by the Company and reasonably satisfactory to Executive) for
a period of one-hundred twenty (120) consecutive calendar days,
unless Executive is granted a leave of absence by the Company's
Board of Directors. Termination under this Agreement will be deemed
to be effective immediately upon Executive's death or upon
Executive's Total Disability.
6.4. Notice. The term "Notice of Termination" as used in this Agreement
will mean at least thirty (30) days' written notice of termination
of Executive's employment, during which period Executive's
employment and performance of services will continue; provided,
however, that the Company may, at its own election but without
reducing Executive's compensation during such period, excuse
Executive from any or all of his duties during such period. The
effective date of the termination of Executive's employment
hereunder will be the date on which such 30-day notice period
expires.
7 Termination Payments. If Executive's employment hereunder terminates, all
compensation and benefits set forth in this Agreement will terminate
except as specifically provided in this Section 7 (the "Termination
Payments").
7.1. Termination due to Death or Total Disability. If Executive's
employment is terminated due to his death or Total Disability,
Executive (or his estate) shall be entitled to:
(a) any unpaid salary and other benefits which have accrued for
services already performed as of the date the termination of
Executive's employment becomes effective and, in the event of
Total Disability, benefits in accordance with the Company's
disability plan;
(b) pro-rata annual bonus for the year of termination based on the
target bonus (based on number of days employed divided by
365);
(c) in the case of Total Disability, the continuation of the
benefits described in Subsections 5.7(a), (b), (c), and (d)
above for a period of twelve (12) months, or a lump sum
payment to Executive of the economic equivalent to the extent
plans do not permit his continued participation, provided that
such benefits shall cease to the extent Executive becomes
covered
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under the plans of a new employer (in which case, Executive
shall return to the Company a pro rata portion of any lump sum
payment made by the Company in lieu of continuing the
benefits).
7.2 Termination by Company without Good Cause. If the Company terminates
Executive's employment without Good Cause prior to the end of the
Term of this Agreement, Executive will be entitled to receive:
(a) any unpaid Base Salary and other benefits which have accrued
for services already performed as of the effective date of
Executive's termination;
(b) the greater of a pro-rata annual target bonus for that portion
of the year of termination actually worked prior to
termination or an amount equal to six (6) months pro-rata
performance at target levels, which ever is greater, payable
in a lump sum within five (5) business days of termination:
(c) twelve (12) months of salary at the then current Base Salary
rate, payable in a lump sum within five (5) business days of
termination:
(d) all amounts, entitlements or benefits in which Executive is
already vested including, without limitation, all options,
which shall remain exercisable for twelve months (12) from the
date of termination.
(e) the continuation of the benefits described in Subsections
5.7(a), (b), (c), and (d) above for a period of twelve (12)
months, or a lump sum payment to Executive of the economic
equivalent to the extent plans do not permit his continued
participation, provided that such benefit shall cease to the
extent Executive becomes covered under similar plans of a new
employer (in which case, Executive shall return to the Company
a pro rata portion of any lump sum payment made by the Company
in lieu of continuing the benefits).
7.3 Good Cause. For purposes of this Agreement, "Good Cause" shall mean
and be limited to the following: willful fraudulent conduct intended
to enrich the Executive at the expense of the Company, embezzlement
or willful misappropriation for his own benefit of any proprietary
information of the Company, the indictment or conviction in any
jurisdiction for any crime which constitutes a felony, or which
constitutes a misdemeanor that involves fraud or moral turpitude, or
the Executive's failure to cooperate with the lawful investigations
of regulatory or governmental agencies. Additionally, the
Executive's material and persistent breach of the provisions of this
Agreement and gross misconduct in, or neglect of, the performance of
his duties and responsibilities hereunder, which causes material
economic harm to the Company, or the Executive's chronic, repeated
willful failure to carry out the reasonable, lawful, specific
written directions of the Board, which directions are consistent
with the provisions of this Agreement, shall be considered Good
Cause for termination, unless the Executive believed and can
demonstrate, that in good faith such action or non action was in, or
not opposed to, the best interests of the Company.
7.4 Termination by the Company for Good Cause. If Executive is
terminated by the Company for Good Cause, Executive will only be
entitled to any unpaid Base Salary and other benefits that have
accrued for services already performed as of the date the
termination of Executive's employment becomes effective.
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A termination for Good Cause shall not take effect unless the
provisions of this paragraph are complied with. The Executive shall
be given written notice by the Board of the intention to terminate
him for Good Cause, stating the grounds on which the proposed
termination for Good Cause is based. The Executive shall be given an
opportunity to cure such conduct within a thirty (30) calendar day
period (to the extent such cure is possible). If he fails to cure
such conduct, the Executive shall then be entitled to a hearing
before the Board, and, thereafter, upon a determination by
affirmative vote of a majority of the members of Board (excluding
Executive) that Good Cause exists, he shall be terminated.
7.5 Good Reason. For purposes of this Agreement, "Good Reason" shall
mean and be limited to any material reduction or adverse change in
Executive's position, which shall mean and refer to:
(a) any reduction or downgrade, in Executive's title, duties,
responsibilities or authority as provided in Sections 1 and 3,
or the assignment to the Executive of duties, responsibilities
or authority inconsistent therewith, provided that hiring a
President(s), COO(s) and/or any other senior executive
officer(s) of the Company shall not constitute "Good Reason"
for purposes of this provision, so long as the duties,
responsibilities and authority of the President(s), COO(s)
and/or other senior executive officer(s) are approved by the
Executive and such position, or positions, answer to
Executive;
(b) a failure to nominate Executive to the Board as part of the
Board's slate of nominees;
(c) any proposed reduction in Base Salary (except to the extent
permitted by Section 5.1);
(d) any change in or failure to continue any stock compensation
plan or other employee benefit plan, including, but not
limited to, pension, life insurance, medical, health, accident
or disability plans, which would directly or indirectly
materially reduce any such benefits to Executive (except to
the extent permitted by Section 5.1);
(e) relocation of Executive's own office location, as assigned to
him by the Company, other than a relocation at Executive's
initiative, to a new location more than fifty (50) miles from
the Executive's current place of residence;
(f) a material breach by the Company of the provisions of this
Agreement;
(g) the failure of the Company to obtain the assumption in writing
of its obligation to perform this Agreement by any successor
to all or substantially all of the assets of the Company
within 30 calendar days after a merger, consolidation, sale or
similar transaction;
(h) the failure of the Company to offer the Executive the position
of Chief Executive Officer of the surviving entity or, the
failure to nominate the Executive to the Board of the
surviving entity, in the event of a Change of Control.
Following written notice from Executive of any of the events
described above, the Company shall have thirty (30) calendar days in
which to cure. If the Company fails to cure, Executive's termination
shall become effective on the 31st calendar day following the
written notice.
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7.6 Termination by Executive with Good Reason. If Executive terminates
his employment hereunder with Good Reason prior to the end of the
Term of this Agreement, Executive will be entitled to receive the
same payments, benefits and rights as described under Subsection 7.2
above.
7.7 Termination by Executive without Good Reason. If Executive
terminates his employment without Good Reason, Executive will be
entitled to the same payments, benefits and rights as described
under Subsection 7.4 above.
7.8 Change in Control. "Change in Control" shall mean the occurrence of
any one of the following events:
(a) any "person," as such term is used in Sections 3(a)(9) and
13(d) of the Securities Exchange Act of 1934, becomes a
"beneficial owner," but excluding a person who owns more than
10% of the outstanding shares of the Company as of the date of
this Agreement, as such term is used in Rule 13D-3 promulgated
under that act, of 50% or more of the Voting Stock of the
Company;
(b) the Company adopts any plan of liquidation providing for
the distribution of all or substantially all of its assets;
(c) all or substantially all of the assets or business of the
Company is disposed of pursuant to a merger, consolidation or
other transaction (unless the shareholders of the Company
immediately prior to such merger, consolidation or other
transaction beneficially own, directly or indirectly, in
substantially the same proportion as they owned of the Voting
Stock of the Company, all of the Voting Stock or other
ownership interests of the entity or entities, if any, that
succeed to the business of the Company); or
(d) the Company combines with another Company and is the
surviving corporation but, immediately after the combination,
the shareholders of the Company immediately prior to the
combination hold, directly or indirectly, 50% or less of the
Voting Stock of the combined company
It is clearly understood, however, that no Change in Control
will be considered to have occurred solely as a result of a
subsequent public offering of Company shares without satisfaction of
at least one of the criteria set forth in Subsections (a) through
(d) above.
For purposes of the Change in Control definition, "the
Company" shall include any entity that succeeds to all or
substantially all of the business of the Company, "Affiliate" of a
person or other entity shall mean a person or other entity that
directly or indirectly controls, is controlled by, or is under
common control with the person or other entity specified and "Voting
Stock" shall mean capital stock of any class or classes having
general voting power under ordinary circumstances, in the absence of
contingencies, to elect the directors of a corporation.
7.9 Consequences of a Change in Control. Upon Executive's termination of
employment pursuant to Section 7.2 or 7.6 within a six (6) month
period following or at any time within the three (3) month period
prior to a Change in Control, Executive shall be entitled to the
benefits provided in Section 7.2 above, except that (a) the amount
payable pursuant to Section 7.2(c) shall be twenty one (21) months
of the Executive's Base Salary and (b) the amount payable pursuant
to
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section 7.2(b) shall be pro rata annual target bonus for a twenty
one (21) month period at target performance levels. Additionally,
all amounts, entitlements or benefits in which Executive is not yet
vested shall become fully vested including, without limitation, all
outstanding options, which shall remain exercisable for one year
from the date of termination.
7.10 No Mitigation: No Offset. In the event of any termination of
employment under this Section 7.10, the Executive shall be under no
obligation to seek other employment and there shall be no offset
against amounts due the Executive under this Agreement on account of
any claims asserted by the Company or any remuneration attributable
to any subsequent employment that he may obtain.
7.11 Other Severance Provisions. Notwithstanding any other provision of
this Agreement:
(a) All payments made to Executive shall be subject to and reduced
by all required tax withholdings.
(b) As a condition precedent to the Company's obligations to make
any payments or provide any benefits pursuant to Sections 7.2, 7.6
or 7.9 above, the Executive must execute and deliver to the Company
a release (in a form and substance acceptable to the Company) as to
any and all claims Executive may have against the Company (which
release, however, need not release any claims relating to
indemnification, contribution, or insurance coverage).
8 Insurance. The Company agrees to continue and maintain a directors' and
officers' liability insurance policy covering Executive in an aggregate
amount of no less than $5,000,000.
9. Restrictive Covenants.
9.1 During Emp1oyment. During the term of this Agreement, Executive
agrees that he will not directly or indirectly render any services
of a commercial or professional nature to any person or organization
other than the Company (except as is necessary or appropriate in
carrying out his duties hereunder) whether for compensation or
otherwise and except as otherwise provided in Section 2 of this
Agreement.
9.2 Noncompetition. Executive agrees that he will not, other than in the
course of performing his duties hereunder, and provided that the
Company is in material compliance with all applicable terms of
Sections 7.1, 7.2, 7.4, 7.6, or 7.9 above as the case may be, at any
time during the Restricted Period set forth in Subsection 9.6 below
and in the "Territory," either directly or indirectly, by or for
himself or for any other person, partnership, corporation, trust, or
company, "Participate" (as defined below) in any business or
enterprise involved in a product, process or service similar to
those developed, produced or provided by the Company (or any
Affiliate as defined in section 7.8 above) or otherwise competitive
with the Company's Business (as defined below); provided, however,
that this restriction shall not apply if Executive has disclosed to
the Company in writing all known facts relating to such work or
activity and has received prior written consent of the Board of the
Company to engage in such work or activity. The term "Territory"
shall mean the world. For purposes of this Agreement, the term
"Participate" includes, without limitation, any direct or indirect
participation or interest in any business, whether as an officer,
director, employee, partner, sole proprietor, stockholder, owner,
advisor, consultant, or otherwise, other than by ownership of less
than three percent (3%) of the stock of a publicly held corporation
whose stock is traded on a national securities exchange or in the
over the-counter market. If Executive believes the
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Company is not in compliance with its obligations under Section 7.1,
7.2, 7.4, 7.6, 7.7 or 7.9 above, as the case may be, Executive shall
deliver written notice to the Company describing the noncompliance.
The Company shall have ten (10) business days after receipt of such
notice in which to cure. If the Company fails to cure, Executive
shall be released from the obligations under this Section 9.2
effective on the 11th business day following delivery of the written
notice.
9.3 Noninterference. Provided that that Company is in material
compliance with all applicable terms of Sections 7.1, 7.2, 7.4, 7.6,
or 7.9 above as the case may be, during any portion of the
Restricted Period, other than in the course of performing his duties
hereunder, Executive will not (a) induce or attempt to induce any
other employee of the Company to leave the employ of the Company or
in any way interfere with the relationship between the Company and
any other employee of the Company, nor will he assist others in
doing so or (b) induce or attempt to induce any customer, supplier,
licensee, or other business relation of the Company to cease doing
business with the Company, nor will he assist others in doing so. If
Executive believes the Company is not in compliance with its
obligations under Section 7.1, 7.2, 7.4, 7.6, 7.7 or 7.9 above, as
the case may be, Executive shall deliver written notice to the
Company describing the noncompliance. The Company shall have ten
(10) business days after receipt of such notice in which to cure. If
the Company fails to cure, Executive shall be released from the
obligations under this Section 9.3 effective on the 11th business
day following delivery of the written notice.
9.4 Business Opportunity. Executive shall, during the term of his
employment with the Company, promptly and fully disclose to the
Company any business opportunity coming to Executive's attention, or
conceived or developed in whole or in part by Executive, which to
the best of Executive's knowledge (a) relates to the then current
Company Business (as set forth in Section 10.3, below) or (b) is
related to the Company's demonstrably anticipated business.
Executive shall not at any time exploit such business opportunities
for his own gain or that of any person or entity other than the
Company or an affiliate or subsidiary of the Company.
9.5 Covenants Reasonable. The Executive acknowledges and agrees that the
covenants in this Section 9 are reasonable in relation to the
position Executive has been afforded with the Company and are a
material inducement for the Company to enter into the Agreement.
However, should any court find that any provision of such covenants
is unreasonable, whether in period of time, geographical area, scope
of activity, or otherwise, then in that event the parties agree that
such covenants shall be interpreted and enforced to the maximum
extent which the court deems reasonable.
9.6 Term of Noncompetition. The term of the covenants set forth in
Subsections 9.2 and 9.3 (the "'Restricted Period") shall begin upon
the execution of this Agreement by the Executive and continue for a
period of one (1) year from the date on which Executive's employment
is terminated with the Company for any reason.
10. Nondisclosure.
10.1 Executive acknowledges that the Company's business and future
success depends on the preservation of the trade secrets and other
confidential information of the Company and its suppliers and
customers (the "Secrets"). The Secrets may include, without
limitation, existing and to-be-developed or acquired source codes,
flow charts, product designs, new product plans or ideas,
technologies, market surveys, the identities of past, present, or
potential customers,
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vendors or investors, business and financial information, pricing
methods or data, contract information, marketing plans, personnel
information, procedural and technical manuals and practices,
servicing routines, and parts and supplier lists proprietary to the
Company or its customers or suppliers, and any other sorts of items
or information of the Company or its customers or suppliers which
are not generally known to the public at large. Executive agrees to
protect and to preserve as confidential during and after the term of
his employment all of the Secrets at any time known to Executive or
in his possession or control (whether wholly or partially developed
by Executive or provided to Executive, and whether embodied in a
tangible medium or merely remembered).
10.2 Executive shall not knowingly use or allow any other person to use
any of the Secrets in any way except (a) in the course of performing
his duties hereunder, (b) to the extent Secrets become known in the
industry or by the public (other than through a breach of the
Agreement by Executive) or (c) to the extent required by a statute,
by a court of law, by any governmental agency having supervisory
authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) with apparent
jurisdiction to order him to divulge, disclose or make accessible
such information. All material containing or disclosing any portion
of the Secrets shall be, and remain the property of, the Company and
shall be returned to the Company upon the termination of Executive's
employment or the earlier request of another officer of the Company
or Chairman of the Board. At such time, Executive shall also
assemble all tangible items of work in progress, notes, plans, and
other materials related in any way to the Company's Business except
personal diaries, rolodexes or similar records of a personal nature,
and will promptly deliver such items to the Company.
10.3 Executive's covenants in this Section shall supplement, and shall
not supplant, any other rights or remedies the Company may have
under applicable law for the protection of its properties and trade
secrets.
For purposes of this Agreement, the "Company Business" shall
mean any of the following activities undertaken to support wireless
transmission or reception techniques, products and services such as,
but not limited to the development of related technologies or
techniques, manufacturing, servicing, operation of wireless
equipment and/or systems, including free space optical technology or
techniques, marketing and selling voice and/or data and/or video
transmission and/or wireless networking equipment or services,
whether bi-directional and/or broadcast, and other related wireless
transmission/reception techniques and/or media. Further, in the
event that the Company should expand the scope of the Company
Business during the Term of this Agreement, either by acquisition or
organic growth, any such new business activities or technologies
shall also be added to the term "Company Business."
11. Intellectual Properties.
11.1 All ownership, copyright, patent, trade secrecy, and other rights in
all works, programs, fixes, routines, inventions, ideas, designs,
manuals, improvements, discoveries, processes, or other properties
(the "Intellectual Properties") made or conceived by Executive and
relating to the Company's Business during the term of his employment
by the Company shall be the rights and property solely of the
Company, whether developed independently by Executive or jointly
with others, and whether or not developed or conceived during
regular working hours or at the Company's facilities, and whether or
not the Company uses, registers, or markets the same. To the extent
any such works may be considered "works made for hire" under the
Copyright Act, they are hereby agreed to be works made for hire;
otherwise, Executive hereby irrevocably
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assigns and conveys all such rights, title, and interests to the
Company, subject to no liens, claims, or reserved rights.
11.2 Executive will assist the Company as requested during and after the
term of his employment to further evidence and perfect, and to
enforce, the Company's rights in and ownership of the Intellectual
Properties covered hereby, including without limitation, the
execution of additional instruments of conveyance and assisting the
Company with applications for patents or copyright or other
registrations provided that Executive shall be reimbursed any
expenses he incurs in meeting the obligations pursuant to this
Section 11.2.
11.3 Notwithstanding the foregoing, the provisions of this Section 11
shall not apply to or assign to the Company any of Executive's
rights in any invention for which no equipment, supplies,
facilities, or trade secret information of the Company was used, and
which was developed entirely on Executive's own time, unless the
invention:
(a) relates, at the time of conception or reduction to practice of
the invention, directly to the Company's Business or to the
Company's actual or demonstrably anticipated research or
development; or
(b) results from any work performed by Executive for the Company.
12. Assignment. This Agreement will be binding on and inure to the benefit of
the parties and each of their respective affiliates, legal
representatives, successors, and assigns. The Company may not assign or
transfer its rights under this Agreement except in the case of a transfer
or sale of all or substantially all of the assets of the Company or its
merger or consolidation into another company. In no event will Executive's
obligations to perform future services for the Company or its affiliates
be delegable or transferable.
13. Remedies.
13.1 Equitable Relief. Executive acknowledges that any violation by him
of Sections 9, 10 or 11 of this Agreement may cause the Company
injury. The Company (acting through its Board) acknowledges that any
violation by the Company of this Agreement may cause Executive
injury. Therefore, each party separately agrees that the injured
party will be entitled, in addition to any remedies it may have
under this Agreement or at law, to injunctive and other equitable
relief to prevent or curtail any breach of this Agreement by the
other party.
13.2 Severability. The provisions of this Agreement will be deemed to be
severable. The invalidating of any one provision by a court of
competent jurisdiction will not invalidate any other provision. If a
court of competent jurisdiction determines that any of the
restrictions contained in this Agreement is unreasonable, such court
is free to impose and is authorized to enforce any lesser
restriction or restrictions determined by it to be reasonable.
Inclusion in the Agreement of this Subsection 13.2 will not in any
way be deemed to be a waiver, renunciation, or denial by either
party of Executive's agreement contained in Subsection 13.4 below.
13.3 Survival of Remedies. Executive agrees that his covenants and
agreements made in and the requirements imposed on him by Sections
9, 10 and 11 and this Section 13 will be construed as an agreement
independent of any of the provisions of this Agreement as set forth
in the respective provisions. The existence of any claim or cause of
action of Executive against the Company or any of its Affiliates,
irrespective of whether predicated on the terms of this Agreement,
will not constitute a defense to the enforcement of the covenants
and agreements
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of Executive contained in Sections 9, 10 and 11 or the requirements
imposed on him by this Section 13.
13.4 Fairness. Executive acknowledges that he has carefully read and
reviewed the provisions of this Agreement, including the provisions
contained in Sections 9, 10 and 11 and this Section 13, has been
granted the opportunity to discuss the meaning and effect of these
provisions with counsel, and agrees that they are fair and
reasonable.
13.5 Arbitration. Any controversy or claim arising out of or relating to
this Agreement shall be settled exclusively by final and binding
arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (" AAA ") then in effect,
conducted by a panel of three (3) arbitrators, either mutually
agreed upon by the parties or selected in accordance with the AAA
Rules, and judgment on any award rendered by the arbitrator(s) may
be entered in any court having proper jurisdiction. This Subsection
13.5 does not limit a party's right to seek preliminary injunctive
or other equitable relief as provided in Subsection 13.1 from a
court or an arbitrator pending arbitral determination of
controversies or claims under this Subsection 13.5. Each party to
the dispute shall be responsible for its own cost of the
arbitration, including attorney fees pertaining to the dispute.
Further, the Company will continue to provide the Executive with
benefit coverage during the arbitration proceedings to the extent
otherwise required by this Agreement.
14. General Provisions.
14.1 Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the
Commonwealth of Virginia without regard to its principles of
conflicts of laws.
14.2 Modifications. No amendment, modification, or waiver of this
Agreement will be binding or effective for any purpose unless it is
made in a writing signed by the party against which or whom
enforcement of such amendment, modification, or waiver is sought.
Any amendment, modification, or waiver by the Company must be
approved by a majority of the Board (excluding Executive) to be
valid. The course of dealing between the parties will not be deemed
to affect, modify, amend, or discharge any provision or term of this
Agreement. A delay on the part of either party in the exercise of
its or his rights or remedies will not operate as a waiver of such
rights or remedies, and a single or partial exercise by a party of
any such right or remedy will not preclude other or further
exercises of that right or remedy. A waiver of right or remedy on
anyone occasion will not be construed as a bar to or waiver of any
such right or remedy on any other occasion.
14.3 Construction. This Agreement contains the entire agreement between
the parties with respect to its subject matter. Its language is and
will be deemed to be the language chosen by the parties jointly to
express their mutual intent. No rule of construction based on which
party drafted the Agreement or certain of its provisions will be
applied against either party.
14.4 Headings. All titles and headings used in this Agreement are solely
for convenience and shall not in any way affect the interpretation
of this Agreement.
14.5 Nonwaiver. Failure of either party to insist upon or to enforce
strict performance of any provision of this Agreement or to exercise
any right, remedy or provision of this Agreement
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will not be construed as a waiver to any extent of such party's
rights under this Agreement, and such provision shall remain in full
force and effect.
14.6 Notice. All notice required by the terms of this Agreement will be
given in writing and delivered personally by registered or certified
mail or by overnight courier service (charges prepaid), addressed as
follows: If to the Company, to the then-current address of its
general corporate offices, to the attention of the Corporate
Secretary; and if to Executive, to his residence address as last
reflected on the records of the Company.
14.7 Company Representation. The Company represents and warrants that it
is fully authorized and empowered to enter into this Agreement, that
the performance of its obligations pursuant to this Agreement will
not violate any agreement between it and any other firm or
organization or the Certificate of Incorporation or the Bylaws of
the Company and that this Agreement has been duly authorized and
approved by the Board.
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on
the date set forth above.
"COMPANY" "EXECUTIVE"
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------- ------------------------
Xxxxx X. Xxxxxxx - V.P, Legal Xxxxxx X. Xxxxxxxxxx
Date: February 10, 2005 Date: February 9, 2005
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