EMPLOYMENT AGREEMENT
EXHIBIT
10.22
THIS
EMPLOYMENT AGREEMENT ("Agreement") is officially dated March 24, 2008 and is
executed between ERF Wireless, Inc., a Nevada corporation (the "Company") and
Xxxxxx & Xxxxxxxxx, Inc. Certified Public Accountants of which Xxxxxxx X.
Xxxxxx is a shareholder.
WHEREAS,
the Company desires to retain the services of Xxxxxxx X. Xxxxxx (“the
Executive”) as the. Chief Financial Officer of ERF Wireless, Inc. It
is anticipated that the Executive will concentrate the majority of his time and
attention to the day to day financial aspects of the company including managing
all of the financial affairs of the Company in support of the CEO of Company The
Executive desires to render such services on the terms and conditions set forth
herein;
NOW,
THEREFORE, in consideration of the mutual promises contained herein, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Employment
Term.
The
Company employs the Executive and the Executive accepts employment by the
Company, upon the terms and subject to the conditions set forth in this
Agreement, until January 31, 2011; provided, however, that such employment may
be sooner terminated pursuant to the terms of this Agreement.
2. Management of the
Company.
The
Executive shall devote the Executive's full time, best efforts, attention and
skill to, and shall perform faithfully, loyally and efficiently the Executive's
duties at the Company Corporate Headquarters or other locations as agreed to by
the CEO of Company. Further, the Executive will punctually and faithfully
perform and observe any and all rules and regulations that the Company may now
or shall hereafter reasonably establish governing the Executive's conduct and
the conduct of the Company's business that are consistent with this
Agreement.
3. Compensation.
In
consideration of the services rendered to the Company by the Executive, the
Company shall pay Xxxxxx & Fleschler, Inc. annual compensation of $200,000
(the "Base Compensation"). The Executive agrees that the Base Compensation will
be paid in ERF Wireless free-trading common stock to Xxxxxx & Xxxxxxxxx,
Inc. The compensation shall be payable in accordance with the normal
payroll practices of the Company then in effect. All federal, state or local
income taxes will be responsibility of Xxxxxx & Fleschler, Inc.
Benefits. In
addition to the Salary, during the Employment Term, the Executive shall be
entitled to: all legal and religious holidays in accordance with Company policy,
and four weeks paid vacation per annum in accordance with the standard policies
and procedures of the company. The Executive shall arrange for vacations in
advance at such time or times as shall be mutually agreeable to the Executive
and the Company's CEO. The Executive may; (i) not receive pay in lieu of
vacation; (ii) participate in all employee benefit plans and/or arrangements
adopted by the Company relating to pensions, hospital, medical, dental,
disability and life insurance, deferred salary and savings plans, and other
similar employee benefit plans or arrangements to the extent that the Executive
meets the eligibility requirements for any such plan as in effect from time to
time (all medical and dental plans continue through April 15, 2011 at company
practice); (iii) receive payment by the Company directly, or reimbursement by
the Company for, reasonable and customary business and out-of-pocket expenses
incurred by the Executive in connection with the performance by the Executive of
the Executive's duties under this Agreement in accordance with the Company's
policies and practices for reimbursement of such expenses, as in effect from
time to time, including, without limitation, reasonable and necessary travel,
lodging, entertainment and meals incurred by the Executive in furtherance of the
Company's business and at the Company's request.
Incentives.
As
incentive to accelerate the rapid and profitable growth of the company you will
be awarded 1,000,000 shares of restricted common stock with piggyback rights at
the point where the company has EBITDA(earnings before interest(which includes
financing derivative expenses), taxes, depreciation and amortization) based on
the Company’s filings of Form 10-K's or Form 10-Q’s.
As
incentive to accelerate the rapid and profitable growth of the company you will
be awarded 1,000,000 shares of restricted common stock with piggyback rights at
the point where the company has achieved a private or public financing of at
least $25M from any source.
As
incentive to accelerate the rapid and profitable growth of the company you will
be awarded 1,000,000 shares of restricted common stock with piggyback rights at
the point where the company has achieved a listing on a national stock
exchange.
4. Termination of
Employment.
The
Executive's employment hereunder shall terminate upon the earliest to occur of
any the following events, unless earlier renewed, on the dates and at the times
specified below:
(i) the close
of business on January 31, 2011 (the "Expiration Date")
(ii) the close of
business on the date of the Executive's death “Death")
(iii) the close of
business on the Termination Date (as defined below) specified in the Notice of
Termination (as defined below) which the Company shall have delivered to the
Executive due to the Executive's Disability. "Disability" shall mean if (i) the
Executive is absent from work for 45 consecutive calendar days in any
twelve-month period by reason of un-excused illness or incapacity whether
physical or otherwise) or (ii) the Executive is unable to perform his duties,
services and responsibilities by reason of illness or incapacity (whether
physical or otherwise) for a total of 45 consecutive calendar days in any
twelve-month period during the Employment Term. The Executive agrees,
in the event of any dispute under this Section, and after receipt by the
Executive of such Notice of Termination from the Company, to submit to a
physical examination by a licensed physician selected by the Company. The
Executive may seek a second opinion from a licensed physician acceptable to the
Company. If the results of the first examination and the second examination are
different, a licensed physician selected by the physicians who have performed
the first and second examinations shall perform a third physical examination of
the Executive, the result of which shall be final for purposes of this
Section.
(iv) the close of business on
the Termination Date specified in the Notice of Termination which the Executive
shall have delivered to the Company to terminate his employment ("Voluntary
Termination”)
(v) the close of business on
the Termination Date specified in the Notice of Termination which the Company
shall have delivered to the Executive to terminate the Executive's employment
for Cause. "Cause" as used herein means termination based on (i) the Executives
material breach of this Agreement, (ii) conviction of the Executive for (a) any
crime constituting a felony in the jurisdiction in which committed, (b)
conviction of any crime involving moral turpitude whether or not a felony), or
(c) any other criminal act against the Company involving dishonesty or willful
misconduct intended to injure the Company (whether or not a felony), (iii)
illegal substance abuse by the Executive, (iv) the continued failure or refusal
of the Executive to follow one or more lawful and proper directives of the Board
of Directors delivered to the Executive in writing, or (v) willful malfeasance
or gross misconduct by the Executive which discredits or damages the
Company.
5.
Rights Upon Termination
Any
purported termination by the Company or the Executive (other than by reason of
Death or on the Expiration Date) shall be communicated by written Notice of
Termination to the other. As used herein, the term "Notice of Termination" shall
mean a notice which indicates the specific termination provision in this
Agreement relied upon and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. After receipt of a Notice of
Termination, the Executive shall continue to be available to the Company on a
part-time basis at reasonable and customary hourly rates to assist in the
necessary transition.
As used
herein, the term "Termination Date" shall mean, (i) in the case of Death, the
date of the Executive's death, (ii) in the case of expiration of the term
hereof: the Expiration Date, or (iii) in all other cases, the date specified in
the Notice of Termination.
Upon
involuntary termination of this agreement, unless involuntary termination was by
cause for prohibited or competitive activities as defined in this agreement,
Executive shall receive for excluding the possibility of long term bonus
incentives a severance package to include:
a. The
remainder of the employment contract annual compensation paid
monthly
b. One
year look forward vesting privileges on all incentives.
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6.
Employee Covenants.
Trade
Secrets and Proprietary Information. The Executive agrees and understands that
due to the Executive's position with the Company, the Executive will be exposed
to, and has received and will receive, confidential and proprietary information
of the Company or relating to the Company's business or affairs collectively,
the "Trade Secrets"), including but not limited to technical information,
product information and formulae, processes, business and marketing plans,
strategies, customer information, other information concerning the Company's
products, promotions, development, financing, expansion plans, business policies
and practices and other forms of information considered by the Company to be
proprietary and confidential and in the nature of trade secrets. Trade Secrets
shall not include any such information which (A) was known to the Executive
prior to his employment by the Company or (B) was or becomes generally available
to the public other than as a result of a disclosure by the Executive in
violation of the provisions of this Section. Except to the extent that the
proper performance of the Executive's duties, services and responsibilities
hereunder may require disclosure, the Executive agrees that during the
Employment Term and at all times thereafter the Executive will keep such Trade
Secrets confidential and will not disclose such information, either directly or
indirectly, to any third person or entity without the prior written consent of
the Company. This confidentiality covenant has no temporal, geographical or
territorial restriction. On the Termination Date unless the Executive remains as
an employee of the Company thereafter in which case, on the date which the
Executive is no longer an employee of the Company), the Executive will promptly
supply to the Company all property, keys, notes, memoranda, writings, lists,
files, reports, customer lists, correspondence, tapes, disks, cards, surveys,
maps, logs, machines, technical data, formulae or any other tangible product or
document which has been produced by, received by or otherwise submitted to and
retained by the Executive in the course of his employment with the
Company. Any material breach of the terms of this paragraph shall be
considered Cause.
Prohibited
and Competitive Activities. The Executive and the Company recognize that due to
the nature of the Executive's engagement hereunder and the relationship of the
Executive to the Company, the Executive has had and will have access to, has had
and will acquire, and has assisted and may continue to assist in, developing
confidential and proprietary information relating to the business and operations
of the Company and its affiliates, including, without limitation, Trade Secrets.
The Executive acknowledges that such information has been and will be of central
importance to the business of the Company and its affiliates and that disclosure
of it to, or its use by, others (including, without limitation, the Executive
(other than with respect to the Company's business and affairs)) could cause
substantial loss to the Company.
The
Executive and the Company also recognize that an important part of the
Executive's duties win be to develop good will for the Company and its
affiliates through the Executive's personal contact with Clients (as defined
below), employees, and others having business relationships with the Company,
and that there is a danger that this good will, a proprietary asset of the
Company, may follow the Executive if and when the Executive's relationship with
the Company is terminated. The Executive accordingly agrees as
follows:
(i)
Prohibited Activities. The Executive agrees that the Executive will not at any
time during the Employment Term: (A) (other than in the course of the
Executive's employment) disclose or furnish to any other person or, directly or
indirectly, use for the Executive's own account or the account of any other
person, any Trade Secrets, no matter from where or in what manner he may have
acquired such Trade Secrets, and the Executive shall retain all such Trade
Secrets in trust for the benefit of the Company, its affiliates and the
successors and assigns of any of them, (B) directly or through one or more
intermediaries, solicit for employment or recommend to any subsequent employer
of the Executive the solicitation for employment of: any person who, at the time
of such solicitation, is employed by the Company or any affiliate, (C) directly
or indirectly, whether for the Executive's own account or for the account of any
other person, solicit, divert, or endeavor to entice away from the Company or
any entity controlled by the Company, or otherwise engage in any activity
intended to terminate, disrupt, or interfere with, the Company's or any of its
affiliates' relationships with, Clients, or otherwise adversely affect the
Company's or any of its affiliates' relationships with Clients or other business
relationships of the Company or any affiliate thereof, or (D) publish or make
any statement critical of the Company or any shareholder or affiliate of the
Company or in any way adversely affect or otherwise malign the business or
reputation of any of the foregoing persons (any activity described in clause
(A), (B), (C) or (D) of this Section being referred to as a Prohibited
Activity"); provided, however, that if in the written opinion of Counsel, the
Executive is legally compelled to disclose Trade Secrets to any tribunal or else
stand liable for contempt or suffer other similar censure or penalty, then the
disclosure to such tribunal of only those Trade Secrets which such counsel
advises in writing are legally required to be disclosed shall not constitute a
Prohibited Activity provided that the Executive shall give the Company as much
advance notice of such disclosure as is reasonably practicable. As used herein,
the term "Clients" shall mean those persons who, at any time during the
Executive's course of employment with the Company (including, without
limitation, prior to the date of this Agreement) are or were clients or
customers of the Company or any affiliate thereof or any predecessor of any of
the foregoing.
(ii)
Non-Competition. By and in consideration of the Company's entering into this
Agreement, the Executive agrees that the Executive will not, during the
Employment Term, engage in any Competitive Activity. The term "Competitive
Activity" means engaging in any of the following activities: (A) serving as a
director of any Competitor (as defined below), (B) directly or indirectly
through one or more intermediaries, either (X) controlling any Competitor or (Y)
owning any equity or debt interests in any Competitor (other than equity or debt
interests which are publicly traded and, at the time of any acquisition thereof
by the Executive, do not in the aggregate exceed 5% of the particular class of
interests of such Competitor then outstanding) (it being understood that, if
interests in any Competitor are owned by an investment vehicle or other entity
in which the Executive owns an equity interest, a portion of the interests in
such Competitor owned by such entity shall be attributed to the Executive, such
portion determined by applying the percentage of the equity interest in such
entity owned by the Executive to the interests in such Competitor owned by such
entity), (C) employment by (including serving as an officer, director or partner
of), providing consulting services to (including, without limitation, as an
independent contractor), or managing or operating the business or affairs of:
any Competitor or (D) participating in the ownership, management, operation or
control of or being connected in any manner with any Competitor. The term
"Competitor" as used herein (i) during the Employment Term, means any person
(other than the Company or any of their respective affiliates) that competes,
either directly or indirectly with any of the business offerings conducted
through the termination date of the Employee's employment by the Company or any
affiliate.
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7. Remedies.
The
Executive agrees that any breach of the terms of this Section would result in
irreparable injury and damage to the Company for which the Company would have no
adequate remedy at law. The Executive therefore agrees that in the event of said
breach or any threat of breach, the Company shall be entitled to an immediate
injunction and restraining order to prevent such breach and/or threatened breach
and/or continued breach by the Executive and/or any and all persons and/or
entities acting for and/or with the Executive, without having to prove
damages.
The terms
of this paragraph shall not prevent the Company from pursuing any other
available remedies to which the Company may be entitled at law or in equity for
any breach or threatened breach hereof, including but not limited to the
recovery of damages from the Executive. The provisions of this
Section 8 shall survive any termination of this Agreement. The existence of any
claim or cause of action by the Executive against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of the covenants and agreements of this
Section.
8.
Proprietary Information and Inventions.
The
Executive agrees that any and all inventions, discoveries, improvements,
processes, formulae, business application software, patents, copyrights and
trademarks made, developed, discovered or acquired by him prior to and during
the Employment Term, solely or jointly with others or otherwise, which relate to
the business of the Company, collectively, the "Inventions"), shall be fully and
promptly disclosed to the Board of Directors and to such person or persons as
the Board of Directors shall direct and the Executive irrevocably assigns to the
Company all of the Executive's right, title and interest in and to all
Inventions of the Company and all such Inventions shall be the sole and absolute
property of the Company and the Company shall be the sole and absolute owner
thereof The Executive agrees that he will at all times keep all Inventions
secret from everyone except the Company and such persons as the Board of
Directors may from time to time direct. The Executive shall, as requested by the
Company at any time and from time to time, whether prior to or during the
Employment Term, execute and deliver to the Company any instruments deemed
necessary by the Company to effect disclosure and assignment of the Inventions
to the Company or its designees and any patent applications (United States or
foreign) and renewals with respect thereto, including any other instruments
deemed necessary by the Company for the prosecution of patent applications, the
acquisition of letters patent and/or the acquisition of patents or copyrights in
any and all countries and to vest title thereto in the Company or its
nominee.
9. Representations and Warranties of
the Executive.
The
Executive represents and warrants to the Company that:
(i) The
Executive's employment by the Company as contemplated will not conflict with,
and will not be constrained by, any prior or current employment, consulting
agreement or relationship, whether written or oral; and
(ii) The
Executive does not possess confidential information arising out of any
employment, consulting agreement or relationship with any person or entity other
than the Company, which could be utilized in connection with the Executive's
employment by the Company.
(iii) The
Executive participates in outside businesses not related to the Company, and may
have obligations to serve on the Board of Directors of other entities. The
Executive may participate and have ownership in business outside the Company and
the work product of such participation in outside businesses does not constitute
a violation this agreement.
10. Binding Effect or
Assignment.
This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective heirs, executors, representatives, states, successors and
assigns, including any successor or assign to all or substantially all of the
business and/or assets of the Company, whether direct or indirect, by purchase,
merger, consolidation, acquisition of stock, or otherwise; provided, however,
that the Executive, or any beneficiary or legal representative of the Executive,
shall not assign all or any portion of the Executive's rights or obligations
under this Agreement without the prior written consent of the
Company.
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11. Notices.
All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made as of the date
delivered, mailed or transmitted, and shall be effective upon
receipt.
12. Amendment and
Modification.
No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by each of
the Executive and the Company. No such waiver or discharge by either party
hereto at any time or any waiver or discharge of any breach by the other party
hereto of, or compliance with, any condition or provision of this agreement to
be performed by such other party, shall be deemed a waiver or discharge of
similar or dissimilar provisions or conditions, or a waiver or discharge of any
breach of any provisions at the same or at any prior or subsequent
time.
13. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with the
laws of Texas without giving effect to the conflict of law principles of that
state.
14. Severability.
In the
event that any one or more of the provisions of this Agreement shall be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other portion of this Agreement, and
this Agreement shall be construed as if such provision had never been contained
herein.
15. Withholding
Taxes.
Notwithstanding
anything contained herein to the contrary, all payments required to be made
hereunder by the Company to the Executive, Xxxxxx & Xxxxxxxxx, or his estate
or beneficiaries, shall be subject to the withholding of such amounts as the
Company may reasonably determine it should withhold pursuant to any applicable
federal, state or local law or regulation.
16. Arbitration of
Disputes.
The
parties hereto mutually consent to the resolution by arbitration of all claims
and controversies arising out of or relating to this Agreement. Any dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively in the manner set forth in this Section 16. If the Company and the
Executive disagrees on any matter arising under or in connection with this
Agreement, either party shall have the right to deliver to the other party a
written request (a "Consent Request") that the other party consent to the
position of the requesting party with respect to the matter in question. The
parties shall negotiate in good faith to resolve the matters set forth in the
Consent Request. If the parties are unable to agree on a matter set forth in a
Consent Request within thirty (30) days following delivery thereof: then the
parties shall elect one arbitrator, who shall be knowledgeable in the high
technology industry. If the parties fail to agree upon an arbitrator within
thirty (30) days either party may request the Office of the president of the
American Arbitrator Association to do so.
Each
party shall then submit its or his position in writing to the arbitrator within
thirty (30) days of the arbitrator's selection. After receiving the written
positions of the parties, and after a hearing, if the arbitrators deem a hearing
to be necessary, the arbitrator shall and must select the position offered by
one of the parties. Such arbitration procedure shall be commenced immediately
upon selection of the arbitrator and shall be completed within ninety (90) days.
The decision of the arbitrator shall be final and binding on the parties.
Notwithstanding any other provision of this Agreement, if any termination of
this Agreement becomes subject to arbitration, the Company shall not be required
to pay any amounts to the Executive (except those amounts required by law) until
completion of the arbitration and the rendering of the arbitrator's
decision.
The
amounts, if any, determined by the arbitrator to be owed by the Company to the
Executive shall be paid within the five (5) days after the decision by the
arbitrator is rendered. All matters approved pursuant to this Section 16 shall
be deemed conclusively to have been approved or agreed upon by the parties for
all purposes of the Agreement. Judgment may be entered on the Arbitrator's award
in any court having jurisdiction. The costs and expenses of such arbitration
shall be borne in accordance with the determination of the arbitrator. All
benefits including salary and other compensation will be in full effect during
the duration of the arbitration if the disagreement occurs during the term of
this contract. Failure on behalf of the Company to continue compensation will
result in an automatic breach of this agreement and all compensation earn and
unearned will become immediately due to the employee.
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17. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument.
18. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties and supersedes
any and all prior agreements, written or oral, understandings and arrangements,
either oral or written, between the parties with respect to the subject matter,
and shall, as of the date hereof: constitute the only employment agreement
between the parties.
19. Further
Assurances.
Each
party shall do and perform, or cause to be done and performed, all further acts
and things and shall execute and deliver all other agreements, certificates,
instruments, and documents as any other party reasonably may request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated.
20. Construction.
The
headings in this Agreement are for reference purposes only and shall not limit
or otherwise affect the meaning or interpretation of this
Agreement.
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of
the date first above written.
/s/ H. Xxxx
Xxxxxx
By:
Name: Dr.
H. Xxxx Xxxxxx
Title:
Chief Executive Officer
"Executive"
/s/ Xxxxxxx X.
Xxxxxx
By:
Xxxxxxx
X. Xxxxxx, Shareholder
Xxxxxx
& Xxxxxxxxx, Inc.
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