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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is effective upon execution between Digital
Lightwave, Inc., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxx
("Xxxxx").
WHEREAS, Grant has served the Company as its Vice President, Finance
and CFO, and has demonstrated his professional value to the Company, and
WHEREAS, the Company wishes to continue to have Grant's services for a
minimum period of three years (the "Initial Period"), and
WHEREAS, Grant wishes to be employed for this minimum period, and
WHEREAS, Grant has requested the Company to enter into this Agreement
as a condition of his continuing to accept employment by the Company,
THEREFORE, in consideration of their past relationship, the terms and
conditions of this Agreement, and other valuable consideration, the receipt and
sufficiency of which is acknowledged, the Company and Grant agree:
1. Duties and Responsibilities. Grant is hereby promoted to and
employed as Executive Vice President, Finance and Chief Financial Officer of
the Company. Grant will report to Xx. Xxxxx X. Xxxx, Chairman and Chief
Executive Officer of the Company. As Executive Vice President, Grant will have
these responsibilities:
(1) developing, implementing and directing the financial
strategy, policy, and operations of the Company as approved by
the CEO. These duties include but are not limited to
oversight of the Treasury Division, budgetary planning and
analysis, authorizing of financial plans and policies, and
generation and qualification of financial statements;
(2) management and oversight of the financial aspects of:
mergers and acquisitions, SEC and IRS reporting and
compliance, investor and Wall Street relations, presentations
to the Board and to the Street, public stock offerings and
capital acquisitions and asset management and growth; and
(3) supervision of the Director of Human Resources,
including the supervision of the Company's compliance with
state and federal laws governing the Company's relationship
with its employees.
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2. Exclusive Services. During the term of employment, Grant will
be a full time employee of the Company. His services will be exclusive to the
Company and he will devote his productive time and attention to the performance
of his duties during the term of employment.
3. Confidentiality. Grant occupies a position of trust and
confidence. To fulfill his responsibilities, Grant will be afforded full and
unlimited access to all Company data and documents, regardless of the location
of the data and documents, and regardless of the physical form in which they
are kept. Except where he is under an obligation under this Agreement or under
a legal obligation to do so, Grant shall not disclose the information which he
learns as Executive Vice President. Information commonly known outside of the
Company or which is disclosed to regulatory authorities or publicly available
is excluded from this provision. This confidentiality provision extends beyond
the term of this Agreement. The current Confidentiality Agreement is ratified
and continued except as revised herein.
4. Compensation. (1) Salary: For the period from execution of
this Agreement, Grant shall receive a minimum salary of Two Hundred Thousand
dollars ($200,000.00) annually, payable in arrears in semi-monthly
installments, and paid on the 15th and final day of the month. Any salary
increases beyond the minimum salary is at the discretion of the Company's
Compensation Committee as advised by the Chief Executive Officer.
(2) Bonuses: Grant will be paid a bonus (which is
primarily related to a deferred sign-on bonus) of Forty
Thousand dollars ($40,000.00) on April 15, 1998, upon
completion of the Company's filings with the Securities and
Exchange Commission for its year which ended December 31, 1997.
Thereafter, Grant will be paid an annual bonus in accordance
with the soon to be adopted Executive Bonus Plan.
(3) Benefits: Grant and his family shall be entitled to
participate in the insurance and benefit plans of the Company.
(4) Leave: For the period from execution of the
Agreement until December 31, 1998, Grant will receive ten (10)
paid vacation leave days, twelve (12) paid holiday leave days
and five (5) paid sick leave days. For the year commencing
January 1, 1999, Grant shall receive leave days at the same
level. On January 1, 2000, Grant shall receive fifteen (15)
paid vacation leave days, twelve (12) paid holiday leave days,
and five (5) paid sick leave days. On January 1, 1999 and
each January 1 thereafter, Grant shall be paid for all unused
vacation leave days.
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5. Company Stock Options. Upon execution of this Agreement or no
later than the date of the next meeting of the Compensation Committee of the
Board of Directors, Grant shall be granted Two Hundred Thousand (200,000) shares
of the Company stock. One fourth of this number shall vest on the date of the
grant and one fourth shall vest each three hundred sixty-five (365) days
thereafter. If Grant's employment is terminated, all shares granted under this
paragraph but not yet vested shall continue to vest unless there is a "change
of control" (as defined below) in which case the vesting will accelerate.
Grant may purchase additional shares of the Company's stock under the Company's
Stock Purchase Plan for employees. The parties intend that any previous stock
offers be rescinded, and that this provision reflects the only stock agreement
between the parties.
6. Term. This Agreement shall be for a three-year period,
commencing with its execution by the Company and Grant. The Agreement will be
automatically renewed for an additional two-year period (the "Renewal Period")
unless either party gives the other party a Notice of Non-Renewal, no later
than 90 days prior to expiration of the Initial Period. Nothing in this
agreement precludes either party from negotiating a Renewal Period in "good
faith" for a period of shorter or longer duration prior to the receipt of a
timely Notice of Non-Renewal.
7. Termination. (1) Defined terms: (a) "change of control"
shall mean the merger or consolidation of the Company in which the Company is
the acquired part, or the sale of all, or substantially all of the assets of the
Company or if Xxxxx X. Xxxx and/or his family cease to have voting control of
the common stock of the Company; (b) "change in duties" shall mean a material
alteration of Grant's duties from those described in this Agreement; (c) "change
in location" shall mean the relocation of the Company's headquarters from the
Tampa Bay Metropolitan area; (d) "change in accounting and financial practices"
shall mean a material disagreement with respect to generally accepted accounting
and financial practices; (e) "termination" shall mean an act or omission which
ends Grant's employment, whether a purported termination by the Company or the
happening of an event which constitutes one or more of the following: a change
of control, a change in duties, a change in location, or a change in accounting
and financial practices, or the expiration of this Employment Agreement; and (f)
"severance compensation" shall mean compensation, including all benefits, for
eighteen (18) months at Grant's then effective salary rate except in the event
of a change of control where the period will be for twenty-four (24) months.
This compensation shall be paid in a lump sum if termination occurs as a result
of a change of control or if the Company elects to terminate Grant for no reason
or for a reason which is not "Cause" as that term is defined in this Agreement.
If the Company elects to terminate Grant for no reason or for a reason which is
not "Cause" as that term is defined in this Agreement, compensation shall be
paid periodically and not in lump sum if a lump sum payment would represent a
material change in the Company's liquidity position. For all other types of
termination, the Company may choose to pay it in a lump sum or over an
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eighteen (18) month period. Regardless, all benefits will continue over an
eighteen (18) month period (unless a change of control has occurred, then Grant
will receive benefits over a twenty-four (24) month period.) If Grant becomes
employed during either the eighteen (18) month period or the twenty-four (24)
month period (in the event of a change of control) and if Grant has comparable
benefits, then the fringe benefits, but not the salary, will be discontinued.
(3) Rights Upon Expiration of This Agreement - If Grant's
employment is terminated on or after the expiration of the
Employment Agreement, Grant shall be entitled to severance
compensation as defined above.
(4) The payment and benefits to be paid to Grant pursuant
to this Agreement shall be absolute, regardless of whether
Grant is discharged for Cause, until March 31, 1998, or the
date of the Form 10-K filing, whichever is later ("the filing
date"). After the filing date, payment and benefits to be
paid pursuant to this Agreement shall not be payable in the
event that Grant is terminated by the Company for Cause. For
the purposes of this Agreement, the Company shall have "Cause"
for termination of the Grant's employment only (i) if Grant is
indicted for or pleads guilty or nolo contendere to any crime
alleged to have been committed after the filing date, (except
if committed upon advice from counsel to the Company); or (ii)
if Grant has engaged in conduct or activities involving moral
turpitude materially damaging to the business or reputation of
the Company alleged to have been committed after the filing
date; or (iii) if Grant knowingly or willfully violates any
law, rule, regulation or order of any governmental authority,
thereby exposing the Company to potential material civil or
criminal penalties alleged to have been committed after the
filing date, unless the employee has done so on advice from
counsel to the Company; or (iv) in the event of Grant's gross
misfeasance, intentional misconduct or fraud in the
performance of his responsibilities to the Company alleged to
have been committed after the filing date, as set forth by the
Board of Directors of the Company; or (v) if after the filing
date, Grant knowingly misappropriates for his own purpose and
benefit, any property of the Company or unlawfully
appropriates any corporate opportunity of the Company.
8. Indemnification. The Company and Grant have previously
entered into an Indemnification Agreement dated September 15, 1997, a copy of
which is affixed as Appendix "A" to this Agreement ("Indemnification
Agreement"). It is expressly ratified and confirmed and continued. The
parties intend to enlarge on Grant's rights under that Agreement in this
Agreement and to in no respect diminish, depreciate or otherwise dilute or
destroy Grant's rights. Grant's rights under the Indemnification Agreement are
enlarged
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as follows:
(1) The definition of "change of control" in the
Indemnification Agreement is modified to include the
definitions of change of control herein without limiting the
definition in the Indemnification Agreement.
(2) In addition to the rights granted under the
Indemnification Agreement, Grant shall have the right to
obtain independent legal counsel at the Company's expense and
to reimburse them for or to advance to himself all expenses
(as defined in the Indemnification Agreement) in the event he
deems it to be necessary, regardless of whether a claim has
been made. Further, Grant may express the right as he, in his
sole discretion, deems necessary and need not obtain any
further approvals in order to do so, unless such fees will
exceed $1,000.
(3) Grant's rights under the Indemnification Agreement
and this paragraph survive the termination, for whatsoever
cause or reason (including expiration) of this Employment
Agreement. It is the intent of the parties that Grant's
rights shall continue until the statute of limitations
applicable to the identifiable act or omission runs.
(4) No act or omission which would allow the Company to
refuse indemnity under the Indemnification Agreement shall xxx
Xxxxx'x right to indemnification for acts or omissions from
September 15, 1997 until the filing date, as previously
defined. It is the intent of the parties that Grant shall
absolutely entitled to indemnification for claims based on
acts or omissions during the period from his employment
through the filing date, regardless of his actions or his
failure to act.
10. Death or Disability or Incapacity or Inability to Serve for
Whatever Reason. On an annual basis, the Company shall provide Grant
sufficient funds, net of all taxes, to purchase a one million dollar term life
insurance policy and a disability insurance policy to provide comparable
compensation, including benefits. Grant shall furnish the Company with a copy
of every policy. In the event that Grant is unable to serve because of an act
or omission prior to the filing date, Grant or Grant's designee shall receive
all of the salary and benefits from this Agreement. Until a later designation
by Xxxxx, Xxxxxxxx Xxxxxxx Xxxxx is designated to receive these benefits upon
Grant's death, disability or incapacity or inability to serve for whatever
reason.
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11. Preparation of this Agreement. (1) Construction: This
document shall be construed without regard to who authored it.
(2) Legal Fees: Grant has incurred legal fees in the
amount of $7,500.00 in the development and drafting of this Employment
Agreement for which the Company agrees to be responsible.
12. Governing Law. This Agreement will be construed in accordance
with the laws of the State of Florida applicable to contracts made and
performed in Florida without giving effect to the principles of conflicts of
laws.
13. Severability. The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court
of competent jurisdiction to be invalid, void, or otherwise unenforceable, and
the remaining provisions shall remain enforceable to the fullest extent
permitted by law. Furthermore, to the fullest extent possible, the provisions
of this Agreement (including, without limitation, each portion of this
Agreement containing any provision held to be invalid, void, or otherwise
unenforceable, that is not itself invalid, void or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held
invalid, illegal or unenforceable.
14. Modification. This Agreement shall be not be modified or
amended except as agreed to in writing signed by each party or an authorized
representative of each party.
15. No Waiver. The failure of either party to this Agreement to
insist upon the performance of the terms and conditions of this Agreement, or
the waiver of any breach of any of the terms and conditions of this agreement,
shall not be construed as thereafter waiving any such terms and conditions, but
the same shall continue and remain in full force and effect as if no such
forbearance of waiver had occurred.
16. Headings. Titles to the sections of this Agreement are solely
for the convenience of the parties and shall not be used to explain, modify,
simplify, or aid in the interpretation of the provisions of this Agreement.
17. Entire Agreement. Except as to the pre-existing
Indemnification Agreement, the Assignment of Intellectual Property Rights
Agreement and the Confidentiality Agreement, this agreement constitutes the
entire agreement and understanding, and merges and supersedes all prior
discussions, agreements and understandings between the parties regarding the
subject matter described herein.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Employment Agreement as of the date first above written.
DIGITAL LIGHTWAVE, INC.,
a Delaware corporation
/s/ Xxxxx X. Xxxx /s/ Xxxxxx X. Xxxxx
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Xx. Xxxxx X. Xxxx, Xxxxxx X. Xxxxx,
Chief Executive Officer Executive Vice President
Date: 02/27/98 Date: 02/27/98
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