Exhibit 10.1
EMPLOYMENT AGREEMENT
This Agreement, dated as of June 7, 2004 but effective as of January
1, 2004, is between Wireless Frontier Internet, Inc. ("Employer" or the
"Company"), and Xxxx X. Xxxxxxxx("Employee"). Employer and Employee agree to the
following terms and conditions of employment.
1. Period of Employment.
Employer shall employ Employee to render services to Employer in the
position and with the duties and responsibilities described in Section 2 for the
period of three (3) years commencing on the date of this Agreement and will
automatically renew an additional three (3) year term unless Employment is
terminated in accordance with Section 4.
2. Position and Responsibilities.
(a) Position.
Employee accepts employment with the Company as Chief Executive
Officer and shall perform all services appropriate to that position, as well as
such other duties and services as may be assigned by Employer. Employee shall
devote his best efforts to the performance of his duties. Employee shall be
subject to the direction of the Board of Directors, which shall retain full
control of the means and methods by which he performs the above services and of
the place(s) at which all services are rendered.
(b) Extent of Services.
Employee shall devote his entire business time, attention and
energies to the business of the Company so long as employment with the company
continues. The foregoing, however, shall not preclude Employee from engaging in
appropriate civic, charitable or religious activities or from devoting a
reasonable amount of time to private investments or from serving on the boards
of directors of other entities, as long as such activities and services do not
interfere or conflict with his responsibilities to the company.
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(c) Representations and Warranties.
Employee represents and warrants that his execution of this
Agreement, his employment with Employers, and the performance of his proposed
duties under this Agreement shall not violate any obligations he may have to any
former employer (or other person or entity), including any obligations with
respect to proprietary or confidential information of any other person or
entity. Employee agrees that he will not use for the benefit of, or disclose to,
Employer any confidential information belonging to any former employer or other
entity unless he has written permission from the employer or entity to do so (or
unless Employer has been granted such permission).
3. Compensation and Benefits.
(a) Base Salary.
(1) In consideration of the services to be rendered under this
Agreement, Employee shall receive Base Salary as provided herein. For purposes
of this Agreement, Base Salary shall mean a minimum cash salary in the total
amount of Twelve Thousand Five Hundred dollars ($12,500) per month, payable
semi-monthly, pursuant to the procedures regularly established and as they may
be amended by Employer during the Period of Employment, as well as other
compensation provided in this Section 3. Base Salary may be deferred at the
option of Employee, and in such case, Base Salary shall accrue interest at prime
plus 1% as quoted in the Wall Street Journal. Employee has the option to convert
any or all Base Salary and accrued interest in a cash lump sum payment, or may
accept payment in Employer's common stock restricted under Rule 144 at a
conversion rate of One Hundred Ten percent (110%) of the average closing bid
during the month prior to the month being compensated.
(2) As Employee becomes eligible, Employee shall have the
right to participate in and to receive benefits from any Employer stock option
plan generally made available to similarly situated employees of Employer.
(3) Base Salary shall be adjusted by any tax withholdings
required under applicable law.
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(b) Benefits.
Employee shall be entitled to fringe benefits comparable to
similarly situated executives, officers or directors of the Company, including
paid annual tax preparation assistance. As Employee becomes eligible, Employee
shall have the right to participate in and to receive benefits from all present
and future benefit plans generally made available to similarly situated
employees of Employer. The amount and extent of benefits to which Employee is
entitled shall be governed by the Company's specific benefit plans, as amended.
Employee shall also be entitled to any benefits or compensation tied to
termination as described in Section 4. No oral statement concerning benefits or
compensation to which Employee is entitled shall alter in any way the term of
this Agreement or its termination.
(c) Insurance and Indemnity.
Employer shall obtain and pay for the benefit of Employee director's
and officer's liability insurance coverage to protect Employee from personal
liability to the fullest extent allowed by law for acts undertaken as an officer
or director of Employer or an Affiliate. Furthermore, to the fullest extent
allowed by law, Employer shall indemnify Employee for and hold Employee harmless
from any and all claims or causes of action arising out of Employee's exercise
of his duties as an employee, officer or director of Employer or an Affiliate.
Employer shall also provide full benefits package, including family medical
insurance, employee disability and life insurance ($1,000,000) coverage for the
term of this agreement, with beneficiaries to be determined by Employee.
(d) Bonus.
(1) Employee is eligible for annual cash bonuses as awarded by
the Board of Directors. Employee is also eligible for stock option awards as
awarded by the Board of Directors per the Employee Stock Option Plan.
(2) Employee will upon execution of this Agreement, receive
Employee Stock Options according to the following schedule with the
corresponding exercise prices:
- December 31, 2004 - 3,440,531 shares - $0.20 exercise price
- December 31, 2005 - 3,440,531 shares - $0.25 exercise price
- December 31, 2006 - 3,440,530 shares - $0.31 exercise price
- December 31, 2007 - 3,440,530 shares - $0.40 exercise price
These options will entitle Employee to purchase from Wireless
Frontier Internet, Inc. the number of shares of Common Stock listed for a period
of five (5) years.
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4. Termination of Employment
(a) By Notice.
Employer or Employee may terminate Employee's employment without
Cause (as defined below) by providing the other with sixty (60) days advance
written notice.
In the event Employer exercises its right to terminate under this
subsection, Employee shall have the option, in his complete discretion, to
terminate Employee's employment at any time prior to the end of such notice
period, however, Employer shall nevertheless pay to Employee all compensation
due and owing through the last day actually worked, plus an amount equal to the
base salary Employee would have earned through the balance of the above notice
period, plus $100,000. In addition, Employer shall pay to Employee a Severance
Payment, as described in Paragraph 4(g) below, which payment shall be in lieu of
any liquidated damages under this Agreement for any alleged breach of Employer.
(b) By Death.
The Period of Employment shall terminate automatically upon the
death of Employee. All stock options, warrants and bonus stock shall vest and be
due. In addition, Employer shall pay to Employee's beneficiaries or estate, as
appropriate, any Base Salary, other compensation and benefits then due and
owing, including payment for accrued unused vacation, if any, as well as death
benefits to the surviving heirs in the amount equal to 50% of Employee's Base
Salary for the next thirty-six (36) months following the date of death.
Thereafter, all obligations of Employer under this Agreement shall cease.
Nothing in this subsection shall affect any entitlement of Employee's heirs to
the benefits of any life insurance plan or other applicable benefits.
(c) By Employer For Cause.
At any time, and without prior notice, Employer may terminate
Employee for Cause. Employer shall pay to Employee all compensation due and
owing through the last day actually worked, plus an amount equal to the base
salary less amount actually paid, if salary has been accrued in lieu of full
salary payment. Employer shall pay Employee all compensation then due and owing;
In addition, Employer shall pay to Employee a Severance Payment, as described in
Paragraph 4(g) below, which payment shall be in lieu of any liquidated damages
under this Agreement for any alleged breach of Employer. Thereafter, all of
Employer's obligations under this Agreement shall cease. Termination shall be
for "Cause" if Employee: (i) breached or habitually neglected the duties of the
CEO or President which he was required by this Agreement or the Board of
Directors to perform, or (ii) committed act(s) of dishonesty, theft,
embezzlement,
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fraud, misrepresentation, or other act(s) or moral turpitude against the
Company, its subsidiaries or affiliates, it shareholders or its employees.
Additionally, the Employee may not be terminated "For Cause" for refusing to
move from the City of Fort Stockton .
(d) Change in Employer Status.
Notwithstanding anything above or Employee's voluntary reassignment,
Employee may terminate the Period of Employment upon any formal action of
Employer's Board of Directors to materially change Employee's existence as an
Executive Officer , or otherwise wind up its affairs, to sell all or
substantially all of its assets. In the event that Employer removes Employee
from the Chief Executive Officer position, Employer will assign Employee to
another Executive position in the Company with the same compensation, term, and
benefits for the duration of this contract. In the event Employee terminates the
Period of Employment under this subsection, Employer shall pay Employee an
amount equal to the sum of the following: (i) his Base Salary and all other
compensation and benefits due and owing through the last day actually worked;
(ii) one hundred thousand dollars ($100,000) in cash or tradable Buyer's common
stock; and (iii) the Severance Payment as described in subsection 4(g) below,
which payment shall be in lieu of any damages under this Agreement for any
alleged breach of Employer. Employee shall be entitled to compensation under
this subsection 4(b) only if, within ninety (90) days after the change in
Employee status becomes effective, Employee gives Employer, or its successor or
assigns, sixty (60) day's notice of Employee's intent to terminate the Period of
Employment. Upon receiving this notice, Employer shall have the option, in its
complete discretion, to make Employee's termination effective at any time prior
to the end of the notice period, provided that Employer pays Employee all the
Base Salary, other compensation and benefits due and owing through the balance
of the notice period (not to exceed sixty (60) days), as well as all other
compensation due and owing, including without limitation, the Severance Payment.
(e) Disability. For purposes of this Agreement, Employee shall be
deemed be disabled if the Employee has been unable to perform his duties under
this Agreement or as directed by the Board of Directors under this Agreement for
a period of 4 (4) consecutive weeks as a result of his physical or mental
illness ("Disability Period"). Employer shall pay to Employee the sum of the
following amounts: (i) all of his Base Salary, other compensation and benefits
due and owing through the last day actually worked as well as the disability
benefits to the Employee in the amount of fifty percent (50%) of Employee's Base
Salary for the next thirty-six (36) month period or until employee returns to
work
(f) Good Cause. If the Employee experiences a material reduction in
his Base Salary, other compensation or benefits, which is not comparable to
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similarly situated executives of the Company or a material reduction in the
Employee's official title or responsibilities, Employee may terminate the Period
of Employment. In the event Employee terminates the Period of Employment under
this subsection, Employer shall pay Employee the sum of the following amounts:
(i) his Base Salary, other compensation and benefits due and owing through the
last day actually worked; (ii) one hundred thousand dollars ($100,000) in cash
or tradable Buyer's common stock; and (iii) the Severance Payment as described
in subsection 4(g) below, which payment shall be in lieu of any damages under
this Agreement for any alleged breach of Employer. Employee shall be entitled to
compensation under this subsection 4(f) only if, within ninety (90) days after
the change in employee compensation or benefits becomes effective, Employee
gives Employer, or its successor or assigns, sixty (60) day's notice of
Employee's intent to terminate the Period of Employment. Upon receiving this
notice, Employer shall have the option, in its complete discretion, to make
Employee's termination effective at any time prior to the end of the notice
period, provided that Employer pays Employee the sum of the following amounts:
(i) his Base Salary, other compensation, and benefits due and owing through the
balance of the notice period (not to exceed sixty (60) days)(ii) one hundred
thousand dollars ($100,000) in cash or tradable Buyer's common stock; and (iii)
and all other compensation due and owing, including without limitation, the
Severance Payment.
(g) Severance Payment
(1) If Employee terminates the Period of Employment pursuant
to subsection 4(d) and 4(f) above or Employer terminates the Period of
Employment pursuant to subsection 4(a) above, Employer shall pay Employee the
sum of the following amounts: (i) Base Salary and other compensation and
benefits due and owing; (ii)the effective Base Salary for twenty-four (24)
months from the date of termination; and (iii) Employer shall cause all of
Employee's options and warrants to vest immediately upon termination which
payment shall be in lieu of any damages under this Agreement for any alleged
breach of Employer.
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(h) Termination Obligations
(1) Employee agrees that all property, including, without
limitation, all equipment, tangible proprietary information, documents, books,
records, reports, notes, contracts, lists, computer disks (and other
computer-generated files and data), and copies thereof, created on any medium
and furnished to, obtained by, or prepared by Employee in the course of or
incident to his employment, belongs to Employer and shall be returned promptly
to Employer upon termination of the Period of Employment.
(2) All benefits to which Employee is otherwise entitled shall
cease ninety (90) days after Employee's termination, unless explicitly continued
either under this Agreement or under any specific written policy or benefit plan
of Employer.
(3) Upon termination of the Period of Employment, Employee
shall be deemed to have resigned from all offices and directorships then held
with Employer or any Affiliate.
(4) The representations and warranties contained in this
Agreement and Employee's obligations under this subsection 4(h) on Termination
Obligations shall survive the termination of the Period of Employment and the
expiration of this Agreement.
(5) Following any termination of the Period of Employment,
Employee shall fully cooperate with Employer in all matters relating to the
winding up of pending work on behalf of Employer and the orderly transfer of
work to other employees of Employer. Employee shall also cooperate in the
defense of any action brought by any third party against Employer that relates
in any way to Employee's acts or omissions while employed by Employer.
5. Notices.
Any notice or other communication under this Agreement must be in
writing and shall be effective upon delivery by hand or three (3) business days
after deposit in the United States mail, postage prepaid, certified or
registered, and addressed to Employer or to Employee at the corresponding
addresses below. Employee shall be obligated to notify Employers in writing of
any change in his address. Notice of change of address shall be effective only
when done in accordance with this Section.
Employer's Notice Addresses:
Wireless Frontier Internet, Inc.
000 X. Xxxxxxxxx
Xxxx Xxxxxxxx, Xxxxx 00000
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Employee's Notice Address:
000 Xxxxx Xxxx
Xxxx Xxxxxxxx, Xxxxx 00000
6. Action by Employer.
All actions required or permitted to be taken under this Agreement
by Employer, including, without limitation, exercise of discretion, consents,
waivers, and amendments to this Agreement, shall be made and authorized only by
the Chief Executive Officer, by his or his designated representative, or another
representative specifically authorized by the Board of Directors to fulfill the
obligations under this Agreement.
7. Integration and Other Policies.
This Agreement supersedes all other prior and contemporaneous
representations, agreements and statements, whether written or oral, express or
implied, and it may not be contradicted by evidence of any prior or
contemporaneous representations, statements or agreements. Except as
specifically restricted by an express provision of this Agreement, Employer
retains and may exercise all management rights and prerogatives in its
discretion. However, to the extent that the practices, policies, or procedures
of Employer, now or in the future, apply to Employee and are inconsistent with
the terms of this Agreement, the provisions of this Agreement shall control.
8. Amendments; Waivers.
This Agreement may not be amended except by an instrument in
writing, signed by each of the parties. No failure to exercise and no delay in
exercising any right, remedy, or power under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
or power under this Agreement preclude any other or further exercise thereof, or
the exercise of any other right, remedy, or power provided herein or by law or
in equity.
9. Assignment; Successors and Assigns.
This agreement will be binding on all successors and assigns of the
Employer. The Employee may not delegate his duties hereunder.
10. Severability.
If any provision of this Agreement, or its application to any
person, place, or circumstance, is held by an arbitrator or a court of competent
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jurisdiction to be invalid, unenforceable, or void, such provision shall be
enforced to the greatest extent permitted by law, and the remainder of this
Agreement and such provision as applied to other persons, places, and
circumstances shall remain in full force and effect.
11. Attorneys' Fees.
In any legal action, arbitration, or other proceeding brought to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and costs.
12. Interpretation.
This Agreement shall be construed as a whole, according to its fair
meaning, and not in favor of or against any party. By way of example and not in
limitation, this Agreement shall not be construed in favor of the party
receiving a benefit nor against the party responsible for any particular
language in this Agreement. Captions are used for reference purposes only and
should be ignored in the interpretation of the Agreement.
13. Proprietary Information.
Employee represents and warrants that Employer has consistently made
Employee's willingness to protect Employer's confidential and proprietary
information from any unauthorized use and disclosure, and Employee's willingness
to comply with the terms of Employer's confidentiality policies, procedures, and
agreements, conditions of (1) Employer's agreement to disclose confidential and
proprietary information to Employee, (2) Employee's employment, and (3)
Employee's continued employment. Employee agrees that Employer's requirement of
satisfactory confidentiality agreements is reasonable and necessary to protect
Employer's confidential and proprietary information and to effectuate the
purposes of, and is ancillary to, Employee's employment agreement.
14. Acknowledgment.
The parties acknowledge that they have had the opportunity to consult
legal counsel in regard to this Agreement, that they have read and understand
this Agreement, that they are fully aware of its legal effect, and that they
have entered into it freely and voluntarily and based on their own judgment and
not on any representations or promises other than those contained in this
Agreement.
15. Governing Law.
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Governing Law. This Agreement shall be interpreted, construed and governed
according to the laws of the State of Texas. Venue for all actions hereunder
shall be in Pecos County, Texas.
16. Prior Agreements Superceded.
This Agreement supersedes any prior understandings or written or oral
agreements between the parties respecting the subject matter.
The parties have duly executed this Agreement as of the date first written
above.
/s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Chairman & CEO
Wireless Frontier Internet, Inc.
/s/ Xxxxx Xxxxxxx
-------------------------------
By: Xxxxx Xxxxxxx
Its: CFO
/s/ Xxxxx Xxxxxxx
-------------------------
Notary Public
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