AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
made and entered into as of July 1, 2000, by and between CHADMOORE WIRELESS
GROUP, INC., a Colorado corporation (the "Corporation"), and Xxxx X. Xxxxxx (the
"Employee").
W I T N E S S E T H
WHEREAS, the Corporation and the Employee previously entered into an
Employment Agreement, dated as of December 10, 1998 (the "Prior Agreement"),
pursuant to which Employee has been employed by the Corporation as Senior Vice
President and Chief Regulatory Officer;
WHEREAS, Employee and the Corporation desire to amend and restate the
Prior Agreement in its entirety pursuant to the terms of this Agreement; and
WHEREAS, Employee desires to be employed by the Corporation and the
Corporation desires to employ the Employee under the terms and conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, agree to the following terms and conditions, which shall be effective
from and after the date hereof.
1. RETENTION, TERM AND DUTIES
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1.1 Retention. The Corporation hereby employs the Employee as
Senior Vice President and Chief Regulatory Officer and the Employee hereby
accepts such employment, upon the terms and subject to the conditions of this
Agreement.
1.2 Term. The term of employment of the Employee by the Corporation
shall be for the period commencing on July 1, 2000 (the "Commencement Date") and
ending on June 30, 2002 (the "Term"), unless this Agreement is sooner terminated
pursuant to Section 5 herein. Notwithstanding anything contained herein to the
contrary, the term of employment will be automatically extended for successive
one (1) year periods commencing July 1, 2002 (referred to below as an "Extended
Term"), unless either party to this Agreement elects to terminate this Agreement
by providing notice pursuant to Section 12 hereof of such election to the other
party during the thirty (30) day period commencing prior to the expiration of
the then applicable Term or Extended Term.
1.3 Duties. The Employee shall be Senior Vice President and Chief
Regulatory Officer of the Corporation, with duties and responsibilities
commensurate with such positions. The Employee shall report to the Corporation's
President and Chief Executive Officer. The Employee shall perform the duties
regularly associated with this position at the Corporation's corporate
headquarters in Las Vegas, Nevada. Any change in the Employee's duties or work
location shall be mutually agreed upon by Corporation and the Employee.
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2. SCOPE OF SERVICES
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2.1 Services. The Employee agrees that he or she shall perform
their services to the best of their ability. During the term of this Agreement
the Employee shall not render any services for others in any line of business in
which the Corporation or its subsidiaries are significantly engaged without
first obtaining the Corporation's written consent; and they shall devote their
full business time, care, attention and best efforts to the Corporation's
business.
3. COMPENSATION
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3.1 Base. The Corporation shall pay to the Employee an annual base
salary of $135,000.00 (the "Base Compensation"), payable in equal installments
(in accordance with the Corporation's standard practices, but no less often than
semi-monthly) subject to all withholding for income, FICA and other similar
taxes, to the extent required by applicable law. Salary for a portion of any
period will be prorated. The Corporation agrees to provide an annual written
performance review of the Employee by the Employee's direct supervisor, and to
subsequently review the then current Base Salary of the Employee. Said Base
Salary may be adjusted by the supervisor, subject to the concurrence of the
Board of the Corporation or the Compensation Committee (if any), at the sole
discretion of the Corporation.
3.2 Bonus. In addition to the Base Salary payable to the Employee
pursuant to Section 3.1 hereof, the Corporation (i) shall make available to the
Employee a bonus in the amount of Forty Thousand Dollars ($40,000) based on
meeting performance standards or targets set reasonably and in good faith by the
President and CEO and as approved by the Board of Directors or the Compensation
Committee thereof, and (ii) may pay any additional amounts as, in the discretion
of the Corporation's Board of Directors or the Compensation Committee, it may
desire as a result of the Employee's services. These amounts shall be referred
to as "Bonus."
3.3 Employee Stock Option Plan. In addition to the Base
Compensation payable to the Employee pursuant to Section 3.1, and the Bonus
payable to the Employee pursuant to Section 3.2 hereof, the Corporation may
issue stock options as, in the discretion of the Corporation's Board of
Directors or the Compensation Committee (if any), it may desire as a result of
the Employee's services.
4. OTHER BENEFITS
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4.1 Insurance Benefits. The Employee shall be entitled to
participate in all other employee benefit programs of the Corporation in effect
from time to time, on the same availability and basis as other employees of a
similar level of employment, as determined at the sole discretion of the
Corporation or as required by applicable laws, subject to a determination of
eligibility under the terms of said plan in accordance with its respective
terms. The Corporation maintains the exclusive right, at its sole discretion, to
change, alter, modify or eliminate any or all of said employee benefits at any
time. Upon termination of Employment for any reason, the Employee may, at the
Employee's discretion, elect to acquire any desired benefit plans which are
convertible to the Employee as per the terms and conditions of the particular
benefit plan(s), consistent with applicable Corporation policies, and all
federal, state and local laws, including COBRA.
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4.2 Expenses. To the extent not otherwise reimbursed under this
Agreement, the Corporation shall reimburse the Employee for all reasonable and
customary expenses which the Employee shall incur in connection with the
Employee's services to the Corporation or any subsidiary pursuant to this
Agreement. All additional benefits are to be authorized by and subject to
approval by the Corporation's Board of Directors.
4.3 Vacation; Sick Leave. The Corporation shall provide to the
Employee such paid vacation and paid sick leave as outlined in the Corporation's
Associate Managed Time Off (AMTO) Policy which do not materially interfere with
the Employee's performance of his obligations hereunder.
5. TERMINATION
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This Agreement may be terminated prior to the Expiration Date
only in accordance with the following provisions:
5.1 Death. In the event of the Employee's death, the Employee's
employment with the Corporation shall be deemed to be terminated as of the date
of death. Upon death, the Employee's estate or other legal representative shall
be entitled to receive any Base Salary installments which are accrued and unpaid
at that time. All other compensation or benefits shall cease at the date of
death, except for any prior vested amount due the Employee under any benefit
program of the Corporation in which the Employee was enrolled, and such other
benefits as may be maintained by the spouse and/or dependents of the Employee as
per the terms and conditions of the particular benefit plan(s), consistent with
applicable Corporation policies, and all federal, state and local laws,
including COBRA.
5.2 Termination by the Corporation. Corporation may terminate the
Employee's employment hereunder, by delivering to the Employee a Notice of
Termination (defined hereinafter), as follows:
(i) At will, without cause, during the first ninety (90) days
of continuous employment with the Corporation, without additional employment or
severance remuneration.
(ii) At will, without cause, at any time after the first ninety
(90) days of continuous employment, with payment of twelve (12) months of Base
Salary as severance remuneration. All Employee Options granted to Employee shall
immediately vest upon the date of termination at will, without cause.
(iii) For cause, at any time during employment, without
additional remuneration or severance, with cause having any of the following
meanings:
(a) the Employee having been convicted of any felony or
other crime involving moral turpitude;
(b) the use of narcotics or alcohol to the extent which
materially impairs the Employee's performance of his or her duties;
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(c) malfeasance or gross negligence by the Employee in the
performance of his or her duties;
(d) a material violation by the Employee of any provision
of this Agreement; or
(e) willful or gross misconduct by the Employee materially
injurious to the Corporation.
5.3 Voluntary Termination. Employee may voluntarily terminate his
or her employment with the Corporation at any time, with a minimum of thirty
(30) days of notice, by giving the Corporation a Notice of Termination (defined
hereinafter). If the Employee voluntarily terminates his or her Employment with
the Corporation under this Agreement, the Employee shall not receive additional
remuneration, but shall receive pay only for days worked, but not yet paid
through the last day worked. In the event Employee voluntarily terminates
employment due to inability of Corporation to meet payroll obligations for 31
consecutive days, all employee stock options and/or stock appreciation rights
granted to employee will vest at date of termination. Also, the Employee may, in
his or her discretion, elect to acquire or assume any desired benefit plans
which are convertible to the Employee, as per the terms and conditions of the
benefit plan, consistent with applicable Corporation policies, and as per all
applicable federal, state and local laws, statutes or ordinances, including
COBRA.
5.4 Termination Following Change of Ownership. If, within one year
following a "change in the ownership" (as defined below) of the Corporation,
this Agreement is terminated by the Corporation or its successor(s) or
assign(s), or Employee is required to relocate more than fifty (50) miles from
Las Vegas, Nevada, or there is a reduction in the Employee's compensation
(including base salary, bonus and benefits), or there is an adverse change in
Employee's duties, responsibilities and/or authorities, or Employee is required
by the Corporation or its successors or assigns to travel outside of a fifty
(50) mile radius of Las Vegas, Nevada, for in excess of ten (10) business days
during any thirty (30) day period or during any calendar month, and in lieu of
the benefits provided for in Section 5.2, the Corporation shall pay to Employee
a lump sum payment equal to 2.99 times the average annual compensation paid by
the Corporation and includable by Employee in his gross income during the lesser
of (i) the period of time employed by the Corporation, and (ii) the five tax
years ended prior to the tax year in which such change in ownership or control
occurs. In addition, in the event of a "change of ownership," the vesting of all
Employee Stock Options shall be fully accelerated as of the date of the change
of ownership. For purposes of this Section 5.4, a "change in the ownership" of
the Corporation will be deemed to have occurred upon: (i) completion of a
transaction resulting in a consolidation, merger, combination or other
transaction in which the common stock of the Corporation is exchanged for or
changed into other stock or securities, cash and/or any other property and the
holders of the Corporation's common stock immediately prior to the completion of
such transaction are not, immediately following completion of such transaction,
the owners of at least a majority of the voting power of the surviving entity,
(ii) a tender or exchange offer by any person or entity other than Employee
and/or his affiliates for fifty percent (50%) of the outstanding shares of
common stock of the Corporation is successfully completed, (iii) the Corporation
has sold all or substantially all of the Corporation's assets, (iv) during any
period of twenty-four (24) consecutive months, individuals who at the beginning
of such period
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constituted the board of directors of the Corporation (together with any new or
replacement directors whose election by the board of directors, or whose
nomination for election, was approved by a vote of at least a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for reelection was previously so
approved) cease for any reason to constitute a majority of the directors then in
office. In the event that Employee shall become entitled to payments and/or
benefits provided by this Agreement or any other amounts in the "nature of
compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Corporation, any person whose actions
result in a change of ownership or effective control covered by Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code"), or any
person affiliated with the Corporation or such person) as a result of such
change in ownership or effective control (collectively the "Corporation
Payments"), and such Corporation Payments will be subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code, the Corporation shall pay to
Employee, subject to required withholding, at the time specified in the last
sentence of this paragraph, an additional amount (the "Gross-up Payment") such
that the net amount retained by Employee, after deduction of any Excise Tax on
the Corporation Payments and on the Gross-Up Payment provided for under this
paragraph and any U.S. federal, state, and local income or payroll tax upon the
Gross-up Payment provided for by this paragraph shall be equal to the
Corporation Payments. In the event that the Excise Tax is subsequently
determined by the Corporation to be less than the amount taken into account
hereunder at the time the Gross-up Payment is made, Employee shall repay to the
Corporation or, in the event that the Corporation shall have then already been
liquidated or dissolved, any then-existing liquidating trust of which some or
all of the shareholders of the Corporation are beneficiaries, at the time that
the amount of such reduction in Excise Tax is finally determined, the portion of
the prior Gross-up Payment attributable to such reduction (plus the portion of
the Gross-up Payment attributable to the Excise Tax and U.S. federal, state and
local income tax imposed on the portion of the Gross-up Payment being repaid by
Employee). In the event that the Excise Tax is later determined by the
Corporation or the Internal Revenue Service to exceed the amount taken into
account hereunder at the time the Gross-up Payment is made (including by reason
of any payment the existence or amount of which cannot be determined at the time
of the Gross-up Payment), the Corporation or, in the event that the Corporation
shall have then already been liquidated or dissolved, any then-existing
liquidating trust established for the purpose of repaying or otherwise
discharging the debts of the Corporation, shall make an additional Gross-up
Payment in respect of such excess (plus any interest or penalties payable with
respect to such excess) at the time that the amount of such excess is finally
determined. The Gross-up Payment or portion thereof provided for in this
paragraph shall be paid not later than the thirtieth (30th) day following
delivery by Employee to the Corporation of notice that an event that subjects
Employee to the Excise Tax has occurred; provided, however, that if the amount
of such Gross-up Payment or portion thereof cannot be finally determined on or
before such day, the Corporation shall pay to Employee on such day an estimate,
as determined in good faith by the Corporation, of the minimum amount of such
payments and shall pay the remainder of such payments (together with interest at
the rate provided in Section 1274(b)(2)(B) of the Code) promptly following such
time as the amount thereof has been determined.
5.5 Notice of Termination. For purposes of this Agreement, the term
"Notice of Termination" shall mean a written document delivered to the Employee
(if termination is by the Corporation) or to the Corporation (if a voluntary
termination by the Employee), which shall
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specify the section of this Agreement under which the termination occurs.
Termination shall be effective on the date that the Notice of Termination is
effective, or any date specified by the Corporation (if termination is by the
Corporation). Notwithstanding the foregoing, the Notice of Termination shall be
effective immediately upon termination for "cause."
6. INDEMNIFICATION AND INSURANCE
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6.1 Obligation. The Corporation shall indemnify and hold harmless,
and in any action, suit or proceeding, defend the Employee (with the Employee
having the right to use counsel of his choice) against all expenses, costs,
liabilities and losses (including attorneys' fees, judgments and fines, and
amounts paid or to be paid in any settlement) (collectively "Indemnified
Amounts") reasonably incurred or suffered by the Employee in connection with the
Employee's service as an employee of the Corporation or any affiliate to the
full extent permitted by the By-laws of the Corporation as in effect on the date
of this Agreement, or, if greater, as permitted by the general corporation law
of the jurisdiction of the Corporation's incorporation (the "GCL"), provided
that the indemnity afforded by the Corporation's By-laws shall never be greater
than permitted by the GCL. The Corporation shall advance on behalf of Employee
all Indemnified Amounts as they are incurred. To the extent a change in the GCL
(whether by statute or judicial decision) permits greater indemnification than
is now afforded by the By-laws and a corresponding amendment shall not be made
in said By-laws, it is the intent of the parties hereto that the Employee shall
enjoy the greater benefits so afforded by such change.
6.2 Determination. A determination that indemnification with
respect to any claims by the Employee pursuant to this Section 6 is proper shall
be made by independent legal counsel selected by the Board of Directors of the
Corporation and set forth in a written opinion furnished by such counsel to the
Board of Directors, the Corporation and the Employee. In the event it is
determined by such counsel that Employee is not entitled to indemnification
pursuant to this Section 6 (and if contested by Employee, such determination is
confirmed by the final non-appendable order of a court of competent
jurisdiction), or if a court of competent jurisdiction determines in a final
non-appendable order that Employee is not entitled to indemnification pursuant
to this Section 6, Employee hereby undertakes that he or she shall promptly
reimburse the Corporation for all such advances of Indemnified Amounts made by
the Corporation on Employee's behalf.
6.3 Notice of Claims. The Employee shall advise promptly the
Corporation in writing of the institution of any action, suit or proceeding
which is or may be subject to this Section 6, provided that Employee's failure
to so advise the Corporation shall not affect the indemnification provided for
herein, except to the extent such failure has a material and adverse effect on
the Corporation's ability to defend such action, suit or proceeding.
6.4 Indemnification Insurance. The Employee shall be covered by
insurance, to the same extent as other employees of the Corporation are covered
by insurance, with respect to (a) directors and officers liability, (b) errors
and omissions, and (c) general liability insurance. The Corporation shall
maintain reasonable and customary insurance of the type specified in parts (b)
and (c) in the preceding sentence. The Employee shall be a named insured or
additional insured, without right of subrogation against him or her, under any
policies of insurance carried by the Corporation. The Corporation will, in good
faith, make efforts to maintain insurance
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coverage of the type specified in part (a) above at commercially reasonable
rates, but the failure to obtain such coverage shall not constitute a breach of
the Corporation's obligations hereunder.
7. CONFIDENTIAL INFORMATION: NONDISCLOSURE, ETC.
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7.1 Confidentiality. Except as may be in furtherance of the
Employee's performance of his functions as the Corporation's Senior Vice
President and Chief Regulatory Officer (including, without limitation, in
connection with acquisitions, dispositions, financings and other significant
corporate transactions, developments or planning which involve the participation
of third parties) or otherwise with the consent of the Board of Directors, the
Employee shall not, throughout the Term of this Agreement and thereafter,
disclose to any third party, or use or authorize any third party to use, any
material information relating to the material business or interests of the
Corporation (or any of its subsidiaries) which Employee knows to be confidential
and valuable to the Corporation or any of its subsidiaries (the "Confidential
Information"). The Confidential Information is and will remain the sole and
exclusive property of the Corporation, and, during the Term of this Agreement,
the Confidential Information, when entrusted to the Employee's custody, shall be
deemed to remain at all times in the Corporation's sole possession and control.
7.2 Return of Documents. Upon termination of this Agreement for any
reason whatsoever, or whenever requested by the Board of Directors of the
Corporation, the Employee shall return or cause to be returned to the
Corporation all of the Confidential Information or any other property of the
Corporation in the Employee's possession or custody or at his or her disposal,
which he or she has obtained or been furnished, without retaining any copies
thereof.
8. NON-COMPETITION
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8.1 Restriction. Subject to Section 2 hereof, the Employee shall
not, (i) throughout the Term or Extended Term of this Agreement, as the case may
be, and (ii) for a period of 12 months thereafter, in each case without the
Corporation's prior written consent, render services to a business, or plan for
or organize a business, which is materially competitive with the Corporation or
of any of its subsidiaries by becoming an owner, officer, director, shareholder
(owning more than 4.9% of such business' equity interests), partner, associate,
employee, agent or representative or consultant or serve in any other capacity
in any such business.
8.2 Trade Secrets. Subject to Section 2 hereof, all ideas and
improvements which are protectable by patent or copyright or as trade secrets,
conceived or reduced to practice (actually or constructively) during the Term of
this Agreement by the Employee, shall be the property of the Corporation;
provided, however, that the provisions of this Section 8.2 shall not apply to an
invention for which no equipment, supplies, facility or trade secret information
of the Corporation was used and which was developed entirely on the Employee's
own time, and (a) which does not relate to (i) the business of the Corporation
or any of its subsidiaries or (ii) the actual or demonstrably anticipated
research or development by the Corporation of any of its subsidiaries or (b)
which does not result from any work performed by the Employee pursuant to this
Agreement.
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9. REMEDIES
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9.1 Arbitration. In the event of any dispute or controversy arising
under, out of or relating to this Agreement or the breach hereof other than
under Section 7 or 8 hereunder for which the Corporation may seek injunctive
relief, it shall be determined by arbitration in Las Vegas, Nevada to be heard
by a single arbitrator chosen by the Corporation and the Employee, provided that
if the Corporation and the Employee cannot agree on a single arbitrator, each
shall select one arbitrator and the arbitrators so selected shall select a third
arbitrator, and the panel of three arbitrators shall determine the dispute. The
arbitration is to commence within four (4) weeks after service of a demand for
arbitration by either party, and each party shall have the right to make one
document request on the other party prior to commencement of the arbitration
proceeding, but no other discovery shall be conducted other than that which is
agreed upon in writing by both parties. Such arbitration and any award made
therein shall be binding upon the Corporation and the Employee.
9.2 Injunctive Relief. The Employee acknowledges and agrees that
any material breach which occurs or which is threatened of Section 7 or 8 hereof
shall cause substantial and irreparable damage to the Corporation in an amount
and of a character difficult to ascertain. Accordingly, in addition to any other
relief to which the Corporation may otherwise be entitled at law, in equity or
by statute, or under this Agreement, the Corporation shall also be entitled to
seek such immediate temporary, preliminary and permanent injunctive relief on
such breach or threatened breach of Section 7 or 8 hereof as may be granted
through appropriate proceedings.
9.3 Fees. If any action at law or in equity or arbitration is
necessary to enforce or interpret the terms and conditions of this Agreement,
the prevailing party shall be entitled to reasonable attorney's, accountant's
and expert's fees, costs and necessary disbursements in addition to any other
relief to which it or he may be entitled. As used in this Section 9.3, the term
"prevailing party" shall include, but not be limited to, any party against whom
a cause of action, demand for arbitration, complaint, cross-complaint,
counterclaim, cross-claim or third party complaint is voluntarily dismissed,
with or without prejudice.
10. NOTICES
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All notices required or permitted hereunder shall be in
writing and shall be delivered in person, by facsimile, telex or equivalent form
of written communication, or sent by certified or registered mail, return
receipt requested, postage prepaid, as follows:
To Corporation:
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Chadmoore Wireless Group, Inc.
0000 X. Xxxxxxx Xxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000
Attention: President
Fax: 000-000-0000
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To the Employee:
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Xxxx X. Xxxxxx
00 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
or such other party and/or address as either party may designate in a written
notice delivered to the other party in the manner provided herein. All notices
required or permitted hereunder shall be deemed duly given and received on the
date of delivery, if delivered in person or by facsimile, telex or other
equivalent written telecommunication, or on the seventh day next succeeding the
date of mailing if sent by certified or registered mail.
11. FURTHER ACTION
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The Corporation and the Employee each agrees to execute and
deliver such further documents as may be reasonably necessary by the other in
order to give effect to the intentions expressed in this Agreement.
12. HEADING; INTERPRETATIONS
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The headings and captions used in this Agreement are for
convenience only and shall not be construed in interpreting this Agreement.
13. ASSIGNABILITY
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13.1 By Corporation. This Agreement is binding upon, and shall inure
to the benefit of the Corporation, and any successors or assigns, and may be
assigned in whole or in part by the Corporation, its successors and assigns.
13.2 By Employee. This Agreement is a personal services contract,
and the Employee may not assign this Agreement, or any part hereof, without the
prior, written consent of the Corporation, which consent may be withheld for any
reason.
14. ENTIRE AGREEMENT
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This Agreement contains the entire agreement and understanding
of the parties with respect to the matters herein, and supersedes all existing
negotiations, representations or agreements, including, without limitation, the
Prior Agreement, and all other oral, written and other communications between
them concerning the subject matter of this Agreement.
15. AMENDMENTS
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This Agreement may be amended or modified in whole or in part
only by an agreement in writing signed by the Corporation and the Employee.
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16. WAIVER AND SEVERABILITY
-----------------------
The waiver by either party of a breach of any terms or
conditions of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by such party. In the event that one or more provisions of
this Agreement shall be declared to be invalid, illegal or unenforceable under
any law, rule or regulation, such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of the other
provisions of this Agreement.
17. GOVERNING LAW
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This Agreement and the rights of the parties under it shall be
governed by and construed in accordance with laws of the State of Nevada,
including all matters of construction, validity, performance and enforcement and
without giving effect to the principles of conflict of laws, except that matters
of corporate law and governance shall be governed by and construed in accordance
with the laws of the State of Nevada.
18. COUNTERPARTS
This Agreement may be executed in any number of counterparts,
each of which shall be an original, and all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
EMPLOYEE
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
CHADMOORE WIRELESS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx W, Xxxxx
Title: President and CEO
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