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EXHIBIT 10.23
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made
effective as of October 1, 1998, by and between XXXXXXX COMMUNICATIONS
CORPORATION, an Iowa corporation (the "Corporation"), and XXXXXX X. XXXXXXX (the
"Employee").
RECITAL
The Corporation and the Employee desire to amend and restate
the Employment Agreement between them originally dated April 4, 1997.
AGREEMENTS
In consideration of the mutual covenants and agreements set
forth in this Agreement, the parties agree as follows:
1. Employment. The Corporation employs the Employee and the
Employee accepts employment with the Corporation on the terms and conditions set
forth in this Agreement.
2. Term. The original term of the Employee's employment
hereunder shall commence on the date of this Agreement and continue until
December 31, 2001, and renew automatically from year to year thereafter, unless
terminated earlier pursuant to paragraph 6 of this Agreement or unless written
notice is given by either party to the other at least 90 days before the end of
the original term or any renewal term that such employment shall cease as of the
end of such term (the "Employment Period").
3. Duties. The Employee will initially serve as the
Corporation's Chief Executive Officer and will perform the duties specified in
the Corporation's By-Laws and specified by the Board of Directors from time to
time. The Employee will devote his entire business time, effort, skill and
attention to such employment.
4. Compensation.
(a) Base Salary. The Employee shall receive a base
annual salary of $250,000, payable in regular and equal semi-monthly
installments ("Base Salary").
(b) Salary Adjustment. The Compensation Committee of
the Board of Directors (the "Compensation Committee") will review at least
annually the Employee's Base Salary to determine whether it should be increased.
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(c) Incentive Bonus. During the term of this Agreement,
the Employee will be eligible to participate in an incentive compensation
program to be developed by the Compensation Committee. The terms and conditions
of such program, including the amount of any bonus payable to the Employee, and
the performance objectives to be met for a bonus to be paid, will be in the sole
discretion of the Compensation Committee.
(d) Stock Options. The Corporation and the Employee
executed and delivered a Stock Option Agreement in conjunction with the
execution and delivery of the original Employment Agreement between them.
Additional options have been, and may be in the future, granted to the Employee.
5. Fringe Benefits.
(a) Group Insurance. The Employee will be eligible to
participate in the Corporation's group insurance programs on the same terms and
conditions as are available to other employees of the Corporation generally.
(b) Vacation. The Employee will be entitled to receive
four weeks of paid vacation annually. Such vacation shall be taken at such times
and in such intervals as are mutually acceptable to the Employee and the
Corporation.
(c) Automobile. The Corporation will provide the
Employee with full use of an automobile (retail price not to exceed $30,000)
owned or leased by the Corporation for use in carrying out his duties for the
Corporation and for use in such personal business as he deems appropriate. The
Corporation agrees to provide adequate insurance for the automobile and
occupants and to pay maintenance costs necessary to keep the automobile in good
operating condition.
(d) Generally. In addition to the benefits described
above, the Corporation will provide the Employee with the same fringe benefits
as are enjoyed by other employees of the Corporation generally.
6. Termination of Employment.
(a) Generally. Except as provided in section 6(b), if
the Employee's employment is terminated by the Corporation for any reason other
than Cause (as defined herein), the Employee will be entitled to receive, as his
exclusive severance benefit, compensation at the rate of $150,000 per year for a
period equal to the period of noncompetition described in section 7(b) after the
date of such termination. If the Employee's Employment is terminated by the
Employee or is terminated by the Corporation with Cause, the payments for
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compensation and vested rights to fringe benefits shall be pro rated to the date
of termination. "Cause" shall mean death, disability which, in the opinion of
the Board of Directors, renders the Employee unable to perform his duties under
this Agreement, fraud, dishonesty, acts of negligence in the course of
employment, misrepresentation to the shareholders or Board of Directors, the
commission of an act constituting a felony or the Employee's failure to follow
and/or perform a specific directive of the Board of Directors.
(b) Termination Following a Sale of the Company. "Sale
of the Company" shall mean a sale or other transfer not in the ordinary course
of business of all or substantially all of the Corporation's assets, or a
merger, tender offer or other transaction, or series of related transactions,
the effect of which is to cause more than 50% of the Corporation's issued and
outstanding voting capital stock to be beneficially owned by one person or
entity or a group of related or affiliated persons or entities. Notwithstanding
any of the other provisions of this section 6 if, following a Sale of the
Company, the Employee's employment terminates for any reason, prior to the 180th
day after such Sale of the Company, whether such termination is initiated by the
Employee or the Corporation (and regardless of the existence or lack of Cause),
the Employee (or if the Employee dies, his heirs or beneficiaries) will be
entitled to receive, as his exclusive severance benefit, and the Corporation
will pay and provide his then Base Salary for a period of three years after the
date of such termination.
7. Noncompetition. The parties agree that the Corporation's
customer contacts and relations are established and maintained at great expense
and by virtue of the Employee's employment with the Corporation, the Employee
will have unique and extensive exposure to and personal contact with the
Corporation's customers, and that he will be able to establish a unique
relationship with those individuals and entities that will enable him, both
during and after employment, to unfairly compete with the Corporation. The
parties further agree that the Corporation's customers and business contacts are
a small percentage of the total number of organizations, associations and
individuals who are customers or potential customers for companies offering the
same or similar services and products offered by the Corporation. Further, the
parties agree that the terms and conditions of the following restrictive
covenants are reasonable and necessary for the protection of the Corporation's
business, trade secrets and confidential information and to prevent great damage
or loss to the Corporation as a result of action taken by the Employee. The
Employee acknowledges that the noncompete restrictions and nondisclosure of
confidential information restrictions contained in this Agreement are reasonable
and the consideration provided for herein is sufficient to fully and adequately
compensate the Employee for agreeing to such restrictions.
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(a) During Term of Employment. The Employee hereby
covenants and agrees that, during his employment with the Corporation, he shall
not, directly or indirectly, either individually or as an employee, officer,
principal, agent, partner, shareholder, owner, trustee, beneficiary,
co-venturer, distributor or consultant or in any other capacity, participate in,
become associated with, provide assistance to, engage in or have a financial or
other interest in any business, activity or enterprise which is competitive with
the Corporation or any successor or assign of the Corporation. The ownership of
less than a 2% interest in a corporation whose shares are traded in a recognized
stock exchange or traded in the over-the-counter market, even though that
corporation may be a competitor of the Corporation, shall not be deemed
financial participation in a competitor.
(b) Upon Termination of Employment. Employee agrees
that during a period after termination of his employment with the Corporation
equal to two years, he will not, directly or indirectly, either individually or
as an employee, officer, agent, partner, shareholder, owner, trustee,
beneficiary, co-venturer, distributor, consultant or in any other capacity:
(i) Canvass, solicit or accept from any person or
entity who is an "Active Customer" of the Corporation any business in
competition with the business of the Corporation or the successors or assigns of
the Corporation. "Active Customer" shall mean any account which received within
the twelve months prior to the Employee's termination of employment, any
products or services supplied by or on behalf of the Corporation and any
prospective account which was under active solicitation by the Corporation
during the final twelve months of Employee's employment with the Corporation.
(ii) Request or advise any of the Active
Customers, suppliers or other business contacts of the Corporation who currently
have or have had business relationships with the Corporation within twelve
months preceding the date of the Employee's termination of employment, to
curtail or cancel any of their business or relations with the Corporation.
(iii) Induce or attempt to induce any employee,
officer, director, sales representative, consultant or other personnel of the
Corporation to terminate his relationship or breach his agreements with the
Corporation.
(iv) Participate in, become associated with,
provide assistance to, engage in or have a financial or other interest in any
business, activity or enterprise within the "Restricted Territory" which is
competitive with the business of the Corporation or any successor or assign of
the Corporation; provided, however, that the ownership of less than 2% of the
stock of a corporation whose shares are traded in a recognized stock exchange or
traded in the over-the-
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counter market, even though that corporation may be a competitor of the
Corporation, shall not be deemed financial participation in a competitor. For
purposes of this Agreement, the "Restricted Territory" shall mean the
Continental United States.
8. Confidential Information. The parties agree that the
Corporation's customers, business connections, customer lists, procedures,
operations, techniques, trade secrets, proprietary information and other aspects
of its business (the "Confidential Information") are established at great
expense and protected as Confidential Information and provide the Corporation
with a substantial competitive advantage in conducting its business. The parties
further agree that by virtue of the Employee's employment with the Corporation,
he will have access to, and be entrusted with, secret, confidential and
proprietary information, and that the Corporation would suffer great loss and
injury if the Employee would disclose this information or use it to compete with
the Corporation. Therefore, the Employee agrees that during the term of his
employment, and (a) until such time as the Confidential Information becomes
generally available to the public through no fault of the Employee, (b) until
such time as the Confidential Information no longer provides benefit to the
Corporation or (c) for a period of two years after the expiration of the
Employment Period, whichever occurs sooner, the Employee will not, directly or
indirectly, either individually or as an employee, officer, agent, partner,
shareholder, owner, trustee, beneficiary, co-venturer, distributor, consultant
or in any other capacity, use or disclose, or cause to be used or disclosed, any
Confidential Information acquired by the Employee during his employment with the
Corporation whether owned by the Corporation prior to or discovered and
developed by the Corporation subsequent to the Employee's employment, and
regardless of the fact that the Employee may have participated in the discovery
and the development of that information.
9. Relationship with Suppliers. The parties agree that the
profitability and goodwill of the Corporation depends on continued, amicable
relations with its suppliers and the Employee agrees, during his employment with
the Corporation and for two years thereafter, he will not cause, request or
advise any suppliers of the Corporation to curtail or cancel their business with
the Corporation.
10. Common Law of Torts and Trade Secrets. The parties agree
that nothing in this Agreement shall be construed to limit or negate the common
law of torts or trade secrets where it provides the Corporation with broader
protection than that provided herein.
11. Inventions and Improvements. The Employee agrees that
every improvement, invention, process, technique, apparatus, method,
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manufacturing system, computer program, design or other creation that the
Employee may invent, discover, conceive or originate by himself or in
conjunction with any other person that relates in any respect to the business of
the Corporation now or hereafter carried on by it shall be the exclusive
property of the Corporation. The Employee understands and agrees that in partial
consideration of his employment for the compensation herein stated, all such
developments, inventions, improvements, products, processes, apparatuses,
methods, designs and other creations shall be the exclusive property of the
Corporation. If the Employee shall fail to make or refuse to make an assignment
to the Corporation of any development, invention, improvement, process,
apparatus, technique, method, computer program, design or other creation
heretofore referred to, the Corporation shall have the authority, and this
Agreement shall operate to give the Corporation authority to execute, seal and
deliver, as the act of the Employee, any license, any license agreement,
contract, assignment or other instrument in writing that may be necessary or
proper to convey to the Corporation the entire right, title and interest in and
to said invention or development heretofore referred to. The Employee hereby
agrees to hold the Corporation and its assigns harmless by reason of the
Corporation's acts pursuant to this paragraph. The Employee further agrees that,
during the term of this Agreement and at any time thereafter whenever reasonably
necessary for the protection of the Corporation, he shall cooperate with and be
compensated by the Corporation and its counsel in the prosecution and/or defense
of any litigation at the cost of the Corporation which may arise in connection
with the inventions or other creations referred to above, without any liability
or cost to the Employee.
12. Specific Performance. The parties acknowledge and agree
that breach of this Agreement by the Employee would cause irreparable damage to
the Corporation and that monetary damages alone would not provide the
Corporation with an adequate remedy for breach of this Agreement. Therefore, if
any controversy arises concerning the rights or obligations of the Employee
under this Agreement, such rights or obligations shall be specifically enforced
by an injunction order issued by a court of competent jurisdiction. Such remedy,
however, shall be cumulative and nonexclusive and shall be in addition to any
other remedy to which the parties may be entitled.
13. Sale, Consolidation or Merger. In the event of a
consolidation or merger of the Corporation with or into another corporation or
entity, or the sale of substantially all of the operating assets of the
Corporation to another corporation, entity or individual, the
successor-in-interest shall be deemed to have assumed all liabilities of the
Corporation under this Agreement.
14. Waiver. The failure of either party to insist, in any
one or more instances, upon performance of the terms or conditions of this
Agreement
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shall not be construed as a waiver or a relinquishment of any right granted
hereunder or of the future performance of any such term, covenant or condition.
15. Severability. In the event that any provision shall be
held to be invalid or unenforceable for any reason whatsoever, it is agreed such
invalidity or unenforceability shall not affect any other provision of this
Agreement and the remaining covenants, restrictions and provisions hereof shall
remain in full force and effect and any court of competent jurisdiction may so
modify the objectionable provision as to make it valid, reasonable and
enforceable. Furthermore, the parties specifically acknowledge the covenants and
agreements contained in sections 7 and 8 hereof are separate agreements.
16. Amendment. This Agreement may only be amended by an
agreement in writing signed by all of the parties hereto.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Iowa.
18. Benefit. This Agreement shall be binding upon and inure
to the benefit of and shall be enforceable by and against the Corporation, its
successors and assigns, and the Employee, his heirs, beneficiaries and legal
representatives. It is agreed that the rights and obligations of the Employee
may not be delegated or assigned except as specifically set forth in this
Agreement.
XXXXXXX COMMUNICATIONS CORPORATION
BY /s/ Xxx X. Xxxxxxx
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Xxx X. Xxxxxxx, Chairman
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Approved by the Compensation Committee of the Board of Directors as of the 30th
day of December, 1998.
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx, Director and
Chairman of the
Compensation Committee
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