EXHIBIT 10.4
Executive Employment Agreement
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This Executive Employment Agreement (this "Agreement") is made as of
the 18th day of November, 1999 by and between Speedcom Wireless International
Corporation, a Florida corporation (the "Company") and Xxx X. Xxxxxx, a natural
person, ("Xx. Xxxxxx").
WHEREAS, Xx. Xxxxxx has served on the Board of Directors of the Company
since June 30, 1999;
WHEREAS, the Company wishes to employ Xx. Xxxxxx as its Chief Financial
Officer and Xx. Xxxxxx wishes to accept such employment;
WHEREAS, the Company wishes Xx. Xxxxxx to move to Florida in order to
facilitate the performance of his duties for the Company; and
WHERAS, the Company and Xx. Xxxxxx wish to set forth the terms of Xx.
Xxxxxx'x employment and certain additional agreements between Xx. Xxxxxx and the
Company,
NOW, THEREFORE, in consideration of the foregoing recitals and the
representations, covenants and terms contained herein, the parties hereto agree
as follows:
1. Employment Period
The Company will employ Xx. Xxxxxx, and Xx. Xxxxxx will serve the
Company, under the terms of this Agreement for an initial term of three
years commencing as of December 7, 1999 (the "Commencement Date"). On
the third anniversary of the Commencement Date and on each anniversary
date thereafter, the term of this Agreement shall automatically be
extended for an additional period of twelve months; provided, however,
that either party hereto may elect not to so extend this Agreement by
giving written notice to the other party at least 60 days prior to such
anniversary date. Notwithstanding the foregoing, Xx. Xxxxxx'x
employment hereunder may be earlier terminated, subject to Section 5
hereof. The period of time between the commencement and the termination
of Xx. Xxxxxx'x employment hereunder shall be referred to herein as the
"Employment Period."
2. Duties and Status
The Company hereby engages Xx. Xxxxxx as its Chief Financial Officer
and a member of the Company's Executive Committee on the terms and
conditions set forth in this Agreement. During the Employment Period,
Xx. Xxxxxx shall report directly to the Chief Executive Officer of the
Company, or in his absence, the Chairman and exercise such authority,
perform such executive duties and functions and discharge such
responsibilities as are reasonably associated with Xx. Xxxxxx'x
position, commensurate with the authority vested in Xx. Xxxxxx pursuant
to this Agreement and consistent with the governing documents of the
Company. These duties include, but may not be limited to, (i)
structuring and obtaining capital from varied sources to facilitate the
growth of the Company, (ii) supervision and review of financial
reporting, and (iii) acquisition of and negotiation with strategic
business partners. Xx. Xxxxxx shall work with the Chief Executive
Officer to determine what additional responsibilities Xx. Xxxxxx shall
perform, commensurate with Xx. Xxxxxx'x position as the Chief Financial
Officer of the Company.
During the Employment Period, Xx. Xxxxxx shall devote substantially all
of his business time (minimum of 5 days per week), skill and efforts to
the business of the Company. Notwithstanding the preceding sentence,
Xx. Xxxxxx may make and manage personal business investments of his
choice, continue to serve as a director of the Company, TRI Advisors,
Ltd., a Bermuda Corporation, 3C Corporation, a Nevada corporation,
Accounts Receivable, Inc., an Illinois corporation (and any successors
to any of them) and up to two other corporations (not counting the
Company or any affiliates of the Company) of his choice and serve in
any capacity with any civic, educational or charitable organization, or
any trade association, without seeking or obtaining the approval of the
Board of Directors or the Chief Executive Officer, provided such
activities and service do not materially interfere or conflict with the
performance of his duties hereunder.
3. Compensation and Benefits
(a) Salary. During the Employment Period, the Company shall pay to Xx.
Xxxxxx, as compensation for the performance of his duties and
obligations under this Agreement, a base salary of US $120,000 per
annum, payable in arrears not less frequently than monthly in
accordance with the normal payroll practices of the Company. Such
base salary shall be subject to review each year for possible
increase by the Board of Directors and/or Chief Executive Officer
(as appropriate) in its sole discretion, but shall in no event be
decreased from its then existing level during the Employment
Period.
(b) Annual Bonus. During the Employment Period, Xx. Xxxxxx shall have
the opportunity to earn an annual bonus in accordance with a
Company annual bonus program for senior executives. The terms of
any such bonus program shall be as set forth and as determined in
the sole discretion of the Board of Directors and/or the Chief
Executive Officer, as determined by corporate policy. Xx. Xxxxxx
is not guaranteed a bonus in any particular year. In the event
that the Company has not instituted an annual bonus program, Xx.
Xxxxxx may still earn a bonus at the discretion of the Board of
Directors and/or Chief Executive Officer of the Company (as
appropriate).
(c) Equity. (i) As partial consideration for entering into this
Agreement, the Company hereby grants Xx. Xxxxxx the right to
purchase 300,000 shares of the common stock of the Company at
$3.00 per share (the "Stock Options"). The Stock Options shall
vest ratably over the initial three year term of this Agreement
(i.e. 8,333.333 per month for 36 months), or earlier if Xx.
Xxxxxx'x employment is terminated without cause or for good reason
(as described in Section 4 hereof) or earlier due to a change in
control, sale of a majority of the common stock or substantially
all of the assets of the Company or merger of the Company into or
with another company (unless such company is less than 33% of the
size (measured by market value) of the Company). The Stock
Options must be exercised by the fifth anniversary of the date of
vesting or shall be forfeited by Xx. Xxxxxx. The number, kind and
strike price of the Stock Options shall be appropriately and
equitably adjusted to reflect any stock dividend, stock split,
spin-off, split-off, extraordinary cash dividend,
recapitalization, reclassification or other major corporate action
affecting the stock of the Company to the end that after such
event Xx. Xxxxxx'x proportionate interest in the Company shall be
maintained as before the occurrence of such event.
(ii) If the Company proposes to sell or permit the transfer of
stock amounting in the aggregate to 50% or more of the outstanding
capitalization of the Company, then Xx. Xxxxxx shall have the
right to require the proposed purchaser to purchase from him the
shares of stock underlying any of the Stock Options, and any
unvested Stock Options shall become vested. Such sale by Xx.
Xxxxxx shall be at the same price and on the same terms and
conditions of the sale of stock triggering Xx. Xxxxxx'x right of
sale. The Company shall cause Xx. Xxxxxx to be actually notified
of any proposed sale of stock and the terms and conditions of such
proposed sale covered by this Section 5(c)(ii) not less than 30
days prior to the date of consummation of the sale.
(iii) If the Company proposes to file a registration statement
with the U.S. Securities and Exchange Commission, or comparable
non-U.S. regulatory authority, relating to the offer or sale of
stock of the Company to the public, the Company shall cover under
such registration statement, for the benefit of Xx. Xxxxxx, the
sale by Xx. Xxxxxx of the stock of the Company underlying the
Stock Options, and shall take such other actions as are necessary
or desirable
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for the stock of the Company underlying the Stock Options to be
freely salable by Xx. Xxxxxx (subject to any restrictions imposed
by the underwriters of such stock offering).
(iv) In addition to the Stock Options, Xx. Xxxxxx shall be
entitled to receive additional awards under any other stock option
or equity based incentive compensation plan or arrangement adopted
by the Company during the Employment Period for which senior
executives are eligible. The level of Xx. Xxxxxx'x participation
in any such plan or arrangement shall be in the sole discretion of
the Company's Board of Directors and/or Chief Executive Officer,
as appropriate.
(d) Other Benefits. During the Employment Period, Xx. Xxxxxx shall be
entitled to participate in all of the employee benefit plans,
programs and arrangements of the Company in effect during the
Employment Period which are generally available to senior
executives of the Company, subject to and on a basis consistent
with the terms, conditions and overall administration of such
plans, programs and arrangements. In addition, during the
Employment Period, Xx. Xxxxxx shall be entitled to fringe benefits
and perquisites comparable to those of other senior executives of
the Company, including, but not limited to, 12 days of vacation
pay per year plus 1 sick/personal day, to be used in accordance
with the Company's vacation pay policy for senior executives.
(e) Business Expenses. During the Employment Period, the Company
shall promptly reimburse Xx. Xxxxxx for all appropriately
documented, reasonable business expenses incurred by Xx. Xxxxxx in
the performance of his duties under this Agreement.
(g) Relocation Expenses. The Company shall promptly reimburse Xx.
Xxxxxx for all appropriately documented relocation expenses,
including the cost of moving himself and his wife and their
personal property to Florida and the cost of any initial broker's
fees for Xx. Xxxxxx'x apartment, condominium or other dwelling in
Florida, in aggregate up to $5,000. Additionally, the Company
shall provide Xx. Xxxxxx with up to six (6) weeks free housing in
a Company provided apartment (or hotel, if an apartment is
unavailable) during the time that Xx. Xxxxxx and his family is
looking for permanent housing in the Sarasota area.
(h) Support Services. The Company shall provide to Xx. Xxxxxx an
office, appropriate for his position with the Company, and
secretarial and other business services at the Company's primary
executive offices. Such offices shall be located within 10 miles
of Sarasota, Florida. Additionally, Xx. Xxxxxx shall have the use
of a company provided wireless telephone for business use on the
ATT plan with 1000 minutes usage per month including long distance
costs.
(i) Prior introductions and advisory services. The Company shall
compensate Xx. Xxxxxx, in addition to other compensation under
this Agreement, for the successful completion of certain projects
which Xx. Xxxxxx began prior to his joining the Company full time.
The amount of such compensation shall be that which Xx. Xxxxxx was
entitled to under his consulting contract with the Company dated
March 30, 1999. The projects for which Xx. Xxxxxx shall be
entitled to additional compensation are: (1) capital raised for
the Company by National Capital prior to March 15, 2000; (2)
investment by Xxxxx Xxxxxxx prior to January 31, 2000, and (3)
transactions completed (including investments) by parties on or
prior to December 7, 1999, including those investments made by
Xxxx Xxxxxxx and certain of his associates, for which Xx. Xxxxxx
would otherwise have been eligible to receive compensation under
his consulting contract. Except as set forth in this paragraph,
the consulting portion of Xx. Xxxxxx'x March 30 contract shall
otherwise terminate on December 8, 1999 (however, the board of
directors provisions shall not).
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4. Termination of Employment
(a) Termination for Cause. The Company may terminate Xx. Xxxxxx'x
employment hereunder for cause. For purposes of this Agreement
and subject to Xx. Xxxxxx'x opportunity to cure as provided in
Section 4(c) hereof, the Company shall have "cause" to terminate
Xx. Xxxxxx'x employment hereunder if such termination shall be the
result of:
(i) willful fraud or material dishonesty in connection with Xx.
Xxxxxx'x performance hereunder;
(ii) the deliberate or intentional failure by Xx. Xxxxxx to
substantially perform his duties hereunder that results in
material harm to the Company; or
(iii) the conviction for, or plea of nolo contendere to a charge
of, commission of a felony.
(b) Termination for Good Reason. Xx. Xxxxxx shall have the right at
any time to terminate his employment with the Company for any
reason. For purposes of this Agreement and subject to the
Company's opportunity to cure as provided in Section 4(c) hereof,
Xx. Xxxxxx shall have "good reason" to terminate his employment
hereunder if such termination shall be the result of:
(i) a material diminution during the Employment Period in the
Executive's duties, responsibilities, reporting relationship
or title as set forth in Section 2 hereof;
(ii) a breach by the Company of the compensation and benefits
provisions set forth in Section 3 hereof;
(iii) a material breach by the Company of any of the terms of this
Agreement, other than as specifically provided herein; or
(iv) notice by the Company of non-renewal of the Agreement
pursuant to Section 1 hereof.
(c) Notice and Opportunity to Cure. Notwithstanding the foregoing, it
shall be a condition precedent to the Company's right to terminate
Xx. Xxxxxx'x employment for "cause" and Xx. Xxxxxx'x right to
terminate his employment for "good reason" that (1) the party
seeking termination shall first have given the other party written
notice stating with specificity the reason for the termination
("breach") and (2) if such breach is susceptible of cure or
remedy, a period of thirty days from and after the giving of such
notice shall have elapsed without the breaching party having
effectively cured or remedied such breach during such 30-day
period, unless such breach cannot be cured or remedied within
thirty days, in which case the period for remedy or cure shall be
extended for a reasonable time (not to exceed thirty days)
provided the breaching party has made and continues to make a
diligent effort to effect such remedy or cure.
(d) Termination Upon Death or Permanent and Total Disability. The
Employment Period shall be terminated by the death of Xx. Xxxxxx.
The Employment Period may be terminated by the Board of Directors
if Xx. Xxxxxx shall be rendered incapable of performing his duties
to the Company by reason of any medically determined physical or
mental impairment that can be reasonably expected to result in
death or that can be reasonably expected to last for a period of
either (1) six or more consecutive months from the first date of
Xx. Xxxxxx'x absence due to the disability or (2) nine months
during any twelve-month period (a "Permanent and Total
Disability"). If the Employment Period is terminated by reason of
Permanent and Total Disability of Xx. Xxxxxx, the Company shall
give 30 days' advance written notice to that effect to Xx. Xxxxxx.
5. Consequences of Termination.
(a) Without Cause or for Good Reason. In the event of a termination of
Xx. Xxxxxx'x employment during the Employment Period by the
Company other than for "cause" (as
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provided for in Section 4(a) hereof), by Xx. Xxxxxx for "good
reason" (as provided for in Section 4(b) hereof) or due to death
or disability (as provided for in Section 4(d) hereof) the Company
shall pay Xx. Xxxxxx (or his estate) and provide him with the
following:
(i) Lump-Sum Payment. A lump-sum cash payment, payable within
30 days after Xx. Xxxxxx'x termination of employment, equal
to the sum of the following:
(A) Salary. The equivalent of six months (the "Severance
Period") of Xx. Xxxxxx'x then-current base salary; plus
(B) Earned but Unpaid Amounts. Any previously earned but
unpaid salary through Xx. Xxxxxx'x final date of
employment with the Company, and any previously earned
but unpaid bonus amounts for any completed fiscal year
prior to the date of Xx. Xxxxxx'x termination of
employment.
(ii) Equity. Xx. Xxxxxx shall have 12 months from the date of a
termination of his employment that is subject to this
Section 5 to exercise any stock options granted to him
during the Employment Period. All unvested stock options
shall vest upon a termination without cause, for good reason
or due to death or disability.
(iii) Other Benefits. The Company shall provide continued
coverage for the Severance Period under all health, life,
disability and similar employee benefit plans and programs
of the Company on the same basis as Xx. Xxxxxx was entitled
to participate immediately prior to such termination,
provided that Xx. Xxxxxx'x continued participation is
possible under the general terms and provisions of such
plans and programs. In the event that Xx. Xxxxxx'x
participation in any such plan or program is barred, the
Company shall arrange to provide Xx. Xxxxxx with benefits
substantially similar (including all tax effects) to those
which Xx. Xxxxxx would otherwise have been entitled to
receive under such plans and programs from which his
continued participation is barred. In the event that Xx.
Xxxxxx is covered under substitute benefit plans of another
employer prior to the expiration of the Severance Period,
the Company will no longer be obligated to continue the
coverages provided for in this Section 5(a)(iii).
(b) Other Termination of Employment. In the event that Xx. Xxxxxx'x
employment with the Company is terminated during the Employment
Period by the Company for "cause" (as provided for in Section 4(a)
hereof) or by Xx. Xxxxxx other than for "good reason" (as provided
for in Section 4(b) hereof), the Company shall pay Xx. Xxxxxx any
earned but unpaid salary and annual bonus amounts for any
completed fiscal year prior to the date of Xx. Xxxxxx'x
termination of employment, but only to the extent such amounts are
payable in accordance with the terms of any such bonus plan,
through Xx. Xxxxxx'x final date of employment with the Company,
and the Company shall have no further obligations to Xx. Xxxxxx.
(c) Withholding of Taxes. All payments required to be made by the
Company to Xx. Xxxxxx under this Agreement shall be subject only
to the withholding of such amounts, if any, relating to tax,
excise tax and other payroll deductions as may be required by law
or regulation.
(d) No Other Obligations. The benefits payable to Xx. Xxxxxx under
this Agreement are not in lieu of any benefits payable under any
employee benefit plan, program or arrangement of the Company,
except as provided specifically herein, and upon termination Xx.
Xxxxxx will receive such benefits or payments, if any, as he may
be entitled to receive pursuant to the terms of such plans,
programs and arrangements. Except for the obligations of the
Company
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provided by the foregoing and this Section 5, the Company
shall have no further obligations to Xx. Xxxxxx upon his
termination of employment.
(e) No Mitigation or Offset. Xx. Xxxxxx shall have no obligation to
mitigate the damages provided by this Section 5 by seeking
substitute employment or otherwise and there shall be no offset of
the payments or benefits set forth in this Section 5 except as
provided in Section 5(a)(iii).
6. Change in Control Agreement.
(a) Termination Protection. In the event of the termination of Xx.
Xxxxxx'x employment without "cause" (as provided for in Section
4(a) hereof) or for "good reason" (as provided for in Section 7(c)
hereof) following a change in control, Xx. Xxxxxx shall be
entitled to receive the payments and benefits set forth in Section
5(a)(i) through (iii) above.
(b) For purposes of this Agreement, a "change in control" shall be
deemed to have occurred if and when:
(i) individuals who at the date hereof constitute the entire
Board of Directors of the Company (the "Board") and any new
directors whose election by the Board, or whose nomination
for election by the Company's stockholders, shall have been
approved by a vote of at least a majority of the directors
then in office who either were directors at the date hereof
or whose election or nomination for election shall have been
so approved shall cease for any reason to constitute a
majority of the members of the Board;
(ii) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") shall after the date hereof become the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, of securities of
the Company representing 30% or more of the voting power of
all then outstanding securities of the Company having the
right under ordinary circumstances to vote in an election of
the Board (including, without limitation, any securities of
the Company that any such person has the right to acquire
pursuant to any agreement, or upon exercise of conversion
rights, warrants or options, or otherwise, shall be deemed
beneficially owned by such person);
(iii) there shall be consummated any corporate transaction,
including a consolidation or merger, of the Company in which
the Company is not the continuing or surviving corporation
or pursuant to which shares of the Company's capital stock
are converted into cash, securities or other property, other
than a consolidation or merger of the Company in which the
holders of the Company's voting stock immediately prior to
the consolidation or merger shall, upon consummation of the
consolidation or merger, own at least 50% of the voting
stock; or
(iv) there shall be consummated any sale, lease, exchange or
transfer (in any single transaction or series of related
transactions) of all or substantially all of the assets or
business of the Company.
7. Indemnity and Insurance.
The Company shall, to the fullest extent permitted by law and by its
Certificate of Incorporation and By-laws, indemnify Xx. Xxxxxx and hold
him harmless for any acts or decisions made by him while performing his
duties pursuant to this Agreement, unless such acts or decisions are
made in
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bad faith or are intentionally harmful to the welfare of the
Company. The Company shall also, to the fullest extent permitted by law
and by its Certificate of Incorporation and By-laws, indemnify Xx.
Xxxxxx and hold him harmless from any legal fees or expenses incurred
by Xx. Xxxxxx arising out of his good faith service as an officer or
agent of the Company.
The Company shall provide that Xx. Xxxxxx is covered by any Directors'
and Officers' insurance that the Company provides to other senior
executives.
8. Notice.
All notices, requests and other communications pursuant to this
Agreement shall be sent by e-mail:
If to Xx. Xxxxxx: xxxxxxx00@xxx.xxx
If to the Company: xxx@xxxxxxxx.xxx
9. Waiver of Breach.
Any waiver of any breach of this Agreement shall not be construed to be
a continuing waiver or consent to any subsequent breach on the part of
either Xx. Xxxxxx or of the Company.
10. Non-assignment; Successors.
Neither party hereto may assign his or its rights or delegate his or
its duties under this Agreement without the prior written consent of
the other party; provided, however, that (i) this Agreement shall inure
to the benefit of and be binding upon the successors and assigns of the
Company upon any sale of all or substantially all of the Company's
assets, or upon any merger, consolidation or reorganization of the
Company with or into any other corporation, all as though such
successors and assigns of the Company and their respective successors
and assigns were the Company; and (ii) this Agreement shall inure to
the benefit of and be binding upon the heirs, assigns or designees of
Xx. Xxxxxx to the extent of any payments due to them hereunder. As used
in this Agreement, the term "Company" shall be deemed to refer to any
such successor or assign of the Company referred to in the preceding
sentence.
11. Severability.
To the extent any provision of this Agreement or portion thereof shall
be invalid or unenforceable, it shall be considered deleted therefrom
and the remainder of such provision and of this Agreement shall be
unaffected and shall continue in full force and effect.
12. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
13. Noncompetition; Nonsolicitation
Xx. Xxxxxx agrees that for a period of six months after the termination
of his employment with the Company (the "Noncompetition Period"),
unless Xx. Xxxxxx is terminated without "cause" or he terminates for
"good reason" (in which case Xx. Xxxxxx shall not be subject to this
section 13), Xx. Xxxxxx will not act as a consultant, officer or
employee of a company engaged in manufacturing, servicing or selling
wireless telecommunications products to commercial entities (a
"Competing Activity"). Xx. Xxxxxx also agrees during the Noncompetition
Period and for one year thereafter, if any, not to solicit or recruit
any employees of the Company to join any other
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company or engage in a Competing Activity or to solicit or recruit a
substantial number of employees to work with any company with whom Xx.
Xxxxxx is associated if the departure of the solicited or recruited
employees from the Company would materially harm the Company.
14. Entire Agreement.
This Agreement constitutes the entire agreement by the Company and Xx.
Xxxxxx with respect to the subject matter hereof and except as
specifically provided herein, supersedes any and all prior agreements
or understandings between Xx. Xxxxxx and the Company with respect to
the subject matter hereof, whether written or oral. This Agreement may
be amended or modified only by a written instrument executed by Xx.
Xxxxxx and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
November 18, 1999.
Xxx X. Xxxxxx Speedcom Wireless International Corporation
______________________ By_________________________________________
Its:_______________________________________
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