1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
RECITALS:
WHEREAS, Employer desires to obtain the services of Employee, and
Employee desires to provide services to Employer in accordance with the terms,
conditions, and provisions of this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements of
the parties herein contained, the parties to this Agreement agree as follows:
1. TERM. Employee's employment pursuant to this agreement
shall commence as of March 1, 1998 and shall continue pursuant to this
Agreement until the earliest occurrence of (i) death of Employee, (ii)
disability of employee which renders him unable to perform his obligations
hereunder for a period of at least 120 days out of any 150 consecutive day
period or which, in the written opinion of a physician of recognized ability
and reputation, mutually agreeable to Employee and Employer, renders him
permanently unable to perform his duties hereunder, (iii) discharge of Employee
by the Employer pursuant to Section 8 hereof, or (iv) February 28, 2001
provided however, that the term of this Agreement will be automatically renewed
for successive six month periods following the initial term hereof, unless one
party notifies the other party in writing that it or he intends to terminate
this Agreement at least six months prior to the termination date. In the event
Employee elects to terminate this Agreement as provided in the preceding
sentence, Employee, at the option of the Employer, will cooperate and assist
Employer in the training of Employee's successor during that part (or all) of
the remaining term of this Agreement for which Employee is compensated at the
Salary being received by him pursuant to Section 3(a) below at the time of
termination of this Agreement. In the event that Employee provides such notice
of termination to Employer, Employer, at its option, may choose to terminate
this Agreement on any date it chooses during such six-month period and Employee
shall be paid through such termination date.
2. DUTIES. Employee will be employed as the Vice President,
Chief Financial Officer, Assistant Secretary and Treasurer of Employer, and in
such capacity will perform the normal duties associated with such position and
such other duties as may be assigned from time to time by the Board of
Directors of Employer. During the term of this Agreement, employee shall
devote his full time, attention, and energies to the business of Employer in
order to discharge his duties faithfully, diligently, to the best of his
abilities, and in a manner consistent with any and all policies and guidelines
as may be established by Employer from time to time.
3. COMPENSATION.
(a) Subject to the terms and conditions of this Agreement and as
compensation for the performance of his services hereunder, Employer will pay
Employee a fixed salary at a minimum annual rate of $132,000 (such rate, as may
be adjusted upward from time to time as provided by the Board of Directors of
Employer, is referred to herein as "Salary"). Employee's Salary will accrue
and be payable to Employee in accordance with payroll practices of Employer for
senior executives in effect from time to time during the term of this
Agreement.
(b) Additionally, on the closing date of the Employer's Initial
Public Offering on Registration Form S-1, Employer will pay Employee a lump-sum
cash amount equal to $66,000.
(c) At its sole discretion the Board of Directors of Employer may
develop such incentive compensation arrangements as may be determined to be
appropriate for the conduct of Employer's business and Employee's duties in
connection therewith.
(d) All payments to Employee pursuant to this Agreement will be
subject to deduction and withholding authorized or required by applicable law.
1
2
4. EMPLOYEE BENEFITS; REIMBURSEMENT OF EXPENSES. During the
term of this Agreement, Employer shall provide such fringe benefits, including
paid sick leave, paid holidays, participation in health insurance plans, and
other employee benefit plans which are regularly maintained by Employer for it
senior executive officers in accordance with the policies of Employer in effect
from time to time. Notwithstanding the foregoing, Employee shall be entitled
to a minimum of three weeks of paid vacation each year of this Agreement. In
addition, during the term of this Agreement, Employer shall pay Employee the
amount of $500 each month as car allowance and reimburse Employee for his
travel, entertainment, and other business expenses incurred in connection with
his employment under this Agreement in accordance with the policies of Employer
in effect from time to time.
5. CONFIDENTIALITY. Employee acknowledges that he is
being employed by Employer in a capacity in which he will receive or contribute
to information not generally known, and proprietary to Employer, about
Employer's business, services and products (collectively, "Confidential
Information"). Employee hereby acknowledges and agrees that all Confidential
Information concerning the business or affairs of Employer which Employee may
acquire in connection with or as a result of his association with Employer will
be received in strict confidence and will be used only for the purposes of
performing his duties pursuant to this Agreement and that no such Confidential
Information will be otherwise used or disclosed by Employee during or after the
term of this Agreement without the prior written consent of Employer. Upon
termination of Employee' employment hereunder, all Confidential Information and
other documents, records, notebooks, customer lists, mailing list, business
proposals, contracts, agreements and other repositories containing information
concerning Employer or its business (including all copies hereof) in Employee's
possession, whether prepared by Employee or others, will remain with or be
returned to Employer. Notwithstanding the foregoing, this Section shall be
inoperative as to any portion of the Confidential Information which (i) is or
becomes generally available to the public other than as a result of a
disclosure by Employee or (ii) becomes available to Employee on a
non-confidential basis and not in contravention of Employer's rights or
applicable law from a source (other than Employer) which Employee reasonable
believes is entitled to possess and disclose it.
6. NONCOMPETITION AND NONSOLICITATION. Employee acknowledges and
agrees that the training he will receive, the experience he will gain while
employed and the Confidential Information he will acquire will enable him to
injure Employer if he should violate the provisions set forth in this Section 6.
In addition, Employee acknowledges and agrees that Employer is entering into
this Agreement at the request of Employee and that Employer would not enter into
this Agreement unless this Agreement contained the terms set forth in this
Section 6. For these reasons, Employee hereby agrees as follows:
(a) During the period Employee is employed by Employer or one
of its Affiliates and for a period of two years thereafter, except for
services performed on behalf of Employer or one of its Affiliates,
Employee agrees that he will not directly or indirectly either as an
individual, a partner or a joint venturer, or in any other capacity,
(i) invest in a company engaged in (other than investments in
publicly-owned companies which constitute not more than 5% of the
voting securities of any such company), or engage in, within the
United States or other country from which Employer and its Affiliates
derive at least 5% of their revenues (such 5% determination to be made
as of the one-year period ending on the date of such proposed
investment if Employee is at the time employed by Employer or as of
the one-year period ending on the date Employee ceases to be employed
by the Employer if the proposed investment or engagement is after the
time Employee is employed by Employer) (the "Restricted Area") (x) the
business of distributing or renting site-based, two-way communication
equipment to end-users or dealers or any other business that generates
more than 5% of the revenues of Employer and its Affiliates (such 5%
determination to be made in the same manner as is described above)
(the items listed under clause (x) hereto are collectively referred to
herein as "Competitive Businesses"), or (ii) accept employment with or
render services to Competitive Businesses that engages in such
Competitive business within the Restricted Area as a director,
officer, agent, employee, consultant, or any other capacity. The
parties agree that, if such non-competition agreement is determined by
a court of competent jurisdiction to be unenforceable, such agreement
2
3
should be reformed by the court to the extent necessary to be
enforceable and to give effect to the intent of this Section 6.
"Affiliates" of a person or entity means each entity that controls, is
controlled by, or under common control with such person or entity.
(b) During the period Employee is employed by Employer or one
of its Affiliates and for a period of two years thereafter, neither
Employee nor any of his Affiliates will, directly or indirectly, (i)
solicit for the purpose of distributing or renting site-based, two-way
communication equipment to end-users or dealers or any other business
that generates more than 5% of the revenues of Employer and its
Affiliates, any customer or former customer of Employer or any of its
Affiliates, (ii) solicit for employment by himself, itself, or anyone
else, any employee of Employer or any of its Affiliates or any person
who was an employee of Employer or any of its Affiliates within a
one-year period immediately preceding such solicitation or employment;
or (iii) induce or attempt to induce, any such employee of Employer or
any of its Affiliates to terminate such Employee's employment.
(c) Employee acknowledges and agrees that the breach by him of
the provisions of this Section 6 could not be adequately compensated
with monetary damages and would irreparably injure Employer, and,
accordingly, that injunctive relief and specific performance shall be
appropriate remedies to enforce the provisions of this Section against
Employee, and Employee waives any claim or defense that there is an
adequate remedy at law for such breach; provided, however, that nothing
contained herein shall limit the remedies, legal or equitable,
otherwise available to Employer, and all remedies of Employer herein
are in addition to any remedies available to Employer at law or
otherwise.
(d) The parties hereto acknowledge that the provisions of
this Section 6 are supported by good and valuable consideration.
Employee acknowledges and agrees that the limitations as to time,
geographic area and scope of activity set forth in this Section 6 are
reasonable and do not impose a greater restraint than is necessary to
protect the goodwill or other business interest of Employer. Employee
acknowledges and recognizes that the enforcement of any of the
noncompetition provisions in this Agreement by Employer will not
interfere with the ability of him to pursue a proper livelihood.
Employee further represents that he is capable of pursuing a career
that would not violate the noncompetition provisions hereof to earn a
proper livelihood.
(e) The parties hereto intend all provisions of this
Agreement including the provisions set forth in this Section 6 hereof
to be enforced to the fullest extent permitted by law. Accordingly,
should a court of competent jurisdiction determine that the scope of
any provision herein is too broad to be enforced as written, the
parties intend that the court reform the provision to such narrower
scope as it determines to be reasonable and enforceable. In addition,
however, Employee agrees that the noncompetition agreements,
non-solicitation agreements, and nonemployment agreements set forth
above each constitute separate agreements independently supported by
good and adequate consideration and shall be severable from the other
provisions of, and shall survive, this Agreement. If any provision of
this Agreement is held to be illegal, invalid or unenforceable under
present or future laws effective during the date hereof, such
provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part of this Agreement; and the remaining
provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom. Furthermore, in lieu of such
illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its
terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable.
7. INJUNCTIVE RELIEF. This section has been intentionally
deleted.
3
4
8. TERMINATION.
(a) Employer may terminate Employee's employment with or
without Cause (as defined herein). If Employee's employment is
terminated for Cause, Employee will be paid Salary to the date of such
termination notice (less all amounts required to be withheld or
deducted therefrom and all undisputed amounts owed or due by Employee
to Employer).
(b) In the event Employer terminates Employee other than for
Cause, except as provided for in Section 8(e) hereof, Employer shall
(i) continue to pay Salary to Employee through the stated term of this
Agreement (less all amounts required to be withheld or deducted
therefrom and all undisputed amounts owed or due by Employee to
Employer), and (ii) continue to provide Employee during the term of
this Agreement health insurance with coverage no less than the
coverage available during such period to Employer's senior executive
officers, and Employer shall have no other obligation thereunder.
(c) If no other provision in this SECTION 8 is applicable and
in the event this Agreement terminates pursuant to the expiration of
the term set forth in SECTION 1, Employee will be paid only Salary as
has been earned to the date of termination (less all amounts required
to be withheld or deducted therefrom and all undisputed amounts owed or
due by Employee to Employer) or such longer period as he is entitled
pursuant to the provisions of SECTION 9.
(d) If Employee dies during the term hereof, this Agreement
will terminate, and Employer will pay to the estate of Employee the
Salary which would otherwise be payable to Employee up to the end of
the month in which his death occurs (less all amounts required to be
withheld or deducted therefrom and all undisputed amounts owed or due
by Employee to Employer).
(e) If Employee's employment is terminated by Employer
without Cause, Employee shall use his best efforts to seek other
reasonably comparable employment. If Employee becomes employed during
the remaining term of this Agreement, Employer's obligation to provide
health insurance to Employee shall terminate upon Employee's gaining
such other employment. If Employee gains other employment that
provides him with compensation equal to 75% or more of Employee's
Salary as of the date he ceases to be employed by Employer, Employer's
obligation to pay Salary hereunder shall terminate at the earlier of
six months after Employee gains such other employment or the end of
the stated term of this Agreement. If Employee's new employment does
not provide him with compensation equal to 75% or more of his Salary
as of the date he ceased to be employed by Employer, Employer's
obligation to pay 100% of the Salary hereunder shall terminate at the
earlier of six months after Employee gains such other employment or
the end of the stated term of this Agreement, and if the end of such
six-month period is before the end of the stated term of this
Agreement then Employer shall also be obligated to pay to Employee
from the end of such six-month period until the end of the sated term
of this Agreement the difference between 75% of Employee's Salary as
of the date Employee ceased to be employed by Employer and Employee's
compensation from his new employment. Not withstanding the foregoing,
payments under this Agreement after termination shall reduce amounts
payable after termination under the Severance Agreement ("Severance
Agreement"), if any, that is entered into between Employer and
Employee
(f) For the purposes of this Agreement, "Cause" shall mean:
(i) the failure or inability for any reason of
Employee to devote his full business time to Employer's
business,
(ii) the failure of Employee to diligently or
effectively perform his duties under this Agreement (other
than any such failure resulting from incapacity due to
physical injury or illness or mental illness as such is
provided for in SECTION 9); provided, that, before a
termination of Employee pursuant to this Section 8(g)(ii)
shall be considered for "Cause", Employer must give Employee
10 days' notice and an opportunity during such 10 day
4
5
period to cure such failure,
(iii) any intentional dishonest or fraudulent act or
course of conduct by Employee that is detrimental to Employer,
or other act or course of conduct by Employee constituting a
criminal act, or the commission by Employee of an act or a
course of conduct involving moral turpitude, or the commission
by Employee of an act that renders Employee incapable of
performing his duties under this Agreement or materially
adversely affects Employer's business reputation,
(iv) any material breach by Employee of any of the
terms of, or the material failure to perform any covenant
contained in, this Agreement; provided, that, before a
termination of Employee pursuant to this Section 8(g)(iv)
shall be considered for "Cause" if such breach or failure is
curable, Employer must give Employee 10 days' notice and an
opportunity during such 10 day period to cure such breach or
failure, or the violation by Employee of written policies
established by Employer with respect to the operation of its
business and affairs or employee's failure to carry out the
instructions of the Board of Directors, Chairman or President
of Employer, provided that, before a termination of Employee
pursuant to this section 8(g)(v) shall be considered for Cause
if such violation or failure is curable, Employer must give
Employee 10 days' notice and an opportunity during such 10 day
period to cure such violation or failure.
For purposes of this Agreement, Employee's act, or failure to act will
be deemed "intentional" only if done, or omitted to be done, without
reasonable belief that his action or omission was in the best interest
of Employer.
9. DISABILITY. If Employee is unable to perform his assigned
duties by reason of illness, injury or incapacity (other than as a result of
abuse of drugs, alcohol or other substances), he will be entitled to receive
such disability benefits as are provided by Employer's disability policies for
its other senior executive officers. Notwithstanding the foregoing, upon any
Disability as described in Section 1 hereof, Employee's employment under this
Agreement shall terminate.
10. BINDING NATURE.
(a) Employer will require any successor and any corporation
or other legal person which is in control of such successor (as
"control" is defined in Regulation 230.405 or any successor rule or
regulation promulgated under the Securities Act of 1933, as amended)
to all or substantially all of the business and/or assets of Employer
(by purchase, merger, consolidation or otherwise), by agreement in
form and substance satisfactory to Employee, to expressly assume and
agree to perform this Agreement in the same manner and to the same
extent that Employer would be required to perform it if no such
succession had taken place. Notwithstanding the foregoing, any such
assumption shall not, in any way, affect or limit the liability of the
Employer under the terms of this Agreement or release the Employer from
any obligations hereunder. As used in this Agreement "Employer" shall
mean Employer as hereinbefore defined and any successor to its business
and/or all or part of its assets as aforesaid which executes and
delivers the agreement provided for in this SECTION 10 or which
otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
(b) This Agreement and all the rights of Employee under this
Agreement will inure to the benefit of and will be enforceable by
Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees.
(c) Except as set forth above, neither this Agreement, nor
any of the rights, interests or
5
6
obligations hereunder shall be assigned by either party hereto,
without the prior written consent of the other party (except that
Employer may assign this Agreement to one of its affiliates without
Employees consent and such assignment shall not release Employer of
any obligations hereunder), nor is this Agreement intended to confer
upon any other person other than the parties hereto any rights or
remedies hereunder.
11. SEVERABILITY. If any provision of this Agreement is declared
or found to be illegal, unenforceable or void, in whole or in part, then both
parties will be relieved of all obligations arising under such provision, but
only to the extent it is illegal, unenforceable or void. The intent and
agreement of the parties to this Agreement is that this Agreement will be
deemed amended by modifying any such illegal, unenforceable or void provision
to the extent necessary to make it legal and enforceable while preserving its
intent, or if such is not possible, by substituting therefor another provision
that is legal and enforceable and if the remainder of this Agreement will not
be affected by such declaration or finding and is capable of substantial
performance, then each provision not so affected will be enforced to the extent
permitted by law.
12. WAIVER. No delay or omission by either party to this
Agreement to exercise any right or power under this Agreement will impair such
right or power or be construed as a waiver thereof. A waiver by either of the
parties to this Agreement of any of the covenants to be performed by the other
or any breach thereof will not be construed to be a waiver of any succeeding
breach thereof or of any other covenant contained in this Agreement. All
remedies provided for in this Agreement will be cumulative and in addition to
and not in lieu of any other remedies available to either party at law, in
equity, or otherwise.
13. GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of Texas without giving
effect to any principle of conflict-of-laws that would require the application
of the law of any other jurisdiction.
14. NOTICES. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid addressed as
follows:
If to Employee: Bearcom, Inc.
Attention: Xxxxxxx X. Xxxxx
00000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
If to Employer: Bearcom, Inc.
Attention: Chairman of the Board
00000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. ATTORNEYS FEES. If any arbitration or civil action, whether
at law or in equity, is necessary to enforce or interpret any of the terms of
this Agreement, the prevailing party will be entitled to reasonable attorney's
fees, court costs and other reasonable expenses of litigation, in addition to
any other relief to which such party may be entitled.
16. ARBITRATION. Any dispute arising under this Agreement shall
be submitted to arbitration in Dallas, Texas in accordance with the rules of
the American Arbitration Association. The decision of the arbitrator(s) will
be binding, conclusive and nonappealable.
17. COUNTERPARTS. This Agreement constitutes the entire agreement
between the parties to this
6
7
Agreement with respect to the subject matter of this Agreement and, except for
the Severance Agreement, there are no understandings or agreements relative to
this Agreement which are not fully expressed in this Agreement. All prior
agreements between the parties with respect to the subject matter of this
Agreement, whether oral or written, are expressly superseded by this Agreement.
No change, waiver or discharge of this Agreement will be valid unless in
writing and signed by the party against which such change, waiver or discharge
is to be enforced.
IN WITNESS WHEREOF, THE PARTIES TO THIS AGREEMENT HAVE EXECUTED AND
DELIVERED THIS AGREEMENT ON THE DATE FIRST ABOVE WRITTEN.
EMPLOYER:
BEARCOM, INC.
By: /s/ XXXXX XXXXXX
---------------------------------------
Xxxxx Xxxxxx, President
EMPLOYEE:
/s/ XXXXXXX X. XXXXX
--------------------------------------------
Xxxxxxx X. Xxxxx
7
