May 1, 2004
Xxxx Xxxxxxx
M-Wave, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Dear Xxxx:
By this letter agreement ("Agreement"), your duties as an employee of M-Wave
(the "Company) will change as of May 1, 2004, and you will become a Special
Consultant to the Company. This Agreement sets forth all terms and conditions of
your new consulting role, and fully replaces your prior Employment Agreement.
The terms of the services you will provide to the Company are as follows:
1. The Consulting Period is from May 1, 2004 until January 29, 2005.
2. As a Special Consultant, you will provide assistance to Company
management in financial matters, including training of employees and as
otherwise requested generally relating to your prior position as Chief Financial
Officer of the Company.
3. For your services under this Agreement, you will be paid at an
annualized rate of $145,000, paid bi-weekly less ordinary and necessary payroll
deductions, including 401(k) deductions, according to normal payroll practices
of the Company for senior managers..
4. In consideration of the payments in Paragraph 3, you shall provide
services for fifteen (15) consecutive full business days beginning May 3, 2004;
and, an additional twenty-five (25) full business days before August 31, 2004
for which you will receive additional compensation at the rate of $70.00 per
hour for all services provided after five (5) full business days. All of the
services shall be provided as requested by the Company, which agrees to consider
your needs to care for your ill spouse in making such requests, but you will not
be required to provide services in excess of three (3) business days per week
without your consent in any circumstances. Any further services that you provide
during the consulting period of this Agreement shall be by mutual agreement
between you and the Company, and you shall be paid $70.00 per hour for those
services. Any such hourly payments shall be made at the next regular payroll
date following the end of the week in which any services are provided, less
ordinary and necessary payroll deductions according to normal payroll practices
of the Company.
5. Your services under this Agreement shall be provided at the Company's
corporate offices in West Chicago, Illinois.
6. During the Consulting Period, the Company shall provide you, at the
Company's expense, with insurance benefits under the Company's group benefits
plans equal to those you
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received under your prior Employment Agreement, with no co-pay of premiums by
you, including life, medical, dental, disability and vision protection. Upon the
termination of the Consulting Period, you will be entitled to elect continuation
of benefits under COBRA, at your expense.
7. All unvested Company stock options you presently hold shall vest
immediately. Therefore, upon execution of this Agreement, you shall hold
fully-vested options to acquire 76,000 shares of the Company's common stock.
Your rights and obligations with respect to such options shall be as set forth
in the Option Plans of the Company, and any related stock option agreements,
under which they were granted.
8. The Company will reimburse up to $5,000 of reasonable and documented
legal fees that you incur related to advice concerning your employment
transition and benefits, including negotiation of this Agreement.
9. Should a dispute arise pursuant to the terms of this Agreement, the
prevailing party in any action to enforce this Agreement shall be paid or
reimbursed its reasonable attorneys' fees by the other party.
10. The Company agrees to indemnify you and continue coverage under all
applicable directors and officers insurance policies to cover your duties as a
Special Consultant in the same manner and to the same extent as the senior
management of the Company is indemnified as though you were still an officer of
the Company.
Xxxx, I trust that the terms set out in this letter accurately state our
agreement. Please sign where indicated below to acknowledge our agreement and
confirm our understanding.
Sincerely,
Xxx Xxxxx
President, M-Wave, Inc.
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
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