EMPLOYMENT AGREEMENT
This Agreement is executed effective April 1, 1997 between CODED
COMMUNICATIONS CORPORATION, a Delaware corporation ("Employer"), and Xxxx X.
Xxxxxxxx, Xx., an individual ("Employee"), who agree as follows:
1. Hiring. Employer hereby hires Employee as, and Employee hereby
agrees to act as, President of Decom Systems, Inc.
2. Duties. Employee shall faithfully and diligently perform the
following duties on a full-time basis: (a) Devoting Employee's entire
productive time, ability and attention to the business of Employer, including
without limitation performing the duties consistent with the position of
President of Decom Systems as set forth on attached Exhibit A; and
(b) Performing such other duties as Employer shall from time to time specify
that are consistent with the duties normally performed by an employee like
Employee.
2.1. If during the first twelve (12) month period of this
Agreement, the Employer restructures the operations of Decom Systems, Inc.
such that in the sole opinion of the Employer the Employee's entire productive
time and attention is not required to manage Decom's business, then Employer
will enter into an agreement with Employee pursuant to which Employee will
perform his duties hereunder on a less than full-time basis, and as long as
Employee is not in breach of that agreement he shall not be considered to have
breached this Agreement.
3. Term. The term of this Agreement shall commence on the date of this
Agreement, and, unless terminated earlier as set forth below, shall expire on
September 18, 1999 (the "Termination Date").
4. Termination. At any time that Good Cause (as defined below) exists
or has arisen, Employer may, at its election, terminate this Agreement by so
notifying Employee in writing (the "Good Cause Notice"). From and after the
date of this Agreement, whether or not Good Cause exists or has arisen, either
Employer or Employee may, at either party's election, terminate this Agreement
by so notifying the other in writing (the "Termination Notice"), for any
reason whatsoever or for no reason. Upon the earlier of the Termination Date,
immediately after the giving of the Good Cause Notice, or fifteen (15) days
after the giving of the Termination Notice, (a) this Agreement shall be deemed
terminated, (b) neither Employee nor Employer shall have any further rights or
obligations under this Agreement (except with respect to the obligations under
the Paragraphs in this Agreement entitled "Termination Obligations,"
"Confidentiality," "Proprietary Information," and "Competition," which
obligations shall survive any such termination), (c) Employee shall return to
Employer all property belonging to Employer, including without limitation all
Confidential Material (as defined below), promotional material, advertising
information, samples, price lists and similar items, and (d) Employer shall
have no obligation to make any further payments to Employee, except for
amounts earned pursuant to this Agreement by Employee prior to such
termination, which amounts Employer shall pay to Employee upon Employee's
returning to Employer all such property. For purposes of this Agreement, "Good
Cause" shall mean the existence or occurrence of any of the following:
4.1. If Employee is convicted of theft, larceny, embezzlement,
fraud or other felony.
4.2. The death of Employee.
4.3. If Employee becomes materially disabled (as "disability" is
defined under applicable state law or the Employee's long-term disability
insurance plan) to such an extent that Employee is precluded from performing
the duties set forth in this Agreement for a period of 90 consecutive days, or
120 days in the aggregate during any one-year period.
5. Compensation. Employee's total compensation under this Agreement
shall be $140,000 per year, payable at the rate of $2,692.31 per week, which
payments shall be made in accordance with and at the same times as Employer's
ordinary payroll procedures ("Base Salary").
6. Options. Employee acknowledges the prior grant to Employee of stock
options (the "Options") to purchase 1,000,000 (one million) shares of
Employer's common stock. The Options are granted and subject to the terms and
conditions of Employer's 1992 Stock Option Plan.
7. Benefits. Employee shall be entitled to the following benefits
during the term of this Agreement:
7.1. Four weeks paid vacation for each one-year period during the
term of this Agreement (prorated for any partial year), to be taken at such
times that are consistent with Employee's performance of Employee's duties
under this Agreement and Employer's policy for vacation.
7.2. Reimbursement for reasonable out-of-town travel expenses and
local expenses incurred in the proper performance of Employee's duties under
this Agreement, in accordance with Employer's policy.
7.3. Inclusion in Employer's medical plan for Employer's other
employees, including Employee's paid dependent insurance coverage.
7.4. All benefits generally available to other employees of
Employer.
7.5 Employer shall provide a leased automobile for use by the
Employee. Employer shall be responsible for automobile insurance and regular
maintenance and repairs; the Employee shall be responsible for all gasoline
expense.
7.6 Inclusion in Employer's term life insurance plan for
Executive Officers, with premiums paid by the Employer, when and if such plan
is approved by the Employer.
Employee shall not be entitled to any other compensation or benefits.
8. Termination Obligations. If this Agreement is terminated prior to
the Termination Date, Employee will be entitled to the following termination
benefits:
8.1. If this Agreement is terminated by Employee after giving
Employer the Termination Notice and if Employee has been within the employ of
Employer for 12 continuous months from the date of the Agreement, prior to the
giving of the Termination Notice, then Employee will receive the severance
benefits equal to the lesser of (i) the Base Salary payable over the unexpired
term of this Agreement payable in equal monthly payments beginning the first
month after the date of the Termination Notice, or (ii) eighteen (18) months
Base Salary payable in eighteen (18) equal monthly payments beginning the
first month after the date of the Termination Notice.
8.2. If this Agreement is terminated by Employer for any reason
other than Good Cause after giving Employee the Termination Notice, then
Employee shall receive a severance benefit equal to the balance of the Base
Salary payable over the unexpired term of this Agreement, such benefit to be
payable in equal monthly installments beginning the first month after the date
of the Termination Notice and ending on September 18, 1999.
8.3. If this Agreement is terminated by Employer due to
Employee's disability as described in Paragraph 4.3 above after giving
Employee the Good Cause Notice, then Employee shall receive a severance
benefit of twelve (12) month's Base Salary, less any amounts payable to
Employee under any applicable disability insurance maintained by Employer for
the benefit of Employee, payable in equal consecutive monthly installments
commencing one month after the effective date of the Good Cause Notice.
8.4. If this Agreement is terminated by Employer due to the death
of the Employee after giving Employee's estate the Good Cause Notice, then
Employee's estate shall receive a death benefit of six (6) month's Base
Salary, less any benefits paid to Employee's beneficiaries under any life
insurance plan maintained by Employer for the benefit of Employee, payable in
six (6) equal monthly installments commencing one month after the effective
date of the Good Cause Notice.
8.5. If this Agreement is terminated by Employer for any reason
other than Paragraph 4.1 after giving Employee the Termination Notice, then
Employer shall cause to be paid for the unexpired term of this Agreement: (i)
Employee's COBRA medical insurance premiums, including dependent care premiums
if applicable, and (ii) insurance premiums under any life insurance plan
existing at the Termination Date pursuant to paragraph 7.6 above.
8.6 If this Agreement is terminated by Employee for any reason,
then Employee shall return to Employer the leased automobile described in
paragraph 7.5 in good condition not more than thirty (30) days from the date
of the Termination Notice. In the event the Employer terminates this
Agreement for any reason other than Paragraph 4.1 above, then Employee shall
return to Employer the leased automobile in good condition within thirty (30)
days of the Termination Date, provided however, Employee shall have the option
to notify Employer within such thirty (30) day period that Employee elects to
(i) assume the remaining term of the lease agreement, or (ii) buy out the
leased vehicle at a price equal to the residual value of the leased vehicle as
set out in the lease agreement. In the event Employee is terminated by
Employer under Paragraph 4.1 above, the leased vehicle shall be returned to
the Employer in good condition within three (3) days of the date of the Good
Cause Notice.
Notwithstanding the foregoing, Employee shall not be entitled to
any benefits under this Paragraph 8 if Employee accepts any position of
employment or consulting with a competitor of Employer's mobile data
communications business at any time within one year after the Termination Date
or effective date of the Termination Notice or Good Cause Notice. In such
case, Employer will have no further Termination Obligations under Paragraph 8
to Employee effective on the date Employee accepts any position of employment
or consulting with a mobile data competitor.
9. Representations and Warranties. Employee represents and warrants
that this Agreement will not cause or require Employee to breach any
obligation to, or agreement or confidence with, any other person.
10. Confidentiality. Employee hereby acknowledges that Employer has
made (or may make) available to Employee certain customer lists, product
design information, performance standards and other confidential and/or
proprietary information of Employer and its subsidiaries or licensed to
Employer and its subsidiaries, including without limitation trade secrets and
copyrighted materials (collectively, the "Confidential Material"). Neither
Employee nor any agent, employee, officer, or independent contractor of or
retained by Employee shall make any disclosure of this Agreement, the terms of
this Agreement, or any of the Confidential Material. Neither Employee nor any
agent, employee, officer, or independent contractor of or retained by Employee
shall make any duplication or other copy of any of the Confidential Material.
Immediately upon request from Employer, Employee shall return to Employer all
Confidential Material. Employee shall notify each person to whom any
disclosure is made that such disclosure is made in confidence, that the
Confidential Material shall be kept in confidence by such person, and that
such person shall be bound by the provisions of this Paragraph.`
11. Proprietary Information. For purposes of this Agreement,
"Proprietary Information" shall mean any information, observation, data,
written material, record, document, computer program, software, firmware,
invention, discovery, improvement, development, tool, machine, apparatus,
appliance, design, promotional idea, customer list, practice, process,
formula, method, technique, trade secret, product and/or research related to
the actual or anticipated research, development, products, organization,
business or finances of Employer (or any of its affiliates). All right, title
and interest of every kind and nature whatsoever in and to the Proprietary
Information made, discussed, developed, secured, obtained or learned by
Employee during the term of this Agreement, or the 60-day period immediately
following termination of this Agreement, shall be the sole and exclusive
property of Employer for any purposes or uses whatsoever, and shall be
disclosed promptly by Employee to Employer. The covenants set forth in the
preceding sentence shall apply regardless of whether any Proprietary
Information is made, discovered, developed, secured, obtained or learned
(a) solely or jointly with others, (b) during the usual hours of work or
otherwise, (c) at the request and upon the suggestion of Employer or
otherwise, or (d) with Employer's materials, tools, instruments or on
Employer's premises or otherwise. All Proprietary Information developed,
created, invented, devised, conceived or discovered by Employee that are
subject to copyright protection are explicitly considered by Employee and
Employer to be works made for hire to the extent permitted by law. Employee
hereby assigns to Employer all of Employee's right, title and interest in and
to the Proprietary Information. Employee hereby forever fully releases and
discharges Employer, any affiliates of Employer and their respective officers,
directors and employees, from and against any and all claims, demands,
damages, liabilities, costs and expenses of Employee arising out of, or
relating to, any Proprietary Information. Employee shall execute any
documents and take any action Employer may deem necessary or appropriate to
effectuate the provisions of this Agreement, including without limitation
assisting Employer in obtaining and/or maintaining patents, copyrights or
similar rights to any Proprietary Information assigned to Employer, if
Employer, in its sole discretion, requests such assistance. Employee shall
comply with any reasonable rules established from time to time by Employer for
the protection of the confidentiality of any Proprietary Information.
Employee irrevocably appoints the Chief Executive Officer of Employer to act
as Employee's agent and attorney-in-fact to perform all acts necessary to
obtain and/or maintain patents, copyrights and similar rights to any
Proprietary Information assigned by Employee to Employer under this Agreement
if (a) Employee refuses to perform those acts, or (b) is unavailable, within
the meaning of any applicable laws. Employee acknowledges that the grant of
the foregoing power of attorney is coupled with an interest and shall survive
the death or disability of Employee. Employee shall promptly disclose to
Employer, in confidence (a) all Proprietary Information that Employee creates
during the term of this Agreement, and (b) all patent applications filed by
Employee within one year after termination of this Agreement. Any application
for a patent, copyright registration or similar right filed by Employee within
one year after termination of this Agreement shall be presumed to relate to
Proprietary Information created by Employee during the term of this Agreement,
unless Employee can prove otherwise. Nothing contained in this Agreement
shall be construed to preclude Employer from exercising all of its rights and
privileges as sole and exclusive owner of all of the Proprietary Information
owned by or assigned to Employer under this Agreement. Employer, in
exercising such rights and privileges with respect to any particular item of
Proprietary Information, may decide not to file any patent application or any
copyright registration on such Proprietary Information, may decide to maintain
such Proprietary Information as secret and confidential, or may decide to
abandon such Proprietary Information or dedicate it to the public. Employee
shall have no authority to exercise any rights or privileges with respect to
the Proprietary Information owned by or assigned to Employer under this
Agreement. This Agreement does not apply to any Proprietary Information that
qualifies fully under the provisions of California Labor Code Section 2870 or
any similar or successor statute.
12. Competition. During the term of this Agreement, Employee shall not
own an interest in, operate or participate in, or be connected as an officer,
director, employee, agent, independent contractor, partner, shareholder or
principal of any business entity or person producing, designing, providing,
soliciting orders for, selling, distributing, or marketing products, goods,
equipment and/or services which compete with Employer's products, goods,
equipment and/or services. To the extent permitted by applicable law, for one
year following termination of this Agreement, Employee shall not undertake any
employment or activity competitive with Employer's business, including without
limitation the inducement or solicitation of Employer's customers, if the
duties or work of, in connection with or related to such competitive
employment or activity would or might cause Employee to reveal or use any
Proprietary Information.
13. Injunctive Relief. Each of Employer and Employee hereby
acknowledge (a) the unique nature of the provisions set forth in the Paragraph
of this Agreement entitled "Confidentiality," "Proprietary Information," and
"Competition," (b) that Employer will suffer irreparable harm if Employee
breaches any of such provisions, and (c) that monetary damages will be
inadequate to compensate Employer for such breach. Therefore, if Employee
breaches any of such provisions, then Employer shall be entitled to injunctive
relief (in addition to any other remedies at law or equity) to enforce such
provisions.
14. Survival. The representations, warranties and covenants of
Employee in this Agreement shall survive any termination of this Agreement.
15. Governing Law. This Agreement is governed by and construed in
accordance with the laws of the State of California, irrespective of
California's choice-of-law principles.
16. Further Assurances. Each party to this Agreement shall execute and
deliver all instruments and documents and take all actions as may be
reasonably required or appropriate to carry out the purposes of this
Agreement.
17. Venue and Jurisdiction. All actions and proceedings arising in
connection with this Agreement must be tried and litigated exclusively in the
State and Federal courts located in the County of San Diego, State of
California, which courts have personal jurisdiction and venue over each of the
parties to this Agreement for the purpose of adjudicating all matters arising
out of or related to this Agreement. Each party authorizes and accepts
service of process sufficient for personal jurisdiction in any action against
it as contemplated by this paragraph by registered or certified mail, return
receipt requested, postage prepaid, to its address for the giving of notices
set forth in this Agreement.
18. Counterparts and Exhibits. This Agreement may be executed in
counterparts, each of which is deemed an original and all of which together
constitute one document. All exhibits attached to and referenced in this
Agreement are incorporated into this Agreement.
19. Attorney's Fees. The prevailing party(ies) in any litigation,
arbitration, mediation, bankruptcy, insolvency or other proceeding
("Proceeding") relating to the enforcement or interpretation of this Agreement
may recover from the unsuccessful party(ies) all costs, expenses, and actual
attorney's fees (including expert witness and other consultants' fees and
costs) relating to or arising out of (a) the Proceeding (whether or not the
Proceeding proceeds to judgment), and (b) any post-judgment or post-award
proceeding including, without limitation, one to enforce or collect any
judgment or award resulting from the Proceeding. All such judgments and
awards shall contain a specific provision for the recovery of all such
subsequently incurred costs, expenses, and actual attorney's fees.
20. Modification. This Agreement may be modified only by a contract
in writing executed by the party to this Agreement against whom enforcement of
the modification is sought.
21. Headings. The paragraph headings in this Agreement: (a) are
included only for convenience, (b) do not in any manner modify or limit any of
the provisions of this Agreement, and (c) may not be used in the
interpretation of this Agreement.
22. Prior Understandings. This Agreement and all documents
specifically referred to and executed in connection with this Agreement: (a)
contain the entire and final agreement of the parties to this Agreement with
respect to the subject matter of this Agreement, and (b) supersede all
negotiations, stipulations, understandings, agreements, representations and
warranties, if any, with respect to such subject matter, which precede or
accompany the execution of this Agreement.
23. Interpretation. Whenever the context so requires in this
Agreement, all words used in the singular may include the plural (and vice
versa) and the word "person" includes a natural person, a corporation, a firm,
a partnership, a joint venture, a trust, an estate or any other entity. The
terms "includes" and "including" do not imply any limitation. For purposes of
this Agreement, the term "day" means any calendar day and the term "business
day" means any calendar day other than a Saturday, Sunday or any other day
designated as a holiday under California Government Code Sections 6700-6701.
Any act permitted or required to be performed under this Agreement upon a
particular day which is not a business day may be performed on the next
business day with the same effect as if it had been performed upon the day
appointed. No remedy or election under this Agreement is exclusive, but
rather, to the extent permitted by applicable law, each such remedy and
election is cumulative with all other remedies at law or in equity.
24. Partial Invalidity. Each provision of this Agreement is valid and
enforceable to the fullest extent permitted by law. If any provision of this
Agreement (or the application of such provision to any person or circumstance)
is or becomes invalid or unenforceable, the remainder of this Agreement, and
the application of such provision to persons or circumstances other than those
as to which it is held invalid or unenforceable, are not affected by such
invalidity or unenforceability unless such provision or the application of
such provision is essential to this Agreement.
25. Successors-in-Interest and Assigns. Employee may not voluntarily
or by operation of law assign, hypothecate, delegate or otherwise transfer or
encumber all or any part of its rights, duties or other interests in this
Agreement without the prior written consent of Employer, which consent may be
withheld in Employer's sole and absolute discretion. Any such transfer in
violation of this paragraph is void. Subject to the foregoing and any other
restrictions on transferability contained in this Agreement, this Agreement is
binding upon and inures to the benefit of the successors-in-interest and
assigns of each party to this Agreement.
26. Notices. Each notice and other communication required or
permitted to be given under this Agreement ("Notice") must be in writing.
Notice is duly given to another party upon: (a) hand delivery to the other
party, (b) receipt by the other party when sent by facsimile to the address
and number for such party set forth below (provided, however, that the Notice
is not effective unless a duplicate copy of the facsimile Notice is promptly
given by one of the other methods permitted under this paragraph), (c) three
business days after the Notice has been deposited with the United States
postal service as first class certified mail, return receipt requested,
postage prepaid, and addressed to the party as set forth below, or (d) the
next business day after the Notice has been deposited with a reputable
overnight delivery service, postage prepaid, addressed to the party as set
forth below with next-business-day delivery guaranteed, provided that the
sending party receives a confirmation of delivery from the delivery-service-
provider.
To: CODED COMMUNICATIONS CORPORATION
0000 Xxxxxxx Xxxx Xxx
Xxxxxxxx, XX 00000
(000) 000-0000 -- (Telecopy)
To: Xxxx X. Xxxxxxxx, Xx.
0000 Xxxxx Xxxx
Xxxxx, XX 00000
Each party shall make a reasonable, good faith effort to ensure that it will
accept or receive Notices to it that are given in accordance with this
paragraph. A party may change its address for purposes of this paragraph by
giving the other party(ies) written notice of a new address in the manner set
forth above.
27. Waiver. Any waiver of a default or provision under this Agreement
must be in writing. No such waiver constitutes a waiver of any other default
or provision concerning the same or any other provision of this Agreement. No
delay or omission by a party in the exercise of any of its rights or remedies
constitutes a waiver of (or otherwise impairs) such right or remedy. A
consent to or approval of an act does not waive or render unnecessary the
consent to or approval of any other or subsequent act.
28. Drafting Ambiguities. Each party to this Agreement has reviewed
and revised this Agreement and has had the opportunity to have such party's
legal counsel review and revise this Agreement. The rule of construction that
ambiguities are to be resolved against the drafting party or in favor of the
party receiving a particular benefit under an agreement may not be employed in
the interpretation of this Agreement or any amendment to this Agreement.
29. Third Party Beneficiaries. Nothing in this Agreement is intended
to confer any rights or remedies on any person or entity other than the
parties to this Agreement and their respective successors-in-interest and
permitted assignees, unless such rights are expressly granted in this
Agreement to another person specifically identified as a "Third Party
Beneficiary."
30. ARBITRATION OF DISPUTES. ANY CONTROVERSY OR CLAIM RELATING TO THIS
AGREEMENT SHALL BE SETTLED IN SAN DIEGO, CALIFORNIA BY ARBITRATION IN
ACCORDANCE WITH THE NATIONAL RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES
OF THE AMERICAN ARBITRATION ASSOCIATION, AND JUDGMENT UPON THE AWARD RENDERED
BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE
ARBITRATOR(S) SHALL NOT HAVE THE AUTHORITY TO AWARD PUNITIVE DAMAGES AGAINST
ANY PARTY(IES) TO THIS AGREEMENT.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THIS AGREEMENT DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE
DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW
YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL. IF YOU REFUSE
TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE
COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
OUT OF THIS AGREEMENT TO NEUTRAL ARBITRATION.
Employer's Initials: ________ Employee's Initials: __________
31. Receipt of Copy. Employee hereby acknowledges that it has received
a signed copy of this Agreement.
EMPLOYEE:
_____________________________________
Xxxx X. Xxxxxxxx, Xx.
EMPLOYER:
CODED COMMUNICATIONS CORPORATION,
a Delaware corporation
By: ___________________________________________
Xxxx Xxxxx, President and Chief Executive Office
Exhibit A
Position Description
POSITION TILE: President of Decom Systems, Inc.
POSITION REPORTS TO: Chief Executive Officer.
FUNCTION: As President, shall have general active charge
and control over the business and affairs of
Decom Systems, Inc. (the "Corporation"), subject
to the Chief Executive Officer. Is responsible
for directing the organization with the
objective of generating the maximum profit and
return on invested capital over the long-term.
Represents the Corporation with its major
customers and suppliers.
ETHICS AND VALUES: Performs all job responsibilities and conducts all business
relationships, both internal and external, in
concert with the ethical standards of the
Corporation's stated policies and values.
RESPONSIBILITIES AND JOB DUTIES:
1. With the advice of senior members of management and other resources,
develops basic objectives and business plans; has these approved by the
Chief Executive Officer.
2. Ensures that corporate policies are properly interpreted and administered
by subordinates; reviews and approves proposed internal policies with the
Vice President of Administration or other applicable Corporate officers.
3. Directs the preparation of adequate plans for the future development and
growth of the Corporation, periodically presents such plans to the Chief
Executive Officer for approval.
4. At specific times, presents operation and capital expenditure budgets for
review and approval by the Chief Executive Officer.
5. With the senior members of management, analyzes operating results of the
Corporation and operating units relative to established objectives and
ensures that appropriate action is taken to correct unsatisfactory
conditions.
6. Establishes the specific limitation of authority of subordinates regarding
policies, contractual commitments, corporate assets, expenditures and
personnel actions, with the concurrence of the Vice President Finance.
A-1
