EMPLOYMENT AGREEMENT
with
Xxxxxxx Xxxxxxxxxx
AGREEMENT entered into as of the 29th day of September 2000 between
Xxxxxxx Xxxxxxxxxx (the "Employee") and Ambient Corporation, a Delaware
corporation ("Ambient" or the "Company").
W I T N E S S E T H
WHEREAS, the Company desires to engage the Employee for the Company upon
the terms and conditions contained herein; and
NOW THEREFORE, in consideration of the premises and mutual agreements
hereinafter contained, the parties hereto agree as follows:
1. Engagement & Duties
1.1 With effect from the effective date (as defined in Section 2), the
Company employs Employee and Employee accepts employment with the Company as its
Chief Financial Officer, upon the terms and conditions set forth herein. The
Employee shall perform faithfully and diligently the duties customarily
performed by persons in the position for which Employee is engaged. Employee
shall devote Employee's full business time and efforts to rendition of such
services and to the performance of such duties as are set forth herein.
The Employee shall further have such duties and responsibilities
commensurate with his position as may be assigned to him from time to time by
the Company.
1.2 The Employee's authority shall be subject to the authority of the
Chief Executive Officer to whom the Employee shall report.
1.3 The Parties acknowledge and agree that the nature of the Employee's
duties hereunder will also require substantial domestic and possible
international travel.
2. Term
2.1 Employee's employment under this Agreement shall be deemed to have commenced
on September 15, 2000 (the "Effective Date") and shall end on the earlier of:
(i) the death or disability (as defined herein ) of the Employee, (ii)
termination of Employee's employment with cause (as defined herein); (iii)
termination by the Company without cause upon two (2) months prior written
notice; (iv) two (2) years from the date
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of this Agreement. After the expiration of such initial term (other than for
reasons set forth in clauses (i), (ii) and (iii), this Agreement shall
automatically renew (unless either party gives notice of its intention to
terminate this Agreement at the end of such term at least 60 days prior to the
end of such term) for additional one year terms without the need for any action
by the parties.
Notwithstanding the foregoing, in the event that Company shall have
terminated this Agreement without cause, upon the request of the Company the
Employee shall vacate his position and the premises on a date specified by the
Company which is earlier than the end of the notice period specified in (iii)
above upon payment to Employee, in one lump sum on the effective date of
termination, the amount of Gross Salary payable under Section 3.1 from the
effective date of termination until the end of such notice period.
2.2 For the purpose of this paragraph 2, "disability" shall mean any
physical or mental illness or injury as a result of which Employee remains
absent from work for a period of two (2) successive months, or an aggregate of
two (2) months in any twelve (12) month period. Disability shall occur at the
end of any such period.
2.3 The Company shall have the right to terminate for "Cause" upon notice
to the Employee only in the event of (a) a failure by the Employee substantially
to perform his duties hereunder, or (b) a failure by the Employee to
substantially comply with the lawful and proper instructions of the Chief
Executive Officer or the Board, or (c) Employee's illegal or unethical acts or
conduct which causes material harm or loss to the Company or otherwise brings
notoriety to the Company or has a material adverse effect on the name or public
image of the Company, provided, however that with respect to clauses (a), (b)
and (c) the foregoing shall not constitute "Cause" if Employee, after being
notified in writing by the Company of the particular acts or circumstances of
such material breach, cures such failure within 30 days after receipt of such
notice (if such failure is reasonably susceptible to cure).
2.4 During the period following notice of termination until the effective
date of termination by either party for whatever reason, the Employee shall
cooperate with the Company and use his best efforts to assist the integration
into the Company the person or persons who will assume the Employee's
responsibilities.
2.5 Upon termination for cause, Employee shall be entitled to the
compensation set forth as Gross Salary herein, prorated to the effective date of
such termination and stock options which have vested under section 4, as full
compensation for any and all claims of Employee under this Agreement.
2.6 If this Agreement and the employment hereunder is terminated by the
Company for any reason other than "Cause", then Employee shall be entitled to a
cash payment equal to Employee total annual Gross Salary then payable as of the
date of termination payable in one lump-sum within 10 days following the
effective date of termination.
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3. Remuneration
Salary. During the term hereof, and subject to the satisfactory
performance of the services required to be performed hereunder by Employee, the
Company shall pay to the Employee for all services rendered hereunder as salary
for the period from the Effective Date through the first anniversary thereof,
payable in accordance with the Company's normal payroll practices, the amount of
$135,000 per annum (the "Gross Salary"), less required deductions for state and
federal withholding tax, social security and other employee taxes. For the
period commencing on the fist anniversary of the Effective Date and continuing
through the scheduled expiration of the employment hereunder, the Gross Salary
shall be increased to $155,000 per annum.
4. Stock Options
4.1 As additional consideration, upon (and subject to) the adoption by the
Company's stockholders of a new company stock option incentive plan, the Company
shall cause to be issued to the Employee options to purchase up to 240,000 of
the Company's Common Stock (the "Options"), of which options for 90,000 shares
shall be fully vested on issuance and exercisable at an exercise price per share
of $1.00 and options for 75,000 shares shall vest on the first anniversary of
the Effective Date and options for the remaining 75,000 shares shall vest on the
second anniversary of the Effective Date, in each case at an exercise price per
share of $2.00, subject to Employee's continuing employment hereunder. The terms
of such options shall be reflected in a separate option agreement to be entered
into by the parties.. The Company represents to the Employee that it intends to
file under the Securities Act of 1933, as amended, a registration statement on
Form S-8 respecting the resale of common stock issuable under such company stock
option incentive plan.
4.1.1 . If during the term of this agreement Employer issues shares
of its common stock ("Common Stock"), Employee shall be entitled to
receive additional options to purchase shares of Common Stock at a price
to be determined by the Board of Directors and in an amount necessary to
maintain Employee's fully diluted percentage ownership of the issued and
outstanding shares of Common Stock had the Option granted pursuant to this
Section 4.1 been exercised upon its grant.
4.2 In the event of a "Change in Control" whereby:
(i) A person (other than a person who is an officer or a director of the
Company on the Effective Date), including a "group" as defined in Section 13 of
the Securities Exchange Act of 1934, becomes, or obtains the right to become,
the beneficial owner of Company securities having 30% or more of the combined
voting power of the then outstanding securities of the Company that may be cast
for the election of Company directors;
(ii) Company consummates a merger in which it is not the surviving entity;
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(iii) substantially all of the Company's assets are sold; or
(iv) Company's stockholders approve the dissolution or liquidation of the
Company,
then, all stock options, warrants and stock appreciation rights, including the
Options ("Rights"), granted by the Company to Employee under any plan prior to
the effective date of the Change in Control, shall become vested, accelerate and
become immediately exercisable at an exercise price per share of $0.01, adjusted
for any stock splits and capital reorganizations having a similar effect,
subsequent to the effective date hereof.
5. Fringe Benefits.
5.1 Vacation. Employee shall be entitled to an aggregate of 15 business
days of paid vacation per year, during the term hereof, prorated for any portion
of a year to date of termination. The timing and duration of any vacation shall
be as agreed upon by the parties. In addition to the foregoing, the Employee
shall be entitled to paid vacation for the following legal holidays in the
United: New Year's, President's Day, Memorial Day, July 4, Labor Day,
Thanksgiving Day (Thursday and Friday), and Christmas; and during the holidays
of Rosh Hashana, Yom Kippur, first two days and last two days of Succot,
Passover and Shavuot.
5.2 No Accumulation. The Employee shall not be entitled to accumulate
unused vacation or sick leave or other fringe benefits from year to year without
the written consent of the Company. Further, Employee shall not be entitled to
receive payments in lieu of any compensation or payment for or in lieu of said
fringe benefits prorated to the date of termination of this Agreement.
6. Development Rights
The Employee agrees and declares that all proprietary information
including but not limited to trade secrets, know-how, patents and other rights
in connection therewith developed by or with the contribution of Employee's
efforts during his employment with the Company shall be the sole property of the
Company. Upon the Company's request (whenever made), Employee shall execute and
assign to the Company all the rights in the proprietary information.
7. Employee Representations
The Employee represents and warrants to the Company that the execution and
delivery of this Agreement and the fulfillment of the terms hereof (i) will not
constitute a breach of any agreement or other instrument to which Employee is
party, (ii) does not require the consent of any person, and (iii) shall not
utilize during the term of his employment any proprietary information of any
third party, including prior employers of the Employee.
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8. Confidentiality
8.1 The term "Information" as used in this section means any and all
confidential and proprietary information including but not limited to any and
all specifications, formulae, prototypes, software design plans, computer
programs, and any and all records, data, methods, techniques, processes and
projections, plans, marketing information, materials, financial statements,
memoranda, analyses, notes, and other data and information (in whatever form),
as well as improvements and know-how related thereto, relating to the Company or
its products. Information shall not include information that (a) was already
known to or independently developed by the Employee prior to its disclosure as
demonstrated by reasonable and tangible evidence satisfactory to the Company;
(b) shall have appeared in any printed publication or patent or shall have
become part of the public knowledge except as a result of breach of this
Agreement by the Employee or similar agreements by other Company employees (c)
shall have been received by the Employee from another person or entity having no
obligation to the Company or (d) is approved in writing by the Company for
release by the Employee.
8.2 The Employee agrees to hold in trust and confidence all Information
disclosed to Employee and further agrees not to exploit or disclose the
Information to any other person or entity or use the Information directly or
indirectly for any purpose other than for Employee's work with the Company.
8.3 The Employee agrees to disclose the Information only to persons
necessary in connection with Employee's work with the Company and who have
undertaken the same confidentiality obligations set forth herein in favor of the
Company. The Employee agrees to assume full responsibility for the
confidentiality of the Information disclosed to Employee and to prevent its
unauthorized disclosure, and shall take appropriate measures to ensure that such
persons acting on his behalf are bound by a like covenant of secrecy.
8.4 The Employee acknowledges and agrees that the Information furnished
hereunder is and shall remain proprietary to the Company. Unless otherwise
required by statute or government rule or regulation, all copies of the
Information, shall be returned to the Company immediately upon request without
retaining copies thereof.
9. Non-Compete.
9.1 Employee will not, directly or indirectly, for his own account or as
an employee, officer, director, consultant, joint venturer, shareholder,
investor, or otherwise ( except of as an investor in a corporation whose stock
is publicly traded and in which the Employee holds less than 5% of the
outstanding shares) interest him/herself or engage, directly or indirectly, in
the design, development, production, sale or distribution of any product or
component that directly or indirectly competes with a product or component (i)
being designed, produced, sold or distributed by the Company or any of its
affiliates (ii) or to which the Company or any of its affiliates shall then have
proprietary rights;
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provided such affiliates operate in a field directly related to the business of
the Company or involve distribution or promoting of the Company's products or
technology.
9.2 Employee will not hire or otherwise contract the services of, whether
directly or indirectly (i) an employee of the Company (ii) a former employee of
the Company whose employment with the Company ended less than six months prior
to the date of such hiring, or (iii) any corporation or entity in which such
employee or former employee is an officer, director or shareholder holding 25%
of the equity or is employed providing service to that corporation or entity.
9.3 Employee's undertakings herein under section 9 shall be binding upon
Employee's successors, heirs or assigns, and shall continue until the later of
(i) the expiration of one year from the date of execution of this Agreement or
(ii) the expiration of one year from the date the Employee last represented
him/herself as an employee, agent or representative of the Company or any of its
affiliates, subsidiaries or successors.
9.4 Employee acknowledges that the restricted period of time specified
under this section 9 are reasonable, in view of the nature of the business in
which the Company is engaged and Employee's knowledge of the Company's business
and products. If such a period of time or geographical location should be
determined to be unreasonable in any judicial proceeding, then the period of
time and area of restriction shall be reduced so that this Agreement may be
enforced in such an area and during such a period of time as shall be determined
to be reasonable by such judicial proceeding.
10. Miscellaneous
10.1 Benefit & Assignment This Agreement shall inure to the benefit of and
be binding upon the Company, its successors and assigns. The rights and
obligations of the Employee under this Agreement may not be assigned by the
Employee.
10.2 Entire Agreement This Agreement constitutes the entire understanding
and agreement between the parties, and supersedes any and all prior discussions
and agreements and correspondence, and may not be amended or modified in any
respect except by a subsequent writing executed by both parties.
10.3 Notices All notices or other communications hereunder shall be in
writing and shall be sent to either party by hand or by Registered or Certified
mail, postage prepaid, return receipt requested, or sent by telegram or
facsimile to the address set forth in the Preamble to this Agreement or to such
other address as the recipient may designate by notice in accordance with the
provisions of this section.
10.4 Applicable Law. This Agreement shall be interpreted, governed,
construed and enforced according to the internal laws of the State of Delaware,
without giving effect to its conflict of laws provisions.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
signed as of the date stated above.
Ambient Corporation
By: s/ Xxxx X. Xxxxxxxx s/ Xxxxxxx Xxxxxxxxxx
--------------------------- -----------------------------
Title: CEO Xxxxxxx Xxxxxxxxxx
