Employment Agreement
Exhibit 10.1
This
Employment Agreement (“Agreement”) is made and
effective as of 10/4/2018 by and between Zoom Telephonics, Inc., a
Delaware company with offices currently located at 00 Xxxx Xxxxxx,
Xxxxxx, XX 00000 (the “Company”), and Xxxxxx Xxx
Xxxxxxx, an individual who resides at whose principal place of
residence is currently at (the “Executive”)
(collectively referred to herein as the
“Parties”).
WHEREAS, the Company desires to employ
Executive by engaging Executive to perform services under the terms
hereof; and
WHEREAS, Executive wishes to be employed
by the Company and provide full-time personal services to the
Company in return for the compensation and benefits detailed
herein.
Statement of Agreement
FOR AND IN CONSIDERATION of the mutual
promises and covenants set forth herein, each of the Company,
directly or through its subsidiaries, and Executive hereby agrees
to the employment of Executive on the following terms and
conditions and, except to the extent specifically superseded by
this Agreement, subject to all of the Company’s policy and
procedures regarding its employees.
1.
Employment.
1.1.
General
The
Company shall employ Executive as a full-time employee of the
Company effective as of October 29, 2018
(the “Start Date”), in the position set forth in
Section 1.2, and upon the other terms
and conditions herein provided. Executive agrees to devote his best
efforts, energies, and skill to the discharge of the
Responsibilities and Authorities set for in Section 1.3
below.
Executive shall
serve as the President and Chief Operating Officer of the Company,
with responsibilities and authority set forth in Section 1.3. Executive shall report to the CEO and,
when requested, the Board of Directors.
a)
Oversee budgets,
financial performance, staff, and other non-CEO executives in the
Company.
b)
Oversee all
contracts and commitments.
c)
Manage the Company
to achieve significant profitable growth.
d)
Manage the Company
for the benefit of its investors and employees.
e)
Work with staff,
other executives, and board members to plan & implement a
near/long term strategy for the Company.
f)
Meet with board
members and other executives to assess the direction of the Company
and ensure it is in line with the Company’s vision and
mission.
g)
Establish business
relationships with manufacturing partners and key component
suppliers.
h)
Assist Company
sales team to help increase profitable sales.
i)
Encourage business
investment as appropriate.
j)
Act as visionary
and provide leadership for the Company.
k)
Oversee complete
operation of the Company ensuring its objectives and goals are
met.
l)
Act as the face of
the Company when dealing with customers, partners, investors,
press, government, and community.
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1.4.
Primary Place of Performance
Company’s
principal executive office currently located at 00 Xxxx Xxxxxx,
Xxxxxx, XX 00000. Executive understands that the principal
executive office may change in the near future to a different
location nearby. In addition, the Company may from time to time
require Executive to travel temporarily to other domestic and
international locations on Company business.
1.5.
Term
The
term of this Agreement commences on the Start Date and continues
until employment terminates pursuant to Section 5 of this
Agreement.
2.
Compensation and Related Matters.
2.1.
Annual Base Salary
Executive shall
initially receive a base salary at the rate of US$200,000 per
annum, subject to withholdings and deductions, and paid
electronically to Executive’s designated bank accounts on a
bi-weekly basis. Annual base salary increases will be a minimum of
the prior year US inflation rate plus 2%.
2.2.
Annual Bonus
Commencing upon the
Start Date, Executive shall be entitled to performance bonuses,
determined and paid semi-annually according to the Company fiscal
year. Each bonus will be based on performance goals mutually agreed
upon by the Executive and the Company. The first semi-annual bonus
will be up to 25% of the Executive’s annual base salary, plus
any pro-rata amount, based on achievement of the mutually agreed
objectives. The second and on-going semi-annual bonus will be up to
25% of the Executive's then annual base salary, based on
achievement of mutually agreed objectives. All bonuses shall be
paid in a lump sum, subject to withholdings and deductions, and
paid electronically to Executive’s designated back
accounts.
2.3.
Signing Bonus
Executive shall be
entitled to a signing bonus in the gross amount, prior to
applicable withholding and deductions, of US$30,000 which shall be
paid by Company within 30 days of the Start Date.
2.4.
Living Expenses
While
Executive is employed by Company, Company will pay for
Executive’s lease of a fully furnished two (2) bedroom
apartment/condo near the Company’s principal office. The
total cost to Company, including furniture and utilities, will not
exceed US$8,500 per month.
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2.5.
Travel and Expenses for Personal Visits Home
While
Executive is employed by Company, Company will pay for two (2)
round-trip economy class airline tickets per month for Executive to
visit his family at his home and/or for Executive’s family
members to visit Executive in Boston. Non-use of any round-trip
economy class airline travel within a given month will be forfeited
and will not be carried forward to the subsequent
month.
2.6.
Travel and Expenses for Business Trips
Domestic and
international travel will be according to Company Travel Policy
and/or normal business travel approach for Senior Executives. For
any international non-stop airline flight greater than six (6)
hours, Executive is entitled to Business Class
accommodations.
3.
Equity Awards.
Upon or near the Executive’s Start Date, Executive will
receive an initial option grant to purchase 100,000 shares of the
Company’s common stock, at a purchase price equal to the fair
market value of the Company’s Common Stock on the date of
grant (such fair market value to be determined by the closing price
on the day prior to the date of grant ). The option will be subject
to the terms and conditions applicable to options granted under the
Company’s 2009 Stock Option Plan (the “Plan”), as
described in the Plan and the applicable option agreement Executive
will be required to sign. All shares subject to such option will
vest over two years from the grant date, the “Vesting
Commencement Date”). Twenty-five percent (25%) of the shares
subject to such option shall vest on the 6-month anniversary of the
Vesting Commencement Date and the remaining options shall vest in
equal 6-month installments over the two years. The initial stock
options will expire three years after the Vesting Commencement
Date.
3.2.
Additional Stock Option
Within 24 months of Executive’s
Start Date, Executive will receive an additional option grant to
purchase that number of shares of Company common stock calculated
by the cost per share as determined by the Black-Scholes pricing
model up to US$100,000 of Company expense totaled over the period
the expense will occur. The option will be subject to the terms,
conditions, vesting, and expiration timeframe listed above in
Section 3.1.
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4.
Benefits and Perquisites.
4.1.
Benefits
Executive shall
participate in such full-time employee and executive benefit plans
and programs as the Company may from time to time offer, subject to
the terms and conditions of such plans. Executive benefits are to
begin on the Start Date.
4.2.
Life Insurance
Company
shall pay for Executive premiums of a Term Life Insurance policy,
up to a maximum of $5,000 annually, beginning on the Start
Date.
4.3.
401(k) Savings
Executive may
participate in the Company 401(k) savings program immediately on
the Start Date.
4.4.
Paid Vacation, Sick, and Holiday
Vacation and sick
time shall be in accordance with Company policies, with four (4)
weeks’ vacation and up to six (6) days sick time per
year.
4.5.
Computer and Cell Phone
On the
Executive’s Start Date, Executive will be provided an Apple
Mac laptop, four (4) monitors, two (2) dual monitor stands, two (2)
docking stations, and printer for use in Executive’s Company
office and his apartment/condo. Monthly Executive cell phone
charges for domestic and international calling will be reimbursed
by Company.
4.6.
Liability Protection
Executive will be
protected under the Company Officer’s and Director’s
liability insurance.
4.7.
Legal Fees
Company
shall promptly reimburse or directly pay on Executive’s
behalf, attorney fees and costs incurred by the Executive in
connection with the negotiation, drafting, and finalization of this
Agreement, up to an amount not to exceed $5,000.
4.8.
Allowed Activities
Executive is
allowed to participate on non-competing company, university, and/or
non-profit organization boards while working at Company full-time,
provided that Executive shall not engage in any activity which
would reasonably be expected to interfere with the performance of
Executive’s duties, services and responsibilities for the
Company.
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5.
Termination.
5.1.
At-Will Employment
Subject
to the obligations of the Company in Section 5.2 and 5.3,
the Parties acknowledge that
Executive’s employment is and shall continue to be at-will,
as defined under applicable law. This means that it is not for any
specified period of time and can be terminated by Executive or by
the Company at any time, with or without advance
notice.
In the
event of “Change of Control” the Executive will receive
severance pay equal to six (6) months’ base salary if (a)
employment is terminated without Cause within six months after a
change-in-control, or (b) the Executive’s job
responsibilities, reporting status or compensation are materially
diminished and the named Executive leaves the employment of the
acquiring company within six months after the change-in-control. In
addition, in the event of a change-in-control of Company,
outstanding stock options granted to the Executive will become
immediately vested, with the right to be exercised at the option
xxxxx xxxxx. For purposes of this Agreement, “Change of
Control” shall mean that any person, partnership or
corporation acquires all or substantially all of the assets and
business of the Company or a majority of the voting power
represented by the equity of the Company or any successor
thereto.
If
Executive is terminated for any reason other than for Cause or
Change of Control, Executive will receive three (3) month base
salary pay to be paid in accordance with the Company’s
normally scheduled payroll and payment on a pro-rata basis of
annual bonus, and all outstanding stock options that have vested
(or that will ordinarily vest within six (6) months) will become
immediately vested and will be exercisable for a period of up to 30
days after termination.
5.4.
Voluntary Termination; For Cause Termination
If
Executive voluntarily terminates his employment with the Company or
if the Company terminates Executive’s employment for Cause,
then Executive shall not be entitled to any severance
compensation.
5.5.
Death or Disability
If this
Agreement terminates due to Executive Death or Disability, Company
shall pay Executive, or to Executive heirs or estate if applicable,
the Severance listed in Section 5.3.
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5.6.
Cause Definition
“Cause”
means, for purposes of this agreement, any of the
following:
a)
Conviction of the
Executive of a felony or any other serious crimes;
b)
Commission by the
Executive of any act of theft, fraud, breach of fiduciary duty or
gross moral turpitude;
c)
Executive’s
gross negligence or willful misconduct in the performance of his
duties;
d)
Wrongful
misappropriation by the Executive of any Company, or Company
clients, money, assets, or other property; or
e)
Any material breach
of this Agreement that remains uncured for 30 days after notice of
such breach.
6.
Executive’s Restrictive
Covenants. Executive’s
employment with the Company is conditioned upon his signing the
Company’s Intellectual Property and Confidentiality Agreement
(“IPCA”), a copy of which is attached as Exhibit A to
this Agreement.
6.1.
Non-Compete
During
the term of Executive’s employment, and for any period while
severance is being paid in accordance with Section 5.3 above,
Executive shall not either alone or as a member of a partnership or
association, or as an officer, director, advisor, consultant,
agent, or employee of any other organization, be engaged in or
concerned with any other duties or pursuits requiring
Executive’s active personal services that will conflict with
Executive’s ability or objectivity in performing
Executive’s obligations under this Agreement. For this
purpose, Competition with the business of the Company includes
supplying products or providing services to any customer or client
with which the Company has done any business during the period
commencing one year prior to the date hereof and ending on the
termination of Executive’s employment with the
Company.
6.2.
Confidential Information
During
the term of Executive’s employment and thereafter, Executive
shall not make or cause to be made any unauthorized disclosure or
other use of any confidential information regarding the Company or
any of its activities and operations, except to the extent
reasonably necessary or appropriate in connection with the
performance by Executive of Executive’s authority and
responsibility under this Agreement or as may be legally required;
provided, however, that nothing herein contained shall preclude the
use or disclosure of any information known generally to the public.
Notwithstanding the foregoing,
Executive acknowledges and understand that he or she shall not be
held criminally or civilly liable under any Federal or State trade
secret law for the disclosure of a trade secret that (A) is made
(i) in confidence to a Federal. State. or local government
official, either directly or indirectly, or to an attorney; and
(ii) solely for the purpose of reporting or investigating a
suspected violation of law; or (B) is made in a complaint or other
document filed in a lawsuit or other proceeding, if such filing is
made under seal. Also, if Executive files a lawsuit for retaliation
by an employer for reporting a suspected violation of law,
Executive may disclose the trade secret to Executive's attorney and
use the trade secret information in the court proceeding, provided
that Executive files any document containing the trade seam under
seal and does not disclose the trade secret except pursuant to
court order.
6.3.
Non-Solicitation
During
the term of Executive’s employment and for a period of one
year thereafter, Executive shall not, either alone or in
conjunction with or assistance of another person, interfere with or
harm, or attempt to interfere with or harm, the business of the
Company (or any of its subsidiaries or affiliates) by offering
employment to any person who is employed by the
Company.
6.4.
Invention Assignment
During
the term of this agreement,
Executive hereby assigns to Company all right, title, and
interest in and to any Inventions Executive develops or creates,
individually or jointly, in connection with Executive's employment
relationship with Company.
6.5.
No Disparagement
During
the term of Executive’s employment and thereafter, Executive
shall not criticize, ridicule or make any statement which
disparages or is derogatory of the Company or any person affiliated
with the Company to any third party or in any public
statement.
6.6.
No Failure to Return Property
Upon
termination of employment, Executive is to immediately surrender to
the Company possession of all Company property in Executive’s
possession or control, tangible or intangible, including without
limitation equipment, trade secrets, confidential and proprietary
information and intellectual property in whatever embodiment or
form, and all copies and other reproductions and extracts thereof,
including those prepared by Executive. Executive also agrees to
destroy any copies of such property and to permanently delete any
electronic copies thereof.
7.
Resolution of Disputes.
7.1.
Negotiation
The
Parties shall attempt in good faith to resolve any such dispute
promptly by negotiation. Either may give the other written notice
of any dispute not resolved in the normal course of business,
stating that party’s position and proceed with negotiations.
Within five (5) business days after delivery of the disputing
party's notice, the Parties shall meet at a mutually acceptable
time and place, and thereafter as often as they reasonably deem
necessary, to attempt to resolve the dispute. All reasonable
requests for information made by one party to the other will be
honored.
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7.2.
Arbitration
If any
issues in dispute are not resolved by such negotiation (or if any
party fails to participate in such negotiation), any party may, by
written notice to the other, demand that the dispute be resolved by
binding arbitration in Boston, MA, before a single arbitrator
pursuant to the national rules for the resolution of employment
disputes of the American Arbitration Association
(“AAA”). The arbitrator shall be instructed, and the
parties shall cooperate, with completing the arbitration with a
ruling, if possible, in writing on each issue in dispute within 60
days of the arbitrator’s appointment by the AAA. The
arbitrator shall have the power to award damages, equitable relief,
reasonable attorney's fees and expenses, and the fees and expenses
of the arbitrator and of the AAA, to any party. The
arbitrator’s rulings and awards shall be final and binding
upon the Parties and judgment thereon may be entered in any court
having competent jurisdiction. Unless otherwise ordered by the
arbitrator, the Company and Executive shall each pay an equal share
of the fees and expenses of the arbitrator and of the
AAA.
8.
Miscellaneous Provisions.
8.1.
Representation as to Limitations
Executive
represents and warrants that Executive is not under any contractual
or legal restraint that prevents or prohibits Executive from
entering into this Agreement or performing the duties and
obligations described in this Agreement.
8.2.
Assignment
Executive may not
assign this Agreement or any of its rights or obligations under
this Agreement without Company’s prior written consent.
Company may assign this Agreement or any of its rights and
obligations under this Agreement, effective upon written Notice to
Executive.
8.3.
Notices
Any
notice, request, claim, demand, document and other communication
hereunder to any Party shall be effective upon receipt (or refusal
of receipt) and shall be in writing and delivered personally or by
certified or registered mail, postage prepaid (or if it is sent
through any other method agreed upon by the Parties), as
follows:
a)
If to Company, at
the address set forth on the first page hereto, to the attention of
the CEO.
b)
If to Executive, at
the address set forth on the first page hereto, to the attention of
the Executive.
c)
Or at any other
address as any Party shall have specified by notice in writing to
the other Party.
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8.4.
Headings
The
headings and captions are for convenience only and shall not be
deemed to limit, construe, affect, or alter the meaning of the
underlying provisions.
8.5.
Severability
If any
provision of this Agreement is or becomes invalid, illegal, or
unenforceable in any jurisdiction for any reason, such invalidity,
illegality, or unenforceability shall not affect the remainder of
this Agreement, and the remainder of this Agreement shall be
construed and enforced as if such invalid, illegal, or
unenforceable portion were not contained herein.
8.6.
Governing Law
This
Agreement shall be construed and enforced under and in accordance
with the laws of the Commonwealth of Massachusetts without giving
effect to the conflict of law principles thereof.
IN WITNESS WHEREOF, the Parties have
duly executed this Agreement as of the date and year first above
written.
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Executive
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By:
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By:
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/s/
Xxxxx
Xxxxxxx
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/s/ Xxxxxx Xxx Wytanis
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Name: Xxxxx Xxxxxxx
Title: Chairman & CEO
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Name: Xxxxxx Xxx Wytanis
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