EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement") is made and
entered into by and between Worldwide Wireless Systems Inc., a Delaware
Corporation (the "Company") and Xxxxx X. Xxxxxx (the "Executive").
N O W , T H E R E F O R E ,
In consideration of the mutual covenants and agreements herein set
forth, the parties hereby agree as follows:
Section 1. Employment. The Company hereby agrees to employ the
Executive as its Executive Vice President and COO, and the Executive hereby
accepts such employment in accordance with the terms of this Agreement and the
terms of employment applicable to regular employees of the Company. In the event
of any conflict or ambiguity between the terms of this Agreement and terms of
employment applicable to regular employees, the terms of this Agreement shall
control.
Section 2. Duties of Executive. In his capacity as Executive Vice
President and COO, the Executive shall have overall responsibility for the
operations of the Company. The Executive shall further perform such other duties
and projects as may be assigned by a superior officer.
The Executive shall devote his entire productive time, ability and
attention to the business of the Company and shall perform all duties in a
professional, ethical and businesslike manner. The Executive will not, during
the term of this Agreement, directly or indirectly engage in any other business,
either as an employee, employer, consultant, principal, officer, director,
advisor, or in any other capacity, either with or without compensation, without
the prior written consent of the Company.
Section 3. Compensation. The Executive will be paid compensation during
this Agreement as follows:
a. Base Salary. A base salary of sixty two thousand dollars ($62,000)
per year until completion of an initial public offering by the
Company or six months after the effective date of this Agreement,
whichever occurs first, and thereafter one hundred five thousand
dollars ($105,000) per year, payable in installments according to
the Company's regular payroll schedule. The Executive's base salary
shall be increased to $125,000 per annum in calendar year 2000
provided the Company's wireless cable related revenues in calendar
year 1999 total at least $800,000, and will increase to $150,000
per annum in calendar year 2001 provided such revenues in calendar
year 2000 total at least $1,500,000.
b. Stock Options. The Executive shall receive options to purchase
165,000 shares of the Company's Common Stock at an exercise price
equal to the current fair market value thereof. The options will
vest ratably to permit the exercise of options to purchase 33,333
shares (as well as the exercise of previously exercisable options)
in each calendar year commencing with calendar year 1999, will
expire ten years after grant, and will be subject to the terms and
conditions of a stock option plan to be adopted by the Company.
Unless otherwise agreed by the Executive or the Executive causes
such options to be ineligible for such classification, the Company
shall cause such
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options to qualify as incentive stock options pursuant to Section
422 of the Internal options to qualify as incentive stock options
pursuant to Section 422 of the Internal Revenue Code.
Section 4. Benefits.
a. Holidays. The Executive will be entitled to at least eight (8) paid
holidays each calendar year and two (2) personal days. The Company
will notify the Executive on or about the beginning of each
calendar year with respect to the holiday schedule for the coming
year. Personal holidays, if any, will be scheduled in advance
subject to requirements of the Company. Such holidays must be taken
during the calendar year and cannot be carried forward into the
next year. The Executive will not be entitled to any personal
holidays during the first six months of employment.
b. Vacation. Following the first six months of employment, the
Executive shall be entitled to twenty one (21) paid vacation days
each year.
c. Sick Leave. The Executive shall be entitled to sick leave and
emergency leave according to the regular policies and procedures of
the Company. Additional sick leave or emergency leave over and
above paid leave provided by the Company, if any, shall be unpaid
and shall be granted at the discretion of the board of directors.
d. Medical and Group Life Insurance. The Company agrees to include the
Executive in the group medical and hospital plan of the Company and
provide group life insurance for the Executive at no charge to the
Executive in the amount equal to three times base salary during
this Agreement. The Executive shall be responsible for payment of
any federal or state income tax imposed upon these benefits.
e. Pension and Profit Sharing Plans. The Executive shall be entitled
to participate in any pension or profit sharing plan or other type
of plan adopted by the Company for the benefit of its officers
and/or regular employees.
f. Expense Reimbursement. The Executive shall be entitled to
reimbursement for all reasonable expenses, including travel and
entertainment, incurred by the Executive in the performance of the
Executive's duties. The Executive will maintain records and written
receipts as required by the Company policy and reasonably requested
by the board of directors to substantiate such expenses.
Section 5. Term and Termination; Confidentiality; Non-Competition.
a. Term. The Initial Term of this Agreement shall commence on August
18, 1998 and shall continue in effect through December 31, 2001.
Thereafter, the Agreement shall be renewed upon the mutual
agreement of the Executive and the Company. This Agreement and the
Executive's employment may be terminated at the Company's
discretion during the Initial Term, provided that the Company shall
pay to the Executive an amount equal to payment at the Executive's
base salary rate for the remaining period of the Initial Term, plus
an amount equal to One Hundred percent (100%) of the Executive's
annual base salary in effect at the time of termination. In
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the event of such termination, the Executive shall be entitled to
any incentive salary the event of such termination, the Executive
shall be entitled to any incentive salary payment or any other
compensation then in effect, prorated or otherwise.
b. Termination by the Company. This Agreement and the Executive's
employment may be terminated by the Company at its discretion after
the initial term, provided that the Company shall pay to the
Executive an amount equal to Seventy Five percent (75%) of the
Executive's then applicable annual base salary. In the event of
such a discretionary termination, the Executive shall be entitled
to receive any incentive salary payment or any other compensation
then in effect, prorated or otherwise.
c. Termination by the Executive. This Agreement may be terminated by
the Executive at the Executive's discretion by providing at least
thirty (30) days prior written notice to the Company. In the event
of termination by the Executive pursuant to this subsection, the
Company may immediately relieve the Executive of all duties and
immediately terminate this Agreement, provided that the Company
shall pay the Executive at the then applicable annual base salary
rate to the termination date included in the Executive's original
termination notice which shall not exceed thirty (30) days without
the prior consent of the Company.
d. Termination for Breach. In the event that the Executive is in
breach of any material obligation owed the Company in this
Agreement, habitually neglects the duties to be performed under
this Agreement, engages in any conduct which is dishonest, damages
the reputation or standing of the Company, or is convicted of any
criminal act or engages in any act of moral turpitude, then the
Company may terminate this Agreement upon five (5) days notice to
the Executive. In event of termination of the agreement pursuant to
this subsection, the Executive shall be paid only at the then
applicable base salary rate up to and including the date of
termination. The Executive shall not be paid any incentive salary
payments or other compensation, prorated or otherwise.
e. Acquisition. In the event the Company is acquired, or is the
non-surviving party in a merger, or sells all or substantially all
of its assets, this Agreement shall not be terminated and the
Company agrees to use its best efforts to ensure that the
transferee or surviving company is bound by the provision of this
Agreement.
f. Confidential Information. The Executive agrees that during the term
of employment the Executive will become privy to confidential
information at both clients of the Company and the Company itself.
The Executive agrees that all work product, as defined below, in
any form (the "Work Product"), created by the Executive while
employed by the Company (or created upon or after termination of
employment with the Company in the event that the Executive
breaches this paragraph or paragraph 5(g) of this Agreement) is the
exclusive property of the Company, or of the client of the Company
in instances when the Company is engaged in contracts which
specifically vest ownership of such work product in the Company's
client. For purposes of this Agreement, Work Product means all of
the work, materials and products created for or on behalf of the
Company in whole or part by the Executive or others (whether or not
the particular work, materials and/or products are ever completed
and whether or not they were developed by the Executive in
conjunction with others), including but
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not limited to (i) computer software (in object code, source code
and commented source code form), (ii) all flow charts and
technical, design, functional and other specifications therefore,
(iii) all graphical user interface(s), date of display(s) and
screen display(s) of such software, (iv) all documentation for such
software, (v) all sound recording, pictorial, graphic, audio/visual
and/or literary works and all other art, designs and technology
(including icons) incorporated in such documentation or
incorporated or generated by such software, and (vi) all
enhancements, modifications, alterations, improvements,
corrections, revisions, upgrades, new versions of and other changes
to computer software, documentation and other works and materials
including those set forth above. In no case shall Executive own any
copyrights to software or other product developed or acquired while
employed by the Company. The Executive agrees that during the term
of his employment by the Company and thereafter, he shall not copy,
permit access by, or divulge to any other person, firm, partnership
or corporation any customer lists or records, marketing plans,
financial statements, development plans, trade secrets, software,
proprietary information or product information of the Company which
the Company may impart to the Executive or which the Executive may
acquire (including confidential information obtained by the
Executive while working with, at, or for clients of the Company)
during his employment by the Company ("Information"), except to the
extent the Executive is specifically authorized by the Company to
do so; and he shall not use any Information for any purpose other
than the performance of services on behalf of the Company. In
addition, the Executive also agrees to honor any and all
confidentiality agreements entered into with clients of the Company
whether signed by the Executive or by the Company on behalf of the
Executive. The Executive agrees that upon termination of his
employment by the Company at any time and for any reason, he shall
immediately return to the Company all materials and/or documents
bearing the Company name, as well as any Work Product, Information
and all copies thereof in his possession or under his control.
g. Non-Disclosure; Non-Competition Agreement. The Executive agrees
that any knowledge or information gained through access to the
Company's clients, contacts or liaisons is proprietary and may not
be used to compete with the Company. The Executive agrees not to
solicit employment or consulting arrangements from or with any
clients of the Company while employed by the Company or while
subject to the non-competition provisions set forth herein without
the consent of the Company which may be withheld in its sole
discretion. Without the Company's prior written approval, the
Executive agrees that during the term of his employment by the
Company, he shall not directly or indirectly work for, advise, be a
consultant to, or otherwise participate in any business which sells
any product or services which compete in any way with those
provided by the Company (including, but not limited to, the
development or sale of Internet services, Internet products,
software, support, technical service, or consulting services in the
Internet services business) similar to those sold by the Company
and which might reasonably be expected to compete in any way with
the Company, or with any Company product or system. If this
Agreement is terminated by the Executive pursuant to Paragraph 1(c)
or by the Company pursuant to Paragraph 1(d), the covenant
described in the immediately preceding sentence shall extend for
one (1) year after termination of employment. It is of the essence
of this Agreement that, in addition to all other rights and
remedies of the Company hereunder, the Company,
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following termination of the Executive's employment, is entitled to
following termination of the Executive's employment, is entitled to
a total period of twelve (12) months during which the Executive
does not compete with the Company. Accordingly, the date on which
the non-competition restriction otherwise would expire shall be
extended by one (1) full week for each week or any portion thereof
during which the Executive shall have failed in whole or in any
part to honor and abide by the terms and provisions of this
paragraph.
h. Remedies on Default of Paragraphs 5(f) and 5(g). If the Employee
breaches the provisions of paragraphs 5(f) or 5(g) of this
Agreement, the Company shall have the right to institute such legal
proceedings as it deems necessary to prevent further breach of this
Agreement, including, without limitation, an action for injunctive
or equitable relief, and to recover damages for any past breach. In
the event that the Company brings an action for equitable or
injunctive relief, the Executive agrees not to assert that the
Company has an adequate remedy at law, and hereby irrevocably
waives any such defense. If the Company prevails in those
proceedings, the Executive will pay for the Company's costs and
expenses of suit and enforcement, including reasonable attorneys'
fees. If the Executive prevails in those proceedings, the Company
will pay the Executive's costs and expenses of suit, including
reasonable attorneys' fees.
Section 6. Notices. Any notice required by this Agreement or given in
connection with it, shall be in writing and shall be given to the appropriate
party by personal delivery or by certified mail, postage prepaid, or recognized
overnight delivery services;
If to the Company: Worldwide Wireless Systems Inc.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Executive: Xxxxx X. Xxxxxx
XXX 00, Xxx 00
Xxxxxxx, Xxxxxxx 00000
Section 7. Final Agreement. This Agreement terminates and supersedes
all prior understandings or agreements on the subject matter hereof. This
Agreement may be modified only by a further writing that is duly executed by
both parties.
Section 8. Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the state of New York.
Section 9. Headings. Headings used in this Agreement are provided for
convenience only and shall not be used to construe meaning or intent.
Section 10. No Assignment. Neither this Agreement nor any or interest
in this Agreement may be assigned by the Executive without the prior express
written approval of the Company, which may be withheld by the Company at the
Company's absolute discretion.
Section 11. Severability. If any term, covenant or condition of this
Agreement or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement, or the
application of such term, covenant or condition to persons or
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circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law.
Section 12. Arbitration. The parties agree that they will use their
best efforts to amicably resolve any dispute arising out of or relating to this
Agreement. Any controversy, claim or dispute that cannot be so resolved shall be
settled by final binding arbitration in accordance with the rules of the
American Arbitration Association and judgment upon the award rendered by the
arbitrator or arbitrators may be entered in any court having jurisdiction
thereof. Any such arbitration shall be conducted in New York, NY, or such other
place as may be mutually agreed upon by the parties. Within fifteen (15) days
after the commencement of the arbitration, each party shall select one person to
act as arbitrator, and the two arbitrators so selected shall select a third
arbitrator within ten (10) days of their appointment. Each party shall bear its
own costs and expenses and an equal share of the arbitrator's expenses and
administrative fees of arbitration.
Section 13. Superseding Prior Agreements. This Agreement supersedes all
prior agreements related to the Executive's employment by the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 17th day of August, 1998.
Worldwide Wireless Systems Inc.
By: /s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxx
President and CEO
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