EXHIBIT 10.20
VARI-L COMPANY, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective August 1 2002, is made and entered into by
and between VARI-L COMPANY, INC. (the "Company") and Xxxxxxx X. Xxxxxxxxxx
("Employee").
WHEREAS, the Company wishes to engage Employee as the Company's Vice
President- of Finance and Chief Financial Officer to manage the Company's
finance and accounting as part of the Company's continuing efforts to build
shareholder value; and
WHEREAS, the Company's Board of Directors, comprised solely of
disinterested directors, has determined to provide Employee with this employment
agreement, including the severance package and other benefits provided hereby,
for the purpose of inducing Employee to accept the Vice President of Finance and
Chief Financial Officer position with the Company and to provide diligent and
efficacious services to the Company during his employment.
NOW, THEREFORE, for good and valuable consideration, the parties hereto
agree as follows:
I. EMPLOYMENT. The Company hereby employs Employee, and Employee hereby
accepts employment, upon the terms and conditions hereinafter set forth.
II. TERM. Subject to the provisions for termination as hereinafter
provided, the term of this Agreement is for a period commencing August 1, 2002,
and expiring July 31, 2003, (the "Initial Term"). On August 1, of each year,
beginning in 2003, the term of this Agreement shall be automatically extended
for an additional year without any further action on the part of the Company or
Employee unless terminated under the provisions of Section VIII of this
Agreement.
III. DUTIES. Employee is engaged as Vice President of Finance and Chief
Financial Officer of the Company, to have complete responsibility for and
authority over the management of finance and accounting and shall have full
authority and responsibility, subject only to the direction of the Company's
Chief Executive Officer or President and the Board of Directors, for
administering those operations of the Company in all respects.
IV. EXTENT OF SERVICES. Employee shall faithfully, industriously, and
to the best of his ability, experience, and talents, perform all of the duties
that may be required of and from him pursuant to this Agreement. Nothing herein
shall be construed as preventing Employee from (a) investing his assets in such
form or manner as will not require any services on the part of Employee, unless
employee discloses in writing to the company the extent of such services and
receives written authorization to provide such services, in the operations or
the affairs of the companies in which such investments are made or (b) serving
as a director, advisor, or consultant; provided, however, that such investments
or services may not be in connection with a business which is in competition
with the Company (excluding (i) indirect investments through mutual funds or
other broad based investment vehicles, (ii) investments in
debt instruments, and (iii) investments in less than 5% of the stock of any
publicly held business). For purposes hereof, "in competition with the Company"
shall be construed consistently with Section VII hereof.
V. COMPENSATION AND EMPLOYEE BENEFITS.
A. ANNUAL BASE SALARY. For all services rendered by Employee
under this Agreement, the Company shall pay Employee an annual base salary ,
payable in equal bi-weekly installments. The amount of such base salary shall be
reviewed at least once each fiscal year by the Compensation Committee of the
Company's Board of Directors.
B. STOCK OPTIONS. Employee shall be eligible for future stock
option grants at the same time and based on the same criteria as other executive
officers of the Company.
C. BONUS COMPENSATION. Employee may receive bonuses, payable
in cash or shares of the Company's stock, as may be determined from time to time
by the Board of Directors or the Compensation Committee of the Board of
Directors, in its sole discretion, on the basis of: (i) Employee's success in
meeting his personal performance goals, as established by the Compensation
Committee of the Board of Directors; (ii) Employee's merit, including but not
limited to the quality of the services provided by Employee and his
industriousness and diligence in performing such services; and (iii) the
Company's financial success and progress in the prior fiscal year. Employee's
annual bonus opportunity is equal to thirty five percent (35%) of his current
annual base salary.
D. VACATION. Employee shall be entitled to accrue four (4)
weeks of paid vacation for each year of service provided. Any accrued but unused
vacation time shall be paid to Employee at or before the termination of his
employment, in accordance with Company policy, in addition to any amounts due
and payable to Employee under Section VIII hereof. Employee shall be required to
take at least two (2) weeks vacation per year, including in at least one case, a
vacation lasting no less than five (5) consecutive business days.
E. EMPLOYEE BENEFITS. Employee shall be entitled to receive
all of the rights, benefits, and privileges of an employee and an executive
officer under any generally applicable retirement, pension, profit-sharing,
insurance, health and hospital, or other employee benefit plans which may be now
in effect or hereafter adopted by the Company.
F. WORKING FACILITIES. Employee shall be furnished with a
private office, business tools, and such other facilities and services suitable
to Employee's position and adequate for the performance of the duties required
by this Agreement.
G. EXPENSES. Subject to limits which may be imposed by the
Chief Executive Officer, President or the Board of Directors, including any
committee thereof, Employee is authorized to incur reasonable expenses in
connection with his responsibilities in conducting the business of the Company,
including expenses for entertainment, travel, and similar items. The Company
will reimburse Employee for all such expenses upon the presentation by Employee,
in a timely manner of an itemized account of such expenditures, including
receipts or other adequate documentation, or Employee may pay such expenses with
2
a Company credit card, if a Company credit card is issued to Employee, and
Employee shall appropriately document the business purpose of such expenditures.
Employee's expenses must be submitted to and approved by the Audit Committee or
another officer or employee designated by the Audit Committee to review and
approve such expenses.
H. AUTOMOBILE ALLOWANCE. The Company will pay Employee an
automobile allowance for the expense of leasing or financing an automobile, as
well as for insurance, maintenance, fuel and repairs associated with such
automobile. Any automobile for which Employee accepts this allowance must be
suitable for the Company's use in performing services for the Company.
Specifically, such automobile must have four doors. The automobile allowance
shall be payable in equal bi-weekly installments and shall be $10,000.00 per
year. If and to the extent that the automobile is not considered by the Company
to have been used for business purposes, based upon documentation submitted to
the Company at the Company's request, the Company will include the value of the
non-business use of the automobile and other reimbursements made in connection
therewith on Employee's Form W-2 or 1099 as income for each year such personal
benefit is received.
I. EDUCATIONAL EXPENSES. Employee shall be entitled to receive
reimbursement for educational expenses consistent with the company's policy on
educational reimbursement.
VI. PROPRIETARY INTERESTS OF COMPANY.
Employee and the Company recognize that the Company is in a
highly competitive business in a highly technical industry. The parties
acknowledge that the success or failure of the Company depends largely on the
development and use of certain proprietary and confidential information and
trade secrets, including without limitation, information concerning any of the
Company's patented components, research and development projects and in patent
process components, and personal relationships with present and potential
customers, suppliers, contractors, and governmental agencies as well as
technology, procedures, systems, and techniques relating to the products
developed or distributed by the Company (hereinafter collectively referred to as
"CONFIDENTIAL INFORMATION"). Confidential Information is a substantial asset of
the Company. Confidential Information will be disclosed to Employee in the
normal course of operation. Employee acknowledges that Confidential Information
is extremely valuable to the Company and must be protected from unauthorized use
by the Company's competitors or other persons. Therefore, Employee agrees not to
disclose or use, whether for the benefit of Employee or any other person or
entity, at any time during or after his employment, any Confidential Information
to any person or entity other than the Company or persons authorized by the
Company to receive such Confidential Information.
Employee recognizes that, during the term of his employment
with the Company, he may develop new products, technology, processes, devices,
inventions, or methods of production, including but not limited to computer
hardware, software or "firmware," and may enhance, improve or perfect existing
products, technology, processes, devices, inventions or methods of production
(hereinafter collectively referred to as "INVENTIONS"). As partial consideration
for the salary and other benefits provided by the Company to Employee, Employee
hereby agrees that his entire work product while in the
3
employ of the Company, including any Inventions, is the exclusive property of
the Company unless Employee has received written authorization from the Company
for the exclusion of such work from this agreement. Employee also agrees to
cooperate fully with the Company and to do whatever acts are reasonably
necessary in order to obtain United States or foreign letters patent or
copyrights, or both, and to vest the entire right and title thereto in the
Company. Employee further agrees that the Company shall have the royalty-free
right to use in its business, and to make, use, and sell such Inventions whether
or not patentable, regardless of whether they are conceived or made by Employee
during the hours which he is employed by the Company or with the use of or
assistance of the Company's facilities, materials or personnel.
Except as required in his duties to the Company, Employee
will not, directly or indirectly, use, disseminate, disclose, lecture upon, or
publish articles concerning any Confidential Information without the prior
written consent of the Company.
Upon termination of his employment with the Company, all
documents, records, notebooks, and similar repositories of or containing
Confidential Information, including copies thereof, then in Employee's
possession, whether prepared by Employee or others, will be left with the
Company, and no copies thereof will be retained by Employee.
It is agreed that any breach of this section of the
Agreement will cause immediate irreparable harm to the Company and monetary
damages would be difficult if not impossible to ascertain. Therefore, the
parties agree that, upon any breach of any covenant in this Section VI, that the
Company may obtain from the district court for the City and County of Denver,
Colorado, or any other court of competent jurisdiction, an appropriate
restraining order, preliminary injunction or other form of equitable relief with
respect thereto. Nothing contained herein shall be construed as prohibiting the
Company from pursuing any other available remedies for such breach, including
the recovery of damages, costs, and attorney fees.
VII. NONCOMPETE AND NONSOLICITATION. During the term of this Agreement
and for a period of the greater of (a) one year after termination or expiration
of this Agreement or (b) the period during which a Severance Amount or
consulting arrangement is being paid to Employee by the Company (the "NONCOMPETE
PERIOD"), Employee will not, directly or indirectly, own, manage, operate,
control, provide services to, be employed by, participate in, or be connected in
any manner with the ownership, management, operation, or control of any business
which develops, manufactures, distributes or sells the same type of products as
the Company, or products which are the functional equivalent of the Company's
products or currently planned products, within and to the same market as the
Company's market at the time of Employee's proposed activity or, after the
termination of this Agreement, at or prior to the time of such termination.
Employee certifies that his employment with the Company will not breach a
previous employment agreement. Employee agrees not to engage in the unauthorized
use of the proprietary assets of others during the term of his employment by the
Company. Employee agrees not to enter into any other employment agreement, oral
or written, which will run concurrently, in whole or in part, with Employee's
employment by the Company without the prior written approval of the CEO of the
Company. It is agreed that any breach of this section of the Agreement will
cause immediate irreparable harm to the Company
4
and that monetary damages for such breach would be difficult if not impossible
to ascertain. Therefore, the parties agree that upon any breach of the covenants
of this section the Company may obtain from the district court for the City and
County of Denver, Colorado, or any other court of competent jurisdiction, an
appropriate restraining order, preliminary injunction or other form of equitable
relief with respect thereto. Nothing contained herein shall be construed as
prohibiting the Company from pursuing any other available remedies for such
breach, including the recovery of damages, costs, and attorney fees.
The foregoing agreement not to compete shall not be held
invalid because of the scope of the territory or the actions restricted thereby,
or the period of time within which such agreement is operative; but any judgment
by a court of competent jurisdiction may define the maximum territory and
actions subject to, and restricted by, this paragraph and the period of time
during which such agreement is enforceable.
Notwithstanding the foregoing, in the event of a Change of
Control, as hereinafter defined, not recommended by a majority of the Board of
Directors of the Company as constituted prior to the date of such Change of
Control, this non-compete agreement shall terminate upon the date of such Change
of Control.
VIII. TERMINATION OF EMPLOYMENT.
A. TERMINATION BY MUTUAL AGREEMENT. The Company and Employee
may agree to terminate this Agreement on terms and conditions mutually
acceptable to them as of the date of termination.
B. DEATH. In the event of Employee's death during the term of
this Agreement, including the Consulting Period, if any, the Company shall pay
to Employee's estate any unpaid wages or other amounts owing at the time of
death and shall pay, in addition to and not as a substitute for the proceeds
from any life insurance policies on Employee's life paid for by the Company, an
amount equal to the Severance Amount which would have been payable to Employee
if there had been a Voluntary Termination on the date of Employee's death and
all notice and other requirements for the payment of such Severance Amount had
been satisfied.
C. DISABILITY. If Employee becomes Disabled during the term of
employment, the Company may, at its option, by written notice to Employee or
Employee's personal representative, terminate the employment. Employee shall
thereafter be eligible to receive disability benefits under the Company's
standard employee disability insurance policy like any other employee.
D. VOLUNTARY OR INVOLUNTARY TERMINATION. Upon a Voluntary or
Involuntary Termination as defined herein, Employee shall continue to render his
services to the Company, if and to the extent required by the Company, up to the
date of such Voluntary or Involuntary Termination as referenced in the written
notice of termination submitted to Employee by the Company, or vice versa, and
shall be paid (i) the unpaid amount of the then applicable annual base salary up
to the date of such Voluntary or Involuntary Termination, (ii) any bonuses which
the Company's Board of Directors may determine, in its sole discretion, to
5
be due and payable to Employee, and (iii) the Severance Amount as defined
herein. In the event of a Voluntary Termination, as a condition to Employee's
receipt of the foregoing payments to Employee, during the time between the
submission of a notice of termination by Employee and the effective date of
termination set forth in such notice, Employee shall continue to diligently
provide the Company with such services as the Company may request. In the event
of an Involuntary Termination, all unvested stock options and stock appreciation
rights that have previously been granted to Employee will fully vest and remain
exercisable for three (3) months after such termination.
E. DEFINITIONS. All the terms defined in this Section shall
have the meanings given below throughout this Agreement.
1. "CHANGE IN DUTIES, COMPENSATION, OR BENEFITS"
shall mean any one or more of the following:
a. a significant and detrimental change in
the nature or scope of Employee's authority, responsibilities or duties from
those currently applicable to him;
b. a reduction in Employee's annual base
salary from that currently provided to him;
c. a diminution in Employee's eligibility to
participate in bonus, stock option, incentive award or any other compensation
plan which provides opportunities to receive compensation from those currently
applicable to him, except for: (i) changes in the eligibility requirements for
plans that are applicable to employees generally; (ii) changes in plans that are
applicable to all executives and result in a diminution of Employee's benefits
under such plan that is fair and proportional as compared to the diminution of
benefits for all executives; and (iii) changes that are required by applicable
law;
d. a material diminution in employee
benefits (including but not limited to medical, dental or life insurance and
long-term disability plans) and perquisites currently applicable to Employee,
except for: (i) changes in the eligibility requirements for benefits that are
applicable to employees generally; (ii) changes in benefits and perquisites that
are applicable to all executives and result in a diminution of Employee's
benefits that is fair and proportional as compared to the diminution for all
executives; and (iii) changes that are required by applicable law;
e. a change in the location of Employee's
principal place of employment by the Company (including its subsidiaries) by
more than fifty (50) miles from the location where he was principally employed
immediately prior to the date on which a Change of Control occurs; or
f. a reasonable determination by a majority
of those persons comprising the Board of Directors of the Company prior to a
Change of Control (even if such determination is made after such Change of
Control) that, as a result of a Change of Control and a change in circumstances
thereafter significantly affecting his position, Employee is
6
unable to exercise the functions or duties attached to his position immediately
prior to the date on which a Change of Control occurs.
2. "CHANGE OF CONTROL" shall be deemed to have
occurred if:
a. any "person," including a "group" as
determined in accordance with Section 13(d)(3) of the Securities Exchange Act of
1934 (the "EXCHANGE ACT"), is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities;
b. as a result of, or in connection with,
any tender offer or exchange offer, merger or other business combination, sale
of assets or contested election, or any combination of the foregoing
transactions (a "TRANSACTION"), the persons who were directors of the Company
before the Transaction shall cease to constitute a majority of the Board of
Directors of the Company or any successor to the Company;
c. the Company is merged or consolidated
with another corporation or entity and, as a result of the merger or
consolidation, less than 80% of the outstanding voting securities of the
surviving corporation or entity is then owned in the aggregate by the former
stockholders of the Company;
d. a tender offer or exchange offer is made
and consummated for the ownership of securities of the Company representing 50%
or more of the combined voting power of the Company's then outstanding voting
securities; or
e. the Company transfers all or
substantially all of its assets to another corporation which is not a wholly
owned subsidiary of the Company.
3. "DISABLED" OR "DISABILITY" shall mean mental or
physical illness or condition rendering Employee incapable of performing any
portion of Employee's normal duties with the Company even after the Company's
reasonable accommodation of any such disability in accordance with the Americans
with Disabilities Act and the Colorado Nondiscrimination statute.
4. "INVOLUNTARY TERMINATION" shall mean any
termination except:
a. VOLUNTARY TERMINATION;
b. termination by mutual agreement;
c. termination as a result of death; or
d. Employee's voluntary retirement from
employment or mandatory retirement from employment pursuant to a retirement plan
to which Employee was subject prior to any Change of Control. ("RETIREMENT").
7
5. "SEVERANCE AMOUNT" is equal to:
a. in the case of a Change in Control,
employee may unilaterally elect to terminate this agreement within six months
after the Change of Control has occurred. Employee's election will be treated as
an Involuntary Termination and he will receive a lump sum Severance Payment,
payable within thirty days of his election, equal to his then current base
salary, plus one hundred percent of his annual bonus opportunity and
continuation of his car allowance for one year. In the case of a Change in
Duties Compensation and Benefits, employee may unilaterally elect to terminate
this agreement. Employee's election will be treated as an Involuntary
Termination and employee will receive a Severance Payment equal to (6) six
months of his then current base salary paid on the company's regular payroll
dates and his pro-rata share of the incentive earned over the six months
following his separation date paid on the company's then regularly scheduled
incentive payment dates and continuation of his car allowance for six months. In
the case of an Involuntary Termination, not following a Change in Control or a
Change in Duties, Compensation and Benefits, employee will receive a Severance
Payment equal to (6) six months of his then current base salary paid on the
company's regular payroll dates and his pro-rata share of the incentive earned
over the six months following his separation date paid on the company's then
regularly scheduled incentive payment dates and continuation of his car
allowance for six months. In the event of Voluntary Termination, no Severance
Amount shall be payable until employee has completed one (1) year of service
with the company and his Severance Amount will be equal to one (1) month's
salary for every year of service completed up to a maximum of three (3) months,
payable ratably on the Company's regular payroll dates.
b. In the case of a Voluntary Termination or
an Involuntary Termination resulting from Employee's resignation following a
Change in Duties, Compensation or Benefits, Employee must give the Company
proper notice of such Termination in order to receive the Severance Amount. For
purposes hereof, proper notice is defined as written notice received by the
Company not less than thirty (30) business days prior to the date of termination
of employment.
c. In the case of an Involuntary Termination
by the Company, the Company must give Employee not less than thirty (30)
business days prior written notice of such termination, provided, however, that
the Company may, in its sole discretion, elect to have Employee provide
different services during such notice period than those provided prior to such
notice.
d. Notwithstanding any other provision of
this Agreement, in the event that Employee is found to have violated the
non-compete provisions of Section VII of this Agreement by a court of competent
jurisdiction ("BREACH"), all Severance Amounts due and owing under this
Agreement shall be terminated upon the effective date of the Breach and Employee
shall reimburse the Company for any portion of the Severance Amount previously
paid to Employee.
6. "VOLUNTARY TERMINATION" shall mean any termination
which results from a resignation by Employee other than a resignation following
a Change in Duties, Compensation, or Benefits as defined herein.
8
7. "VOTING SECURITIES" shall mean any securities
which ordinarily possess the power to vote in the election of directors without
the occurrence of any pre-condition or contingency other than the passage of
time.
8. "BENEFICIALLY OWNED" shall mean beneficial
ownership by Employee, Employee's spouse, or a trust or similar arrangement
established by or for the benefit of Employee, Employee's spouse, or Employee's
minor children as well as the meaning of such term under Section 13 or Section
16 of the Exchange Act.
F. SECTION 280G PAYMENT. In the unlikely event that the
Severance Amount payments under this Agreement are determined by an independent
accounting firm retained by Employee (but paid for by the Company) to constitute
"excess parachute payments" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended, (the "CODE") and any regulations thereunder,
such Severance Amount shall be reduced by the amount necessary to avoid such
classification.
G. MEDICAL AND DENTAL BENEFITS. If Employee's employment by
the Company or any subsidiary or successor of the Company is terminated because
of Death, Disability, or Involuntary Termination, then to the extent that
Employee or any of Employee's dependents may be covered under the terms of any
medical and dental plans of the Company (or any subsidiary) immediately prior to
the termination, the Company will provide Employee and those dependents with the
same or equivalent coverages until three (3) months after any such termination
of employment. The Company may, at its election, procure such coverages apart
from, and outside of the terms of, the plans applicable to other employees. The
Company's obligation to provide such coverages will be limited by the
requirement that Employee and Employee's dependents comply with all of the
conditions of the medical or dental plans applicable to employees generally and
the Company is under no obligation to obtain special coverages for Employee
which would not be covered by the plans applicable to employees generally. In
consideration for these benefits, Employee must make contributions equal to
those required from time to time from other employees for equivalent coverages
under the medical or dental plans. If and to the extent that Employee is
eligible to participate in a medical, dental or other health insurance plan of
another employer after the termination of his employment by the Company, then
the benefit provided by this section shall be eliminated or commensurately
diminished.
IX. LIFE INSURANCE.
A. GROUP LIFE INSURANCE. The Company shall provide Employee
with personal life insurance under the Company's group life insurance policy as
in effect from time to time which shall be payable to a beneficiary designated
by Employee in addition to, and not as a substitute for, any Severance Amount
payable under Section VIII.B above. Employee acknowledges that, while the
Company currently maintains group life insurance which provides for a death
benefit equal to three (3) times an officer's annual base salary at the time of
death, with a maximum payment of $500,000, as well as an accidental death and
dismemberment policy (the "AD&D Policy") which also provides for an additional
benefit in the same amount as the group life insurance if the cause of death is
covered by the AD&D Policy, such coverages may be altered or amended in the
future on a Company-wide basis,
9
provided, however, that under no circumstances will such coverages be reduced
unless other officers of comparable rank within the Company are correspondingly
reduced.
B. KEY MAN LIFE INSURANCE. Employee hereby consents to the
purchase by the Company, at the Company's option, of one or more "key man" life
insurance policies on Employee's life naming the Company or its designee as
beneficiary (the "Key Man Policies"); provided, however, that the Company shall
not be required to obtain such insurance. Employee agrees that he shall take any
reasonable actions which may be requested by the Company, and otherwise fully
cooperate with the Company, in its efforts to purchase and maintain the Key Man
Policies. The Key Man Policies will be owned by the Company and the proceeds
made payable to the Company or its designee. If purchased by the Company, the
Key Man Policies shall be for the purpose of providing funds necessary to obtain
a replacement for Employee and for any other reasonable business purpose as may
be determined by the Company in amounts sufficient to accomplish their intended
purposes.
X. DIRECTORS AND OFFICERS INSURANCE. The Company shall maintain and
keep in force directors and officers liability insurance coverage on all
directors and officers in such an amount as the Company deems reasonable and
necessary under the circumstances but in no event less than $7.5 million of
aggregate coverage.
XI. POST-TERMINATION CONSULTING. In the event of Employee's Involuntary
or Voluntary Termination, Employee agrees to provide services to the Company as
a consultant for a period of ninety (90) days following the completion of all
severance payments (the "Consulting Period"), in exchange for cash compensation
at the rate of $100 per hour. Employee shall have the right to decline to
provide any consulting services requested by the Company after an Involuntary
Termination or Voluntary Termination but such refusal during the period when
severance payments are being made by the Company will result in the forfeiture
of Employee's right to the Severance Amount hereunder. If Employee does elect to
provide consulting services following the completion of the severance period,
Employee shall be obligated to provide no more than ten (10) hours of consulting
services per week during the Consulting Period, if and to the extent requested
by the Company. Employee may determine to cease providing such consulting
services to the Company at any time during the Consulting Period by providing
the Company with ten days written notice.
XII. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and delivered in person or sent by
registered or certified mail to Employee's residence as indicated in Employee's
personnel file at in the Company's records in the case of Employee or to its
principal office in the case of the Company.
XIII. WAIVER. The waiver of any provision of this Agreement shall not
operate or be construed as a waiver of any other provision of this Agreement. No
waiver shall be valid unless in writing and executed by the party to be charged
therewith.
XIV. SEVERABILITY/MODIFICATION. In the event that any clause or
provision of this Agreement shall be determined to be invalid, illegal or
unenforceable, such clause or provision may be severed or modified to the extent
necessary, and, as severed and/or modified, this Agreement shall remain in full
force and effect.
10
XV. ASSIGNMENT. Except for a transfer by will or by the laws of descent
or distribution, Employee's right to receive payments or benefits under this
Agreement shall not be assignable or transferable, whether by pledge, creation
of a security interest or otherwise. In the event of any attempted assignment or
transfer contrary to this paragraph, the Company shall have no liability to pay
any amount so attempted to be assigned or transferred. Employee acknowledges
that the services to be rendered under this Agreement are unique and personal.
Accordingly, Employee may not assign such duties or obligations under this
Agreement.
XVI. SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns (including, without
limitation, any company into or with which the Company may merge or
consolidate). The Company agrees that it will not effect the sale or other
disposition of all or substantially all of its assets unless either (i) the
person or entity acquiring the assets or a substantial portion of the assets
shall expressly assume by an instrument in writing all duties and obligations of
the Company under this Agreement or (ii) the Company shall provide, through the
establishment of a separate reserve or otherwise, for the payment in full of all
amounts which are or may reasonably be expected to become payable to Employee
under this Agreement.
XVII. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
concerning the employment arrangement between the parties and shall, as of the
effective date hereof, supersede all other such agreements between the parties,
provided, however, that nothing in this Agreement shall prevent the Company from
granting additional or special compensation or benefits to Employee after the
date of execution of this Agreement. This Agreement may not be amended except by
an agreement in writing signed by both parties.
XVIII. GOVERNING LAW AND JURISDICTION. This Agreement shall be
interpreted, construed, and enforced under the laws of the State of Colorado.
The courts of the State of Colorado shall have sole jurisdiction and venue over
all controversies which may arise with respect to this Agreement.
XIX. TIME. In comparing any period of time prescribed or allowed by
this Agreement, the day of the act, event or default from which the designated
period of time begins to run shall not be included. Time accounting shall begin
upon midnight of the following calendar day. All periods of time shall be
assumed to be specified in calendar days unless otherwise noted. In the case of
fractional days of time, the appropriate equivalent hours can be calculated and
accounted for against midnight of the calendar day in which the period of time
started. For purposes of calculating the duration of the covenant not to compete
the time period of such covenant shall be extended by one day for each day that
Employee competes with Company in violation of such covenant.
XX. COUNTERPARTS. This Agreement may be signed in one or more
counterparts which, taken together, shall constitute a single binding agreement
between the parties. Photocopies or telecopies of the parties' original
signatures hereto may be relied upon as originals for all purposes.
11
IN WITNESS WHEREOF, the parties have executed this Agreement the date
and year indicated above.
THE COMPANY:
VARI-L COMPANY, INC.
By: /s/ XXXXXXX X. XXXXX
--------------------------------------
Xxxxxxx X. Xxxxx, President
EMPLOYEE:
/s/ XXXXXXX X. XXXXXXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxxxxxx
12
