EMPLOYMENT AGREEMENT
EXHIBIT
10.01
AGREEMENT
made this 1st day of September, 2005 by and between Wireless Xcessories Group,
Inc. (“WIRX” or “Employer”), a Delaware Corporation, and Xxxxxxx Xxxx
(“Employee”).
WITNESSETH:
WHEREAS,
Employee is President, Chief Executive Officer and Chairman of the Board of
Directors of WIRX and has developed an intimate and thorough knowledge of WIRX's
business methods and operations; and
WHEREAS,
the retention of Employee's services for and on behalf of WIRX is of material
importance to the preservation and enhancement of the value of the WIRX
business;
NOW
THEREFORE, in consideration of the mutual covenants set forth below, and
intending to be legally bound hereby, WIRX and the Employee agree as
follows:
1.
TERM
OF
EMPLOYMENT
1.1 WIRX
hereby employs the Employee as President, Chief Executive Officer and Chairman
of the Board of Directors as set forth below, and Employee hereby accepts this
employment and agrees to render such services to WIRX on the terms and
conditions set forth in this Agreement. The initial term of employment under
this Agreement shall commence on September 1, 2005 and shall terminate on August
31, 2008, unless further extended or sooner terminated in accordance with the
terms and conditions of this Agreement. After the initial three-year term,
this
Agreement shall be renewed automatically for successive terms of one year each,
unless either the Board of Directors of WIRX or Employee gives contrary written
notice to the other not less than 90 days in advance of the date on which this
Agreement would otherwise terminate. References to the term of this Agreement
shall refer both to the initial term and successive terms.
1.2 During
the term of this Agreement, the Employee shall perform such executive services
for WIRX as are consistent with Employee's title and as are assigned to Employee
by the WIRX Board of Directors (“Board of Directors”).
1.3 During
the term of this Agreement, Employee shall devote Employee's best efforts to
the
affairs and business of WIRX, including such portion of Employee's time and
effort as Employee has customarily provided to this date as President, Chief
Executive Officer and Chairman of the Board of Directors.
1.4 The
services of Employee shall be rendered principally in the Metropolitan
Philadelphia, Pennsylvania area, but Employee shall do such traveling on behalf
of WIRX as may be reasonably required.
2.
COMPENSATION
AND BENEFITS
2.1 WIRX
will
compensate Employee for Employee's services during the term of the Agreement
an
annualized base salary of $250,000.00, less withholding required by law or
agreed to by Employee through December 31, 2005. The salary will be payable
pursuant to WIRX’s regular payroll policy (or in the same manner as other
similarly situated employees of WIRX). Employee’s base salary will be reviewed
annually by the Board of Directors. Except as mutually agreed upon by Employee
and Employer, yearly increases shall go into effect as of January 1 of the
year,
and shall be no less than the cost of living percentage used by the U.S.
government in determining annual increases in Social Security payments and
at no
time shall such base salary be reduced below the amount of the preceding fiscal
year.
2.2 During
the term of the Agreement, Employee will be entitled to participate in any
WIRX
bonus plan and earn an annual bonus up to and equal to Employee’s salary if
certain reasonable goals and/or targets set by the Board of Directors are met.
Notwithstanding anything herein to the contrary, Employee shall be entitled
to
an annual minimum bonus target of no less than Fifty Thousand Dollars
($50,000.00) per year during the term of the Agreement.
2.3 During
the term of the Agreement, Employee will be entitled to participate in the
standard benefits plan that are made available to employees and executives
of
WIRX or its subsidiaries and affiliates, or may come into existence hereafter,
to the extent commensurate with his duties and responsibilities, including
retirement, medical, dental, disability, life insurance, stock option, profit
sharing, or other plan, benefit or privilege as fixed by the WIRX Board of
Directors or any committee of such Board selected for such purpose. To the
extent Employee is otherwise eligible and qualifies, he shall participate in
and
receive such benefits or privileges. The Board of Directors shall not make
any
changes in such plans, benefits or privileges which would adversely affect
Employee's rights or benefits, unless such change occurs pursuant to a program
applicable to all executive officers of WIRX and does not result in a
proportionately greater adverse change in the rights of or benefits to Employee
as compared with any other executive officer of WIRX. Nothing paid to Employee
under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the salary payable to Employee pursuant
to Section 2.1.
2.4
(a) WIRX
shall purchase a long term disability policy for the benefit of the Employee,
on
terms and conditions reasonably satisfactory to the Employee and WIRX, which
shall pay benefits equal to 75% of Employee’s then base salary for disabilities
lasting more than six (6) consecutive months.
(b)
In the
event that no such long term disability insurance is available, and the Employee
shall suffer a Disability, as defined in Section 4.1(c) below, Employee shall
receive fifty percent (50%) of Employee's compensation under Section 2.1 for
the
remaining term of this Agreement. In the event that the Employee returns to
active employment on other than a full-time basis, then Employee's compensation
(as set forth in Section 2.1 of this Agreement) shall be reduced in proportion
to the time spent in employment, but no less than 75%.
(c) There
shall be deducted from the amounts paid to Employee during any period of
Disability, as described in Section 2.4(b), any amounts actually paid to
Employee pursuant to any disability insurance paid by WIRX for its employees
or
other similar such program
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which
WIRX has instituted or may institute on behalf of its employees for the purpose
of compensating Employee in the event of disability.
2.5 Nothing
in this Agreement shall prevent or limit Employee’s continuing or future
participation in any plan, program, policy or practice provided by WIRX or
any
of its affiliates for which Employee may qualify while an employee, nor shall
anything in this Agreement limit or otherwise affect such rights as Employee
may
have under any contract or agreement with WIRX or any of its affiliates relating
to subject matters other than that specifically addressed herein. Vested
benefits and other amounts that Employee is otherwise entitled to receive under
any plan, policy, practice or program of, or any other contract or agreement
with, WIRX or any of its affiliates on or after the date of termination of
Employee’s employment shall be payable in accordance with the terms of each such
plan, policy, practice, program, contract or agreement, as the case may be,
except as explicitly modified by this Agreement.
2.6 Compensation
and Benefits in the Event of a Change of Control.
(a) Employee’s
compensation, bonus plan and benefits, including, but not limited to, health,
life, disability, profit sharing, stock option, retirement and severance
benefits (collectively referred to as “Benefits”), shall continue after any
Change of Control (as defined in section 4.1 (b) herein) in the same manner
that
they existed prior to such Change of Control if Employee remains employed by
WIRX. If Employee does not remain employed by WIRX after a Change of Control,
paragraph 4 herein shall govern.
(b) In
the
event of a Change of Control, any and all options to purchase shares of stock
in
WIRX shall be immediately vested and exercisable to the extent permissible
by
the SEC and any and all other applicable laws.
3.
EXPENSES
3.1 WIRX
shall reimburse Employee or otherwise provide for or pay for all reasonable
expenses incurred by Employee in furtherance of or in connection with the
business of WIRX including, but not limited to, automobile, travel, telephone
and Internet expenses, and all reasonable entertainment expenses (whether
incurred at the Employee's residence, while traveling, or otherwise) subject
to
such reasonable limitations as may be established by the WIRX Board of
Directors. Such expenses must be deductible by WIRX for purposes of federal
income taxation to be paid by WIRX. If such expenses are paid in the first
instance by Employee, WIRX will reimburse Employee. Such expenses will only
be
reimbursed upon Employee's presentation of an itemized account and written
proof
of such expenses.
4.
TERMINATION
4.1 Definitions.
(a) “Cause”
means:
(i)
Employee’s conviction of any felony or misdemeanor involving moral turpitude or
conviction of any other crime which WIRX reasonably deems to involve fraud;
or
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(ii) any
act
or omission by Employee which constitutes gross negligence or intentional
misconduct inimical to the best interests of WIRX in the performance of the
Employee’s obligations, duties and responsibilities as an employee of WIRX; or
(iii) violation
by Employee of any of the covenants set forth under Sections 5 or 6 of this
Agreement that has a material adverse affect on WIRX or any of its Affiliates.
A
termination of Employee’s employment for Cause shall be effected by written
notice to Employee.
(iv) Any
act
or omission to act by the Employee in reliance upon an opinion of counsel to
WIRX or counsel to the Employee shall not be deemed “cause”.
(b) “Change
in Control” in this Agreement shall mean
(i) A
Person
(as defined by the Securities and Exchange Commission (“SEC”)) not currently a
holder of 50% or more of the stock of WIRX becomes the beneficial owner (as
that
term is defined by the SEC) of 50% or more of the stock of WIRX;
(ii) The
sale
of all or substantially all of the assets of WIRX;
(iii) The
Board
of Directors approves the sale, merger, reorganization, consolidation or other
disposition of all or substantially all of the assets of WIRX, or the
acquisition of the assets of another company, where the affect is that the
controlling ownership of WIRX has changed;
(iv) The
Board
of Directors approves the liquidation or dissolution of WIRX; or
(v) WIRX
is
acquired by a Person by means of a take-over (hostile or friendly) of a
controlling interest in the shares of stock of WIRX.
(c) “Disability”
means that Employee has been unable, for a period of one hundred eighty (180)
consecutive days, to perform Employee’s duties as a result of physical or mental
illness or injury, and a physician selected by WIRX’s insurers, and acceptable
to Employee or Employee’s legal representative, has determined that Employee’s
incapacity will continue. In the event that Employee and WIRX’s insurer cannot
agree on a physician to be selected, the issue shall be referred to binding
arbitration in the manner provided in Section 10 herein.
(d) “Terminated”
shall mean that Employee is not offered or fails to accept a comparable position
in the surviving entity in the Change in Control, that is similar in
responsibility and compensation to the position Employee held in WIRX or
Affiliate prior to the Change in Control, within 50 miles of Philadelphia,
Pennsylvania, or, if Employee is so offered such a position and accepts such
a
position, Employee is not maintained in that position for a minimum of twelve
(12) months after the Change in Control, unless Employee is subsequently
terminated for Cause.
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(e) “Good
Reason”. For purposes of this Agreement, “Good Reason” for Employee’s
termination of his employment will exist at any time after the happening of
one
or more of the following events:
(i)
any
material diminution of Employee’s duties or authority with WIRX as specified
herein, or the assignment of duties and responsibilities inconsistent with
Employee’s status as President, Chief Executive Officer and Chairman of the
Board of Company and any of which changes are made without Employee’s prior
express written consent;
(ii) a
reduction in salary or material reduction in benefits without the express prior
written consent of Employee;
(iii) any
breach by WIRX of any material obligation of WIRX under this
Agreement;
(iv) a
reassignment which requires Employee to move his principal work location more
than fifty (50) miles from Employee’s residence maintained at the time of
execution of this Agreement;
4.2 Notice
of
Termination by Employee for Good Reason. Employee shall be required to give
WIRX
thirty (30) days prior written notice to terminate his employment for Good
Reason. WIRX shall then have the opportunity, during said thirty-day period,
to
remedy or cure the circumstances, which are the basis for Employee’s ability to
terminate his employment for Good Reason, and Employee shall not be able to
terminate his employment for Good Reason if WIRX does so remedy or cure the
circumstances within such thirty-day period. During such thirty-day opportunity
to remedy given to WIRX, all of Employee’s benefits shall continue in full force
and effect as they had existed prior to the Good Reason.
4.3 Termination
by Employee without Good Reason; Termination by WIRX Due to Death, Disability
or
Cause.
(a) Voluntary
Termination by Employee Without Good Reason. If Employee terminates his
employment voluntarily then no severance shall be payable other than amounts
otherwise due to Employee under WIRX policy, including, but not limited to,
accrued but unpaid vacation, any portion of Employee’s salary through the date
of termination that has not yet been paid and any WIRX employee benefit plan,
or
as otherwise required by law or this Agreement. Employee, his dependents or
estate shall also be entitled to receive any benefits under WIRX benefit plans
that are due in accordance with the terms of such plans.
(b) Termination
by WIRX Due to Employee’s Death. If Employee is terminated due to his death,
Employee’s estate will receive the greater of either
(i) a
one-time lump sum payment equivalent, before applicable deductions, to two
(2)
times the sum of Employee’s last base salary, or
(ii) the
benefits of a life insurance policy owned by WIRX and taken on Employee’s life.
Employee’s
designated beneficiary shall be entitled to Five
5
Hundred
Thousand Dollars ($500,000.00) of the Three Million Dollar ($3,000,000.00)
life
insurance policy which WIRX currently carries on Employee’s life, and WIRX shall
immediately make such modifications to the policy to reflect this requirement.
(iii) In
addition to the payment in 4.3(b)(i) or (ii), Employee’s estate will receive all
amounts otherwise due to Employee under WIRX policy, including, but not limited
to, any portion of Employee’s salary through the date of termination that has
not yet been paid and any WIRX employee benefit plan, or as otherwise required
by law or this Agreement. Employee’s estate shall also be entitled to receive
any benefits under WIRX benefit plans that are due in accordance with the terms
of such plans and any
and
all options to purchase shares of stock in WIRX shall be immediately vested
and
exercisable to the extent permissible by the SEC and any and all other
applicable laws.
(c) Termination
by WIRX Due to Employee’s Disability. If Employee is terminated due to his
Disability (as defined above), then no severance shall be payable, except as
provided in Sections 2.4 (a), (b), and (c), other than amounts otherwise due
to
Employee under WIRX policy, including, but not limited to, accrued but unpaid
vacation, any portion of Employee’s salary through the date of termination that
has not yet been paid and any WIRX employee benefit plan, or as otherwise
required by law or this Agreement. Employee, his dependents or estate shall
also
be entitled to receive any benefits under WIRX benefit plans that are due in
accordance with the terms of such plans and any
and
all options to purchase shares of stock in WIRX shall be immediately vested
and
exercisable to the extent permissible by the SEC and any and all other
applicable laws.
4.4 Termination
by WIRX for Other Than Cause, Death or Disability or Employee for “Good Reason”.
If WIRX terminates Employee’s employment for other than Cause, death or
Disability, or Employee terminates his employment for “Good Reason”, then WIRX
shall pay Employee any portion of Employee’s salary through the date of
termination that has not yet been paid. In addition, WIRX shall pay Employee
severance in an amount equal to two (2) years of annual base salary (as in
effect immediately prior to the termination of employment date). If Employee
elects COBRA continuation coverage under WIRX’s group health plans, WIRX also
shall pay the first six (6) months of COBRA premiums on behalf of Employee.
As a
condition to the receipt of such payments, Employee must execute the release
and
waiver of claims attached hereto as Exhibit A and must not revoke such release
and waiver. The severance amount shall be paid in a lump sum no later than
ten
(10) business days after the later of the date WIRX receives Employee’s executed
release and waiver of claims or the date any period of revocation under such
waiver expires provided that Employee has not revoked his waiver. In the event
any amounts hereunder are such that Employee becomes subject to the excise
tax
provisions of Internal Revenue Code Section 4999, WIRX will pay Employee all
such additional amounts as will allow Employee to retain a net amount equal
to
the net amount he would have had if he had been subject only to income taxation.
Any amounts to be paid hereunder by WIRX shall be paid at the time any
withholding may be required, and any additional amounts required herein will
be
paid to Employee within fifteen (15) days of the calculation of such amount.
Notwithstanding the foregoing, if WIRX has in effect a severance plan or policy
that complies with or is exempt from Code Section 409A applicable to all
employees similarly situated that provides a larger severance benefit than
that
described in this section, then such severance plan or policy shall apply in
lieu of this Agreement and no severance payment shall be made
hereunder.
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4.5 Termination
following “Change in Control”. If at any time within one (1) year of a Change of
Control Employee is Terminated, it shall be deemed that such termination is
due
to the Change of Control, and Employee shall be paid severance in the amount
of
Employee’s last annual base salary plus Employee’s last annual bonus amount for
a period of two (2) years (“Severance Period”) on the same terms and conditions
as payments to be made to Employee under Section 4.2 above. In addition, all
Benefits, including, but not limited to, health insurance benefits, shall
continue during the Severance Period to the same extent as existed prior to
the
Change of Control.
4.6 Notice
of
Termination. Any termination of Employee's employment by WIRX or by Employee
shall be communicated by written notice of termination to the other party.
For
purposes of this Agreement, a “notice of termination” shall mean a written dated
notice which shall (i) indicate the specific termination provision in the
Agreement relied upon; (ii) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under the provision so indicated; (iii) specify a date of
termination, which shall be not less than 30 nor more than 90 days after such
notice of termination; provided, however, that in the case of termination by
WIRX of Employee's employment for just cause pursuant to Section 4.3, the notice
of termination may specify a date of termination as of the date such notice
of
termination is given.
5. CONFIDENTIAL
INFORMATION AND INVENTION ASSIGNMENT.
5.1 Access
to Confidential Information; Development of Inventions.
During
employment by WIRX, Employee will have access to certain confidential
information and materials originated in WIRX or disclosed to WIRX by others
under agreements to hold the same confidential (“Confidential Information”). In
addition, Employee may during the period of employment make, develop or conceive
inventions, discoveries, concepts, ideas, information and improvements, either
patentable or not, which relate to or are useful in the business or activities
in which WIRX is or may become engaged, and which may or may not also constitute
Confidential Information (“Inventions”).
5.2 Use
of
Confidential Information.
Employee agrees not to utilize any Confidential Information for Employee’s own
benefit nor to disclose, disseminate, lecture upon or publish articles about
any
Confidential Information to anyone outside WIRX, or to any officer or employee
of WIRX not also having access to such information, at any time either during
or
after employment by WIRX, unless WIRX expressly consents beforehand in
writing.
5.3 Disclosure
and Ownership of Inventions.
Employee agrees to disclose promptly, in writing if so requested, to WIRX’s
Board of Director’s, any Inventions that Employee may make, develop or conceive
during the period of Employee’s employment by WIRX or by its predecessors or
successors. All Inventions shall be and remain the property of WIRX. Employee
hereby assigns (and agrees to assign) to WIRX all of Employee’s rights, title
and interest in any such Inventions, whether or not during the period of
Employee’s employment such Inventions may be reduced to practice, and to execute
all patent applications, assignments and other documents, and to take all other
steps necessary, to vest in WIRX the entire right, title and interest in and
to
those Inventions and in and to any patents obtainable therefore in the United
States and in foreign countries.
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5.4 Patent
Applications.
If it
chooses to prosecute applications for patent for any Inventions, it being
understood that it is not obligated to do so, WIRX shall assume the entire
expense of preparing, filing and prosecuting such applications, through patent
counsel appointed by WIRX.
5.5 Use
and Adaptation of Inventions.
It is
understood and agreed that WIRX shall have the royalty-free right to use, or
to
adapt and to develop in any way all Inventions conceived or made by Employee,
whether or not patentable, including, but not limited to, processes, methods,
formulas, and techniques, as well as improvements thereof or know-how related
thereto, or not to use them at all should it so choose.
5.6 Ownership
of Materials Pertaining to Confidential Information.
All
records and other material pertaining to Confidential Information, whether
developed by Employee or others, shall be and remain the property of WIRX.
Upon
termination of Employee’s employment with WIRX, all documents, records,
notebooks and other material of any kind pertaining to or containing
Confidential Information then in Employee’s possession, whether prepared by
Employee or others, will be left with or returned to WIRX by
Employee.
5.7 Previous
Inventions.
WIRX
will not assert any rights to any inventions, discoveries, concepts or ideas,
or
improvements thereof or know-how related thereto, as having been made or
acquired by Employee prior to being employed by WIRX.
5.8 Assignment
Obligations.
Employee shall not be obligated to: (i) assign to WIRX any invention made by
Employee while in WIRX’s employ which does not relate to any business or
activities in which WIRX is or may become engaged, except that Employee is
so
obligated if the same relates to or is based on proprietary or Confidential
Information to which Employee shall have had access during and by virtue of
Employee’s employment or arises out of work assigned to Employee by WIRX; (ii)
assign any invention which may be wholly conceived by Employee after Employee
leaves the employ of WIRX, except that Employee is so obligated if such
invention shall involve the utilization of proprietary or Confidential
Information obtained while in the employ of WIRX; or (iii) assign any invention
which relates to or would be useful in any business or activities in which
WIRX
is engaged if such invention was conceived and reduced to practice by Employee
prior to Employee’s employment with WIRX.
6.
NON-COMPETITION
AND NON-SOLICITATION.
6.1 Non-Competition.
Excepting only the passive investment in another business entity (which shall
be
defined as a direct or beneficial ownership interest in not more than ten per
cent [10%], or with the written consent of the Board of Directors, up to twenty
per cent [20%] of the ownership interest), Employee will not, during the term
of
Employee’s employment with WIRX and thereafter for the period used to calculate
any severance payment pursuant to Section 4 hereof (the “Restriction Period”),
directly or indirectly engage in, represent in any way, be connected with,
furnish or perform services in, or be employed by, provide services to, or
have
any interest (whether as owner, employee, principal, partner, servant, agent,
employee, consultant, officer, director, stockholder, or otherwise) in any
business, company, or entity which (a) produces or manufactures products or
services that are competitive with, or substitutable for, any products or
services of Company, or (c) is a wholesaler, distributor, reseller or marketer
of any such products or services in the geographical area where WIRX does,
or at
the time of Employee’s termination is doing, business (which geographical area
is acknowledged at this time to be the continental United States).
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6.2 If
the
employment of Employee is terminated by WIRX for “Cause” or by Employee without
breach of this Agreement by Company, the term “Restriction Period” means a
period of one (1) year following the effective date of termination of Employee’s
employment.
6.3 While
employed by WIRX and thereafter during the Restriction Period, Employee agrees
not to induce, solicit, attempt to induce or solicit, or cause to be induced
or
solicited, any party who is an agent, employee, representative or is affiliated
with WIRX to leave the employ of or cease doing business with WIRX.
6.4 Notwithstanding
the referral of claims to Arbitration contained elsewhere in this Agreement,
Employee acknowledges that the remedy at law for any breach of the foregoing
will be inadequate, and WIRX will therefore be entitled, in addition to any
other relief available to it, to temporary and permanent injunctive relief
without the necessity of proving actual damage by applying for same in the
Court
of Common Pleas of Xxxxxxxxxx County, Pennsylvania or the United States District
Court for the Eastern District of Pennsylvania, which courts shall have
jurisdiction over, and be the appropriate venue for, any such
action.
6.5 If
provisions of this Section are ever determined by a court of competent
jurisdiction to exceed limitations permitted by law, then such provisions shall
be reformed automatically to set forth the maximum limitations period.
7.
MISCELLANEOUS
7.1 Notwithstanding
any other provision contained in this agreement, the payment or obligation
to
pay any monies or granting of any rights or privileges to Employee as provided
in this Agreement shall not be in lieu or derogation of the rights and
privileges that Employee now has under any plan or benefit presently
outstanding.
7.2 This
Agreement may not be modified, changed, amended, extended, or altered except
in
writing signed by the Employee or by his duly authorized representative, and
by
the Board of Directors or the Compensation Committee of WIRX
7.3 WIRX’s
obligation to make the payments provided for in, and otherwise to perform its
obligations under, this Agreement shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action that the
WIRX
may have against Employee or others. In no event shall Employee be obligated
to
seek other employment or take any other action by way of mitigation of the
amounts payable to Employee under any of the provisions of this
Agreement.
7.4 All
notices given or required to be given shall be in writing, sent by United States
first-class certified or registered mail or by a known overnight carrier,
postage prepaid, to Employee (or to Employee's spouse or estate upon Employee's
death or disability) at Employee's last known address, and to WIRX at its
principal offices. All such notices shall be effective when deposited in the
mail in the manner specified in herein. Either party by a notice in writing
may
change or designate the place for receipt of all such notices.
7.5 No
course
of conduct between WIRX and Employee and no delay or omission of WIRX or
Employee to exercise any right or power given under this Agreement shall: (i)
impair the subsequent exercise of any right or power, or, (ii) be construed
to
be a waiver of any
9
default
or any acquiescence in or consent to the curing of any default or of any other
right or power that shall have arisen. Every power and remedy granted by law
and
by this Agreement to any party may be exercised as may be deemed expedient.
All
such rights and powers shall be cumulative to the fullest extent permitted
by
law.
8.
SUCCESSORS
8.1 This
Agreement shall inure to the benefit of and be binding upon Employee, and,
to
the extent applicable, Employee's heirs, assigns, executors, and personal
representatives, and WIRX, its successors, and assigns, including, without
limitation, any person, partnership, or corporation which may acquire all or
substantially all of WIRX's assets and business, or with or into which WIRX
may
be consolidated or merged. This provision shall apply in the event of any
subsequent merger, consolidation, or transfer.
8.2 The
duties and responsibilities of Employee hereunder are of a personal nature
and
shall not be assignable or delegable in whole or in part by
Employee.
9.
APPLICABLE
LAW
9.1 This
Agreement shall be governed in all respects and be interpreted by and under
the
laws of the Commonwealth of Pennsylvania.
10.
ARBITRATION
10.1 In
the
event that any dispute should arise between the parties regarding the meaning
or
effect of this Agreement, which dispute cannot be resolved by the parties
(except the question of Employee's disability which is governed in Section
4.1(c), or an action for injunctive relief under 6.4), the parties shall appoint
a panel of three persons as arbitrators. Employee shall appoint one such
arbitrator, WIRX shall appoint another, and the third shall be appointed by
the
first two. Proceedings under this paragraph may be initiated by either party
informing the other in writing of the necessity for arbitration and the subject
matter of the arbitration. The parties shall select the first two arbitrators
within 45 days after such notice has been sent. The panel of two arbitrators
shall select the third arbitrator within 30 days after their appointment from
a
list or lists of eligible persons submitted to them by the parties. Proceedings
under this paragraph shall be commenced and pursued as expeditiously as
possible. The parties shall compensate the arbitrators selected. All other
costs
of the arbitration shall be borne equally. All proceedings or the enforceability
of any award and all other matters pertaining to the arbitration shall be
governed by the Federal Uniform Arbitration Act.
11.
INDEMNIFICATION
11.1 WIRX
shall indemnify,
defend and hold Employee his agents, executors, heirs and assigns, harmless
against and from liability and claims of any kind, whether threatened or
pending, for loss or damage, financial or otherwise, to WIRX or any other person
or entity, arising out of Employee’s position as a director, officer or employee
or agent of WIRX or due to acts which are under the authority or powers given
to
Employee. WIRX shall, at WIRX’s sole expense, defend Employee, his agents,
executors, heirs and assigns, in any action or proceeding arising from any
such
claim, by counsel reasonably satisfactory to Employee and shall indemnify
Employee against all reasonable and actual costs, attorneys fees, expert witness
fees and any other reasonable and actual expenses incurred in or for such action
or proceeding, whether pending or threatened.
10
12.
REFERRAL
FEE
12.1 It
is
specifically agreed herein that should Employee introduce, cause or be
responsible in any material way for the acquisition (excluding an acquisition
that is unwanted by a majority of the shareholders of WIRX), consolidation,
sale, merger, disposition or change of control of WIRX (including, but not
limited to, a change in majority ownership or a majority of its Board of
Directors) (all of which separately and collectively shall be referred to as
a
“Change Event”), Employee shall be compensated therefore by payment of a
percentage of the price received or paid by WIRX for such Change Event.
12.2 Employee
shall receive a percentage of the purchase or sale price received or paid by
WIRX as follows:
(a) Five
percent (5%) of the first Ten Million Dollars ($10,000,000.00);
(b) Four
percent (4%) of the second Ten Million Dollars ($10,000,000.00);
(c) Three
percent (3%) of the third Ten Million Dollars ($10,000,000.00); and
(d) One
percent (1%) of all amounts paid or received over Thirty Million Dollars
($30,000,000.00).
12.3 Payment
to Employee hereunder shall be made within thirty (30) days of receipt or
payment by WIRX of any consideration related to such Change Event.
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and
year first above written.
WIRELESS
XCESSORIES GROUP, INC.
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Attest:
_______________________________
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By:
/s/ Xxxxxxxxxxx X. XxXxxxxxx
Chairman-Comp
Committee
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EMPLOYEE
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Witness:
_____________________________
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By:
/s/ Xxxxxxx Xxxx
Xxxxxxx
Xxxx
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By:
/s/ Xxxxxx X. Xxxxx
CFO
and Secretary
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11
EXHIBIT
A TO RADE EMPLOYMENT AGREEMENT
General
Release
Xxxxxx
Xxxx (“You”)
and Wireless
Xcessories Group, Inc.
(the
“Company”)
have
agreed on the following:
Effective
today, your employment at the Company shall be terminated. Within ten business
days after the later of the date the Company receives Employee’s executed
release and waiver of claims, or the date the period of revocation hereunder
expires provided that Employee has not revoked his waiver after you sign this
Agreement, the Company will pay you $__________ (the equivalent to two (2)
years
of annual base salary [as in effect immediately prior to the termination of
employment date]) less applicable tax withholdings, and, if you elect COBRA
continuation coverage, the first six (6) months of COBRA premiums as
consideration for this release, in accordance with the terms of this Agreement
and Paragraph 4.3 of the Employment Agreement entered into by you dated August
1, 2005 (“Employment Agreement”). Notwithstanding
anything herein to the contrary, nothing herein shall in any way change, modify
or diminish the vested or accrued obligations and rights of the
parties,
as of
the date of termination under the Employment Agreement or any stock option
agreement or any of your other Benefits (as defined by the Employment
Agreement).
In
return
for this payment, you completely release any and all claims you may now have
or
have ever had against the Company, its affiliated, related, parent or subsidiary
corporations, and its present and former directors, officers, and employees,
and
agree not to file, cause to be filed, or otherwise pursue any such claims.
For
purposes of this General Release, the term “claims”
includes, but is not limited to, any and all: claims for compensation, bonuses,
severance pay, or stock options; claims arising from your employment including,
but not limited to, claims arising under any federal, state, or other
governmental statute, regulation, or ordinance, including, without limitation,
Title VII of the Civil Rights Act of 1964, as amended; the Federal Age
Discrimination in Employment Act; the Federal Older Workers Benefit Protection
Act; the Federal Americans with Disabilities Act; the Family Medical Leave
Act;
the Fair Labor Standards Act; the Federal Equal Pay Act; the Fair Credit
Reporting Act, The Employee Retirement and Income Security Act, The Pennsylvania
Human Relations Act; and any other federal, state or local law, statute,
regulation or ordinance applicable to the employment relationship between the
parties; and any and all claims for attorneys’ fees and costs. The parties
agree
that any and all disputes arising out of the terms of this Agreement or their
interpretation, any of the matters herein being released, or
any
other dispute between the parties, shall be resolved in accordance with the
Employment Agreement.
YOU
AGREE
THAT THIS RELEASE SPECIFICALLY COVERS KNOWN AND UNKNOWN CLAIMS WHICH, IF KNOWN
BY YOU, WOULD HAVE MATERIALLY AFFECTED YOUR DECISION TO ENTER INTO THIS
AGREEMENT.
You
acknowledge that the payment and benefits described above exceed the amount
to
which you otherwise are entitled under the Company’s policies and practices. You
also agree that this Agreement is confidential and you will not discuss it,
or
any of its terms, with anyone without the Company’s prior consent.
You
agree
that the Company would be irreparably harmed by any violation, or threatened
violation of this Agreement and that, therefore, the Company shall be entitled
to an injunction prohibiting you from any violation or threatened violation
of
this Agreement. This right shall be in addition to and not by way of limitation
of any other legal or equitable remedies to which the Company may be entitled,
including, but not limited to, the right of the Company to seek recovery or
set
off of any and all consideration paid to you under this Agreement in the event
you breach this Agreement or this Agreement is held invalid.
You
represent and warrant to the Company that there has been no assignment or other
transfer of any interest in any claim which you may have against the Company
or
anyone else released hereby and agree to indemnify and hold all such parties
harmless from any liability, claims, demands, damages, costs, expenses, and
attorney’s fees incurred as a result of any person asserting any such assignment
or transfer of any claims.
You
warrant that while in the employ of the Company, you did not misrepresent the
Company or deal with any third party in bad faith. You further warrant that
you
have not incurred any expenses or obligations or liabilities on behalf of the
Company which have not been disclosed to the Company at the signing of this
Agreement.
You
acknowledge that this Agreement is binding on you and your heirs, successors,
and assigns and inures to the benefit of the Company and its successors and
assigns.
You
have
the right to consult an attorney and have been advised that you may have
21 days to consider this Agreement. (You, of course, do not have to wait
21 days to sign this Agreement). You have also been advised that you may
revoke this Agreement within 7 days after you sign it, and that this
agreement shall not become effective or enforceable until the revocation period
has expired. If you elect to revoke this Agreement, you will do so via written
letter sent certified mail to Board of Dirctors, Wireless Xcessories Group,
Inc.
0000 Xxxxxx Xxxx Xx., Xxxxx 000, Xxxxxxxxxx Xxxxxx, XX 00000 ALL
SEVERANCE SHALL BE PAID ONLY AFTER THIS AGREEMENT HAS BEEN SIGNED AND DELIVERED
TO THE COMPANY BY YOU AND THE REVOCATION PERIOD HAS ENDED.
Finally,
you acknowledge that you have been afforded every opportunity to and have read
this Agreement, are fully aware of its contents and legal effect, and have
chosen to enter into this Agreement freely, without coercion, and based on
your
own judgment.
WIRELESS
XCESSORIES GROUP, INC.
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Xxxxxxx
Xxxx
|
[Name and Title of Company Signatory] | |||
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Date:
|
Date:
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