EXHIBIT 10.24
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), effective as of June 1,
1998, is entered into between Labtec, Inc., a Delaware corporation ("Employer"
or the "Company"), and Xxxxxxx Xxxxx ("Employee").
RECITAL
Employer desires to continue to retain the services of Employee upon
the terms and conditions set forth herein, and Employee is willing to provide
services to Employer upon the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, for and in consideration of the foregoing premises and
for other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, Employer and Employee hereby agree as follows:
1. Employment
Employer will employ Employee and Employee will accept employment by
Employer as its Senior Vice President - North American Retail Sales on the terms
set forth herein. Employee will perform such management duties as are customary
for such position and consistent with Employer's Bylaws and such other duties as
may be assigned from time to time by the President and Chief Executive Officer
of Employer (consistent with the duties of an officer of Employer), which relate
to the business of Employer, its subsidiaries, any parent corporation, or any
business ventures in which Employer or its subsidiaries may participate.
2. Attention and Effort
Employee will devote all his ability, attention and effort to
Employer's business and will use his best efforts to skillfully serve its
interests during the term of this Agreement. This paragraph is not meant to
preclude Employee from pursuing any other non-conflicting and non-competing
business activities which are primarily passive in nature, or from serving on
other boards of directors so long as such directorships are disclosed fully to
Employer's President and Chief Executive Officer.
3. Term
Unless otherwise terminated pursuant to paragraph 6 of this Agreement,
the stated term of employment under this Agreement shall expire three (3) years
from the effective date of this Agreement.
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4. Compensation
During the term of this Agreement, Employer agrees to pay or cause to
be paid to Employee, and Employee agrees to accept in exchange for the services
rendered hereunder by him, the following compensation:
4.1 Base Salary
Employee's compensation shall consist, in part, of an annual base
salary (the "Base Salary") of $150,000, before all customary payroll deductions,
payable in substantially equal installments and at the same intervals as other
officers of Employer are paid. Such annual Base Salary may be increased from
time to time in the discretion of the Company's President. The Company's
President will review Employee's performance and salary within 30 days after May
31 in each year during the effectiveness of this Agreement.
4.2 Bonus Plan
Employee will be entitled to receive, in addition to the Base Salary,
an annual bonus in amounts up to 70% of the Base Salary for such year based upon
goals to be agreed upon by the Employee and the Company's President. Operation
of the bonus plan will be as mutually agreed upon by Employee and the Company's
President and Chief Executive Officer and confirmed by the Board of Directors.
4.3 Stock
The Employer shall establish and adopt a Senior Management Stock
Purchase Plan shortly after the effective date hereof pursuant to which the
Employee may purchase from the Company such number of shares of the Company's
Common Stock as shall be agreed upon by the Employee and the Company at the
Investor Per Share Value (as defined in the Recapitalization Agreement and Plan
of Merger dated August 26, 1997 between the Company and Speaker Acquisition
Corp. as amended (the "Recapitalization Agreement")), subject to the Employee's
compliance with applicable laws and execution of a Senior Management Stock
Subscription Agreement substantially in the form attached hereto as Exhibit A
(the "Senior Management Subscription Agreement").
4.4 Options
The Employer shall establish and adopt a Senior Management Stock Option
Plan (the "Option Plan") shortly after the effective date hereof pursuant to
which the Employer shall grant to the Employee options to purchase 525,000
shares of the Company's Common Stock under the terms specified in such Option
Plan (it being understood that such number assumes completion of a 20:1 split of
the Company's Common Stock).
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5. Benefits
During the term of this Agreement, Employee will be entitled to
participate, subject to and in accordance with applicable eligibility
requirements, in fringe benefit programs as may be provided from time to time by
Employer.
6. Termination
Employment of Employee pursuant to this Agreement may be terminated as
follows, but in any case, the provisions of paragraph 8 hereof shall survive the
termination of this Agreement and the termination of Employee's employment:
6.1 By Employer
With or without Cause (as defined below), Employer may terminate the
employment of Employee at any time during the term of employment upon giving
Notice of Termination (as defined below).
6.2 By Employee
Employee may terminate his employment at any time, for any reason, upon
giving Notice of Termination.
6.3 By Death or Disability
This Agreement and Employee's employment hereunder shall terminate
automatically upon the death, and may be terminated in the discretion of the
President and Chief Executive Officer of Employer in the event of total
disability, of Employee. The term "total disability" as used herein shall mean
Employee's inability to perform the duties set forth in paragraph 1 hereof for a
period or periods aggregating 120 calendar days in any 12-month period as a
result of physical or mental illness, loss of legal capacity or any other cause
beyond Employee's control, unless Employee is granted a leave of absence by the
President and Chief Executive Officer of Employer. Employee and Employer hereby
acknowledge that Employee's ability to perform the duties specified in paragraph
1 hereof is of the essence of this Agreement. Termination hereunder shall be
deemed to be effective (a) at the end of the calendar week in which Employee's
death occurs or (b) immediately upon a determination of Employee's total
disability, as defined herein.
6.4 Notice
The term "Notice of Termination" shall mean at least 90 days' written
notice of termination of Employee's employment approved by Employer's President
and Chief Executive Officer, during which period Employee's employment and
performance of services will continue;
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provided, however, that Employer may, upon notice to Employee approved by
Employer's President and Chief Executive Officer, and without reducing
Employee's compensation during such period, excuse Employee from any or all of
his duties during such period. The effective date of the termination of
Employee's employment hereunder shall be the date on which such 90-day period
expires.
7. Termination Payments
In the event of termination of the employment of Employee, all
compensation and benefits set forth in this Agreement shall terminate except as
specifically provided in this paragraph 7:
7.1 Termination by Employer
If Employer terminates Employee's employment without Cause prior to the
end of the term of this Agreement, Employee shall be entitled to receive,
commencing the effective date of such termination (a) payments of the Base
Salary then in effect for nine (9) months and (b) any unpaid annual Base Salary
which has accrued for services performed as of the date termination of
Employee's employment becomes effective. In addition, so long as payments are
being made as provided for in subparagraph 7.1(a), Employee shall continue to
receive the benefits provided in paragraph 5 of this Agreement. If Employee is
terminated by Employer for Cause, Employee shall not be entitled to receive any
of the foregoing payments, other than those set forth in clause (b) above.
7.2 Termination by Employee
In the case of voluntary termination by Employee of Employee's
employment, Employee shall not be entitled to any payments hereunder, other than
those set forth in clause (b) of subparagraph 7.1 hereof.
7.3 Termination by Death or Disability
In the case of termination of Employee's employment by reason of death
or total disability as provided in subparagraph 6.3, Employee or his estate
shall be entitled to receive from Employer (a) payments of the Base Salary then
in effect for three (3) months; and (b) any unpaid annual Base Salary which has
accrued for services already performed as of the date termination of Employee's
employment becomes effective. In addition, during the period of the payments
provided for in subparagraph 7.3(a), Employee shall continue to receive the
benefits provided in paragraph 5 of this Agreement.
7.4 Termination Payment Schedule
All payments under this paragraph 7 shall be made to Employee at the
same intervals as payments were made to Employee immediately prior to
termination.
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7.5 Cause
Wherever reference is made in this Agreement to termination being with
or without Cause, "Cause" means cause given by Employee to Employer and shall
include, without limitation, the occurrence of one or more of the following
events:
(a) Failure or refusal to carry out the lawful duties of Employee
described in paragraph 1 hereof or any directions of the Board of
Directors or President and Chief Executive Officer of Employer,
which directions are reasonably consistent with the duties herein
set forth to be performed by Employee for a period of 60 days
following written notice of such refusal or failure, unless, in
the reasonable judgment of the Board of Directors no cure is
possible or such 60-day period would subject the Employer to
unreasonable risk;
(b) Violation by Employee of a state or federal criminal law
involving the commission of a crime against Employer or a felony
which is determined by the Board of Directors of Employer to be
harmful to the business or reputation of Employer;
(c) Abuse by Employee of alcohol or controlled substances; deception,
fraud, material misrepresentation or dishonesty by Employee; any
incident materially compromising Employee's reputation or ability
to represent Employer with the Public; any act or omission by
Employee which substantially impairs Employer's business, good
will or reputation; or
(d) Any other material violation by the Employee of any provision of
this Agreement.
8. Noncompetition and Nonsolicitation
8.1 Applicability
This paragraph 8 shall survive the termination of Employee's employment
with Employer or the expiration of the term of this Agreement.
8.2 Noncompetition
Employee agrees that he will not directly or indirectly, during his
employment and for a period (the "Noncompetition Period") of 18 months from the
date on which his employment with Employer terminates for any reason, be
employed by, consult with or otherwise perform services for, own, manage,
operate, join, control or participate in the ownership, management, operation or
control of or be connected with, in any manner, any Competitor. A "Competitor"
shall include
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any entity which, directly or indirectly, produces, markets, distributes or
otherwise derives benefit from the production, marketing or distribution of
products or services which have the same use or provide the same benefit to the
user thereof or which otherwise compete with products or services produced or
marketed by Employer at the time of termination of employment, or which Employer
is then developing or preparing to develop, produce or market, or which are
extensions of or closely related to or substitutes for the products or services
then produced or marketed by Employer, any place where Employer is then doing
business or where Employer's business plan contemplates doing business in the
ensuing twelve months, unless released from such obligation in writing by
Employer's Board of Directors. Without limiting the generality of the foregoing,
Employee shall be deemed to be related to or connected with a Person which
competes with Employer if, among other things, such Person is (a) a partnership
in which Employee is a general or limited partner, (b) a corporation or
association of which Employee is a stockholder, officer, employee or director or
(c) a partnership, corporation or association for which Employee is a consultant
or agent; provided, however, that nothing herein shall prevent the purchase or
ownership by Employee of securities which constitute less than five percent of
the outstanding equity securities of a publicly held corporation, if Employee
has no other relationship with such corporation.
8.3 Nonsolicitation
Employee shall not directly or indirectly solicit, influence or entice,
or attempt to solicit, influence or entice, any employee or consultant of
Employer to cease his, her or its relationship with Employer or solicit,
influence, entice or in any way divert any customer, distributor, partner, joint
venturer or supplier of Employer to do business or in any way become associated
with any Competitor. This subparagraph 8.3 shall apply during the time period
and geographical area described in subparagraph 8.2 hereof.
8.4 Affiliates
During the Noncompetition Period, Employee shall not knowingly (a)
cause or permit any "Affiliate" (as defined below) of Employee to, in any way,
directly or indirectly, for itself or on behalf of any other person or entity,
conduct, participate in or engage in any activity or enter into any contract or
agreement of any kind whatsoever with respect to any activity that Employee is
prohibited from engaging in by subparagraphs 8.2 and 8.3 or (b) fail to take any
action needed to prevent any Affiliate of Employee from, in any way, directly or
indirectly, for itself or on behalf of any other person or entity, conducting,
participating in or engaging in any activities or entering into any contract or
agreement of any kind whatsoever with respect to any activity that Employee is
prohibited from engaging in by subparagraphs 8.2 and 8.3. An "Affiliate" of
Employee shall mean any other person or entity within the reasonable control of
Employee and, without limiting the generality of the foregoing, shall in any
event include (a) any person or entity of which Employee beneficially owns or
holds five percent or more of any class of voting securities or five percent or
more of the legal or beneficial interest, (b) any director or officer of any
corporation or other entity which is an Affiliate (as described above) of
Employee, (c) any partner, joint venturer
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or business associate of Employee and (d) any member of the "immediate family"
(as defined for purposes of Section 16 of the Securities Exchange Act of 1934)
of Employee.
8.5 Assignment of Intellectual Property
All concepts, designs, machines, devices, uses, processes, technology,
trade secrets, works of authorship, customer lists, plans, embodiments,
inventions, improvements or related work product (collectively "Intellectual
Property") which Employee develops, conceives or first reduces to practice
during the term of his employment hereunder or within one year after the
termination of his employment hereunder or the expiration of this Agreement,
whether working alone or with others, which is related in any way to the
business of Employer, shall be the sole and exclusive property of Employer,
together with any and all Intellectual Property rights, including, without
limitation, patent or copyright rights, related thereto, and Employee hereby
assigns to Employer all of such Intellectual Property. "Intellectual Property"
shall include only such concepts, designs, machines, devices, uses, processes,
technology, trade secrets, customer lists, plans, embodiments, inventions,
improvements and work product which (a) relate to Employee's performance of
services under this Agreement, to Employer's field of business or to Employer's
actual or demonstrably anticipated research or development, whether or not
developed, conceived or first reduced to practice during normal business hours
or with the use of any equipment, supplies, facilities or trade secret
information or other resource of Employer or (b) are developed in whole or in
part on Employer's time or developed using Employer's equipment, supplies,
facilities or trade secret information, or other resources of Employer, whether
or not the work product relates to Employer's field of business or Employer's
actual or demonstrably anticipated research.
8.6 Disclosure and Protection of Inventions
Employee shall disclose in writing all concepts, designs, processes,
technology, plans, embodiments, inventions or improvements constituting
Intellectual Property to Employer promptly after the development thereof by
Employee. At Employer's request and at Employer's expense, Employee will assist
Employer or its designee in efforts to protect all rights relating to such
Intellectual Property. Such assistance may include, without limitation, the
following: (a) making application in the United States and in foreign countries
for a patent or copyright on any work products specified by Employer; (b)
executing documents of assignment to Employer or its designee of all of
Employee's right, title and interest in and to any work product and related
intellectual property rights; and (c) taking such additional action (including,
without limitation, the execution and delivery of documents) to perfect,
evidence or vest in Employer or its designee all right, title and interest in
and to any Intellectual Property and any rights related thereto.
8.7 Nondisclosure; Return of Materials
During the term of his employment by Employer and following termination
of such employment, Employee will not disclose (except as required by his duties
to Employer or by law) any concept, design, process, technology, trade secret,
customer list, plan, embodiment or
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invention, any other Intellectual Property or any other confidential
information, whether patentable or not, of Employer of which Employee becomes
informed or aware during his employment whether or not developed by Employee. In
the event of the termination of his employment with Employer or the expiration
of this Agreement, Employee will return all documents, data and other materials
of whatever nature, including, without limitation, drawings, specifications,
research, reports, embodiments, software and manuals to Employer which pertain
to his employment with Employer or to any Intellectual Property and shall not
retain or cause or knowingly allow any third party to retain photocopies or
other reproductions of the foregoing.
8.8 Equitable Relief
Employee acknowledges that the provisions of this paragraph 8 are
essential to Employer, that Employer would not enter into this Agreement if it
did not include this paragraph 8 and that damages sustained by Employer as a
result of a breach of this paragraph 8 cannot be adequately remedied by damages,
and Employee agrees that Employer, notwithstanding any other provision of this
Agreement, including, without limitation, paragraph 11 hereof, and in addition
to any other remedy it may have under this Agreement or at law, shall be
entitled to injunctive and other equitable relief, including, without
limitation, specific performance, to prevent or curtail any breach of any
provision of this Agreement, including, without limitation, this paragraph 8.
8.9 Effect of Violation
Employee and Employer acknowledge and agree that additional
consideration has been given for Employee entering into this paragraph 8, such
additional consideration including, without limitation, the bonus agreements
detailed above and certain equity agreements being entered into by the parties
in connection herewith and certain provisions for termination payments pursuant
to paragraph 7 of this Agreement. Violation by Employee of this paragraph 8
shall relieve Employer of any obligation it may have to make such bonus and
termination payments, but shall not relieve Employee of his obligations, as
required hereunder, not to compete.
8.10 Definition of Employer
For purposes of subparagraph 8.2 and subparagraph 8.3 hereof,
'Employer" shall include all subsidiaries of Employer, Employer's parent
corporation (if any) and any business ventures in which Employer, its
subsidiaries or its parent corporation may participate.
8.11 Understanding of Employee
In connection with the foregoing provisions of this paragraph 8,
Employee represents that his experience, capabilities and circumstances are such
that such provisions will not prevent him from earning a livelihood. Employee
further agrees that the limitations set forth in this paragraph 8, including,
without limitation, any time or territorial limitations, are reasonable and
properly required for the adequate protection of the business of Employer.
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9. Representations and Warranties
In order to induce Employer to enter into this Agreement, Employee
represents and warrants to Employer as follows:
9.1 Health
Employee is in good health and knows of no physical or mental
disability which would prevent him from fulfilling his obligations hereunder.
Employee agrees, if Employer requests, to submit to annual medical examinations
to be paid for by Employer.
9.2 No Violation of Other Agreements
Neither the execution nor the performance of this Agreement by Employee
will violate or conflict in any way with any other agreement by which Employee
may be bound, or with any other duties imposed upon Employee by corporate or
other statutory or common law.
9.3 Patents, Etc.
Employee has been given the opportunity to prepare and attach hereto as
Schedule 1 a list of all inventions, patent applications and patents made or
conceived by Employee prior to the date hereof, which are subject to prior
agreement or which Employee desires to exclude from this Agreement. If no such
list is attached, Employee hereby represents and warrants to Employer that there
are no such inventions, patent applications or patents.
10. Notice and Cure of Breach
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than pursuant to the definition of "Cause" set forth in
subparagraph 7.5 hereof, before such action is taken, the party asserting the
breach of this Agreement shall give the other party at least 30 days' prior
written notice of the existence and the nature of such breach before taking
further action hereunder and shall give the party purportedly in breach of this
Agreement the opportunity to correct such breach during the 30-day period.
11. Arbitration
Any controversies or claims arising out of or relating to this
Agreement shall be fully and finally settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect (the "AAA Rules"), conducted in the State of
Washington by one arbitrator either mutually agreed upon by Employee and
Employer or chosen in accordance with the AAA Rules, except that the parties
thereto shall have any right to discovery as would be permitted by the Federal
Rules of Civil Procedure for a period of 90 days
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following the commencement of such arbitration and the arbitrator thereof shall
resolve any dispute which arises in connection with such discovery. Each party
shall bear his or its own costs and expenses of any such proceeding and judgment
upon the award rendered by the arbitrator may be entered in any court of
competent jurisdiction.
12. Form of Notice
All notices given hereunder shall be given in writing, shall
specifically refer to this Agreement and shall be personally delivered or sent
by telecopy or other electronic facsimile transmission or by registered or
certified mail, return receipt requested, at the address set forth below or at
such other address as may hereafter be designated by notice given in compliance
with the terms hereof:
If to Employee: Xxxxxxx Xxxxx
Address:
0000 XX 000xx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile:
Phone:
If to Employer: Labtec, Inc.
Suite 350
0000 X.X. Xxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: President
Facsimile: 360/896-2100
Phone: 360/000-0000
Copies to: Sun Capital Partners, Inc.
000 Xxxxx Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxx Floor
West Palm Beach, FL 33401
Attn: Xxxx X. Xxxxx and Xxxxxx X. Xxxxxx
Facsimile: 561/835-1314
Phone: 561/000-0000
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxx
Facsimile: 617/951-7050
Phone: 617/000-0000
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If notice is mailed, such notice shall be effective upon mailing, or if notice
is personally delivered or sent by telecopy or other electronic facsimile
transmission, it shall be effective upon receipt.
13. Assignment
This Agreement is personal to Employee and shall not be assignable by
Employee. Employer may assign its rights hereunder to (a) any corporation
resulting from any merger, consolidation or other reorganization to which
Employer is a party or (b) any corporation, partnership, association or other
person to which Employer may transfer all or substantially all of the assets and
business of Employer existing at such time. All of the terms and provisions of
this Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
14. Waivers
No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a waiver
thereof. The express waiver by a party hereto of any right, title, interest or
remedy in a particular instance or circumstance shall not constitute a waiver
thereof in any other instance or circumstance. All rights and remedies shall be
cumulative and not exclusive of any other rights or remedies.
15. Amendments in Writing
No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party hereto, shall in any event be effective unless the same shall be in
writing, specifically identifying this Agreement and the provision intended to
be amended, modified, waived, terminated or discharged and signed by Employer
and Employee, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by Employer and Employee.
16. Applicable Law
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the State of Washington, without regard
to any rules governing conflicts of laws.
17. Severability
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any
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jurisdiction, for any reason, including, without limitation, the duration of
such provision, its geographical scope or the extent of the activities
prohibited or required by it, then, to the full extent permitted by law (a) all
other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the intent
of the parties hereto as nearly as may be possible, (b) such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of any other provision hereof, and (c) any court or arbitrator
having jurisdiction thereover shall have the power to reform such provision to
the extent necessary for such provision to be enforceable under applicable law.
18. Headings
All headings used herein are for convenience only and shall not in any
way affect the construction of, or be taken into consideration in interpreting,
this Agreement.
19. Counterparts
This Agreement and any amendment or modification entered into pursuant
to paragraph 15 hereof, may be executed in any number of counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one and
the same instrument.
20. Entire Agreement
This Agreement on and as of the effective date hereof constitutes the
entire agreement between Employer and Employee with respect to Employee's
employment with Employer and all prior or contemporaneous oral or written
communications, understandings or agreements between Employer and Employee with
respect to such subject matter are hereby superseded and nullified in their
entireties.
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IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement as of the effective date set forth above.
LABTEC, INC.
By: /s/ Xxxx X. Xxxxx
Its: Vice President
EMPLOYEE:
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
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