EXHIBIT 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 26th 2006 by and between Wi-Tron,
Inc., a Delaware corporation, with offices located at 00 XxXxxxxx Xx, Xxxxxxx,
XX 00000 (the "Company"), and Xxxxxx X. Xxxxxxxxx, an individual residing at 00
Xxxx Xxx, Xxxx Xxxxx, XX 00000 (the "Executive").
WHEREAS, the Company desires to secure the unique experience, ability and
services of the Executive upon the terms and conditions hereinafter set forth
and to prevent any other competitive business from securing his services;
WHEREAS, the Executive desires to render services to the Company upon the
terms and conditions hereinafter set forth; and
NOW, THEREFORE, the parties mutually agree as follows:
1. Employment. The Company hereby employs Executive and the Executive hereby
accepts such employment, as the Chief Executive Officer (CEO) of the Company,
subject to the terms and conditions set forth in this Agreement.
2. Duties. The Executive shall serve as CEO of the Company and shall properly
perform such duties as may be assigned to him from time to time by the Board of
Directors of the Company. The Executive shall serve on the Board of Directors
without additional compensation. During the term of this Agreement, the
Executive shall devote a substantial portion of his business time to the
performance of his duties while still allowing the Executive the flexibility to
continue previously established relationships which directly support Wi-Tron's
interest, including the Executive's Business Development work with Wi-Tron's
customer, Cellvine, and the IA450 International Association for which the
Executive remains a board member. Executive agrees to be examined by a physician
at the Company's expense in order for the Company to obtain a key man life
insurance policy in an amount not to exceed $1,000,000 upon terms and conditions
acceptable to the Company. The company will also obtain $3,000,000 of executive
insurance to insure the individual from personal liabilities.
3. Term of Employment. The term of the Executive's employment shall be for a
period of three years commencing on May 31, 2006, subject to earlier termination
by the parties pursuant to Sections 4, 6 and 7 hereof. The Term of this
Agreement shall be automatically extended for additional one (1) year renewals,
unless either party notifies to other in writing at least ninety (90) days prior
to the expiration of the then existing Term of its intention not to extend the
Term.
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4. Compensation of Executive.
4.1 Salary.
(a) Company shall pay to Executive the following a monthly based
compensation for his services hereunder, less such deductions as shall be
required to be withheld by applicable law and regulations: a base salary of
$130,000 a year (the "Base Salary"). All salaries payable to Executive shall be
paid at such regular monthly interval at the end of each month worked.
(b) Company shall issue to Executive options upon signing for the purchase
of 900,000 Incentive Stock Options exercisable at a price determined pursuant to
the Company's 2005 Stock Option Plan, and 1,100,000 stock options exercisable at
$0.20 per share that shall vest immediately; and
(c) Company shall award additional options as follows:
o January 31, 2007, 1,000,000 at 20% below the median of the
share closing prices for the month on January 2007, vesting
December 2007.
o Upon the successful closing of first contract worth $5,000,000
or more, the company will issue 1,000,000 at the median
closing price for the thirty-day prior to the announcement of
the contract.
o Additional stock options will be issued in 2007, subject to
Board approval and based on the overall performance of the
company.
4.2 Back Payments. Prior to signing this agreement, the Company shall pay
all back invoices and expenses accrued while the Executive served as a
consultant for the Company. This includes all accrued compensation and normal
and customary expenses prior to June 1, 2006.
4.3 Discretionary Bonus. During the Term and in addition to the annual
salary set forth in Section 4.1 above, the Executive shall be entitled to such
bonus compensation as the Board of Directors of the Company may determine from
time to time in its sole discretion payable in cash, options and/or in capital
stock of the Company.
4.4 Expenses. During the Term, the Company shall provide the Executive for
all reasonable and necessary business travel expenses and other bona fide
disbursements incurred by the Executive on behalf of the Company, in performance
of the Executive's duties hereunder.
4.5 Benefits. The Executive shall be permitted during the Term to
participate in any hospitalization or disability insurance plans, health
programs, pension plans, bonus plans or similar benefits that may be available
to other executives of the Company to the extent the Executive is eligible under
the terms of such plans or programs. The Company agrees to provide the Executive
with a paid health insurance plan.
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4.6 Change of Control.
(a) In the event that there occurs a "Change of Control" (as defined
below) during the term of this Agreement and as a result thereof the
Executive resigns or this Agreement is terminated, the Company
expressly agrees that upon such resignation or termination, the
Company shall pay to the Executive a sum equal to one year salary. As
used herein, the term "Change of Control" shall mean, subject to
Section 4.6(b) hereof, either
(i) a sale of all or substantially all of the assets of the Company other
than by way of a public offering of the Company's securities,
(ii) a merger or consolidation of the Company, whereby the holders of
equity securities of the Company prior to the transaction, hold less
than 50% of the total voting power of the surviving corporation, or
(iii)the sale or transfer of shares of the Company by the Company and/or
any one or more of its shareholders, in one transaction or a series
of transactions, to one or more parties under circumstances whereby
the holders of equity securities of the Company prior to the
transaction, hold less than 50% of the total voting power of the
surviving corporation.
(b) Notwithstanding anything set forth herein to the contrary, in the
event that the Executive, as a member of the Company's Board of Directors, votes
in favor of any of the transactions described in either Section 4.7(i) or
4.7(ii) below, then in such event, there shall not be deemed to have occurred a
"Change of Control" for the purposes of this Agreement.
4.7 Acceleration of Compensation. In the event that either: (i) a tender
offer for shares of the Company's Common Stock is made, which tender is not
approved by the Company's Board of Directors and a majority of the Company's
outstanding stock is tendered thereunder, or (ii) a Board of Directors, not
recommended by management is empaneled, then and in either of those events, six
months salary will be awarded to the Executive and all options will immediately
vest.
5. Vacations. The Executive shall be entitled to a vacation of three (3) weeks
for the remainder of 2006 and four (4) weeks per calendar year from then on,
during which period his salary shall be paid in full. The Executive shall take
his vacation at such time or times as the Executive and the Company shall
determine is mutually convenient.
6. Disability of the Executive. If the Executive is incapacitated or disabled by
accident, sickness or otherwise (including, without limitation, as a result of
abuse of alcohol or other drugs or controlled substances) so as to render the
Executive mentally or physically incapable of performing the services required
to be performed under this Agreement for a period of one hundred twenty (120)
consecutive days or longer or for any one hundred eighty (180) days in any
period of three hundred sixty (360) consecutive days (a "Disability"), the
Company may, at that time or any time thereafter, at its option, terminate the
employment of the Executive under this Agreement immediately upon giving the
Executive notice to that effect. In the event of the Disability of the
Executive, the Executive shall receive severance compensation equal to six
months salary.
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7. Termination.
7.1 Termination for Cause. The Company may terminate the employment of the
Executive and all of the Company's obligations under this Agreement at any time
for Cause (as hereinafter defined) by giving the Executive notice of such
termination, with reasonable specificity of the details thereof. "Cause" shall
mean (i) the Executive's legal misconduct could reasonably be expected to have a
material adverse effect on the business and affairs of the Company, (ii) the
Executive's disregard of lawful instructions of the Company's Board of Directors
consistent with the Executive's position relating to the business of the Company
or neglect of duties or failure to act, which, in each case, could reasonably be
expected to have a material adverse effect on the business and affairs of the
Company, (iii) the commission by the Executive of an act constituting common law
fraud, or a felony, or criminal act against the Company or any affiliate thereof
or any of the assets of any of them, (iv) conviction of a crime involving moral
turpitude or (v) the Executive's material breach of any of the agreements
contained herein. A termination pursuant to Section 7.1(i), (ii)or (v) shall
take effect fifteen (15) days after the giving of the notice contemplated hereby
unless the Executive shall, during such fifteen (15) day period, remedy to the
satisfaction of the Board of Directors of the Company the misconduct, disregard
or breach specified in such notice; provided, however, that such termination
shall take effect immediately upon the giving of such notice if the Board of
Directors of the Company shall, in its sole discretion, have determined that
such misconduct, disregard or breach is not remediable (which determination
shall be stated in such notice). A termination pursuant to Section 7.1(iii) or
(iv) shall take effect immediately upon the giving of the notice contemplated
hereby.
7.2 Termination without Cause. The Company may terminate the employment of
the Executive and all of the Company's obligations under this Agreement (except
as hereinafter provided) at any time during the Term without Cause (hereinafter,
"Not for Cause") by giving the Executive written notice of such termination, to
be effective fifteen (15) days following the giving of such written notice.
7.3 Termination for Good Reason; Resignation. The Executive may (i) resign
or (ii) terminate his employment and all of his obligations under this Agreement
at any time during the Term for Good Reason (as hereinafter defined) by giving
the Company notice of such termination, with reasonable specificity of the
details thereof, to be effective fifteen (15) days following the giving of such
written notice. Good Reason shall mean the occurrence of any of the following
events or conditions:
(i) (A) the assignment to the Executive of any duties materially
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2 of this Agreement, or (B) any
other action by the Company which results in a material diminution in such
position, authority, duties or responsibilities, other than an insubstantial and
inadvertent action which is remedied by the Company promptly after receipt of
notice thereof given by the Executive; or (ii) any failure by
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the Company to comply with the provisions of Section 4 or 5 of this Agreement,
other than an insubstantial and inadvertent failure which is remedied by the
Company promptly after receipt of notice thereof given by the Executive; or
(iii) the Company's requiring the Executive to be based at any office or
location outside a fifteen (15) mile radius from the Company's principal
executive offices, except for travel reasonably required in the performance of
the Executive's responsibilities; or (iv) any purported termination by the
Company of the Executive's employment otherwise than as permitted by this
Agreement, it being understood that any such purported termination shall not be
effective for any purpose of this Agreement.
For purposes of this subsection, any good faith determination of Good
Reason made by the Executive shall be conclusive.
For convenience of reference, the date upon which any termination of the
employment of the Executive pursuant to Sections 6 or 7 shall be effective shall
be hereinafter referred to as the "Termination Date".
8. Effect of Termination of Employment.
(a) Upon the termination of the Executive's employment for Cause, neither
the Executive nor the Executive's beneficiaries or estate shall have any further
rights under this Agreement or any claims against the Company arising out of
this Agreement, except the right to receive (i) two months salary; and (ii)
reimbursement for any expenses for which the Executive shall not have
theretofore been reimbursed, as provided in Section 4.4 (the "Expense
Reimbursement Amount").
(b) Upon the termination of the Executive's employment by the Company Not
for Cause or by the Executive for Good Reason, neither the Executive nor the
Executive's beneficiaries or estate shall have any further rights under this
Agreement or any claims against the Company arising out of this Agreement,
except the right to receive (i) the unpaid portion of the Base Salary computed
on a pro rata basis to the close of the calendar month in which the Executive is
terminated (the "Unpaid Salary Amount"), (ii) the Expense Reimbursement Amount
and (iii) six months additional severance payment.
(c) In the event the Executive resigns from the employment by the Company
prior to the end of the Term, neither the Executive nor the Executive's
beneficiaries or estate shall have any further rights under this Agreement or
claims against the Company arising out of this Agreement except the right to
receive (i) the Unpaid Salary Amount, and (ii) the Expense Reimbursement Amount.
Notwithstanding the preceding provisions of this Section 8, in the event
the payments to be received by the Executive would constitute an "excess
parachute payment" under the Internal Revenue Code of 1986, and applicable
regulations as then in effect, then such payments shall be reduced accordingly
so as not to constitute an "excess parachute payment."
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9. Disclosure of Confidential Information. The Executive recognizes that he has
had and will continue to have access to secret and confidential information
regarding the Company, including but not limited to its customer list, products,
formulae, know-how, and business and marketing plans ("Confidential
Information"). The Executive acknowledges that such information is of great
value to the Company, is the sole property of the Company, and has been and will
be acquired by his in confidence. In consideration of the obligations undertaken
by the Company herein, the Executive will not, at any time, during or after his
employment hereunder, reveal, divulge or make known to any person, any
Confidential Information acquired by the Executive during the course of his
employment. The provisions of this Section 9 shall survive the Executive's
employment hereunder for a period of three years.
10. Covenant Not To Compete.
(a) The Executive recognizes that the services to be performed by him
hereunder are special, unique and extraordinary. The parties confirm that it is
reasonably necessary for the protection of Company that the Executive agree, and
accordingly, the Executive does hereby agree that, except for and limited to the
prior relationships and duties held by the Executive that are described in
Section 2 herein, he shall not, directly or indirectly, at any time during the
term of the Agreement and the "Restricted Period" (as defined in Section 10(e)
below):
(i) except as provided in Subsection (c) below, be engaged in the linear
power amplifier industry or provide technical assistance, advice or
counseling regarding the linear power amplifier industry in any state
in the United States or any other country in which the Company or any
affiliate thereof is engaged in business, either on his own behalf or
as an officer, director, stockholder, partner, consultant, associate,
employee, owner, agent, creditor, independent contractor, or
co-venturer of any third party; or
(ii) employ or engage, or cause or authorize, directly or indirectly, to
be employed or engaged, for or on behalf of himself or any third
party, any employee or agent of Company or any affiliate thereof.
(b) The Executive hereby agrees that he will not, directly or indirectly,
for or on behalf of himself or any third party, at any time during
the term of the Agreement and during the Restricted Period solicit
any customers of the Company or any affiliate thereof.
(c) If any of the restrictions contained in this Section 10 shall be
deemed to be unenforceable by reason of the extent, duration or
geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, and in its reduced
form this Section shall then be enforceable in the manner
contemplated hereby.
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(d) This Section 10 shall not be construed to prevent Executive from
owning, directly or indirectly, in the aggregate, an amount not
exceeding one percent (1%) of the issued and outstanding voting
securities of any class of any company whose voting capital stock is
traded on a national securities exchange or on the over-the-counter
market other than securities of the Company.
(e) The term "Restricted Period," as used in this Section 10, shall mean
the period of the Executive's actual employment hereunder plus: (i)
in the event that this Agreement expires or the Executive is
terminated for Cause, the thirty six (36) months after the
Termination Date or (ii) in the event that the Executive is
terminated without Cause, for Good Reason or for a Disability, twelve
(12) months after the Termination Date.
(f) The provisions of this Section 10 shall survive the end of the
Restricted Period as provided in Section 10(e) hereof.
11. Miscellaneous.
11.1 Injunctive Relief. The Executive acknowledges that the services to be
rendered under the provisions of this Agreement are of a special, unique and
extraordinary character and that it would be difficult or impossible to replace
such services. Accordingly, the Executive agrees that any breach or threatened
breach by him of Sections 9 or 10 of this Agreement shall entitle the Company,
in addition to all other legal remedies available to it, to apply to any court
of competent jurisdiction to seek to enjoin such breach or threatened breach.
The parties understand and intend that each restriction agreed to by Executive
hereinabove shall be construed as separable and divisible from every other
restriction, that the unenforceability of any restriction shall not limit the
enforceability, in whole or in part, of any other restriction, and that one or
more or all of such restrictions may be enforced in whole or in part as the
circumstances warrant. In the event that any restriction in this Agreement is
more restrictive than permitted by law in the jurisdiction in which Company
seeks enforcement thereof, such restriction shall be limited to the extent
permitted by law.
11.2 Assignments. Neither the Executive nor the Company may assign or
delegate any of their rights or duties under this Agreement without the express
written consent of the other.
11.3 Entire Agreement. This Agreement constitutes and embodies the full
and complete understanding and agreement of the parties with respect to the
Executive's employment by the Company, supersedes all prior understandings and
agreements, whether oral or written, between the Executive and the Company, and
shall not be amended, modified or changed except by an instrument in writing
executed by the party to be charged. The invalidity or partial invalidity of one
or more provisions of this Agreement shall not invalidate any other provision of
this Agreement. No waiver by either party of any provision or condition to be
performed shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same time or any prior or subsequent time.
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11.4 Binding Effect. This Agreement shall inure to the benefit of, be
binding upon and enforceable against, the parties hereto and their respective
successors, heirs, beneficiaries and permitted assigns.
11.5 Headings. The headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.6 Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered, sent by registered or
certified mail, return receipt requested, postage prepaid, or by private
overnight mail service (e.g. Federal Express) to the party at the address set
forth above or to such other address as either party may hereafter give notice
of in accordance with the provisions hereof. Notices shall be deemed given on
the sooner of the date actually received or the third business day after
sending.
11.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey without giving effect to
such State's conflicts of laws provisions and each of the parties hereto
irrevocably consents to the jurisdiction and venue of the federal and state
courts located in the State of New Jersey, County of Somerset.
11.8 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one of the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.
WI-TRON, INC
By: /s/ Xxxx Xxxxx Xxx
-----------------------------
Xxxx Xxxxx Xxx, President
/s/ Xxxxxx X. Xxxxxxxxx
-------------------------
Xxxxxx X. Xxxxxxxxx
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