EXHIBIT 10(K)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made as of October 1, 1995
by and between EIP Microwave, Inc., a Delaware corporation ("COMPANY"), and Xxxx
X. Xxxxxx ("Employee").
AGREEMENT
In consideration of the provisions hereinafter set forth, the parties agree
as follows:
1. TERM. Company hereby employs Employee for a term (the "TERM")
commencing on the date of this Agreement and continuing for an initial period of
two years from the date hereof; provided that (unless either party notifies the
other in writing of his or its desire not to extend the Term) on the first day
of each month after the date of this Agreement, the Term shall be automatically
extended for an additional month so that following each such extension the
remaining Term shall be two years. Employee hereby accepts such employment for
the Term.
2. DUTIES. Employee shall be and remain employed as Vice Chairman,
Secretary and Treasurer of Company. Employee shall, subject always to
applicable law and to the policies of the Board of Directors, use his best
efforts to take such actions and do all things as he, in his discretion deems
necessary and advisable to perform the duties required of the Vice Chairman,
Secretary and Treasurer as specifically set forth in Company's Bylaws, and to
perform such other duties as the Board of Directors may from time to time
direct.
3. PERFORMANCE. Notwithstanding anything in this Agreement to the
contrary:
(a) Employee agrees to devote so much of his time to the duties
described in Paragraph 2 above as is reasonably appropriate and necessary
to discharge the duties and responsibilities of his offices.
(b) Employee may, directly or indirectly, as an employee, employer,
agent, consultant, partner, shareholder, officer, director, or in any other
individual or representative capacity, organize and participate in any
other business or personal undertaking during the Term; PROVIDED, HOWEVER,
that no such business or undertaking shall be competitive with the business
conducted by Company.
4. COMPENSATION.
(a) SALARY. Company shall pay Employee a salary of Six Thousand Five
Hundred Dollars ($6,500) per month, which salary shall be payable in advance on
the first day of each calendar month during the Term.
(b) AUTOMOBILE.
(i) USE OF AUTOMOBILE. Employee shall be entitled to the full
and unrestricted use of the 1989 Mercedes Benz Model 560 automobile,
VIN WDBCA9E6LA534854 owned by Company and currently provided to
Employee
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for his business and personal use, or any successor replacement
automobile mutually agreed by Company and Employee (the "AUTOMOBILE").
(ii) RIGHT TO PURCHASE AUTOMOBILE. In consideration of
Employee's prior agreement to reduce his monthly base salary to $1.00
a month for the period February 1992 through July 1992, and the
deduction of $217 per month from his monthly salary for the period
from August 1992 through October 1995, Company has irrevocably granted
Employee, and does hereby confirm such grant of, the right to purchase
the Automobile with the foregone salary of $56,846 (6 months x $8,100
per month plus 38 months x $217 per month) being credited toward
payment for the purchase price of the Automobile. The difference in
the Automobile's Xxxxx Blue Book value and $56,846 (if any) is to be
paid as follows: If the Automobile's Xxxxx Blue Book value is more
than $56,846 at time of transfer, the difference is to be paid by
Employee to Company at the time title is transferred to him, or if the
Automobile's Xxxxx Blue Book value is less than $56,846 at time of
transfer, the difference is to be paid by Company to Employee at the
time title is transferred to him. Employee shall be entitled to
exercise his right to purchase the Automobile at any time commencing
two months prior to the last day of the Term and terminating on the
last day of the Term (the "EXERCISE PERIOD"); PROVIDED, HOWEVER, that
Employee or his estate may exercise the right to purchase the
Automobile without regard to the Exercise Period in the event the
provisions of subparagraph 4(b)(iv) are applicable. Company shall
deliver title to the Automobile to Employee free and clear of any
liens, security interests or encumbrances within five (5) business
days after Company's receipt of Employee's written exercise of his
option to purchase the Automobile. The Automobile will be valued as
of the first day of the month in which title is to be transferred from
Company to Employee using the most current Xxxxx Blue Book quotation
for a vehicle substantially similar to the Automobile, taking model
year, model number, accessories and mileage into consideration, and
Company shall be responsible for the payment of the sales tax and any
fees charged by the Department of Motor Vehicles to process the
transfer.
(iii) AUTOMOBILE EXPENSE. During the Term (whether Company
continues to own the Automobile or whether Employee exercises his
option to purchase the Automobile), Company shall pay (or reimburse
Employee) the costs for all gasoline, maintenance, and repair for the
Automobile, shall maintain insurance coverages on the Automobile
substantially similar to the coverages currently in effect and shall
make an Automobile expense deduction of $217 per month from Employee's
salary.
(iv) ELECTION TO PURCHASE AUTOMOBILE OR RECEIVE CASH FOLLOWING
TERMINATION. If Employee's employment with Company is terminated at
any time pursuant to Paragraph 6, then notwithstanding the reason for
or manner of such termination, Employee or his estate shall be
entitled to elect either (1) to exercise his option to purchase the
Automobile in accordance with the provisions of subparagraph 4(b)(ii),
or (2) to receive the previously foregone salary of $56,846 in cash.
Employee shall make such election by delivering a written notice of
election to Company within ninety (90) days after any termination due
to the death of
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Employee or within ten (10) days after termination for any reason
other than death; provided, however, that if Employee or his estate
fails to deliver a written election notice to Company within the
applicable period, then Employee or his estate shall conclusively be
deemed to have elected to receive payment of the previously foregone
salary of $56,846 in cash. If Employee or his estate elects (or is
deemed to have elected) to receive cash rather than the Automobile,
then such cash payment shall be made by Company within thirty (30)
days of such election (or deemed election), and simultaneously with
receipt of such payment by Company, Employee or his estate shall
deliver physical possession of the Automobile to Company.
(c) DISABILITY. Notwithstanding anything in Paragraph 4 to the
contrary, if Employee becomes Permanently Disabled (as hereinafter defined in
this subparagraph 4(c)), the monthly salary payable to Employee pursuant to
subparagraph 4(a) shall be reduced by 50% for the remainder of the Term and the
obligations of the Company under subparagraphs 4(d) and 4(g) shall be
terminated. Employee's monthly salary and other benefits under this Paragraph 4
shall continue to be paid and provided to Employee during all periods in which
he is Temporarily Disabled (as hereinafter defined in this subparagraph 4(c)).
All salary and other benefits payable or to be provided to Employee while he is
Permanently Disabled or Temporarily Disabled shall be paid or provided as and
when such salary or benefits would otherwise have been paid or provided to
Employee had Employee not become disabled.
For purposes of this Agreement, Employee (i) shall be considered
to be "TEMPORARILY DISABLED" if Employee is unable to discharge substantially
all of his obligations hereunder due to any mental or physical impairment and
(ii) shall be considered to be "PERMANENTLY DISABLED" if Employee has been
substantially absent from work for a period of 180 consecutive days and is
unable to discharge substantially all of his obligations hereunder due to any
mental or physical impairment.
(d) OFFICE FACILITIES AND LOCATION. Company shall provide Employee
with a private office, secretarial and administrative assistance, office
equipment, supplies and other facilities and services suitable to Employee's
position and located at 0 Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000 (or a comparable location in the City of Newport Beach). In no event
shall the quality or quantity of any of the foregoing be less than that provided
or available to any other employee, agent, consultant or officer of Company, or
less than that currently provided to Employee. Employee shall not be required
to travel and shall render his services to Company in Orange County, California.
(e) EMPLOYEE BENEFITS. Employee shall be entitled to receive all
employee benefits provided to Company's senior management personnel to the
fullest extent provided to any other employee of Company, including, without
limitation, vacation, sick leave and medical, dental and health insurance
benefits.
(f) EXECUTIVE BENEFIT PLANS. Employee shall be entitled to
participate in Company's Medical Reimbursement Plan which is supplemental to the
group medical plan covering all employees (EIP Microwave Policy No. 9008.2), the
tax and financial counseling reimbursement plan (EIP Microwave Policy No.
9010.1), and the legal
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reimbursement plan (EIP Microwave Policy No. 9012). Employee also shall be
entitled to have premiums for the following term life insurance policy paid by
Company: Policy No. 0360792 issued by UNUM.
(g) BUSINESS EXPENSES. Company shall promptly pay or reimburse
Employee for all expenses incurred by Employee in relation to Company's
business, including, without limitation, expenses pertaining to the use and
maintenance of the Automobile described in subparagraph 4(b) above, travel,
lodging, meals, entertainment, seminars, periodicals and professional
credentials, memberships and societies ("Business Expenses"). Employee shall
provide Company with reasonable documentation substantiating each item of all
Business Expenses.
(h) TAX WITHHOLDING. Company shall have the right to deduct and
withhold from the compensation payable to Employee hereunder such amounts as may
be necessary to satisfy Company's obligations to federal, state and local
authorities to withhold taxes from compensation otherwise payable to Employee.
5. CONFIDENTIALITY AND NON-COMPETITION.
(a) NON-DISCLOSURE. Employee shall not, during the Term or at any time
thereafter, use or disclose, or cause to be disclosed, to any person, firm or
corporation (other than in the performance of his duties to Company) any
information concerning Company's business, inventions, discoveries, suppliers,
customers, prices, marketing strategies or technology which constitutes trade
secrets of Company, which he acquired in the course of, of incident to, his
employment by Company.
(b) EXCEPTIONS. The obligations of confidentiality and non-use set forth
in subparagraph 5(a) shall not apply to (i) information which is or becomes a
part of the public domain without breach of the aforementioned obligations by
Employee; (ii) disclosure which is required by law, including, without
limitation, response to legal process or compliance with governmental
regulations, rules or orders; or (iii) disclosure made with the prior or
contemporaneous approval of Company.
(c) NON-SOLICITATION. As a material inducement for Company to enter into
this Agreement, and expressly in exchange for the performance of Company's
obligations under this Agreement, Employee hereby covenants and agrees that, he
will not, either on his own account or directly or indirectly in conjunction
with or on behalf of any person, firm or company do any of the following:
(i) During the Term and for a one (1) year period following the last
day of the Term, solicit or employ, or attempt to solicit or employ, any
person who is then, or within twelve (12) months prior thereto has been, an
officer, manager or employee of Company (excepting, however, Employee's
son, Xxxx Xxxxxxxx Xxxxxx, and Employee's personal secretary, either of
whom Employee may solicit or employ);
(ii) During the Term and for a one (1) year period following the last
day of the Term, solicit the business of any person, firm or company which
is then,
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or within twelve (12) months prior thereto has been, a customer of Company
(other than the solicitation of business for the benefit of the Company);
or
(iii) During the Term, carry on or be engaged, concerned or
interested in, give advice to or devote any material time to the affairs
of, any trade or business competing with the business of Company.
(d) EQUITABLE RELIEF. Employee acknowledges that Company is relying for
its protection upon the existence and validity of the provisions of this
Paragraph 5, and that irreparable injury will result to Company from any
violation or continuing violation of the provisions of this Paragraph 5 for
which damages may not be an adequate remedy. Accordingly, Employee hereby
agrees that in addition to the remedies available to Company at law or under
this Agreement, Company shall be entitled to obtain such equitable relief as may
be permitted by a court of competent jurisdiction including, without limitation,
injunctive relief from any violation or continuing violation by Employee of any
term or provision of this Paragraph 5, and that Company may take application for
such equitable relief without submitting the matter to binding arbitration under
Paragraph 14 hereof.
6. TERMINATION.
(a) BY COMPANY. The employment of Employee (including without limitation
the obligation of Employee to perform and to otherwise comply with Paragraphs 2
and 3 and the obligation of Company to pay provide the compensation and other
benefits pursuant to Paragraph 4 (other than subparagraph 4(b)(iv)) may be
terminated by Company, at its option, upon written notice to Employee or his
estate after the occurrence of any of the following:
(i) Employee becomes convicted of a felony.
(ii) Employee's willful failure or refusal to perform his duties
hereunder after receipt of written notice from the Board of Directors and a
reasonable opportunity to so perform such duties.
(iii) Employee's gross negligence in the performance of his duties
hereunder after receipt of written notice from the Board of Directors and a
reasonable opportunity to remedy his gross negligence.
(iv) Employee's intentional misappropriation of significant funds or
assets of Company.
(v) Employee's death.
(b) BY EMPLOYEE. The employment of Employee (including without limitation
the obligation of Employee to perform and to otherwise comply with Paragraphs 2
and 3 and the obligation of Company to pay or provide the compensation and other
benefits pursuant to Paragraph 4 (other than subparagraph 4(b)(iv)) may be
terminated by Employee at any time upon thirty (30) days' prior written notice.
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(c) CHANGE OF CONTROL OR FAILURE OF COMPANY TO EXTEND TERM. If a
Change of Control occurs or Company notifies Employee in writing of its
desire not to extend the Term (the date of a Change of Control or any such
notice being the "TRANSITION DATE"), the obligation of Employee to perform
and to otherwise comply with Paragraphs 2 and 3 shall be terminated three
months following the Transition Date. Notwithstanding the preceding
sentence, the obligation of Company to pay or provide the compensation and
other benefits pursuant to Paragraph 4 shall continue from the Transition
Date until the end of the Term, without regard to whether Employee
continues to be employed by Company,
For purposes of this Agreement, the term "CHANGE OF CONTROL" means any
of the following:
(i) the acquisition after the date of this Agreement by any
person or group of associated persons acting in concert (within the
meaning of the Securities Exchange Act of 1934), of more than 20% of
the outstanding shares of voting stock of Company (whether by tender
offer, merger, purchase or other acquisition) coupled with or followed
by the exercise of the voting power pertaining to those shares by the
election of one or more directors of Company in any election (whether
or not such election is supported by the management of Company); or
(ii) as a result of a tender offer, merger, consolidation, sale
of assets or contested election, or any combination of the foregoing
transactions (each, a "Transaction"), persons who were directors of
Company immediately before the Transaction shall cease to constitute a
majority of the Board of Directors of Company or of any successor to
Company within two years subsequent to such Transaction; or
(iii) any sale or liquidation of all or substantially all of
the assets of Company or any merger, consolidation, or reorganization
to which Company is a party and pursuant to which Company or an entity
controlled by Company is not a surviving entity.
(d) SURVIVAL. The obligations of the parties set forth in
subparagraph 4(b)(iv), Paragraph 5 and Paragraph 7 shall survive
termination of this Agreement and termination of Employee's employment with
Company.
7. INDEMNIFICATION. Company shall, to the maximum extent permitted by
the Delaware General Corporation Law (or the laws of any other state in which
Company may then be incorporated) or any other applicable law, defend, indemnify
and hold Employee harmless from and against all expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred in connection
with any proceeding arising by reason of the fact that Employee is or was acting
as an employee, agent, consultant, officer or director of Company. For purposes
of this paragraph, a "proceeding" means any contemplated, threatened, pending or
completed action, proceeding or inquiry, whether civil, criminal, administrative
or investigative, and "expenses" includes, without limitation, the fees and
costs of attorneys, accountants, experts and other professionals, as well as any
other reasonable expense attendant to establishing a right to
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indemnification from Company. This Paragraph 7 shall be cumulative with any
other indemnification right to which Employee is entitled under Company's Bylaws
or pursuant to a separate indemnification contract between Company and Employee.
In the event that applicable law allows the purchase of insurance covering
officers, directors or agents of a corporation, Company shall, at the request of
Employee, purchase and maintain insurance on behalf of Employee against any
liability asserted against or incurred by Employee in Employee's capacity as
employee, agent, consultant, officer or director of Company, whether or not
Company would have the power to indemnify Employee against such liability under
the provisions of Company's Certificate of Incorporation, Bylaws or applicable
law.
8. AUTHORITY. The individual executing this Agreement on behalf of
Company represents and warrants to Employee that the performance of this
Agreement and consummation of the transactions contemplated hereby have been
duly authorized by all requisite action and that he or she has the power and
authority to execute this Agreement.
9. NOTICES. All notices and other communications to any party hereunder
shall be in writing and shall be made by hand-delivery, certified mail, return
receipt requested, or overnight air courier guaranteeing next day delivery:
(a) If to Company:
EIP Microwave, Inc.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
(b) If to Employee:
Xxxx X. Xxxxxx
0 Xxxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
All such notices and communications shall be deemed to have been duly
given when received or when delivery is refused. Either party may change the
address to which notices are to be given to it by giving five (5) days' prior
notice of such change in accordance herewith.
10. FURTHER DOCUMENTS AND ACTS. Each of the parties hereto agrees to
cooperate in good faith with the other and to execute and deliver such further
instruments and perform such other acts as may be reasonably necessary or
appropriate to consummate and carry into effect the transactions contemplated
under this Agreement.
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
12. ATTORNEYS' FEES. In any action, litigation or proceeding between the
parties arising out of or in relation to this Agreement, the prevailing party in
such action shall be awarded, in addition to any damages, injunctions or other
relief, and without regard to whether or
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not such matter be prosecuted to final judgment, such party's costs and
expenses, including without limitation, reasonable attorneys' accountants' and
experts' fees and expenses in connection with such action and any enforcement
thereof.
13. CHOICE OF LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California, including all matters of
construction, validity, performance and enforcement, without giving effect to
principles of conflict of laws. Any dispute, action, litigation or other
proceeding concerning this Agreement shall be instituted, maintained, heard and
decided in Orange County, California.
14. DISPUTE RESOLUTION. Except as provided in subparagraph 5(d), any
dispute, controversy or disputed claim arising under, in connection with or
relating to, this Agreement or to any amendment, purported amendment or
termination, or any breach or violation hereof or thereof, shall be finally
settled and determined by binding arbitration conducted by the Judicial
Arbitration and Mediation Service located in Santa Ana, California ("JAMS") in
accordance with the California Arbitration Act, Code of Civil Procedure ("CCP")
Sections 1280 et. seq., and JAMS applicable commercial arbitration rules and
procedures then in effect (as modified hereby). If the JAMS rules and
procedures then in effect should conflict with the terms of this Paragraph, this
Paragraph shall be controlling. The arbitration shall be held in Orange County,
California. The dispute shall be submitted to an arbitrator selected by the
parties from a JAMS-approved panel; provided, however, that if the parties
cannot agree on a single arbitrator within forty-five (45) days of the date that
the dispute, controversy or claim is submitted to arbitration, then JAMS shall
select an arbitrator. The arbitrator shall have no prior or present affiliation
or relationship with any of the parties or their counsel and shall be a retired
judge of the Courts of the State of California. Any award or decision rendered
pursuant to such rules and procedures shall be final and binding on each of the
parties hereto and their respective heirs, administrators, executors, successors
and assigns. Such decision or award shall be in writing signed by the
arbitrator and shall state the reasons upon which the decision or award is
based. The arbitrator, in deciding any dispute, controversy or claim arising
under this Agreement shall render his or her decision based upon the record
established during the arbitration and shall look to the substantive laws, and
not the laws of conflicts, of the State of California for the resolution of the
dispute, controversy or claim. The parties may obtain discovery in aid of the
arbitration in accordance with CCP Section 1283.05; provided, however, that the
arbitrator's permission shall not be required to take a discovery deposition and
discovery by means of interrogatories and requests for admissions shall not be
permitted. The arbitrator may award damages or may order specific performance,
but in no event shall the arbitrator have the authority to assess consequential,
special or punitive damages against any party. Judgment on any decision or
award pursuant hereto may be entered in any court having jurisdiction thereof.
The prevailing party in any such arbitration shall be awarded, in addition to
any damages or other relief, such party's costs and expenses, including without
limitation reasonable attorneys', accountants' and experts' fees and expenses,
in connection with such arbitration and any enforcement thereof, as the
arbitrator shall determine. Each of the parties reserves the right to file with
a court of competent jurisdiction an application for provisional remedies,
including, without limitation, an application for temporary or preliminary
injunctive relief, on the grounds that (i) provisional remedies are necessary to
enforce the confidentiality and non-competition provisions of Paragraph 5 of
this Agreement, or (ii) that the arbitration award to which the applicant may be
entitled may be rendered ineffectual in the absence of such provisional
remedies.
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15. AMENDMENTS/WAIVER. This Agreement may be amended, supplemented,
modified and/or rescinded only through an express written instrument signed by
all the parties or their respective successors and assigns. Either party may
specifically and expressly waive in writing any portion of this Agreement or any
breach hereof, but no such waiver shall constitute a further or continuing
waiver of any preceding or succeeding breach of the same or any other provision.
The consent by one party to any act for which such consent was required shall
not be deemed to imply consent or waiver of the necessity of obtaining such
consent for the same or similar acts in the future.
16. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all the rights and privileges shall be enforceable to the
fullest extent permitted by law.
17. ENTIRE AGREEMENT.
(a) This Agreement contains the entire and complete understanding
between the parties concerning its subject matter and all representations,
agreements, arrangements and understandings between or among the parties,
whether oral or written, have been fully merged herein and are superseded
hereby.
(b) The parties intend that this Agreement supersede that certain
Employment Agreement between Company and Employee dated as of March 1, 1994, and
upon execution of this Agreement by both parties hereto, such Employment
Agreement shall be terminated.
18. REMEDIES. All rights, remedies, undertakings, obligations, options,
covenants, conditions and agreements contained in this Agreement shall be
cumulative and no one of them shall be exclusive of any other.
19. ASSIGNMENT. Neither this Agreement nor any interest herein shall be
assignable (voluntarily, involuntarily, by judicial process or otherwise) by any
party to any entity without the prior written consent of both parties hereto.
Any attempt at such an assignment without such consent shall be void and, at the
option of the party whose consent is required, shall be an incurable breach of
this Agreement.
20. SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective heirs, legatees, legal
representatives, personal representatives, successors and permitted assigns.
21. INTERPRETATION. The language in all parts of this Agreement shall be
in all cases construed simply according to its fair meaning and not strictly for
or against any party. Whenever the context requires, all words used in the
singular will be construed to have been used in the plural, and vice versa, and
each gender will include any other gender. The captions of the Paragraphs of
this Agreement are for convenience only and shall not affect the construction or
interpretation of any of the provisions herein.
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22. BENEFIT OF AGREEMENT. This Agreement is for the sole and exclusive
benefit of the signators hereto and nothing in this Agreement shall be construed
to give any person or entity other than the signators hereto any legal or
equitable right, claim or remedy.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPANY: EIP MICROWAVE, INC.,
a Delaware corporation
By: /s/ J. Xxxxxx Xxxx
--------------------------------
J. Xxxxxx Xxxx
Authorized Representative
EMPLOYEE: By: /s/ Xxxx X. Xxxxxx
--------------------------------
Xxxx X. Xxxxxx
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