EMPLOYMENT AGREEMENT
THIS
AGREEMENT is by and between DIRECT WIRELESS COMMUNICATIONS, INC., a Texas public
corporation with an address at 0000 X. Xxxxxx Xxxxx Xx., Xxxx, Xxxxx 00000
(hereinafter referred to as “Employer”), and Xxxxxxx Xxxxxxxx, with an address
at 0 Xxxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000 hereinafter referred to as
“Employee”).
WHEREAS,
Employer has purchased assets from the Xxxxxxxx Group, LLC, which was the
previous employer of Employee; and
WHEREAS,
Employer desires to employ Employee and Employee desires to such employment in
accordance with the terms and conditions herein; and
WHEREAS,
Employee represents and warrants to Employer that he is not party to any
contract which Employee will be breaching by entering into this Agreement or
which restricts in any way Employee’s ability to accept employment with
Employer: and
WHEREAS,
Employer would not enter into this Agreement with Employee but for the foregoing
representation and warranty by Employee.
NOW,
THEREFORE, for and in consideration of the mutual benefits to be gained by the
performance thereof, the parties hereto agree as follows:
|
1.
|
EMPLOYMENT/TERM
|
Employer
hereby employs Employee and Employee hereby accepts employment with Employer
under the terms and conditions specified in this Agreement.
Employment
of Employee pursuant to the terms of this Agreement in the position of President
will commence on the 15th day of
September, 2003 and will continue for a period of five (5) years (the “Original
Term”) unless earlier terminated as further set forth herein. This
Agreement shall automatically renew for successive one-year terms unless either
party gives notice to the other party of its intent not to renew within a thirty
day period prior to the end of the then current term.
|
2.
|
TITLE
AND DUTIES
|
2.1 Employee
shall have the title of President and Medical Director. The general
duties to be performed by Employee shall include:
a.
Authority over and responsibility for all medical, scientific research and
development issues including without limitation, research projects, budgets with
respect to such projects, hiring and firing of all scientific and medical
employees, strategic direction and strategic alliance (in conjunction with the
board of directors of Employer), patents, presentations and
publications;
b.
Authority over all research and medical personnel;
c.
Those additional duties assigned to Employee from time to time by the
board of directors of Employer; and
d. To
regularly, promptly and fully report to the board of directors of Employer or to
any person duly authorized by the Employer to receive such reports as to the
performance of Employee’s duties and as to the business and affairs of the
Employer, including business opportunities and activities, know to
Employee.
2.2 Hours - Employee
shall be expected to work such hours as reasonable and necessary to comply with
workload demands, but Employee shall not be prohibited from undertaking other
business or philanthropic ventures, including but not limited to those ventures
with which Employee is currently involved, including serving on the board of
directors or similar governing body of any charitable, civic or service
organization, provided such activities do not interfere with the ability of
Employee to discharge the responsibilities required under this
Agreement. In connection with any activities permitted under this
Section 2.2, Employee shall retain any compensation received
therefore.
|
3.
|
COMPENSATION
|
3.1 Salary - Employer
shall pay Employee base gross salary at the rate of $25,000 per month, payable
in accordance with Employer’s customary payment policy. Consistent with its
mandate, the Compensation Committee of Employer’s board of directors, of if no
such committee is standing, the full board of directors, shall on each
anniversary of the date of this Agreement, grant Employee an increase in his
base gross salary, as in effect on the prior day, equal to the percentage
increase for the preceding twelve calendar months in the United States
Department of Labor’s Bureau of Labor Statistics Consumer Price Index (or
successor to that index). At no time during the term of this
Agreement shall Employee’s base salary be reduced.
3.2 Reimbursement of
Expenses - Employee shall be reimbursed monthly by Employer for
reasonable and necessary business expenses incurred in connection with
Employee’s performance of his duties. Reimbursement is subject to the
submission of expenses in a timely manner with appropriate supporting
documentation, and subject to compliance with the Employer’s standard
reimbursement policy.
3.3 Other Benefits and Duties
– Employee will be entitled to the following additional
benefits:
(a) Incentive Stock Option
Plan – Employee will be eligible to participate in an Incentive Stock
Option Plan granting Employee the number of options with the corresponding
vesting schedules as set forth on Exhibit A upon establishment of the Incentive
Stock Option Plan by the board of directors;
(b) Other Benefits -
Employer shall at all times during the term of this Agreement provide health
insurance benefits for Employee with coverage and premiums no less favorable to
Employee as such coverage and premiums to which Employee is receiving
immediately prior to the date of this Agreement. Employee will also
participate in any employee benefit plans, programs, arrangements and policies
maintained by Employer for its employees from time to time, including, but not
limited to, any benefit or non-qualified deferred compensation plan or program
made available generally to executive officers of Employer and/or members of the
board of directors. Employer will pay all Employee and family
contributions, deductibles, co-insurance and other expenses unreimbursed by the
health insurance plan for medically necessary covered health services provided
in the United States, not to exceed $25,000 per plan year in the
aggregate. Employee will also be eligible to such other benefits
applicable to Employee including retirement, pension, profit sharing, insurance
or other similar plans, which are implemented from time to time by the board of
directors, provided that the rights to such benefits
are not contractual and are subject to modification by Employer at any time,
although such modifications shall apply prospectively.
3.4 Vacation - Employee shall be entitled to 20 paid vacation days during the calendar year from January 1 to December 31. For employment periods of less than one calendar year, vacation days shall accrue at the rate of 0.83 days per month of employment. All vacation must be taken by December 31 in the calendar year in which such vacation is earned.
3.5 Public holidays -
Employee shall also be entitled to all “public holidays,” as that term is
generally defined.
3.6 Taxes - Employer
shall withhold from Employee’s compensation provided for hereunder all
applicable income taxes, social security and Medicare costs that Employer is
required to withhold.
3.7 Additional
Perquisites –
(a) Travel – Employee
shall not be required to be away from his principal office for any more than
four days (or parts thereof) out of any thirty consecutive day period nor more
than eight days (or parts thereof) out of any ninety consecutive day
period.
(b) Travel Expenses – Any
travel by Employee on behalf of Employer shall be at Employer’s expense and
shall include, but not be limited to, all costs of transportation, lodging,
meals, and with respect to air fare at full coach rates for domestic flights
with a scheduled flight time of less than four hours and at full business class
rates for all domestic flights with a scheduled flight time of four hours or
more and for all international flights. All travel will be at the
sole discretion of the Employee.
(c) Office – Employee’s
principal office shall be located in Savannah, Georgia. Employer
shall provide and maintain furniture, fixtures and equipment for Employee’s
principal office as is reasonable for such office, together with a full-time
secretary/receptionist whose continued employment shall be in the sole
discretion of Employee. In no event shall Employee be required to
move his office location or residence in order to satisfy his obligations under
this Agreement.
(d) Director & Officer
Insurance – Employer, at its expense, shall maintain director and officer
insurance covering Employee with a reputable carrier.
|
4.
|
TERM
AND TERMINATION OF EMPLOYMENT;
SUSPENSION
|
(a) 4.1 Termination for Cause
- This Agreement may be terminated by the board of directors of Employer without
prior written notice for “Cause.” “Cause” as used herein means the
following: (i) Employee’s conviction of, or plea of nolo contendere
to, a felony which adversely and materially affects the Employer, (ii)
Employee’s willful failure or refusal to perform the duties as set forth in
Section 2.1 as determined by the Board of Directors or implement a directive
from the Board of Directors, in each case remaining uncured for a period of
fourteen (14) days after receipt of written notice from the Board of Directors
specifying such failure or refusal; or (iii) during any ninety (90) consecutive
day period, failed for a material period of time to perform material duties of
his position on a substantially full time basis by reason of a disability as
defined by 29 C.F.R.§ 1630.2(g)(1), and Employee cannot perform the essential
functions of his position with reasonable accommodation.
4.2 Rights on Termination for
Cause - If the board of directors of Employer terminate this Agreement
for Cause as defined in Section 4.1, then Employer shall make on the date of
termination a lump sum payment equal to the sum of (i) accrued unpaid wages,
(ii) unreimbursed expenses properly incurred
prior to the date of termination and (iii) the value of all accrued unpaid
vacation pay, less any amounts which Employee owes to Employer and which
Employee hereby authorizes shall be offset against amounts owed to him by
Employer. Upon such termination, Employee shall waive his/her right
to further compensation, and shall have a duty to seek other employment in
mitigation of the loss of employment.
4.3 Rights on Termination other
than for “Cause” - If Employer terminates this Agreement, other than for
Cause, then the Employer shall give the Employee thirty (30) days’ prior written
notice of its intent to terminate, in which event Employer shall be required to
(i) continue to meet its obligations to the Employee under Section 3.1 for the
remaining portion of the Original Term of the Agreement (but in no event less
than for a period of one year from the date of termination) and
(ii) reimburse the Employee for ninety (90) days of the Employee’s COBRA
premium payments, commencing with the COBRA payment next due after termination,
should the Employee elect COBRA (the “Continuing Benefit”). The
Employer may deduct from each payment to the Employee any and all amounts
required to be deducted or withheld for general payroll purposes in accordance
with the provisions of federal law and any applicable state law now in effect or
hereafter in effect including without limitation, state and federal income
withholding, FICA and other withholding tax requirements, and such other
deductions permitted by the Employer which Employee may authorize from time to
time. In addition, any outstanding options granted to Employee shall
immediately vest on the date of the termination.
4.4 Rights on Termination “at
will.” - If Employee terminates the Agreement,
(a) for “good reason,” then Employee
shall be entitled to receive the benefits applicable under Section 4.3
above. “Good reason” as used herein means any of the following
without the consent of Employee (i) a breach of this Agreement by Employer, or
(ii) a substantial adverse change in the nature or status of Employee’s
responsibilities or title from those described in this Agreement.
(b) for other than “good reason,” then
Employee shall be entitled to receive the benefits applicable under Section 4.2
above.
4.5 Rights on Termination at
death – Upon the termination of Employee’s employment as a result of
Employee’s death, Employee’s beneficiary or estate shall be entitled to receive
the benefits applicable under Section 4.3 above plus any death benefits for
which Employee is eligible under any play or program maintained by
Employer.
|
5.
|
ASSIGNMENT
|
This
Agreement may not be assigned in whole or in part by Employee, but is personal
to Employee and will terminate as a matter of law upon Employee’s death, if not
terminated earlier pursuant to Article 4.
|
6.
|
NON-COMPETITION
AND PROTECTION OF CONFIDENTIAL INFORMATION BY EMPLOYEE; INTELLECTUAL
PROPERTY
|
6.1 During Employment -
While employed by Employer, Employee shall not directly or indirectly as an
employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or representative
capacity, engage or participate in any business in competition with the business
of Employer or take any action inconsistent with his confidential and fiduciary
relationship with Employer.
6.2 Subsequent
to Employment - In consideration for Employer’s employment of Employee
pursuant to the terms of this Agreement. Employee agrees that upon termination
of employment for Cause by Employer or by Employee, Employee shall not, directly
or indirectly, enter into or engage in direct or indirect competition with
Employer in Texas, Georgia or California, where Employer conducts business, as a
partner, joint venturer, director, officer, employee, agent, consultant, owner
or shareholder of a competing business for a period of 12 months
thereafter. Employee acknowledges that Employer would not have
employed Employee in the position and with the compensation and benefits
provided Employee hereunder, but for Employee’s agreement to this
covenant. The parties expressly intend to enter into a binding and
enforceable covenant not to compete. If the scope of this covenant as
written is subsequently found to be broader than is permitted by the Governing
Law, then the covenant shall be deemed binding and enforceable to the maximum
extent then allowed by the Governing Law.
6.3 Confidential
Information - Employee acknowledges that during employment with Employer,
he will be privy to, make use of, acquire and/or add to confidential information
which is closely guarded and valued by Employer and to which Employee would not
have access but for employment with Employer. Such confidential
information includes, but is not limited to, Employer’s trade secrets, systems,
procedures, manuals, computer software, customer lists (which are deemed for all
purposes confidential and proprietary), vendor list, product list and price
list. As a material inducement to Employer to employ Employee, to
grant Employee access to Employer’s confidential information, and to pay
Employee the compensation stated herein, Employee covenants that he shall not,
at any time during or following the termination of employment or this Agreement,
directly or indirectly, use, divulge or disclose for any purpose whatsoever,
other than within the scope of employment by Employer, any confidential
information that has been obtained by, or disclosed to, Employee as a result of
or during employment with Employer. Employee will not make or possess
without authority copies of documents, papers or other media on which any
confidential information about the Employer or any of its affiliated companies
is recorded. On termination of employment for any reason, Employee
shall deliver to the Employer all such documents, papers or other media together
with all copies thereof. Confidential information shall not include, and the
restrictions herein, shall not apply to information, which is already in the
public domain through no fault of Employee or that was known to Employee prior
to his employment with Employer. If Employee receives a court
subpoena, which seeks Employer’s confidential information, Employee shall
promptly notify Employer of the subpoena and give the Employer the opportunity
to challenge the subpoena, but if Employer does not do so, Employee shall have
no duty to disobey the subpoena.
6.4 Intellectual
Property.
|
(a)
|
Ownership
– If, during the period of Employee’s employment,
Employee either alone or jointly with others, makes any improvement,
process, system, invention, design or discovery, including any registered
or unregistered copyrights, service or trade marks, patents (together
“Inventions”) capable of use in connection with any business of the
Employer or of any subsidiary of the Employer, such Invention shall be and
remain the property of the Employer (whether registered or not) and
accordingly Employee hereby assigns to the Employer any rights Employee
may have in such Inventions. Upon making any Invention,
Employee will immediately communicate all information concerning the same
to the Employer. If so requested, at the Employer’s expense but
without receiving additional payment, Employee will assist the Employer in
obtaining Letters Patent, Trademark or Copyright Registrations, or any
other protection desired by the Employer in respect of any such Invention
and, at the expense of the Employer, will execute all documents and do all
things necessary to give effect to this provision. This Section
6.4 shall apply only to Inventions relating to the business of
Employer. In addition, if Employer is not interested in the
Invention then Employee shall have the right to retain such Invention at
his sole cost.
|
|
|
|
(b)
|
Assignment -
Employee hereby assigns (so as to continue beyond the termination of this
Agreement for whatever reason) to the Employer as beneficial owner by way
of assignment, all of Employee’s rights, title and interest, including
without limitation all patent, trademark and copyright ownership of
Employee, in and to all material written or devised by Employee pertaining
to the actual or potential operation or business of the Employer or any
affiliated company of Employer, resulting from or suggested by any work
which Employee shall do pursuant to Employee’s employment with Employer
whether or not such items constitute a “work made for hire” as defined in
the U.S. Copyright Act of 1976, 17 U.S.C. §101, as amended, and all rights
of action for damages for infringement
thereof.
|
|
|
(c)
|
Appointment of
Attorney-in-Fact - Employee hereby irrevocably appoints the
Employer to be Employee’s attorney-in-fact to execute on Employee’s behalf
any documents as described in this Article 6.4 and generally to act on
Employee’s behalf and in Employee’s name for the purpose of giving to the
Employer the full benefit of the provisions of this Article
6.4. A certificate in writing signed by any director or the
secretary of the Employer that any instrument or act falls within the
authority hereby conferred shall be conclusive evidence that such is the
case.
|
|
7.
|
OTHER
POST-EMPLOYMENT RESTRICTIONS
|
7.1 Solicitation of Employer’s
Customers - Until the expiration of 12 months from the termination of
employment with the Employer for cause, Employee shall not directly or
indirectly solicit, canvass or approach any person or entity:
|
|
(a)
|
Who,
to Employee’s knowledge, was provided with goods or services by the
Employer or any of its subsidiaries at any time during 12 months before
such termination;
|
|
|
(b)
|
For
the purpose of offering to that person or entity goods or services similar
to those which were provided by
Employer.
|
7.2 Solicitation of Employer’s
Employees - After the termination of Employee’s employment with the
Employer for Cause, for a period of 12 months from the date of termination,
Employee shall not directly or indirectly solicit or entice away or endeavor to
entice away from the Employer or any of its affiliates any
employee.
7.3 Representation to Third
Parties - After the termination of Employee’s employment with the
Employer (for whatever reason), Employee shall not represent himself or permit
himself to be held out as being in any way connected with or interested in the
business of the Employer or any of the affiliates of the Employer, except if and
for so long as Employee remains an employee of that affiliate.
|
8.
|
INDEMNITY
|
(a) Employee
hereby agrees to indemnify and hold harmless Employer from all costs arising
from (i) Employee’s breach of this Agreement, (ii) claims made by third parties
that Employee breached an employment or other contract with such third party by
entering into this Agreement or (iii) claims that Employee is restricted from
accepting employment with Employer, or (iv) claims that Employer is by this
Agreement
interfering with a business or contractual relationship between Employee and any
third party, in each case to the extent a court of competent jurisdiction rules
in favor of such third party on the merits of such claim.
(b) Employer
hereby agrees to indemnify and hold harmless Employee from all costs arising
from (i) claims made by third parties that Employee breached an employment or
other contract with such third party by entering into this Agreement or (ii)
claims that Employee is restricted from accepting employment with Employer, or
(iii) claims that Employer is by this Agreement interfering with a business or
contractual relationship between Employee and any third party, in each case
provided that no court of competent jurisdiction rules in favor of such third
party on the merits of such claim.
|
9.
|
GENERAL
PROVISIONS
|
9.1 Notice - Any written
notice required under this Agreement shall be deemed received upon personal
delivery or three days after mailing by certified mail, with return receipt
requested, addressed to the party for which it is intended at the parties’
respective addresses or upon the next business day when deposited with a
nationally recognized express courier.
9.2 Waiver and
Limitations - Employee’s failure to give written notice of any claim or
controversy within ninety (90) days shall constitute a waiver of the claim or
controversy. The statute of limitations for all lawsuits arising
hereunder or related hereto or to Employer’s employment of Employee, or the
termination of Employee’s employment, for any and all claims, shall be two years
unless a shorter limitation period is otherwise fixed by the Governing
Law.
9.3 Entire Agreement -
Understanding - This Agreement supersedes all other agreements or
understandings, either oral or written, between the parties with respect to
Employer’s employment of Employee. Each party has read and understood
and voluntarily entered into this Agreement, which reflects the mutual
understandings of the parties and shall not be construed more strongly in favor
of or against either party. Employee acknowledges that he has had the
opportunity to consult with an attorney about this Agreement, including without
limitation, the arbitration provision, before signing.
9.4 Severability - The
invalidity or unenforceability of a particular provision of this Agreement shall
not affect the enforceability of any other provisions.
9.5 Amendments - This
Agreement may only be amended in writing by an agreement executed by both
parties hereto.
9.6 Waiver - Waiver by
any party of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
9.7 Binding Effect -
Subject to the prohibition against assignment by Employee herein contained, this
Agreement and the terms and conditions herein shall inure to the benefit of and
be binding upon the parties hereto their successors, heirs and legal
representatives.
9.8 Attorney’s Fees - If
any action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be awarded reasonable attorney’s
fees, costs and other expenses necessarily incurred.
9.9 Injunctive Relief -
The covenants by Employee contained in Articles 6 and 7 shall be construed and
interpreted as agreements independent of any other provisions of this
Agreement. The existence of any claim or cause of action by Employee
against Employer, whether predicated on this Agreement
or otherwise, shall not constitute a defense to Employer’s enforcement of such
covenants. Employee acknowledges and expressly agrees that breach of these
covenants would cause immediate and irreparable injury to Employer, the remedies
at law for breach of these covenants are inadequate, and that Employer is
entitled to injunctive relief to prevent a breach, stop a continuing breach or
prevent any further or recurring breach of these covenants, with a minimum bond,
and as to a temporary restraining order without notice. The
provisions of Articles 6 and 7 shall survive any termination of Employee’s
employment and/or the termination of this Agreement.
9.10 Governing Law - THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
AND IS PERFORMABLE IN DALLAS COUNTY, TEXAS.
9.11 Dispute Resolution
– If a dispute arises
between Employer and Employee regarding the implementation of this Agreement,
the parties agree to negotiate in good faith regarding a resolution of the
issues involved for at least thirty days. If the parties fail to
resolve the dispute during this period of negotiation and either party initiates
proceedings to enforce its rights, Employer will immediately escrow $50,000 from
which Employee will be reimbursed for his reasonable litigation expenses monthly
upon presentation to the escrow agent of reasonable proof of
expenditure. Employer will replenish this
escrow fund with an additional $25,000 whenever the balance falls below $10,000,
and will deposit appropriate interest for any late payments. Any
amounts payable to Employee under this Section shall be grossed up to cover any
applicable income taxes. Upon completion of any such proceedings,
unless the parties agree otherwise, the losing party will reimburse the winning
party’s reasonable attorney’s fees and costs incurred in the litigation, and if
Employee shall be the losing party, Employee shall reimburse Employer for
payments to him of his reasonable litigation expenses with appropriate interest
calculated from the date such reimbursement payments are due, which due date
shall not be less than five days form the date of the final judgement in such
litigation, until payment is made. ALL DISPUTES ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR TO EMPLOYER’S EMPLOYMENT OF EMPLOYEE OR THE
TERMINATION OF EMPLOYEE’S EMPLOYMENT SHALL BE SUBMITTED EXCLUSIVELY TO BINDING
ARBITRATION IN DALLAS, TEXAS, PURSUANT TO THE NATIONAL RULES FOR THE RESOLUTION
OF EMPLOYMENT DISPUTES OF THE AMERICAN ARBITRATION ASSOCIATION, provided
however that Employer shall be entitled to injunctive relief from any court of
jurisdiction against Employee’s breach of any covenant in Articles 6 and 7, and
further provided that this Agreement shall not require arbitration of any claim
for workers’ compensation benefits (although any claims arising under Texas
Labor Code § 450.001 shall be subject exclusively to arbitration) or any claim
for unemployment compensation. Employee understands that agreeing to
arbitration waives the right to a jury trial. Arbitral awards shall
be enforceable by any court of competent jurisdiction
9.12 Counterparts - This
Agreement shall be executed in multiple originals, each of which shall be valid
as an original.
9.13 Survival of Certain
Provisions – The provisions hereof, including without limitation those
contained in Articles 4, 7, 8 and Sections 9.8 and 9.11, which are to be
performed or observed after the termination of this Agreement and the covenants
and agreements of the parties contained herein with respect thereto shall
survive the termination of this Agreement and be effective according to their
terms.
|
|
EXECUTED
this 15th
day of September 2003.
|
|
|
EMPLOYER
|
|
|
DIRECT
WIRELESS COMMUNICATIONS, INC.
|
| BY: | /s/ Xxxx X. Xxxxxxxx | ||
| Xxxx X. Xxxxxxxx, Chairman and CEO | |||
|
|
EMPLOYEE
|
| BY: | /s/ Xxxxxxx Xxxxxxxx | ||
| Xxxxxxx Xxxxxxxx | |||
EXHIBIT
A
STOCK
OPTIONS
Xxxxxxx
Xxxxxxxx Employment Agreement,
Page
10
