EMPLOYMENT AGREEMENT
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EFFECTIVE
DATE:
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January
1, 2009
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PARTIES:
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Multiband
Corporation
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0000
Xxxxxxx Xxxxxx Xxxxx
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Xxx
Xxxx, Xxxxxxxxx 00000
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(“Company”)
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Xxxxx
X. Xxxxxx
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0000
Xxxxx Xxxxx Xxxxx
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Xxxxx,
Xxxxxxxxx 00000
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(“Executive”)
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RECITALS:
A. Company
is engaged in the specialized and highly competitive business of innovative
communication, data and entertainment technologies to bring added value and
convenience to its customers. Serving businesses and consumers
nationwide, the Company integrates a wide range of services, including high
speed internet, local-long distance telephone service, digital cable television,
computer networking, office telephony, video surveillance and related
activities.
B. Executive
has been employed as an executive officer of the Company pursuant to an
employment agreement which terminated December 31, 2004.
C. Company
and Executive desire to continue Executive’s employment by the Company under the
terms and conditions stated in this Agreement.
AGREEMENTS:
NOW, THEREFORE, in consideration of the
mutual promises herein contained, Executive and Company agree as
follows:
ARTICLE
1
EMPLOYMENT
OF EXECUTIVE
1.1 Employment. Subject
to the other provisions of this Agreement, Company hereby agrees to employ
Executive to serve as its Chief Executive Officer, and Executive hereby agrees
to employment with Company for a 36-month term commencing on the effective date
of this Agreement, and automatically renewing thereafter for 12-month periods,
unless terminated by either party under the provisions of Section
3.1. During his employment, Executive agrees to serve as a member of
Company’s Board of Directors.
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1.2 Duties.
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(a)
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Executive
agrees, during his employment, to devote his reasonable, full-time efforts
to the business of Company. Executive shall perform those
duties and responsibilities that are reasonably and customarily associated
with the position of Chief Executive Officer of
Company. Subject to the provisions of this Agreement, Executive
shall be granted such powers and authority as are reasonably and
customarily associated with his position;
and
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(b)
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Executive
shall, at all times during his employment with Company comply with
Company’s reasonable standards, regulations and policies as determined or
set forth by the Board of Directors of Company from time to time and as
applicable to executive employees of Company. Executive shall
report to, and be subject to the direction of, Company’s Board of
Directors.
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1.3 Outside
Activities. Company acknowledges and agrees that from time to
time Executive may serve as a member of the Board of Directors of one or more
business or nonprofit entities other than Company; provided, however, that
Executive shall provide Company’s Board of Directors with information about each
proposed directorship, including time required by such directorship, whether
such directorship may involve conflicts of interest with Company or its
interests, and any other factors Executive considers material respecting such
directorship. Company’s Board of Directors shall promptly consider
all submissions by Executive pursuant to this Section 1.3. Company’s
Board of Directors may request in good faith that Executive not accept a
particular directorship, or more than a specific number of directorships, or
that Executive resign from a particular directorship, and Executive agrees to
honor such requests. Company acknowledges the relationships and
activities set forth on Attachment A.
ARTICLE
2
COMPENSATION
AND BENEFITS
2.1 Base
Salary. Executive’s annual Base Salary, which shall be paid by
Company in accordance with Company’s payroll cycle, shall be the gross amount of
$400,000 per year, less withholding for taxes, FICA and any other deductions
required by law or authorized by Executive. Such Base Salary shall
annually be subject to adjustment as the Compensation Committee may determine,
but may not be decreased without Executive’s consent.
2.2 Incentive
Awards. Subject to the provisions of Article 3, for each year
beginning on the Effective Date of this Agreement and ending on December 31,
2011, and for each year thereafter during which Executive is employed by Company
pursuant to this Agreement, Executive shall be eligible to earn a Short Term
Incentive Award and a Long Term Incentive Award (collectively “Incentive
Awards”), each in an amount up to 75% of Executive’s Base Salary for that
year. The Incentive Awards shall be based on the achievement of
performance goals for such awards established by the Compensation Committee in
consultation with Executive. The Incentive Awards shall be paid as
soon as practicable following completion of Company’s audited financial
statements for the year in question, but no later than March 15 of the
following year; provided that Executive shall have no right to damages or
interest if the Incentive Awards are paid at a later date.
2
In the
event that Executive’s employment terminates pursuant to Section 3.1(b) or (e),
Executive shall be paid Incentive Awards, to the extent earned or awarded, for
the number of full calendar quarters (if fewer than four) during which Executive
is employed by Company. Such partial-year Incentive Awards shall be
based on that pro rata portion of Executive’s then current annual Base Salary
which is paid through the date during the calendar quarter during which
Executive is employed, and the percentage achievement for the portion of the
calendar year ending on such termination date, as determined by the Compensation
Committee. Any such partial-year Incentive Award shall be paid as
soon as practicable, following calculation of the amount thereof, after the
termination of Executive’s employment pursuant to Section 3.1(b) or (e), but no
later than March 15 of the following year; provided that Executive shall
have no right to damages or interest if the Incentive Awards are paid at a later
date.
2.3 Benefits. In
addition to cash compensation, Executive shall receive such benefits as are made
available to executive officers of Company in the discretion of Company’s
Compensation Committee, subject to Executive satisfying any eligibility
requirements respecting such benefits. Such benefits may include but
are not limited to health insurance, dental insurance, 401(k), defined
contribution pension plan, disability plans and deferred compensation
agreements. Company is not obligated to provide or continue any of
these benefits to executive officers of Company, and may, without any prior
notice, discontinue any such benefit already provided or as may be provided in
the future, in the discretion of Company’s Compensation Committee; provided,
however, that Executive shall not be singled out for exclusion from any plan
available to other executive officers of Company.
2.4 Vacation. Executive
shall be entitled to paid vacation each year in accordance with Company
policies, as established from time to time.
2.5 Expenses. During
the term of this Agreement, Executive shall be entitled to prompt reimbursement
by Company for all reasonable, ordinary and necessary business related expenses
(including without limitation, out-of-pocket, office-related expenses, travel,
entertainment and long distance telephone charges) incurred by Executive (in
accordance with the policies and procedures established by Company from time to
time) in the performance of his duties and responsibilities under this
Agreement; provided, however, that Executive shall properly account for such
expenses in accordance with federal, state and local tax requirements and
Company’s policies and procedures.
ARTICLE
3
TERMINATION
3.1 Events of
Termination. Executive’s employment:
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(a)
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May
be terminated by mutual written agreement of the
parties.
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(b)
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Shall
terminate immediately upon the death of
Executive.
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3
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(c)
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Except
as otherwise provided in subparagraphs (iii) and (iv) and (v) below, may
be terminated immediately by Company upon written notice to Executive for
“Cause,” which shall mean the
following:
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(i)
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Commission
of (I) a felony, (II) a crime involving moral turpitude, or (III) an act
or omission involving dishonesty, disloyalty or
fraud;
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(ii)
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Conduct
that has brought or could, in the judgment of the Board of Directors,
reasonably be expected to bring Company into substantial public disgrace
or disrepute;
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(iii)
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Substantial
failure to perform duties in accordance with this Agreement, or as
reasonably directed by the Board of Directors and which are consistent
with Executive’s position of, or responsibilities as, Chief Executive
Officer, which, if capable of being cured, is not cured, in the judgment
of the Board of Directors, by Executive within 30 days following written
notice thereof sent by or on behalf of the Board of
Directors;
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(iv)
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Violation
of any material Company policy, which, if capable of being cured, is not
cured in the judgment of the Board of Directors, by Executive within 30
days following written notice thereof sent by or on behalf of the Board of
Directors; or
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(v)
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A
material violation of this Agreement, which, if capable of being cured, is
not cured, in the judgment of the Board of Directors, by Executive within
30 days following written notice thereof sent by or on behalf of the Board
of Directors.
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(d)
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May
be terminated by Executive on 90 days’ written notice from Executive to
the Board of Directors.
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(e)
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May
be terminated without cause by Company on 90 days’ written notice sent to
Executive by or on behalf of the Board of Directors. In the
event of termination of Executive’s employment pursuant to this Section
3.1(e), and assuming Executive’s compliance with the provisions of Section
3.3 and Articles 4 and 5 of this Agreement, Executive shall be entitled to
receive severance pay in the form of salary continuation of his then base
salary for the lesser of 12 months from the effective date of Executive’s
termination or the remaining term of Executive’s employment under this
Agreement. Such salary continuation shall be paid in accordance
with the Company’s normal payroll
procedures.
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(f)
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May
be terminated by Company immediately upon written notice to Executive if
Executive is disabled (meaning that Executive is unable to perform the
essential functions of his position with or without reasonable
accommodation that is not an undue hardship to Company for a period of 90
days during any 12 consecutive month
period).
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4
For
purposes of paragraph (e) above, the phrase “remaining term of his employment”
shall mean the three-year period commencing January 1, 2009, if termination of
Executive occurs prior to January 1, 2012, and shall mean the calendar year
during which termination of Executive’s employment occurs,
thereafter.
3.2 Compensation Upon
Termination of Executive’s Employment. In the event that
Executive’s employment with Company terminates other than pursuant to Section
3.1(b) or (e), the following provisions shall govern as applicable:
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(a)
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If
termination occurs pursuant to Section 3.1(a), the agreement of the
parties shall control; and
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(b)
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If
termination occurs pursuant to Section 3.1(c), (d), or (f), all benefits
and compensation shall terminate as of the termination date, except as
expressly provided in any employee benefit
plans.
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All
payments made to Executive under Section 3.1(e) or this Section 3.2 shall be
reduced by amounts required to be withheld in accordance with federal, state and
local laws and regulations in effect at the time of payment.
3.3 Return of Company
Property. In the event of termination of Executive’s
employment, all corporate documents, records, files, credit cards, computer
disks and tapes, computer access card, codes and keys, file access codes and
keys, building and office access cards, codes and keys, materials, equipment and
other property of Company that are in Executive’s possession shall be returned
to Company at its principal business office within five days after the date of
termination of Executive’s employment. Executive may copy, at
Executive’s expense, documents, records, materials and information of Company
only with Company’s express written permission.
ARTICLE
4
CONFIDENTIAL
INFORMATION
4.1 Definition. “Confidential
Information” as used in this Article 4 means information that is (i) not known
to the general public and (ii) proprietary to Company and material to Company’s
business, or that Company is obligated to treat as proprietary, including
information related to Company’s subsidiaries and affiliated
corporations. Confidential Information shall include, without
limitation:
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(a)
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Trade
secret information about Company and its products and
services;
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(b)
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“Inventions,
plans and ideas” mean any discoveries, ideas, plans and improvements
(whether or not they are in writing or reduced to writing or embodied
solely in practices of Company) or works of authorship (whether or not
they are or can be patented, copyrighted or reduced to another form of
property right) that Executive makes, authors, or conceives (either alone
or with others) and that: concern Company’s business or
Company’s research or development or planning that can be demonstrated to
relate to Company’s then-current business and any planned business which
Company is actively exploring; or result from any work Executive performs
for Company; or use Company’s trade secret information; or are developed
on Company’s time;
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(c)
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Customer
Lists;
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(d)
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Information
concerning Company’s business, research, product and service development,
or business plans of every kind and nature;
and
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(e)
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Information
concerning Company’s volumes, pricing, the terms on which it does
business, and any other information that Company reasonably considers or
treats as Confidential Information, or that Executive actually knows or
reasonably should know that Company considers or treats as Confidential
Information, will be presumed to be Confidential Information (whether
Executive or others originated it and regardless of how Executive obtained
it).
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4.2 Use
Prohibited. Except as required in his duties to Company,
Executive will never knowingly, either during or after his employment by
Company, use or disclose Confidential Information to any person not authorized
by Company to receive it, excluding Confidential Information (i) which becomes
publicly available through a source other than Executive, (ii) which is made
public by Company, (iii) which is received by Executive after termination of
this Agreement from a source who did not obtain the information directly or
indirectly from Company and who was not, to Executive’s knowledge, bound by a
confidentiality obligation to Company, (iv) as to which disclosure thereof
Company has consented to in writing, or (v) which Executive is compelled to
disclose in any judicial or administrative proceeding.
Promptly
upon termination of Executive’s employment with Company, Executive will turn
over to Company all records, documents, materials and any compositions,
articles, devices, apparatus and other items that disclose, describe or embody
Confidential Information, including all copies and reproductions thereof, in
Executive’s possession, regardless of who prepared them.
4.3 Violation by
Executive. Violation of Section 4.2 by Executive shall subject
Executive to those legal and equitable remedies of Company set forth in Article
6. In addition, Company may seek a restraining order, injunctive
relief, and cease making severance payments to Executive until the matter of
Executive’s breach of Article 4 is determined. If it is determined by
the final, nonappealable order of a court of competent jurisdiction that
Executive has breached Article 4, Company shall be relieved of further severance
payments to Executive, and Executive shall repay to Company all severance
payments previously received.
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ARTICLE
5
COMPETITIVE
ACTIVITIES PROHIBITED
5.1 Restrictive
Covenants. Executive agrees that during his employment with
Company and for a period of 12 months after his employment with Company
terminates (regardless of whether Executive’s employment terminated voluntarily
or involuntarily) Executive will not alone, or in any capacity with another
firm, individual or person:
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(a)
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Directly
or indirectly engage in any commercial activity that competes with the
business of Company, or any affiliate of Company
(“Affiliate”).
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(b)
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Directly
or indirectly solicit or do business in competition with Company with any
customer or prospective customer of Company or any Affiliate at the
termination of Executive’s employment with whom Executive had personal
contact within the 12 months preceding his
termination.
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(c)
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In
any way interfere or attempt to interfere with Company’s or any
Affiliate’s relationships with any of its then-current customers,
suppliers, vendors or investors.
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(d)
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Employ
or attempt to employ any of Company’s or any Affiliate’s employees in any
competitive capacity.
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For
purposes hereof, the term “Affiliate” shall mean any person or entity
controlling Company or under common control with Company, whether as a result of
common ownership or through contractual arrangements. Without
limiting the foregoing, Affiliates shall include entities that have management
agreements with Company or any other Affiliate, entities of which Company or any
Affiliate is the general partner or a managing partner and any entity in which
Company or any Affiliate has a substantial (10% or greater) investment interest
and engaged in a business substantially similar to that of
Company. Subject to the express provisions of this section, for
purposes hereof, the term “control” shall be interpreted in the same manner as
under the Securities Exchange Act of 1934.
5.2 Exception. Nothing
in Section 5.1 shall restrict Executive’s employment by, or association with, or
doing business with an entity, venture or enterprise that engages in a business
with a product or service competitive with any product or service of Company or
any Affiliate so long as Executive’s employment or association with such entity,
venture or enterprise is limited to work that does not directly involve products
or services that compete with any product or service offered by Company at the
date of Executive’s termination.
5.3 Violation by
Executive. Violation of Section 5.1 by Executive shall subject
Executive to those legal and equitable remedies of Company set forth in Article
6. In addition, Company may seek a restraining order, injunctive
relief, and cease making severance payments to Executive until the matter of
Executive’s breach of Article 5 is determined. If it is determined
that Executive has breached Article 5, Company shall be relieved of further
severance payments to Executive, and Executive shall repay to Company all
severance payments previously received.
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ARTICLE
6
CERTAIN
COMPANY REMEDIES
6.1 Certain Company
Remedies. The parties acknowledge that Company will suffer
irreparable harm if Executive breaches Sections 3.3, 4.2, or 5.1 of this
Agreement, either during or after its term. Accordingly, Company
shall be entitled to any right or remedy it may have, under this Agreement or
otherwise, at law or equity, including but not limited to, an injunction,
enjoining or restraining Executive from any violation of Sections 3.3, 4.2, or
5.1 of this Agreement.
6.2 Payment of Fees and
Expenses. If either party initiates or becomes a party to a
formal proceeding in law or equity, involving this Agreement, and if either
party obtains a substantial portion of the relief requested by that party (the
“prevailing party”) as determined by a court of competent jurisdiction, then the
non-prevailing party shall pay all of its and the prevailing party’s reasonable
costs and expenses, including reasonable attorneys’ fees and expenses, incurred
with respect to such proceeding. If neither party obtains a
substantial portion of the relief requested, each shall bear its/his own
expenses.
ARTICLE
7
INDEMNIFICATION
7.1 Indemnification. As
to acts or omissions of Executive as a director, officer, employee, or agent of
Company, Company shall indemnify Executive, and his legal representatives and
heirs, and advance expenses, including litigation costs, as they are incurred to
the maximum extent permitted by Section 302A.521 of the Minnesota Business
Corporation Act, as such Section may be subsequently amended, subject to any
limitations on such indemnification established by Company’s Articles of
Incorporation or Bylaws from time to time.
ARTICLE
8
MISCELLANEOUS
8.1 Governing
Law. This Agreement shall be governed according to the laws of
the State of Minnesota.
8.2 Successors. This
Agreement is personal to Executive and Executive may not assign or transfer any
part of his rights or duties hereunder, or any compensation due to him
hereunder, to any other person. This Agreement may be assigned by
Company.
8.3 Waiver. The
waiver by Company or Executive of the breach or nonperformance of any provision
of this Agreement by the other party will not operate or be construed as a
waiver of any future breach or nonperformance under any provision of this
Agreement.
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8.4 Notices. Any
and all notices referred to herein shall be deemed properly given only if in
writing and delivered personally, by facsimile transmission (with receipt
confirmed electronically) or sent postage prepaid, by certified mail, return
receipt requested, as follows:
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(a)
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To
Company by notice to the Chairman of the Board of Directors of Company
(FAX: 000-000-0000) and to Xxxx Plant Xxxxx, 00 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Xxxxx Xxxxxxx (FAX: 000-000-0000);
and
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(b)
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To
Executive at his mailing address as it then appears on the records of
Company, it being the duty of the Executive to keep Company informed of
his current mailing address (or FAX number) at all
times.
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The date
on which notice to Company or Executive shall be deemed to have been given as
provided above shall be the date on the certified mail return receipt, if
mailed, and the date on which the electronic FAX confirmation is
faxed. Personal delivery to Executive shall be deemed to have
occurred on the date notice was delivered to Executive personally or deposited
in a mail box or slot or left with security or administrative personnel, at
Executive’s residence by a representative of Company or any messenger or
delivery service.
8.5 Entire Agreement;
Modification. This Agreement supersedes any and all prior oral
and written understandings, if any, between the parties relating to the subject
matter of this Agreement. The parties agree that this Agreement sets
forth the entire understanding and agreement between the parties and is the
complete and exclusive statement of the terms and conditions thereof, that there
are no other written or oral agreements in regard to the subject matter of this
Agreement. This Agreement shall not be changed or modified except by
a written document signed by the parties hereto.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of ___________,
2009.
| MULTIBAND CORPORATION | |||
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By:
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| Its Chairman of the Board | |||
| Xxxxx X. Xxxxxx | |||
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ATTACHMENT
A
DISCLOSURES
OF CERTAIN ACTIVITIES PURSUANT TO SECTION 1.3
Chairman of the Board, CorVu
Corporation
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