EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter, the "Agreement" or the "Employment
Agreement") is entered into as of the 23rd day of April 2003, between CNE Group,
Inc. (hereinafter called the "Company") and Xxxxxxx X. Xxxxxxxxxx (hereinafter
called the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee, who is currently employed by the Company as its Vice
President, has acquired outstanding and special skills and ability and extensive
background and knowledge of the wireless communications business; and
WHEREAS, the Company desires to continue to utilize such skills, ability,
background and knowledge; and
WHEREAS, the Company desires to continue to employ the Employee as Vice
President and CFO of the Company and to provide him with certain performance
incentives and bonus opportunities on the terms and conditions hereinafter set
forth; and
WHEREAS, the Employee desires to continue in the employ of the Company as
the Vice President and CFO on the terms and conditions hereinafter set forth;
and
WHEREAS, the Employee represents and warrants that he is under no
restriction or disability by reason of any prior contract or otherwise which
would prevent him from entering into and performing this Employment Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto covenant and agree as follows:
1. Term. The Company hereby employs the Employee to perform and discharge
services and duties as the Vice President and CFO of the Company for a
three (3) year initial term, commencing on April 23, 2003 and ending on
April 30, 2006, unless otherwise extended or terminated as provided herein.
The Corporation shall maintain its principal corporate offices in New York,
New York throughout the term of this Agreement and during any extension
thereof, from which the Employee's duties and obligations hereunder shall
be performed. This Employment Agreement shall automatically be extended on
May 1, 2006 and on each anniversary thereafter for an additional one (1)
year (i.e., the term shall be rolling), unless either party hereto provides
the other with written notice of his/its intent not to renew this Agreement
on or before April 1, 2006 and each succeeding April 1.
2. Duties. The Employee shall work for the Company and devote his best efforts
during the term hereof to perform the services and duties assigned to him.
Employee shall serve as an officer and/or director of the Company or of any
subsidiary, if so elected. Employee may engage in other business or
employment during the term hereof, provided that such business or
employment does not compete with the Company's business or interfere with
the performance of the Employee's duties and obligations hereunder.
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3. Compensation; Termination. During the time of his employment:
a) The Company shall pay the Employee an annual gross salary of one
hundred ten thousand dollars ($110,000.00) per year ("Base Fee") in
bi-weekly installments. Such installments being subject to all
withholding of taxes required by federal, state and local authorities.
b) In addition to the Base Fee set forth above, the Board of Directors of
CNE Group, Inc. (the "Parent") may determine a Bonus Amount to be paid
to the employee.
c) This Agreement shall terminate: (i) at the end of the initial term or
any extension thereof as provided in Paragraph 1; (ii) upon the
Employee's death; (iii) upon the Employee's disability, if such
disability prevents him from performing his obligations under this
Agreement for six (6) consecutive months during any term hereof; or
(iv) upon termination of the Employee's employment with the Company
for cause as provided herein. It is understood and agreed between the
Employee and the Company that the Base Fee, the Bonus amount, and any
other compensation provided to the Employee herein shall continue to
be paid to the Employee until the end of the initial term of this
Agreement or any extension thereof, except if the Employee is
terminated for cause as provided herein, in which case, the Employee
shall be entitled only to a prorated amount of the Base Fee and the
Bonus amount earned up to the time his employment terminates as well
as any accrued and unused vacation time earned up to that time. The
Company shall have the right to terminate the Employee's employment
for cause upon ten (10) days written notice to the Employee only for
the following reasons: (i) if the Employee is convicted of a felony;
(ii) if the Employee commits theft of the Company's assets; or (iii)
if the Employee commits fraud against the Company (iv) willful
misconduct that is materially injurious to the Company; or (v)
repeated failure to undertake communicated directives from the
Company's Chief Executive Officer.
d) The Employee shall be entitled to participate at the highest executive
level in all benefit programs of the Company currently existing or
hereafter made available to executives and/or other salaried
employees, as well as any other benefit programs including, but not
limited to, pension and other retirement plans, group life insurance,
hospitalization, medical (including, but not limited to, surgical and
major medical) insurance, health and accident insurance, director and
officer insurance, sick leave, salary continuation, stock option
plans, vacation and holidays, cellular telephone and all related costs
and expenses, long-term disability, and other fringe benefits.
e) The Employee shall be entitled to reasonable time to utilize vacation
as the Employee shall determine in his sole discretion; provided
however, that the Employee shall evidence reasonable judgment with
regard to appropriate vacation scheduling. Notwithstanding the
foregoing, the Employee shall be entitled to a minimum of four ( 4 )
weeks paid vacation per year. The Employee shall be permitted to
accrue vacation time from all previous years of employment with the
Company, notwithstanding Company policy to the contrary. Upon
termination of this Agreement for any reason, the Employee
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shall be fully compensated for all properly accrued and unused
vacation time.
f) The Employee shall receive a grant pursuant to the Company's 2003
Stock Incentive Plan, upon its adoption, for an option to purchase
250,000 shares of the Company's common stock.
4. Non-Competition. Employee agrees that while in the employment of the
Company, and, for a period of two (2) years thereafter, he will not,
directly or indirectly, own, manage, operate, participate as a principal in
or be employed by or otherwise be interested financially in, or connected
in any commercial manner with, any business directly or indirectly
competitive with that conducted by the Company. The Company agrees to pay
to the Employee, on a quarterly basis, in advance, during this two (2) year
period following the Employee's employment with the Company one hundred
percent (100%) of the total Base Fee in consideration for the Employee's
lost opportunities.
5. Confidentiality. Employee agrees that while in the employment of the
Company, directly or indirectly, and for a period of two (2) years
thereafter, so long as payments to be made to him pursuant to Paragraph 4
hereof are current, that he will not (unless in the performance of his
duties hereunder) make use of, or divulge to any person any confidential or
proprietary information in the nature of trade secrets concerning the
business, customers, accounts or finances of, or any of the methods of
doing business used by the Company, or of the dealings, transactions or
affairs of the Company or any of its customers which have come to his
knowledge during his engagement with the Company, either during the period
of this Agreement or of any other employment type arrangement with Company
(together "Confidential Information"). No information will be deemed to be
Confidential Information if it (i) is or becomes known to the public
through no fault of Employee or (ii) is independently obtained or developed
by a third person without breach of any obligation to the Company.
Notwithstanding anything stated above to the contrary, Employee will not be
in violation of this Paragraph if he discloses Confidential Information in the
following circumstances:
a) disclosure is necessary to enable Employee to enforce rights under
this Agreement;
b) disclosure is required by law;
c) disclosure is to Employee's attorneys and/or accountants, said
disclosure is necessary and appropriate in the ordinary course of
Employee's business relationship with said attorneys and/or
accountants and said attorneys and/or accountants agree in writing to
by bound by the confidentiality provisions set forth herein.
6. Non-Interference. Employee agrees for a period of two (2) years following
the termination of his employment by the Company, so long as payments to be
made to him pursuant to Paragraph 4 hereof are current, that he will not,
directly or indirectly through any person, firm or corporation with which
he is affiliated, (i) endeavor or attempt, directly or indirectly, to
induce any person who shall have been at any time during his employment by
the Company a customer or client of the Company to cease dealing with the
Company, or (ii)
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solicit the employment of any employee of the Company on behalf of any
other person or otherwise interfere with the employment relationship
between any employee or officer of the Company and the Company.
7. Delivery of Materials. Employee agrees that upon the termination of his
engagement he will deliver to the Company all documents, papers, materials
and other property of the Company relating to its affairs, which may then
be in his possession or under his control.
8. Remedies. Employee agrees that in the event he is terminated for cause as
provided herein, that he shall be required to comply with the provisions of
Paragraphs 5, 6, 7 and 8 hereof. Upon any material breach of this Agreement
by either party hereto, the non-breaching party shall be entitled, if it so
elects, to institute and prosecute proceedings at law or in equity to
obtain damages with respect to such breach or to enforce the specific
performance of this Agreement by the other or to enjoin the other from
engaging in any activity in violation hereof. The provisions of Paragraphs
4, 5, 6, 7 and 8 hereof will survive any termination of this Agreement. In
addition, if the Company materially breaches this Agreement, the Employee
shall have the right to accelerate all payments owed to him under this
Agreement for the remaining term or any extension term of this Agreement,
including the two (2) year period following employment as provided in
Paragraph 4 hereof. Such payments shall become immediately due and payable
to the Employee upon notice of acceleration to the Company. If the Company
fails to immediately pay in full all amounts due to the Employee under this
Agreement upon receiving notice of acceleration by the Employee, then
interest shall accrue on any unpaid amounts due, including any accrued and
unpaid interest, at the rate of eighteen percent (18%) per annum or the
maximum legal rate allowed under applicable state and federal laws until
paid in full.
9. Entire Agreement. This Agreement constitutes the entire agreement between
the parties and contains all of the agreements between the parties with
respect to the subject matter hereof. This Agreement supersedes any and all
other agreement, including any employment type agreement between Employee
and the Company, either oral or in writing.
10. Amendment. This Agreement may not be amended except by an instrument signed
by both parties hereto, or by their duly appointed representatives.
11. Governing Law; Venue; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without
regard to the conflicts of law principles thereof. Any proceeding arising
between the parties hereto, relating to this Agreement, shall be held in
New York, New York.
12. Waiver. The failure or delay of a party at any time to require performance
by another party of any provision of this Agreement, even if known, shall
not affect the right of such party to require performance of that provision
or to exercise any right, power or remedy hereunder, and any waiver by any
party of any breach of any provision of this Agreement should not be
construed as a waiver of any continuing or succeeding breach of such
provisions, a waiver of the provision itself, or a waiver of any right,
power or remedy under this Agreement. No notice to or demand on any party
in any case shall, of itself, entitle such party to any other or
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further notice or demand in similar or other circumstances.
13. Severability. Every provision in this Agreement is intended to be
severable, and if any term or provision in this Agreement is illegal or
invalid for any reason whatsoever, such provision shall be invalid, but
such illegality or invalidity shall not affect the legality or validity of
the remainder of this Agreement.
14. Assignment. This Agreement and the rights and duties hereunder shall not be
assignable by either party, except with the other party's written consent.
15. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall constitute
but one agreement.
16. Headings. The headings of the sections are for convenience only and shall
not control or affect the meaning or construction or limit the scope or
intent of any of the provisions of this Agreement.
17. Attorney's Fees. In the event a dispute arises between the parties under
this Agreement, the prevailing party shall be entitled to recover his
reasonable costs and attorney's fees from the non-prevailing party. As used
herein, reasonable costs and attorney's fees include any costs and
attorney's fees in any appellate proceeding.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CNE Group, Inc.
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President
/s/ Xxxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx, Employee
