Exhibit 10.4
EMPLOYMENT AGREEMENT
This Agreement, dated as of May 26, 2004 is between Wireless
Frontier Internet, Inc. ("Employer" or the "Company"), and Xxxxx X. Xxxxxxx
("Employee"). Employer and Employee agree to the following terms and conditions
of employment.
1. Period of Employment.
Employer shall employ Employee to render services to Employer in the
position and with the duties and responsibilities described in Section 2 for the
period of one (1) year commencing on the date of this Agreement and will
automatically renew an additional one (1) year term unless renegotiated prior to
the expiration of the term unless Employment is terminated in accordance with
Section 4.
2. Position and Responsibilities.
(a) Position.
Employee accepts employment with the Company as Senior Vice
President and Chief Financial Officer and shall perform all services appropriate
to that position, as well as such other duties and services as may be assigned
by Employer. Employee shall devote his best efforts to the performance of his
duties. Employee shall be subject to the direction of the CEO, which shall
retain full control of the means and methods by which he performs the above
services and of the place(s) at which all services are rendered.
(b) Extent of Services.
Employee shall devote his entire business time, attention and
energies to the business of the Company so long as employment with the company
continues. The foregoing, however, shall not preclude Employee from engaging in
appropriate civic, charitable or religious activities or from devoting a
reasonable amount of time to private investments or from serving on the boards
of directors of other entities, as long as such activities and services do not
interfere or conflict with his responsibilities to the company.
(c) Representations and Warranties.
Employee represents and warrants that his execution of this
Agreement, his employment with Employers, and the performance of his proposed
duties under this Agreement shall not violate any obligations he may have to any
former employer (or other person or entity), including any obligations with
respect to proprietary or confidential information of any other person or
entity. Employee agrees that he will not use for the benefit of, or disclose to,
1
Employer any confidential information belonging to any former employer or other
entity unless he has written permission from the employer or entity to do so (or
unless Employer has been granted such permission).
3. Compensation and Benefits.
(a) Base Salary.
(1) In consideration of the services to be rendered under this
Agreement, Employee shall receive Base Salary as provided herein. For purposes
of this Agreement, Base Salary shall mean a minimum cash salary in the total
amount of Ten Thousand Dollars ($10,000.00) per month, payable semi-monthly,
pursuant to the procedures regularly established and as they may be amended by
Employer during the Period of Employment, as well as other compensation provided
in this Section 3. Upon Employer's receipt of additional corporate funding of a
minimum of $1,000,000 after this date, whether Debt or Equity, Employee's base
shall be raised to Twelve Thousand Five Hundred Dollars ($12,500.00) per month.
This amount may be adjusted up or down contingent on the award of like raises
for other Executive Officers of the Employer. Base Salary may be deferred at the
option of Employee, and in such case, Base Salary shall accrue interest at prime
plus 1% as quoted in the Wall Street Journal. Employee has the option to convert
any or all Base Salary and accrued interest to Employer's common stock
restricted under Rule 144 at a conversion rate of Eighty percent (80%) of the
average closing bid during the month prior to the month being compensated.
(2) As Employee becomes eligible, Employee shall have the
right to participate in and to receive benefits from any Employer stock option
plan generally made available to similarly situated employees of Employer.
(3) Base Salary shall be adjusted by any tax withholdings
required under applicable law.
(b) Benefits.
Employee shall be entitled to full coverage under Employer's Medical
Benefit Plan, and fringe benefits comparable to similarly situated executives,
officers or directors of the Company, including paid annual tax preparation
assistance. As Employee becomes eligible, Employee shall have the right to
participate in and to receive benefits from all present and future benefit plans
generally made available to similarly situated employees of Employer. The amount
and extent of benefits to which Employee is entitled shall be governed by the
Company's specific benefit plans, as amended. Employee shall also be entitled to
any benefits or compensation tied to termination as described in Section 4. No
oral statement concerning benefits or compensation to which Employee is entitled
shall alter in any way the term of this Agreement or its termination.
2
(c) Insurance and Indemnity.
Employer shall obtain and pay for the benefit of Employee director's
and officer's liability insurance coverage to protect Employee from personal
liability to the fullest extent allowed by law for acts undertaken as an officer
or director of Employer or an Affiliate. Furthermore, to the fullest extent
allowed by law, Employer shall indemnify Employee for and hold Employee harmless
from any and all claims or causes of action arising out of Employee's exercise
of his duties as an employee, officer or director of Employer or an Affiliate.
Employer shall also provide full benefits package, including family medical
insurance coverage for the term of this agreement.
(d) Bonus.
(1) Employee will be eligible for a bonus of at least $50,000 per
year based upon goals and criteria determined by the Board of Directors. For the
year 2004, Employee shall receive a bonus of 1% of any capital funds raised,
whether debt or equity, not to exceed $55,000 for the year.
In addition, Employee shall be awarded stock options or common stock
purchase warrants according to the following schedule:
- 50,000 shares upon execution of the agreement
- 200,000 shares upon completion of 90 days of employment
- 250,000 shares upon the completion of the next fund raise by
Employer
The strike price and vesting of warrants will be consistent with
similar instruments that are being awarded at the time of these awards. Warrants
will entitle Employee, upon the terms and subject to the limitations set forth
in the "Common Stock Purchase Warrant," to purchase from Wireless Frontier
Internet, Inc. the number of shares of Common Stock listed above. Any stock
options awarded will be consistent with the terms and conditions of the Employee
Stock Option Plan.
4. Termination of Employment
(a) By Notice.
Employer or Employee may terminate Employee's employment without
Cause (as defined below) by providing the other with sixty (60) days advance
written notice.
(1) In the event Employer exercises its right to terminate under
this subsection, Employee shall have under this the option, in Employee's
3
complete discretion, to terminate Employee's employment at any time prior to the
end of such notice period; however, Employer shall nevertheless pay to Employee
the sum of the following amounts: (i) Base Salary for the term of said
Agreement, including other compensation and benefits due and owing Employee
through the last day of the Agreement, (ii) an amount equal to Employee's Base
Salary for six (6) months. Any awards of options or warrants that are not fully
vested on the day of termination will become fully vested at that time. Tradable
common stock will be calculated by a ten (10) day average upon termination under
this Agreement for any alleged breach of Employer.
(2) In the event Employee exercises his right to terminate this
Agreement under this subsection, Employer shall have no obligation under this
Agreement, other than compensation, and benefits due and owing through the last
day actually worked, of the above notice period.
(b) By Death.
The Period of Employment shall terminate automatically upon the
death of Employee. All stock options, warrants, restricted and bonus stock shall
vest and be due. Employer shall pay to Employee's beneficiaries or estate, as
appropriate, any Base Salary, other compensation and benefits then due and
owing, including payment for accrued unused vacation, if any, as well as death
benefits to the surviving heirs in the amount equal to 50% of Employee's Base
Salary for the next twelve (12) months following the date of death. Thereafter,
all obligations of Employer under this Agreement shall cease. Nothing in this
subsection shall affect any entitlement of Employee's heirs to the benefits of
any life insurance plan or other applicable benefits.
(c) By Employer For Cause.
At any time, and without prior notice, Employer may terminate
Employee for Cause. Employer shall pay Employee all compensation then due and
owing; thereafter, all of Employer's obligations under this Agreement shall
cease. Termination shall be for "Cause" if Employee: (i) breached or habitually
neglected the duties which he was required by this Agreement or the Board of
Directors to perform, or (ii) committed act(s) of dishonesty, theft,
embezzlement, fraud, misrepresentation, or other act(s) or moral turpitude
against the Company, its subsidiaries or affiliates, it shareholders or its
employees.
(d) Disability. For purposes of this Agreement, Employee shall be
deemed to be disabled if the Employee has been unable to perform his duties
under this Agreement or as directed by the Board of Directors under this
Agreement for a period of six (6) consecutive months as a result of his physical
4
or mental illness ("Disability Period"). Employer shall pay to Employee the sum
of the following amounts: (i) all of his Base Salary, other compensation and
benefits due and owing through the last day actually worked as well as the death
benefits to the surviving heirs in the amount of fifty percent (50%) of
Employee's Base Salary for the next twelve (12) month period.
(e) Termination Obligations
(1) Employee agrees that all property, including, without
limitation, all equipment, tangible proprietary information, documents, books,
records, reports, notes, contracts, lists, computer disks (and other
computer-generated files and data), and copies thereof, created on any medium
and furnished to, obtained by, or prepared by Employee in the course of or
incident to his employment, belongs to Employer and shall be returned promptly
to Employer upon termination of the Period of Employment.
(2) All benefits to which Employee is otherwise entitled shall
cease ninety (90) days after Employee's termination, unless explicitly continued
either under this Agreement or under any specific written policy or benefit plan
of Employer.
(3) Upon termination of the Period of Employment, Employee
shall be deemed to have resigned from all offices and directorships then held
with Employer or any Affiliate.
(4) The representations and warranties contained in this
Agreement and Employee's obligations under this subsection 4(h) on Termination
Obligations shall survive the termination of the Period of Employment and the
expiration of this Agreement.
(5) Following any termination of the Period of Employment,
Employee shall fully cooperate with Employer in all matters relating to the
winding up of pending work on behalf of Employer and the orderly transfer of
work to other employees of Employer. Employee shall also cooperate in the
defense of any action brought by any third party against Employer that relates
in any way to Employee's acts or omissions while employed by Employer.
5. Notices.
Any notice or other communication under this Agreement must be in
writing and shall be effective upon delivery by hand or three (3) business days
after deposit in the United States mail, postage prepaid, certified or
registered, and addressed to Employer or to Employee at the corresponding
addresses below. Employee shall be obligated to notify Employers in writing of
any change in his address. Notice of change of address shall be effective only
when done in accordance with this Section.
5
Employer's Notice Addresses:
Wireless Frontier Internet , Inc.
000 X. Xxxxxxxxx
Xxxx Xxxxxxxx, Xxxxx 00000
Employee's Notice Address:
00000 X. Xxxxxxxx Xx.
Xxxxxxxxxxxx, XX 00000
6. Action by Employer.
All actions required or permitted to be taken under this Agreement
by Employer, including, without limitation, exercise of discretion, consents,
waivers, and amendments to this Agreement, shall be made and authorized by the
Chief Executive Officer, and or by his Executive Vice President, or another
representative specifically authorized by the Board of Directors to fulfill the
obligations under this Agreement.
7. Integration and Other Policies.
This Agreement supersedes all other prior and contemporaneous
representations, agreements and statements, whether written or oral, express or
implied, and it may not be contradicted by evidence of any prior or
contemporaneous representations, statements or agreements. Except as
specifically restricted by an express provision of this Agreement, Employer
retains and may exercise all management rights and prerogatives in its
discretion. However, to the extent that the practices, policies, or procedures
of Employer, now or in the future, apply to Employee and are inconsistent with
the terms of this Agreement, the provisions of this Agreement shall control.
8. Amendments; Waivers.
This Agreement may not be amended except by an instrument in
writing, signed by each of the parties. No failure to exercise and no delay in
exercising any right, remedy, or power under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
or power under this Agreement preclude any other or further exercise thereof, or
the exercise of any other right, remedy, or power provided herein or by law or
in equity.
9. Assignment; Successors and Assigns.
6
This agreement will be binding on all successors and assigns of the
Employer. The Employee may not delegate his duties hereunder.
10. Severability.
If any provision of this Agreement, or its application to any
person, place, or circumstance, is held by an arbitrator or a court of competent
jurisdiction to be invalid, unenforceable, or void, such provision shall be
enforced to the greatest extent permitted by law, and the remainder of this
Agreement and such provision as applied to other persons, places, and
circumstances shall remain in full force and effect.
11. Attorneys' Fees.
In any legal action, arbitration, or other proceeding brought to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and costs.
12. Interpretation.
This Agreement shall be construed as a whole, according to its fair
meaning, and not in favor of or against any party. By way of example and not in
limitation, this Agreement shall not be construed in favor of the party
receiving a benefit nor against the party responsible for any particular
language in this Agreement. Captions are used for reference purposes only and
should be ignored in the interpretation of the Agreement.
13. Proprietary Information.
Employee represents and warrants that Employer has consistently made
Employee's willingness to protect Employer's confidential and proprietary
information from any unauthorized use and disclosure, and Employee's willingness
to comply with the terms of Employer's confidentiality policies, procedures, and
agreements, conditions of (1) Employer's agreement to disclose confidential and
proprietary information to Employee, (2) Employee's employment, and (3)
Employee's continued employment. Employee agrees that Employer's requirement of
satisfactory confidentiality agreements is reasonable and necessary to protect
Employer's confidential and proprietary information and to effectuate the
purposes of, and is ancillary to, Employee's employment agreement.
7
14. Acknowledgment.
The parties acknowledge that they have had the opportunity to consult
legal counsel in regard to this Agreement, that they have read and understand
this Agreement, that they are fully aware of its legal effect, and that they
have entered into it freely and voluntarily and based on their own judgment and
not on any representations or promises other than those contained in this
Agreement.
15. Governing Law.
Governing Law. This Agreement shall be interpreted, construed and governed
according to the laws of the State of Texas. Venue for all actions hereunder
shall be in Pecos County, Texas.
16. Prior Agreements Superceded.
This Agreement supersedes any prior understandings or written or oral
agreements between the parties respecting the subject matter.
The parties have duly executed this Agreement as of the date first written
above.
/s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx - Employee
WIRELESS FRONTIER INTERNET, INC.
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxx Xxxxxxx
------------------------------- --------------------------
By: Xxxx X. Xxxxxxxx Notary Public
Its: Chairman and CEO
8
