EXHIBIT 10.7
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of November 14, 1995, by and
between TELETRAC, INC., a Delaware corporation (the "Company"), and XXXXX
X. QUEEN (the "Employee").
W I T N E S S E T H:
WHEREAS the Company desires to induce the Employee to enter into
employment with the Company for the period provided in this Agreement, and
the Employee is willing to accept such employment with the Company on a
full-time basis, all in accordance with the terms and conditions set forth
below;
NOW, THEREFORE, for and in consideration of the premises hereof
and the mutual covenants contained herein, the parties hereto hereby
covenant and agree as follows:
1. Employment. (a) The Company hereby employs the
Employee, and the Employee hereby accepts such employment with the
Company, for the period set forth in Section 2 hereof, all upon the terms
and conditions hereinafter set forth.
(b) The Employee affirms and represents that he is under no
obligation to any former employer or other party which is in any way
inconsistent with, or which imposes any restriction upon, the Employee's
acceptance of employment hereunder with the Company, the employment of the
Employee by the Company, or the Employee's undertakings under this
Agreement.
32 Term of Employment. Unless earlier terminated as
hereinafter provided, the term of the Employee's employment under this
Agreement shall initially be for a period beginning on the date hereof and
ending on December 31, 1998. Thereafter, this Agreement will continue in
full force and effect from year to year unless terminated by either the
Employee or the Company by written notice given to the other not later
than October 31 of the year of such termination. The period from the date
hereof until the date the Employee's employment hereunder is terminated
(whether on December 31, 1998 or earlier or later as provided herein) is
hereinafter called the "Employment Term."
3. Duties. The Employee shall be employed as the Chief
Executive Officer of the Company, shall faithfully and competently perform
such duties as are specified in the Bylaws of the Company and shall also
perform and discharge such other executive employment duties and
responsibilities consistent with his position as Chief Executive Officer
as the Board of Directors of the Company may from time to time reasonably
prescribe. The Employee shall perform his duties at such places and times
as the Board of Directors of the Company may reasonably prescribe;
PROVIDED, HOWEVER, that if compliance with this requirement would require
the Employee to relocate more than 40 miles from his current home in
Kansas City, Missouri, the Employee will only be required to relocate on
such terms and to such location as is mutually acceptable to the Employee
and the Company. Except as may otherwise be approved in advance by the
Board of Directors of the Company, and except during vacation periods and
reasonable periods of absence due to sickness, personal injury or other
disability, personal affairs or non-profit public service activities, the
Employee shall devote his full time during normal business hours
throughout the Employment Term to the services required of him hereunder.
The Employee shall render his business services exclusively to the Company
during the Employment Term and shall use his best efforts, judgment and
energy to improve and advance the business and interests of the Company in
a manner consistent with the duties of his position.
4. Salary, Bonus and Stock Option. (a) Salary. As
compensation for the performance by the Employee of the services to be
performed by the Employee hereunder during the Employment Term, the
Company shall pay the Employee a base salary at the annual rate of two
hundred thousand dollars ($200,000) (said amount, together with any
increases thereto as provided in this Section 4(a), being hereinafter
referred to as "Salary"). Any Salary payable hereunder shall be paid in
regular intervals (but in no event less frequently than monthly) in
accordance with the Company's payroll practices from time to time in
effect. The Salary payable to the Employee pursuant to this Section 4(a)
may be increased as determined from time to time by the Board of Directors
of the Company in its sole discretion.
(b) Bonus. The Employee shall be eligible to receive bonus
compensation from the Company in respect of each fiscal year (or portion
thereof) occurring during the Employment Term in an amount up to 25% of
his then current Salary, to be determined by the Board of Directors of the
Company. Any bonus payable hereunder shall be paid as promptly as
practicable as determined by the Board of Directors in its sole
discretion.
(c) Withholding, Etc. The payment of any Salary and bonus
hereunder shall be subject to applicable withholding and payroll taxes,
and such other deductions as may be required under the Company's employee
benefit plans.
(d) Stock Option. (i) Simultaneously with the "Subsequent
Closing" (as such term is defined in the Stock Purchase Agreement dated as
of the date hereof by and among the Company and the Investors named
therein, including the Employee (the "Stock Purchase Agreement")) that
occurs concurrently with the closing under the Asset Purchase Agreement
dated as of the date hereof between the Company and AirTouch Services (the
"Asset Purchase Agreement"), the Company shall grant to the Employee a
stock option, intended (to the maximum extent permissible) to qualify as
an "incentive stock option" within the meaning of Section 422(b) of the
Internal Revenue Code of 1986, as amended, and otherwise to be treated as
a "non-qualified stock option," to purchase a number of shares of Common
Stock, $.01 par value, of the Company ("Common Stock"), subject to
adjustment as provided therein, constituting 8.53% of the outstanding
shares of Common Stock on a fully-diluted basis (determined on the basis
of the aggregate number of shares of Common Stock then issued pursuant to
the Stock Purchase Agreement and including the shares of Common Stock
issuable pursuant to all options granted under the Plan). The terms and
conditions of such option shall be as provided in the Teletrac, Inc. Stock
Option Plan, in substantially the form attached as Exhibit A to the
Stockholders Agreement dated as of the date hereof among the Company and
the other parties thereto, including the Employee (the "Plan"), and as set
forth in a definitive option agreement or agreements between the Company
and the Employee.
(ii) Simultaneously with each Subsequent Closing under the Stock
Purchase Agreement occurring thereafter, the Company shall grant to the
Employee a stock option to purchase a number of shares of Common Stock,
subject to adjustment as provided therein, such that the Employee's
percentage holdings of Common Stock on a fully-diluted basis (determined
as provided above) shall remain constant. The terms and conditions of
each such option shall be as provided in the Plan and as set forth in a
definitive option agreement or agreements between the Company and the
Employee, and shall be identical to the terms and conditions of the
options granted pursuant to paragraph (a) above; PROVIDED, that the
Company shall be required to grant options intended to qualify as
"incentive stock options" only to the extent permissible under the
applicable provisions of the Internal Revenue Code of 1986, as amended.
5. Other Benefits. During the Employment Term, the Employee
shall:
(i) be eligible to participate in employee fringe benefits and
pension and/or profit sharing plans that may be provided by the Company
for its senior executive employees in accordance with the provisions of
any such plans, as the same may be in effect from time to time;
(ii) be eligible to participate in any medical and health plans
or other employee welfare benefit plans that may be provided by the
Company for its senior executive employees in accordance with the
provisions of any such plans, as the same may be in effect from time to
time;
(iii) be entitled to four weeks' annual paid vacation;
(iv) be entitled to sick leave, sick pay and disability
benefits in accordance with any Company policy that may be applicable to
senior executive employees from time to time; and
(v) be entitled to reimbursement for all reasonable and
necessary out-of-pocket business expenses incurred by the Employee in the
performance of his duties hereunder in accordance with the Company's
policies applicable thereto.
6. Confidential Information. The Employee hereby covenants,
agrees and acknowledges as follows:
(a) The Employee has and will have access to and will
participate in the development of or be acquainted with confidential
or proprietary information and trade secrets related to the business
of the Company, its subsidiaries and affiliates (collectively, the
"Companies"), including but not limited to (i) business plans,
operating plans, marketing plans, financial reports, operating data,
budgets, wage and salary rates, pricing strategies and information,
terms of agreements with suppliers or customers and others, customer
lists, patents, devices, software programs, reports, correspondence,
tangible property and specifications owned by or used in the
businesses of one or more of the Companies, (ii) information
pertaining to future developments such as, but not limited to,
research and development, future marketing, distribution, delivery or
merchandising plans or ideas, and potential new business locations,
and (iii) other tangible and intangible property, which are used in
the business and operations of the Companies but not made publicly
available. The information and trade secrets relating to the
business of the Companies described hereinabove in this paragraph (a)
are hereinafter referred to collectively as the "Confidential
Information", provided that the term Confidential Information shall
not include any information (x) that is or becomes generally publicly
available (other than as a result of violation of this Agreement by
the Employee) or (y) that the Employee receives on a nonconfidential
basis from a source (other than the Company, its
affiliates or representatives) that is not known by him to be bound
by an obligation of secrecy or confidentiality to the Companies or
any of them.
(b) The Employee hereby assigns to the Company, in
consideration of his employment, all Confidential Information
developed by or otherwise in the possession of the Employee at any
time during the Employment Term, whether or not made or conceived
during working hours, alone or with others, which relates, directly
or indirectly, to businesses or proposed businesses of any of the
Companies, and the Employee agrees that all such Confidential
Information shall be the exclusive property of the Companies. Upon
request of the Board of Directors of the Company, the Employee shall
execute and deliver to the Companies any specific assignments or
other documents appropriate to vest title in such Confidential
Information in the Companies or to obtain for the Companies legal
protection for such Confidential Information.
(c) The Employee shall not disclose, use or make known for his
or another's benefit any Confidential Information or use such
Confidential Information in any way except in the best interests of
the Companies in the performance of the Employee's duties under this
Agreement. The Employee may disclose Confidential Information when
required by applicable law or judicial process, but only after notice
to the Company of the Employee's intention to do so and opportunity
for the Company to challenge or limit the scope of the disclosure.
(d) The Employee acknowledges and agrees that a remedy at law
for any breach or threatened breach of the provisions of this
Section 6 would be inadequate and, therefore, agrees that the
Companies shall be entitled to injunctive relief in addition to any
other available rights and remedies in case of any such breach or
threatened breach; PROVIDED,
HOWEVER, that nothing contained herein shall be construed as
prohibiting
the Companies from pursuing any other rights and remedies available
for any such breach or threatened breach.
(e) The Employee agrees that upon termination of his employment
by the Company for any reason, the Employee shall forthwith return to
the Company all Confidential Information, documents, correspondence,
notebooks, reports, computer programs and all other materials and
copies thereof (including computer discs and other electronic media)
relating in any way to the business of the Companies in any way
developed or obtained by the Employee during the period of his
employment with the Company.
(f) The obligations of the Employee under this Section 6 shall,
except as otherwise provided herein, survive the termination of the
Employment Term and the expiration or termination of this Agreement
and shall terminate three years after the termination of the
Employment Term.
(g) Without limiting the generality of Section 10 hereof, the
Employee hereby expressly agrees that the foregoing provisions of
this Section 6 shall be binding upon the Employee's heirs, successors
and legal representatives.
7. Termination. (a) The Employee's employment hereunder shall
be terminated upon the occurrence of any of the following:
(i) death of the Employee;
(ii) termination of the Employee's employment hereunder by the
Employee at any time for "good reason" (as defined below);
(iii) termination of the Employee's employment hereunder by the
Employee at any time for any reason whatsoever (including, without
limitation, resignation or retirement), other than "good reason" as
contemplated by clause (ii) above;
(iv) termination of the Employee's employment hereunder by the
Company because of the Employee's inability to perform his duties on
account of disability or incapacity within the meaning provided in
the disability insurance policy referred to in paragraph (c) below;
(v) termination of the Employee's employment hereunder by the
Company at any time "for cause" (as defined below), such termination
to take effect immediately upon written notice from the Company to
the Employee;
(vi) termination of the Employee's employment hereunder by the
Company at any time, other than (x) termination by reason of
disability or incapacity as contemplated by clause (iv) above or (y)
termination by the Company "for cause" as contemplated by clause (v)
above; and
(vii) termination of the Employee's employment hereunder
without action by either party, simultaneously with the termination
of the Asset Purchase Agreement pursuant to its terms (in which
event, notwithstanding any provision to the contrary contained
herein, the obligations of the Employee under Sections 6 and 9 hereof
shall also expire and terminate).
(b) In the event that the Employee's employment is terminated
pursuant to clause (ii) or (vi) of Section 7(a) above, the Company shall
pay to the Employee, as severance pay or liquidated damages or both,
during the twelve-month period immediately following such termination, the
amount of Salary that the Employee would have otherwise been entitled to
receive during such twelve-month period had the Employee's employment not
been so terminated; PROVIDED, HOWEVER, that no such payment shall be due
in the event such termination occurs as a result of a notice of
termination given by the Company or by the Employee in connection with a
failure to renew this Agreement as provided in Section 2.
(c) Promptly after the execution of this Agreement the Company
shall obtain, and shall maintain in effect during the Employment Term, (i)
insurance on the Employee's life in favor of his estate or his named
beneficiary or beneficiaries, in a minimum amount equal to his Salary as
from time to time in effect and (ii) long-term disability insurance in
favor of the Employee, in a minimum amount equal to 60% of his Salary as
from time to time in effect, the proceeds of which shall be payable in the
event the Employee's employment is terminated pursuant to clause (i) or
clause (iv) of Section 7(a) above, as the case may be.
(d) Notwithstanding anything to the contrary expressed or
implied herein, except as required by applicable law and except as set
forth in Sections 7(b) and 7(c) above, the Company (and its affiliates)
shall not be obligated to make any payments to the Employee or on his
behalf of whatever kind or nature by reason of the Employee's cessation of
employment (including, without limitation, by reason of termination of the
Employee's employment by the Company for "cause"), other than (i) such
amounts, if any, of his Salary as shall have accrued and bonus as shall
have been determined to be due by the Board of Directors and, in each
case, remained unpaid as of the date of said cessation and (ii) such other
amounts, if any, which may be then otherwise payable to the Employee from
the Company's benefits plans or reimbursement policies. The termination
of this Agreement shall not relieve the Employee of any liability for any
willful breach hereof.
(e) No interest shall accrue on or be paid with respect to any
portion of any payments hereunder.
(f) For purposes of this Agreement, the following definitions
shall apply:
(i) The term "good reason" shall mean only the following: (1)
material default by the Company in the performance of its obligations
hereunder, (2) material diminishment of the duties, position or
responsibilities of the Employee hereunder (provided that, in either
such case, the Employee shall have provided the Board of Directors of
the Company with written notice of such default or other event and a
reasonable opportunity to discuss the matter with the Employee,
followed by a notice that the Employee adheres to his position and a
reasonable opportunity to cure), or (3) a "Change of Control" of the
Company (as defined below);
(ii) The term "cause" shall mean only the following:
(1) conviction of the Employee of having committed a felony, (2) acts
of dishonesty or moral turpitude by the Employee that are materially
detrimental to the Company and/or its affiliates, (3) acts or
omissions by the Employee that the Employee knew were likely to
materially damage the business of the Company and/or any affiliate of
the Company whose business, operations, assets or properties are
material to the Company, (4) gross negligence by the Employee in the
performance of, or willful disregard by the Employee of, his
obligations hereunder, or willful and material breach by the Employee
of the terms hereof or (5) failure by the Employee to obey the
reasonable and lawful orders of the Board of Directors that are
consistent with the provisions of this Agreement (provided that, in
the event such failure shall not also constitute "cause" under any of
clauses (1) through (4) above, the Employee shall have received
written notice of such failure and a reasonable opportunity to
discuss the matter with the Board of Directors, followed by a notice
that the Board of Directors adheres to its position and a reasonable
opportunity to comply with such orders). It is understood and agreed
that the performance of the Company, whether financial, operational
or otherwise, shall not (in the absence of "cause" as provided in
clauses (1) through (5) above) constitute "cause."
(iii) "Change of Control" shall mean the acquisition of (a)
beneficial ownership of more than 50% of the voting equity securities
of the Company or any successor to the Company (by merger or
otherwise) or (b) all or substantially all the assets of the Company,
by any person or entity (including, without limitation, any group
within the meaning of Section 13(d)(3) of the Securities Exchange
Act, as amended) other than the "Investors," as such term is defined
in the Stock Purchase Agreement dated as of September , 1995, among
the Company and the Investors, or their respective affiliates.
8. Non-Assignability. (a) Neither this Agreement nor any
right or interest hereunder shall be assignable by the Employee or his
beneficiaries or legal representatives without the Company's prior written
consent; PROVIDED, HOWEVER, that nothing in this Section 8(a) shall
preclude the Employee from designating a beneficiary to receive any
benefit payable hereunder upon his death or incapacity.
(b) Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to exclusion, attachment, levy or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary,
to effect any such action shall be null, void and of no effect.
9. Competition, etc. (a) During the Employment Term and
during the two-year period following the end of the Employment Term for
any reason whatsoever, provided that payments, if any, required pursuant
to Section 7(b) hereof are made in full and in a timely fashion:
(i) the Employee will not directly or indirectly (as a
director, officer, employee, manager, consultant, independent
contractor, advisor or otherwise) engage in competition with, or own
any interest in, perform any services for, participate in or be
connected with any business or organization which engages in
competition with the Company or any of its affiliates in any State
where any business shall be carried on (or formally contemplated to
be carried on) by the Company or any of its affiliates during the
Employment Term or as of the end of the Employment Term, as the case
may be, PROVIDED, HOWEVER, that the provisions of this Section 9(a)(i)
shall not be deemed to prohibit (A) the Employee's ownership of not
more than five percent (5%) of the total shares of all classes of
stock outstanding of any publicly held company, or ownership, whether
through direct or indirect stock holdings or otherwise, of one percent
(1%) or more of any other business or (B) non-profit public service
activities, as contemplated by Section 3 hereof; and
(ii) the Employee will not directly or indirectly induce or
attempt to induce any employee of the Company or any affiliate of the
Company to leave the employ of the Company or such affiliate, or in
any way interfere with the relationship between the Company or any
such affiliate and any employee thereof.
(b) For purposes of this Section 9, a person or entity
(including, without limitation, the Employee) shall be deemed to be a
competitor of the Company or any of its affiliates, or a person or entity
(including, without limitation, the Employee) shall be deemed to be
engaging in competition with the Company or any of its affiliates, if such
person or entity in any way conducts, operates, carries out or engages in
(i) the business of vehicle location and fleet management services or
related services and supplies, or (ii) such other business or businesses
as the Company may conduct in the future in such geographical area or
areas as such business or businesses are conducted.
(c) For purposes of this Section 9, no company or entity that
may be deemed to be an affiliate of the Company solely by reason of its
being controlled by, or under common control with, any of the Investors or
their respective affiliates other than the Company, will be deemed to be
an affiliate of the Company.
(d) In connection with the foregoing provisions of this
Section 9, the Employee represents that his experience, capabilities and
circumstances are such that such provisions will not prevent him from
earning a livelihood. The Employee further agrees that the limitations
set forth in this Section 9 (including, without limitation, time and
territorial limitations) are reasonable and properly required for the
adequate protection of the businesses of the Company and its affiliates.
It is understood and agreed that the covenants made by the Employee in
this Section 9 (and in Section 6 hereof) shall survive the expiration or
termination of this Agreement, except as otherwise expressly provided
herein.
(e) The Employee acknowledges and agrees that a remedy at law
for any breach or threatened breach of the provisions of this Section 9
would be inadequate and, therefore, agrees that the Company and any of its
affiliates shall be entitled to injunctive relief in addition to any other
available rights and remedies in cases of any such breach or threatened
breach; PROVIDED, HOWEVER, that nothing contained herein shall be
construed as prohibiting the Company or any of its affiliates from
pursuing any other rights and remedies available for any such breach or
threatened breach.
10. Binding Effect. Without limiting or diminishing the effect
of Section 8 hereof, this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors,
legal representatives and assigns.
11. Notices. Any notice required or permitted to be given
under this Agreement shall be sufficient if in writing and either
delivered in person or sent by first class certified or registered mail,
postage prepaid, if to the Company, at the Company's principal place of
business, and if to the Employee, at his home address most recently filed
with the Company, or to such other address or addresses as either party
shall have designated in writing to the other party hereto.
12. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
13. Severability. The Employee agrees that in the event that
any court of competent jurisdiction shall finally hold that any provision
of Section 6 or 9 hereof is void or constitutes an unreasonable
restriction against the Employee, the provisions of such Section 6 or 9
shall not be rendered void but shall apply with respect to such extent as
such court may judicially determine constitutes a reasonable restriction
under the circumstances. If any part of this Agreement other than Section
6 or 9 is held by a court of competent jurisdiction to be invalid,
illegible or incapable of being enforced in whole or in part by reason of
any rule of law or public policy, such part shall be deemed to be severed
from the remainder of this Agreement for the purpose only of the
particular legal proceedings in question and all other covenants and
provisions of this Agreement shall in every other respect continue in full
force and effect and no covenant or provision shall be deemed dependent
upon any other covenant or provision.
14. Waiver. Failure to insist upon strict compliance with any
of the terms, covenants or conditions hereof shall not be deemed a waiver
of such term, covenant or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time
or times.
15. Entire Agreement; Modifications. This Agreement
constitutes the entire and final expression of the agreement of the
parties with respect to the subject matter hereof and supersedes all prior
agreements, oral and written, between the parties hereto with respect to
the subject matter hereof. This Agreement may be modified or amended only
by an instrument in writing signed by both parties hereto.
16. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have duly
executed and delivered this Agreement as of the day and year first above
written.
TELETRAC, INC.
By /s/Xxxxxx X. Xxxxxxx
________________________________
Name: Xxxxxx X. Xxxxxxx
Title: General Counsel and Secretary
/s/Xxxxx X. Queen
__________________________________
Xxxxx X. Queen
TELETRAC HOLDINGS, INC.
TELETRAC, INC.
0000 XXXXX XXXXXX
XXXXX 0000
XXXXXX XXXX, XXXXXXXX 00000
November 11, 1997
Xx. Xxxxx X. Queen
Teletrac, Inc.
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Teletrac, Inc.
Teletrac Holdings, Inc.
_______________________
Dear Mr. Queen:
Reference is made to that certain employment agreement dated as
of November 14, 1995 (the "Employment Agreement") between you and
Teletrac, Inc. ("Teletrac"), regarding the terms of your employment with
Teletrac, and to the Incentive Stock Option Agreement and Non-Qualified
Stock Option Agreements between you and Teletrac, as assigned to Teletrac
Holdings, Inc., the sole stockholder of Teletrac ("Holdings" and, together
with Teletrac, the "Company"). Capitalized terms used and not otherwise
defined herein shall have the respective meanings assigned to them in the
Employment Agreement.
This will confirm our understanding that the Employment
Agreement and such Stock Option Agreements are hereby amended as follows:
17. Section 2 of the Employment Agreement is hereby deleted and
the following is inserted in its place:
"18. Term of Employment. Unless earlier terminated as
hereinafter provided, the term of the Employee's employment under this
Agreement shall initially be for a period beginning on the date hereof and
ending on December 31, 1999. The period from the date hereof until the
date the Employee's employment hereunder is terminated (whether on Decem-
ber 31, 1999 or earlier as provided herein) is hereinafter called the
"Employment Term."
19. Section 3 of the Employment Agreement is hereby deleted and
the following is inserted in its place:
"3. Duties. The Employee shall initially be employed as the
Chairman and Chief Executive Officer of the Company and after
relinquishment of such titles shall be employed in such capacity as the
Board of Directors shall reasonably prescribe. Employee shall faithfully
and competently perform such duties as the Board of Directors of the
Company or any successor Chief Executive Officer may reasonably prescribe
commensurate with Employee's experience and capabilities. The Employee
shall relinquish his title and duties as Chairman and Chief Executive
Officer effective as of the date on which the Company shall employ another
individual to serve as Chief Executive Officer and Chairman. The Employee
shall perform his duties at such places and times as the Board of
Directors of the Company may reasonably prescribe; PROVIDED, HOWEVER, that
if compliance with this requirement would require the Employee to relocate
more than 40 miles from his current home in Kansas City, Missouri, the
Employee will only be required to relocate on such terms and to such
location as is mutually acceptable to the Employee and the Company.
Except as may otherwise be approved in advance by the Board of Directors
of the Company, and except during vacation periods and reasonable periods
of absence due to sickness, personal injury or other disability, personal
affairs or non-profit public service activities, the Employee shall devote
his full time during normal business hours throughout the Employment Term
to the services required of him hereunder. The Employee shall render his
business services exclusively to the Company during the Employment Term
and shall use his best efforts, judgment and energy to improve and advance
the business and interests of the Company in a manner consistent with the
duties of his position."
20. Section 4(a) of the Employment Agreement is hereby deleted
and the following is inserted in its place:
"(a) Salary. As compensation for the performance by the
Employee of the services to be performed by the Employee hereunder during
the Employment Term, the Company shall pay the Employee a base salary at
the annual rate of two hundred twenty thousand dollars ($220,000) (said
amount being hereinafter referred to as "Salary"). Any Salary payable
hereunder shall be paid in regular intervals (but in no event less fre-
quently than monthly) in accordance with the Company's payroll practices
from time to time in effect."
21. Section 4(b) of the Employment Agreement is hereby deleted
and the following is inserted in its place:
"(b) Bonus. (i) The Employee shall be eligible to receive
bonus compensation from the Company in respect of each fiscal year (or
portion thereof) occurring during the Employment Term in an amount up to
$65,000, to be determined by the Board of Directors of the Company.
Any bonus payable hereunder shall be paid as promptly as
practicable as determined by the Board of Directors in its sole
discretion."
22. Section 7(b) of the Employment Agreement is hereby deleted
and the following is inserted in its place:
"(b) In the event that the Employee's employment is terminated
pursuant to clause (ii) or (vi) of Section 7(a) above, the Company shall
pay to the Employee, as severance pay or liquidated damages or both, the
amount of Salary that the Employee would have otherwise been entitled to
receive had the Employee's employment hereunder not been terminated prior
to December 31, 1999. At the election of the Company, such payments may
be made either (A) in a lump sum equal to the net present value of such
payments (at an interest rate determined by the Board of Directors in its
reasonable discretion) payable within five business days following the
date of termination by the Employee pursuant to said clause (ii) or on the
date of termination by the Company pursuant to said clause (vi); or (B)
during the period from the date of termination through December 31, 1999,
in accordance with the Company's payroll practices from time to time in
effect."
23. Clause (i) of Section 7(f) of the Employment Agreement is
hereby deleted and the following is inserted in its place:
"(i) The term "good reason" shall mean only the following: (1)
material default by the Company in the performance of its obligations
hereunder, PROVIDED that the Employee shall have provided the Board
of
Directors of the Company with written notice of such default and a
reasonable opportunity to discuss the matter with the Employee,
followed by a notice that the Employee adheres to his position and a
reasonable opportunity to cure; or (2) a "Change of Control" of the
Company (as defined below);"
24. The parties acknowledge that the Employee has heretofore
been granted options to purchase shares of Common Stock of the Company
pursuant to the Incentive Stock Option Agreements ("ISOs") and Non-
Qualified Stock Option Agreements ("NQSOs") listed below, all of which
were originally granted by Teletrac and assumed by Holdings:
Vested Unvested Total
ISO/NQSO Grant Date Shares Shares Shares
________ __________ ______ ______ ______
ISO 1/17/96 1,000.00 2,000.00 3,000.00
NQSO 1/17/96 874.21 1,748.42 2,622.63
NQSO 2/9/96 572.04 1,144.08 1,716.12
NQSO 3/15/96 919.20 1,838.39 2,757.59
NQSO 4/23/96 837.14 1,674.27 2,511.41
NQSO 5/29/96 917.89 1,835.78 2,753.67
NQSO 7/10/96 838.28 1,676.55 2,514.83
NQSO 8/7/96 564.70 1,129.39 1,694.09
NQSO 11/2/96 1,700.22 3,400.45 5,100.67
________ _________ _________
24,671.01
=========
The parties have agreed that certain of such options be relinquished and
canceled, and that the provisions of the ISO and the NQSOs be amended (i)
to extend the vesting periods of remaining unvested options and (ii) to
extend the period following termination of employment during which any
options vested as of the date of termination may be exercised, all as
provided below:
Cancellation of Options. The parties agree that (i) options to
purchase an aggregate 548.09 shares subject to the NQSO granted on January
17, 1996 that remain unvested as of the date hereof (such canceled shares
to be pro rata from the Class I Option Shares, Class II Option Shares and
Class III Option Shares referred to therein) and (ii) all options to
purchase shares under the NQSOs granted subsequent to January 17, 1996
that remain unvested as of the date hereof, are hereby canceled and
extinguished, such that the aggregate number of unvested shares under all
such Stock Option Agreements is hereby reduced to 3,200.33. Effective as
of the date hereof, the Employee's rights in respect of the options
canceled hereby are terminated and of no force and effect.
Amendment of January 17, 1996 ISO. (a) Section 4(a) of the ISO
granted on January 17, 1996 is hereby deleted and the following is insert-
ed in its place:
"(a) Subject to Section 8 hereof, you will not be entitled to
exercise the Option (and purchase any Option Shares) prior to January
17, 1997. Commencing on each of January 17, 1997, November 2, 1998
and November 2, 1999, provided you shall continue to be employed on
a full-time basis by the Company, you shall become entitled to
exercise the Option with respect to one-third of each of the Class I
Option Shares, the Class II Option Shares and the Class III Option
Shares (rounded to the nearest whole share) until the Option expires
and terminates pursuant to Section 2 hereof."
(b) Section 8(c) of the ISO granted on January 17, 1996 is
hereby deleted and the following is inserted in its place:
"(c) In the event that your employment with the Company terminates
for any reason other than as provided in paragraphs (a) and (b) above
or in connection with a Change in Control, then the Option may only
be exercised until the earlier of (i) January 17, 2003 and (ii) three
months after such termination, and only to the same extent that you
were entitled to exercise the Option on the date your employment was
so terminated and had not previously done so."
Amendment of January 17, 1996 NQSO. (a) Section 4(a) of the
NQSO granted on January 17, 1996 is hereby deleted and the following is
inserted in its place:
"(a) Subject to Section 8 hereof, you will not be entitled to
exercise the Option (and purchase any Option Shares) prior to January
17, 1997. Commencing on each of January 17, 1997, November 2, 1998
and November 2, 1999, provided you shall continue to be employed on
a full-time basis by the Company, you shall become entitled to
exercise the Option with respect to one-third of each of the Class I
Option Shares, the Class II Option Shares and the Class III Option
Shares (rounded to the nearest whole share) until the Option expires
and terminates pursuant to Section 2 hereof."
(b) Section 8(c) of the NQSO granted on January 17, 1996 is
hereby deleted and the following is inserted in its place:
"(c) In the event that your employment with the Company terminates
for any reason other than as provided in paragraphs (a) and (b) above
or in connection with a Change in Control, then the Option may only
be exercised until the earlier of (i) January 17, 2003 and (ii) one
year after such termination, and only to the same extent that you
were entitled to exercise the Option on the date your employment was
so terminated and had not previously done so."
Amendment of Other NQSOs. (a) Section 4(a) of each of the other
NQSOs is hereby deleted and the following is inserted in its place:
"(a) Subject to Section 8 hereof, you will not be entitled to
exercise the Option (and purchase any Option Shares) prior to January
17, 1997. Commencing on each of January 17, 1997, November 2, 1998
and November 2, 1999, provided you shall continue to be employed on
a full-time basis by the Company, you shall become entitled to
exercise the Option with respect to one-third of each of the Class I
Option Shares, the Class II
Option Shares and the Class III Option Shares (rounded to the nearest
whole share) until the Option expires and terminates pursuant to
Section 2 hereof."
(b) Clause (ii) of Section 8(c) of each of the NQSOs other than
the January 17, 1996 NQSO is hereby deleted and the following is inserted
in its place:
"(ii) one year after such termination"
25. Except as expressly provided in this Amendment, nothing
herein shall affect or be deemed to affect any provisions of the
Employment Agreement, the ISO or any of the NQSOs, and except only to the
extent that they may be varied hereby, all of the terms of each such
agreement shall remain unchanged and in full force and effect and are
hereby ratified and confirmed.
* * * * * * *
If the foregoing correctly sets forth our understanding
concerning this matter, please sign below and return to us an
executed copy of this letter, whereupon this letter shall become a binding
agreement between us.
Very truly yours,
TELETRAC, INC.
By/s/Xxxxxx X. Xxxxxxx
_______________________________
Name: Xxxxxx X. Xxxxxxx
Title: General Counsel and Secretary
TELETRAC HOLDINGS, INC.
By/s/Xxxxxx X. Xxxxxxx
_______________________________
Name: Xxxxxx X. Xxxxxxx
Title: General Counsel and Secretary
Accepted and agreed to
as of the date first
above written:
/s/Xxxxx X. Queen
______________________________
Xxxxx X. Queen
