EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of March 19,
1998("Effective Date") between Xxxxx 0. Xxxxxxxxx ("Employee") and Antennas
America ,Inc., a Utah Corporation ("Company"). For purposes of this Agreement,
each of Employee and Company is individually referred to as a "Party", and
Employee and Company are referred to collectively as "Parties".
RECITALS
1. Company is in the business of developing, manufacturing and marketing
antennas and antenna systems.
2. Employee has been engaged in and represents that he has had a great deal of
experience in the above designated business.
3. Employee is willing to be employed by Company, and Company is willing to
employ Employee, on the terms, covenants, and conditions set forth in this
Agreement.
AGREEMENT
In consideration of the premises and of the mutual covenants included in this
Agreement, the Parties agree as follows:
1. Services: Company retains Employee and Employee shall perform services for
Company as set forth in this Agreement on behalf of Company for the period and
under the terms and conditions set forth in this Agreement.
2. Term: This Agreement shall be for a period ("Term") commencing on the
Effective Date and ending on December 31, 1999, subject, however, to review and
termination during the Term as provided herein, including Section 8 hereof.
3. Duties: Employee shall perform the following services for Company:
3.1. Employee shall serve as Chief Scientist and in that capacity shall
work with the Company to pursue Company's plans as directed by the Chief
Executive Officer. design and manufacture of Company's products and the
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performance of consulting design activities on behalf of Company's customers,
subject to the direction of the Chief Executive Officer. Employee agrees not to
send any prototypes or any revisions of prototypes to customers prior to the
product review meeting that must include Employee and the Chief Executive
Officer and/or Vice President. Employee further agrees that the estimated or
final costs of the product must be agreed to in the product review meeting.
3.3. During the Term, Employee shall devote all of Employee's business time
to the performance of Employee's duties under this Agreement. Without limiting
the foregoing, Employee shall be on Company's premises between the hours of 8:30
a.m. and 5:00 p.m., performing services on behalf of Company or traveling, which
includes required off-premises testing, on behalf of Company for at least 40
hours per week and Employee shall be available at the request of Company at
other times, including weekends and holidays, to meet the needs and requests of
Company's customers.
3.4. During the Term, Employee shall not engage in any other activities or
undertake any other commitments that conflict with or take priority over
Employee's responsibilities and obligations to Company and Company's customers,
including without limitation those responsibilities and obligations incurred
pursuant to this Agreement.
3.5. Employee agrees to commit to exercise sound judgment when answering
customer inquiries regarding what Company can deliver for what price and by what
date. Any such responses shall be approved in advance by the Chief Executive
Officer.
3.6. Employee agrees to keep his work area organized and to maintain proper
documentation for each project.
3.7. Employee agrees to act in a responsible manner commensurate to that
for the Chief Scientist position.
4. Compensation: Company shall pay Employee for the performance of services
pursuant to this Agreement as follows:
4.1. Company shall pay Employee for the performance of services pursuant to
this Agreement a salary at the annual rate of not less than $66,000 for the
first twelve (12) months, effective as of March 19,1998, payable in at least
bi-weekly installments. If the bonus criteria described in Section 4.3 below are
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met in 1998 pursuant to this Agreement, Company shall pay Employee as the result
of this performance a salary at the annual rate of not less than $70,000 per
year effective the first day after the Chief Executive Officer has determined
that the 1998 bonus criteria have been met.
4.2. Any payments that Company agrees to make to Employee under this
Agreement shall be reduced by (i) such amounts as are required to be withheld
with respect to those amounts under and for the purposes of any of the
applicable income tax and other applicable laws or regulations, and (ii) such
amounts as Employee may owe to Company at any time.
4.3 Employee shall be paid a bonus of $10,000 if the Company's annual net
income equals $300,000 to $599,000; $20,000 if the Company's annual net income
equals $600,000 to $899,999 and $30,000 if the Company's annual net income
equals or exceeds $900,000. Employee's bonus is subject, however, to Employee
contributing a reasonable amount of finished products to the Company's
assortment of existing products for the fiscal year that the bonus is payable.
New product projects will be reviewed by Employee and the Chief Executive
officer on a quarterly basis and at that time it will be determined (a) if a new
project should be added to the Company's business plan; (b) if an ongoing new
project is on schedule; (c) if specifications and objectives have been met. Any
new projects proposed by Employee and approved by the Chief Executive Officer
but not completed within a reasonable time will be subject to cancellation and
possible off-set of any successful new projects. However, Employee will have the
option to unilaterally cancel any new project within 90 days from the date of
the Chief Executive Officer's initial authorization to proceed. Current projects
subject to the bonus are the (a) Harpoon; (b) indoor off-air antenna and; (c)
off-air amplifier. Maintenance projects will not be considered as new projects
for bonus purposes, viz. Lojack, Norand, Intermec, Micron, mobile/GPS. A new
project will be considered successful only after the new product is included in
the Company's monthly production schedule. In the event that Employee and the
Chief Executive Officer can not come to agreement regarding the authorization or
prioritization of a new project, either party may call for an executive meeting
of the Board to arbitrate the dispute. It is further agreed that Employee will
prepare a written report at least quarterly describing the status of all new
projects.
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4.3.1. The bonus shall be based on the audited year-end financial
statements of Company and shall be payable on or before 30 business days after
the filing by the Company with the S.E.C. of Company's Annual Report on Form
10-KSB or Form 10-K, or the successor to either such Form, with respect to that
fiscal year.
4.4. Employee shall be eligible for participation in any present or future
incentive compensation, pension, retirement, or stock purchase plan of Company
of which other employees of Company are generally eligible. It is understood,
however, that entitlements which may accrue to Employee pursuant to such
arrangements may differ from those which accrue to other employees, such
differences being based on the discretion of the Board.
4.5. Employee agrees, upon execution of this Agreement not to offer, sell
or agree to sell, or otherwise dispose of directly or indirectly, prior to
December 31, 1999, any shares of Common Stock beneficially owned by Employee,
without the prior written consent of the Company. Employee agrees that the
Company may cause a restrictive legend describing the restrictions to be placed
on each of the respective undersigned's stock certificates representing shares
of Common Stock and that the Company may instruct the Company's stock transfer
agent not to allow the transfer of any of the undersigned's respective shares of
Common Stock. Employee further agrees that in the event his employment with the
Company is terminated for any reason by either himself or the Company, the terms
of this Section 4.5. will survive, and that the above referenced restrictions on
Employees stock will remain in force until at least December 31, 1999.
5. Reimbursement of Expenses: Employee shall be reimbursed for reasonable
pre-approved expenses incurred on behalf of Company in the performance of
Employee's duties and services pursuant to this Agreement. Employee shall
provide Company with an expense report containing a detailed description of
expenses incurred by the 30th day following the calendar month in which the
expenses were incurred on behalf of Company. The description of expenses shall
contain such information as may be required in order to permit such
reimbursements as proper deductions to Company under the Internal Revenue Code
as amended and the rules and regulations adopted pursuant thereto and in effect
at that time. Company shall make approved reimbursements within 30 days of
receipt of the expense report.
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6. Additional Benefits:
6.1. Employee shall be entitled to 10 days of paid vacation, 5 days of paid
sick leave, and 5 days of paid personal leave, each calendar year, during the
Term of this Agreement in accordance with the vacation policies and practices of
Company. Employee shall provide Company with at least one day notice prior to
Employee's use of personal leave days. Employee shall not be entitled to utilize
personal leave days on days on which Employee's services are required by Company
to meet the needs of Company's customers or where Employee's absence will
otherwise have a material effect on the operations or business of Company. The
use by Employee of a personal day in violation of the prior sentence shall be a
material breach of this Agreement. Employee shall be entitled to receive such
additional vacation, personal, and sick leave days as are provided to all other
managers or directors of Company.
6.2 Employee and his family, if any, shall be entitled to receive such
benefits from medical insurance plans, life and disability insurance and
otherwise, as are provided to all other salaried employees of Company.
7. Proprietary Information and Inventions Agreement: Employee agrees that his
employment with Company is contingent upon his signing and dating the
Proprietary Information and Inventions Agreement on the same day he signs and
dates this Agreement.
8. Termination: Employee's employment with Company will not be for a specified
term and may be terminated with cause by the Company at any time. Any contrary
representations or agreements which may have been made to Employee are
superseded by this Agreement.
8.1. This Agreement shall terminate upon the death of Employee or if
Employee becomes disabled. Employee shall be considered "disabled" if, and on
the date on which, Employee has been unable to perform a substantial and
material portion of Employee's services hereunder, for a period of 90 continuous
days, because of sickness, injury, or disability, as determined by a majority of
the Board.
8.2 In the event Employee's employment is terminated, then all unaccrued
salary and any bonus obligations of Company to Employee shall cease as of the
date of termination.
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9. Alternative Dispute Resolution: Employee agrees that any and all disputes
that Employee has with Company or with any of Company's employees, which arise
out of Employee's employment or under the terms of this Agreement shall be
resolved through final and binding arbitration, as specified herein. This shall
include, without limitation, disputes relating to this Agreement, Employee's
employment by Company or the termination thereof, claims for breach of contract
or breach of the covenant of good faith and fair dealing, and any claims of
discrimination or other claims under any federal, state or local law or
regulation now in existence or hereinafter enacted and as amended from time to
time concerning in any way the subject of Employee's employment with Company or
his termination. The only claims not covered by this Paragraph 9 are wage
claims, claims for benefits under the workers' compensation laws or claims for
unemployment insurance benefits, which will be resolved pursuant to those laws.
Binding arbitration will be conducted in either Arapahoe, Denver, or Jefferson
County, Colorado, in accordance with the rules and regulations of the American
Arbitration Association Employment Dispute Resolution Rules. Each Party will
split the cost of the arbitration filing and hearing fees, and the cost of the
arbitrator; each Party will bear its own attorneys' fees, unless otherwise
decided by the arbitrator. Employee understands and agrees that the arbitration
shall be instead of any civil litigation and that the arbitrator's decision
shall be final and binding to the fullest extent permitted by law and
enforceable by any court having jurisdiction thereof. Employee further
represents that he is making a voluntary and knowing waiver of his right to
pursue any and all employment-related claims in court and that he acknowledges
that he has been encouraged by Company to have this Agreement reviewed by his
legal counsel prior to his signing.
10. Non-compete: Employee acknowledges and recognizes the highly competitive
nature of Company's business and that Employee's duties hereunder justify
restricting Employee's future employment following any termination of employment
with Company. Employee agrees that so long as Employee is employed with Company,
and for a period of two years following the termination of employment with
Company, Employee, except when acting on behalf of or for the benefit of
Company, will not (i) induce customers, agents or other sources of distribution
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of Company's business under contract or doing business with Company to
terminate, reduce, alter or divert business with or from Company, or (ii)
compete, within the United States, with Company, or participate as an officer,
principal,employee, or consultant in any business that includes part or all of
the Company's Area of Business, as defined below. As used herein, the term
"compete, within the United States" shall include any competitive activity,
including any sale, distribution, marketing or manufacturing that occurs, or is
intended to occur, directly or indirectly, in the United States or with a person
or entity located in, operating in with respect to that activity or
headquartered in, the United States that involves products that directly
conflict with products introduced and developed by the Company. These products
include but are not limited to disguised vehicular antennas for the purpose of
tracking and locating vehicles, off-air antennas for the purpose of providing
clandestine Local home TV reception, flat panel antennas that include the use of
styrofoam and die-cut copper foil, any antenna product using the cable as a
receptor, and any product currently patented, a patent has been filed for or is
patent pending by the Company prior to or during the term of this Agreement.
Ownership by Employee, for investment purposes only, of less than five percent
of any class of securities of a corporation if said securities are listed on a
national securities exchange or registered under the Securities Exchange Act of
1934, as amended, shall not constitute a breach of the foregoing covenant.
Company's Area of Business includes the design, marketing, production and sale
of antennas and antenna systems.
11. Miscellaneous Provisions:
11.1. Notice: Any notice pursuant to this Agreement shall be validly given
or served if that notice is made in writing and delivered personally or sent by
certified mail, return receipt requested, postage prepaid, to the following
addresses:
To Company: Antennas America, Inc.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxx 00000
To Employee: Xxxxx X. Xxxxxxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
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All notices so given shall be effective upon receipt. Either Party, by notice so
given, may change the address to which his or its future notices shall be sent.
11.2. Entire Agreement: This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter of this Agreement and
supersedes all prior and contemporaneous agreements between the Parties with
respect to the subject matter of this Agreement.
11.3. Severability: Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, and if any provision of this Agreement shall be or become
prohibited or invalid in whole or in part for any reason whatsoever, that
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remaining portion of that provision or the
remaining provisions of this Agreement.
11.4. Non-waiver: The waiver of either Party of a breach or violation of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach or violation of any provision of this Agreement.
11.5. Amendment: No amendment or modification of this Agreement shall be
deemed effective unless and until it has been executed in writing by the Parties
to this Agreement. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be any estoppel to enforce any provision of
this Agreement, except by a written instrument that has been executed by the
Party charged with such waiver or estoppel.
11.6. Inurement: This Agreement shall be binding upon Employee and Company
and its successors and/or assigns. This Agreement shall not be assignable by
Employee.
11.7. Headings: The headings in this Agreement are for convenience only;
they form no part of this Agreement and shall not affect its interpretation.
12. Representations and Warranties:
12.1. Company represents and warrants to Employee the following: (i)
Company has been duly formed as a corporation under the laws of the State of
Utah; and (ii) the execution of this Agreement has been duly authorized by
Company and does not require the consent of or notice to any party not
previously obtained or given.
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12.2. Employee represents and warrants to Company that the execution of
this Agreement and the performance of Employee's obligations hereunder does not
require the consent of or notice to any party not previously obtained or given,
and there is nothing that prohibits or restricts the execution by Employee of
this Agreement or his performance of the obligations hereunder.
13. Covenants: Each of Employee and Company covenants to diligently and
skillfully do and perform the acts and services required herein.
IN WITNESS WHEREOF and intending to be legally bound, the Parties to this
Agreement have executed this Agreement on the dates indicated below to be
effective as of the Effective Date.
Employee:
Date: March 19,1998
----------------------- ------------------------------------
Xxxxx X. Xxxxxxxxx
Company:
Antennas America, Inc.
By:
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Xxxxxxx X. Xxxx
Chief Executive Officer
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