Exhibit 10.1 -- Employment Agreement
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") made as of June 1, 2000 by and
between DCI Telecommunications, a Colorado corporation having its principal
place of business at 000 Xxxxxx Xxxx, Xxxxxxxxx, XX (the "Employer"), and Xxxx
X. Xxxxx (the "Employee").
WITNESSETH:
WHEREAS the Employer is engaged in the Telecommunications business; and
WHEREAS the Employee possesses technical, management and marketing
experience related to the type of business and activities in which the Employer
is now engaged; and
WHEREAS the Employee desires to be employed by the Employer and the
Employer desires to employ the Employee, upon the terms and conditions
contained in this Agreement.
NOW, THEREFORE, in consideration of the covenants and promises contained
in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Employer and the Employee
agree as follows:
1. Employment. The Employer hereby employs the Employee and the Employee
hereby accepts employment from the Employer, upon the terms and conditions set
forth in this Agreement.
2. Term. The term of this Agreement shall commence on the date of this
document
and shall end five (5) years from such date.
3. Scope of Duties. During the term of this Agreement, the Employee
shall be employed as the President and Chief Executive Officer of the
Employer. The employee shall have general control of and the responsibility for
the day to day operations of the Employer relating to the general
administration of the business, financial matters, development of new business
and sales of products of the business. Such control and responsibility shall
include, without limitation, the power to hire and discharge employees, to
disburse funds, and to do all other acts necessary or appropriate to operate
the business of the Employer. Furthermore, the Employee shall have general
responsibility for such duties as are consistent with such position and as
directed by the Board of Directors from time to time. Such duties may include
acquisition activities, sale of subsidiary companies, analysis, planning,
direction and implementation of business plans for the Company and its various
subsidiaries.
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4. Scope of Service. During the term of this Agreement, the Employee
shall, consistent with his duties as President and Chief Executive Officer of
Employer, devote his attention, energies, and best efforts to the business of
the Employer, and shall perform all of the duties that are required of him
pursuant to the express terms of this Agreement. During the term of this
Agreement, the Employee shall not, directly or indirectly, alone or as a member
of any partnership, firm, corporation, association or other entity, or as an
officer, director, employee or consultant of any corporation or other entity,
be engaged in or concerned with any other business activity, whether or not
such business activity is pursued for gain or profit or for other pecuniary
advantage which shall compete with the Employer in the promotion, marketing and
sales of telecommunications-related merchandise. Employee will be allowed to
serve on boards of directors of non-telecommunications companies, non-profit
organizations, engage in charitable activities and deliver lectures which do
not directly compete with, or directly benefit competitors of the Employer.
The foregoing shall not, however, be construed as preventing the Employee from
investing his personal assets in such form or manner as will not require any
services on his part in the operation of affairs of the companies or
enterprises in which such investments are made.
5. Compensation. As compensation for services rendered by the Employee to
the Employer, the Employee shall be paid during the term of this Agreement out
of the general fund of Employer in the following amounts:
(a) Base Salary.
(i) For the calendar year 1999 and until December 31, 2000, the
Employee shall receive a base salary equal to one hundred twenty five thousand
($125,000 US) per annum, payable in twice-monthly installments ("Base Salary").
(ii) The amount of the Employee's Base Salary in all subsequent years
during the term of this Agreement, and renewals thereof, will be increased on
January 1 of each year. During the term of this Agreement and all renewals
thereof, the then current, current base salary shall be increased as of each
January 1, beginning January 1, 2001 by a rate equivalent to any increase in
the Consumer Price Index for the twelve month period occurring prior to the
date of the scheduled change, plus 5 percent (%). As used in this section, the
Consumer Price Index shall mean (i) the "CONSUMER PRICE INDEX FOR URBAN WAGE
EARNINGS AND CLERICAL WORKERS", currently published by the Bureau of Labor
Statistics of the United States Department of Labor for the Greater New York
Metropolitan Area on a bi-monthly basis, or (ii) if the publication of the
Consumer Price Index shall be discontinued, and/or the Consumer Price index is
published more or less frequently at the time of the foregoing determinations
are made, the comparable index most clearly reflecting diminution of the real
value of the Base Salary and/or the publications periods most comparable to
those specified above. In the event of a change in the base for the Consumer
Price Index, the Numerator of the fraction referred to above shall be
appropriately adjusted to reflect continued use of the base period in effect at
the time of its adoption for use hereunder. At the request of either party
hereto, the other from time to time shall execute an appropriate instrument
supplemental to this Agreement evidencing the then current Base Salary payable
by the employer hereunder.
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(b) Stock Purchase Incentive.
(I) As inducement to secure the Employee's services the Company will
grant an option, outside of the Company's Stock Option Incentive plan, (non-
statutory options) in the amount of 150,000 shares of the Company's stock at an
exercise price of 50 cents (.50) per share, with no time limit on the
employee's right to exercise said option.
(c) Incentives.
(i) The Employee will participate in the Company's Stock Option Incentive
plan.
6. Withholdings. All compensation, including any incentive bonus, paid
to the Employee under this Agreement shall be subject to applicable
withholdings for federal, state, and local income taxes, FICA, and all other
applicable withholdings required by law.
7. Vacation. In each calendar year during the term hereof, the Employee
shall be entitled to an annual paid vacation of four (4) weeks. Vacation shall
be taken upon reasonable advance notice to the Employer, and at such times not
to interfere with the proper operation of the business of Employer or the
Employee's responsibility under this Agreement. Unused vacation shall be
carried over from year to year, and the Employee shall be entitled to the value
of any unused vacation time remaining upon the expiration or earlier
termination of this Agreement.
8. Employee Benefits. During the term of this Agreement the Employee
shall be entitled, at the Employee's option, to participate in, and to
receive, any and all benefit plans and bonuses (either Employer's or DCI's),
at Employee's option, for which he is now or hereafter eligible, including, but
not limited to, the following:
(a) Life insurance and disability, health, dental and welfare plans of
the Employer or DCI;
(b) Any and all retirement plans established by the Employer or DCI
pursuant to the terms of said plan, including, but not limited to, Thrift
Plans, ESOP's and 401(k) plans; and
(c) Any other benefits which officers or employees of the Employer or DCI
may be entitled to at any time during this Agreement.
9. Expenses.
(a) Employer shall reimburse the Employee for all reasonable expenses
incurred by the Employee in connection with the rendering of services under
this Agreement.
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(b) Employer's obligation to reimburse the Employee for such reasonable
expenses is conditioned upon the employee submitting itemized statements,
bills, receipts, or other evidence of expenditure, in a form reasonably
satisfactory to the Employer. Reimbursement for any authorized expenses shall
be made by the Employer within thirty (30) days after the Employer's receipt of
such itemized statements, bills, receipts, or other evidence of expenditure
from the Employee.
10. Termination.
(a) Termination for cause. The Employer, acting through its Board of
Directors, may terminate this Agreement only for cause by written notice to the
Employee. For the purposes of this Agreement, the term "cause" shall include
only the following acts: (1) any material breach of any fiduciary duty owed by
the Employee to Employer which if curable is not cured within 30 days after
written notice from Employer to Employee; or (2) any mental or physical
disability suffered by the Employee which makes it impossible for the Employee
to perform his duties under this Agreement for a period of one hundred eighty
(180) consecutive days; or (3) the Employee's failure, not caused by physical
or mental disability, to perform his duties and responsibilities as required
under the express terms of this Agreement. Employer may not terminate this
Agreement under any other circumstances.
(b) Voluntary termination by employee. This Agreement may be terminated
by the Employee with or without cause upon sixty (60) days written notice to
the Employer provided that employee may not compete with Employer and or DCI
for a period equal to the lesser of one year from date of termination or the
remainder of the then effective term of this Agreement.
In the event that this Agreement is terminated by the Employee for any of
the following reasons (collectively, "Employee Cause"), the Employee shall be
entitled to Severance Benefits described in Section 11 below:
(i) The Employer is liquidated, dissolved, consolidated, merged or sold, or
a controlling interest in the common stock of the Employer is transferred from
the current owner(s) thereof;
(ii) Any material breach of any other obligation of the Employer hereunder.
Employer covenants that it will not:
(i) Remove Employee from his current position, or reduce the Employee's
duties and responsibilities;
(ii) Relocate the Employee;
(iii) Reduce the Employee's salary and/or benefits from those set forth in
this Agreement; or
(iv) Terminate this Agreement for any reason other than as set forth in
Section 10(a).
Any breach by Employer of this provision will constitute a "material breach"
under Section 10(b) (ii) hereof.
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(c) Physician statement. Prior to terminating the Employee by reason of
the existence of any condition of mental or physical disability, as stated in
paragraph (a) of this Section 10, the Employer shall first obtain a written
statement from an attending physician or psychotherapist competent in the area
relating to Employee's illness or condition, stating that in the physician or
psychotherapist's professional opinion, the Employee is unable to perform his
duties and responsibilities in a manner contemplated by this Agreement. If
Employee refuses or fails to consent to an examination of the Employee for the
purpose of obtaining the written statement required herein, then the necessity
of obtaining such statement shall be deemed waived by the Employee.
(d) Termination upon death of Employee. This Agreement shall terminate
upon the Employee's death. Upon such termination Employee's estate shall be
entitled to receive Base Salary plus any adjustments due to the Employee to the
last day of the calendar month in which death occurs and any unpaid incentive
bonus for that month which may become due by reason of collection after
Employee's death.
11. Severance. In the event that this Agreement is terminated by the
Employee for Employee Cause, then the Employer shall pay Employee the
following:
a)
(i) The present value of the Employee's salary, less amounts the Employee
would have paid for under the benefits set forth in Section 8(b) hereof for the
greater of the unexpired term of this Agreement or two (2) years;
(ii) At the Employee's election, either the payment of the present value
as a lump sum, or payment in any form and manner provided for in the Employer's
or DCI's retirement plan, of the pension benefits which the Employee would have
received at the end of the term hereof, calculated on the assumptions of full
vesting and compensation for the unexpired portion of the term hereof at the
rate in effect at the time of termination;
(iii) The present value of payments the Employer or DCI would have made
during the unexpired portion of the term hereof to any ESOP and Thrift Plan for
the Employee; and
(b) The Employee's then-effective Base Salary for a period of six (6)
months or until Employee obtains new employment, to be paid to the Employee on
the dates when such salary would have been payable had such employment not been
terminated; and
12. Assignment. The Employee acknowledges that the services to be
rendered by him are unique and personal. Accordingly, the Employee may not
assign any of his rights or delegate any of his duties or obligations under
this Agreement.
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13. Entire Agreement. This Agreement contains the entire agreement of the
parties regarding the subject matter hereof and supersedes any and all prior
agreements relating to the employment of the employee by the Company. This
Agreement may not be amended or modified except by a writing executed by both
the Employer and the Employee.
14. Severability. All agreements and covenants contained in this
Agreement are severable, and in the event any of them are held to be invalid,
then this Agreement shall be interpreted as if such invalid agreements or
covenants were not contained herein.
15. Governing Law. This Agreement shall be governed, construed, and
interpreted by and in accordance with the laws of the State of Connecticut.
16. Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, and all collectively
constituting the same instrument.
17. Notices. All notices required or permitted under this Agreement shall
be in writing and shall de deemed "given" when personally delivered or if
mailed by registered or certified mail, postage prepaid, to the respective
addresses of the parties stated in the preamble to this Agreement, within 5
business days of such mailing.
18. Successors; Binding Agreement, Assignment.
(a) The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business of the Company, by agreement to expressly, absolutely and
unconditionally assume and agree to perform the Agreement in the same manner
and to the same extent that the Company would be required to perform it if no
such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a material
breach of this agreement and shall entitle the Executive to terminate the
Executive's employment with the Company or such successor for Good Reason
immediately prior to or at any time after such succession. As used in this
agreement "Company" shall mean (I) the Company as hereinbefore defined, and
(ii) any successor to all of the stock of the Company or to all or
substantially all of the Company's business or assets which executes and
delivers an agreement provided for in this section 18(a) or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law, including any parent or subsidiary of such successor.
19. Waiver of Breach. The waiver by either party of a breach or violation
of any provisions of this Agreement shall not operate as, or be construed to
be, a waiver of any subsequent breach thereof.
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IN WITNESS WHEREOF, the parties have executed this employment agreement on
the day and year first above written.
DCI Telecommunications, Inc.
(Employer)
__________________________ By: ____________________________
its duly authorized Chairman
__________________________ _____________________________
Witness (Employee) Xxxx X. Xxxxx
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