Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of January 1, 2003, by and
between TELULAR CORPORATION, a Delaware corporation (the "Company"), and
XXXXXXX XXXXXXX, a resident of Lake Forest, Illinois (the "Executive") ;
WITNESSETH:
WHEREAS, the Company wishes to employ the Executive as its Chairman,
President and Chief Executive Officer; and
WHEREAS, the Executive wishes to be employed in this capacity by the
Company, on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual obligations set forth
herein, the parties hereto hereby agree as follows:
1. Engagement. The Company hereby agrees to employ the Executive as
its Chairman, President and Chief Executive Officer and the Executive hereby
accepts such employment, on the terms and conditions hereinafter set forth. The
Executive's principal place of business shall be at the headquarters of the
Company.
2. Term of Employment. The Executive's employment by the Company
under this Agreement shall commence on January 1, 2003 (the "Effective Date").
Employment shall be on an "at-will" basis and shall continue in effect until
terminated by either party upon at least 60 days' prior written notice; provided
that the 60-day notice requirment shall not apply in the case of a termination
under Sections 10 ("Termination for Cause") or 12 ("Death or Disability of the
Executive"). The period of employment of the Executive by the Company is
referred to herein as the "Term."
3. Duties. During the Term, Executive shall serve as the Company's
Chairman, President and Chief Executive Officer and shall have such duties and
responsibilities as are set forth in the Company's Bylaws and such other
executive responsibilities and performances as may be assigned to him from time
to time by
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the Board of Directors of the Company (the "Board").The Executive shall use his
best efforts and shall act in good faith in performing all duties reasonably
required to be performed under this Agreement.
4. Availability. The Executive shall devote his entire working time,
attention and energies to the Company's business and, during the term of this
Agreement, shall not be engaged in any other business activity without the
express written approval of the Board.
5. Expenses. (a) The Company shall reimburse the Executive, promptly
upon presentation of itemized vouchers, for all ordinary and necessary business
expenses incurred by the Executive in the performance of his duties hereunder.
(b) The Company shall reimburse the Executive for all "Excess
Medical Costs.", For this purpose, "Excess Medical Costs" shall be defined as
the actual costs (1) incurred by the Executive or, if covered under the
Company's standard medical benefit plans ("Medical Plans"), by his spouse or
dependent children, (2) for services or treatments that are covered under the
Medical Plans, and (3) to the extent such costs exceed those amounts reimbursed
and reimbursable under the Medical Plans. For example, Excess Medical Costs
shall include, but not be limited to, co-payments, percentage limitations,
reasonable and customary charges as determined by insurance companies and
benefit administrators. The Executive shall provide the Company with reasonable
supporting documentation for all expenses for which reimbursement is sought.
6. Compensation. As compensation for the services to be rendered
hereunder, the Company agrees as follows:
(a) The Company shall pay to the Executive an annual base salary
(the "Base Salary") which shall be-at the annual rate of $400,000. The Base
Salary shall be paid in bi-monthly installments or in such other installments as
to which the Company and the Executive may agree.
(b) The Executive shall be eligible to participate in the Company's
Senior Management Bonus Plan as in effect from time to time and shall receive a
performance bonus, if any, pursuant to the terms of such plan.
(c) The Company shall permit the Executive to participate in such
pension, 401(k), and other employee benefit plans as are made available to
employees of the Company generally; provided that the Company
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retains the right to amend or terminate such plans at any time The Executive
shall be entitled to four weeks of paid vacation per year.
7. Stock Options. Under an Option Agreement dated January 28, 2003,
the Company is granting to the Executive certain stock options under the
Company's Stock Incentive Plan.
8. Ownership of Material Information. All right, title and interest
of every kind and nature whatsoever in and to discoveries, inventions,
improvements, patents (and applications therefor), copyrights, ideas, know-how,
laboratory notebooks, creations, properties and all other proprietary rights
arising from, or in any way related to, the Executive's employment hereunder
shall become and remain the exclusive property of the Company, and the Executive
shall have no interest therein.
9. Trade Secrets. The Executive shall not, during the Term or
thereafter, disclose to anyone (except to the extent reasonably necessary for
the Executive to perform his duties hereunder or as may be required by law) any
confidential information concerning the business or affairs of the Company (or
of any affiliate or subsidiary of the Company), including but not limited to
lists of customers, business plans, joint ventures, financial or cost
information, and confidential scientific and technological information (whether
of the Company or entrusted to the Company by a third party under a
confidentiality agreement or understanding) which the Executive shall have
acquired in the course of, or incident to, the performance of his duties
pursuant to the terms of this Agreement or pursuant to any prior dealings with
the Company or any affiliate or subsidiary of the Company. In the event of a
breach or threatened breach by the Executive of the provisions of this Section
9, the Company shall be entitled to an injunction restraining the Executive from
disclosing, in whole or in part, such information or from rendering any services
to any person, firm, corporation, association or other entity to whom such
information has been disclosed or is threatened to be disclosed. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
available to the Company for such breach or threatened breach, including the
recovery of damages from the Executive. Nothing herein shall be construed as
prohibiting the Executive from disclosing to anyone any information which is, or
which becomes, available to the public (other than by reason of a violation of
this Section 9) or which is a matter of general business knowledge or
experience.
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10. Termination For Cause. The Company may terminate the employment
of the Executive under this Agreement in the event that the Board determines
that the Executive (a) has materially and substantially breached his obligations
under Section 3, 4, 9, 13, or 14 of this Agreement, provided that the employment
of the Executive shall not be terminated under this clause (a) unless the
Executive is given notice in writing that the conduct in question constitutes
grounds for termination under this Section 10 and the Executive is allowed at
least thirty (30) days to remedy the refusal or failure, (b) has been convicted
of a felony constituting a crime of moral turpitude (whether or not in
conjunction with the performance by the Executive of his duties under this
Agreement), or (c) has through willful misconduct or gross negligence engaged
in an act or course of conduct that causes material injury to the Company (or
any affiliate or subsidiary of the Company). If the employment of the Executive
under this Agreement is terminated under this Section 10, the Board shall give
written notice to the Executive specifying the cause of such action. Upon a
termination of employment under this Section 10, the Company shall be relieved
of all further obligations under this Agreement. Notwithstanding such
termination of employment, the Executive shall continue to be bound by the
provisions of Sections 8, 9, and 13.
11. Termination Without Cause.
(a) If, except as otherwise provided in Section 12, the employment
of the Executive is terminated by the Company other than (i) for Cause or by
resignation or retirement of the Executive, or (ii) if such employment is
terminated by the Executive because the responsibilities and duties of the
Executive are, other than for Cause, materially diminished or changed by the
Company in a manner that materially impairs the Executive's ability to function
as the Chief Executive Officer of the Company and such diminution or change is
not cured by teh Company within 30 days after notice thereof by the Executive to
the Company, the Executive shall be entitled to receive, upon such termination,
a severance payment in an amount equal to $400,000.
(b) Termination of employment under this Section 11 shall not
terminate the Executive's obligations under Sections 8, 9 and 13.
12. Death or Disability of the Executive. In the event that the
Executive, during the period while employed under this Agreement, shall die or
at any time become unable, due to ill-health, accident, injury or similar cause,
to carry out his duties under this Agreement, the Company may terminate this
Agreement and be
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relieved of all further obligations hereunder, other than compensation for
services provided prior to such termination, reimbursement for expenses incurred
prior to such-termination. Termination of employment under this Section 12 shall
not terminate the Executive's obligations under Section 8, 9 and 13.
13. Non-Competition. The Executive hereby agrees that, during the
Term and for a period of eighteen (18) months following the termination of his
employment under this Agreement, he will not, directly or indirectly and in any
way, (a) own, manage, operate, control, be employed by, participate in, or be
connected in any manner with the ownership, management, operation or control of
any business competing with the business of the Company, (b) interfere with,
solicit on behalf of another or attempt to entice away from the Company (or any
affiliate or subsidiary of the Company) (i) any project, financing or customer
that the Company (or any affiliate or subsidiary of the Company) has under
contract (including unfulfilled purchase orders), or any letter of supply or
other supplier contract or arrangement entered into by the Company (or any
affiliate or subsidiary of the Company), and all extensions, renewals and
resolicitations of such contracts or arrangements, (ii) any contract, agreement
or arrangement that the Company (or any affiliate or subsidiary of the Company)
is actively negotiating with any other party, or (iii) any prospective business
opportunity that the Company (or any affiliate or subsidiary of the Company) has
identified, or (c) for himself or another, hire, attempt to hire, or assist in
or facilitate in any way the hiring of any employee of the Company (or any
affiliate or subsidiary of the Company), or any employee of any person, firm or
other entity, the employees of which the Company.(or any affiliate or subsidiary
of the Company) has agreed not to hire or endeavor to hire. The effective time
of the limitations imposed by this Section 13 shall be extended for the period
of time equal to any period of time during which the Executive acts in
circumstances that a court of competent jurisdiction finds to have violated the
terms of this Section 13.
Because of the Executive's knowledge of the Company's business, in the event of
the Executive's actual or threatened breach of the provisions of this Section
13, the Company shall be entitled to, and the Executive hereby consents to, an
injunction restraining the Executive from any of the foregoing. However, nothing
herein shall be construed as prohibiting the Company from pursuing any other
available remedies for such breach or threatened breach, including the recovery
of damages from the Executive. The Executive agrees that the provisions of this
Section 13 are necessary and reasonable to protect the Company in the conduct of
its business. If any restriction
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contained in this Section 13 shall-be deemed to be invalid or unenforceable by
reason of the extent, duration of geographic scope thereof, then the Company
shall have the right to reduce such extent, duration, geographic scope of other
provisions thereof, and in their reduced form such restrictions shall then be
enforceable in the manner contemplated hereby.
14. Capacity. The Executive represents and warrants to the Company
that he is not now under any obligation, of a contractual nature or otherwise,
to any person, firm, corporation, association or other entity that is
inconsistent or in conflict with this Agreement or which would prevent, limit or
impair in any way the performance by him of his obligations hereunder.
15. Withholding. The Executive acknowledges that salary and all
other compensation payable under this Agreement shall be subject to withholding
for income and other applicable taxes to the extent required by law, as
determined by the Company in its reasonable judgment.
16. Indemnification. To the greatest extent permitted by applicable
law, and in a manner consistent with any procedures required by applicable law,
the Corporation shall indemnify and hold the Executive harmless from and against
any liability (including, without limitation, reasonable attorneys, fees)
incurred by the Executive in any claim, action, suit, or proceeding instituted
or brought against the Executive as a result of or arising out of service by the
Executive as an officer or director of the Company, or of any other corporation
or other entity at the request or direction of the Company, except to the extent
that such liability is the result of the criminal action or willful misconduct
on the part of the Executive.
17. Waiver. No act, delay, omission or course of dealing on the part
of any party hereto in exercising any right, power or remedy hereunder shall
operate as, or be construed as, a waiver thereof or otherwise prejudice such
party's rights, powers and remedies under this Agreement.
18. Notice. Any and all notices referred to herein shall be
sufficient if furnished in writing and delivered by hand, by facsimile
transmission or by overnight delivery service maintaining records of receipt, to
the respective parties at the following addresses:
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If to the Company: Telular Corporation
000 X. Xxxxxxxx Xxxxxxx
Xxxxxx Xxxxx, XX 00000
000-000-0000
Attention:___________________
If to the Executive: Xx. Xxxxxxx Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile #: 000-000-0000
with a copy to: Xx. Xxxxxxx Xxxxxxx
c/o/ Telular Corporation
000 X. Xxxxxxxx Xxxxxxx
Xxxxxx Xxxxx, XX 00000
Facsimile #: 000-000-0000
or to such other address or addresses as either party may from time to time
designate by notice given as aforesaid. Notices shall be effective when
delivered
19. Arbitration. Except as provided otherwise in this Agreement, all
disputes arising under or in connection with this Agreement may be submitted to
arbitration in Chicago, Illinois under the rules of the American Arbitration
Association, and the decision of the arbitrator shall be final and binding upon
the parties. Judgment upon the award rendered may be entered and enforced in any
court having jurisdiction.
20. Assignability. The rights and obligations contained herein shall
be binding on and inure to the benefit of the successors and assigns of the
Company. The Executive may not assign his rights or obligations hereunder
without the express written consent of the Company.
21. Governing Law. To the extent not preempted by federal law, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Illinois, excluding any conflicts or choice of law rule or principle
that might otherwise refer construction or interpretation of this provision to
the subtantive law of another jurisdiction.
22. Completeness. Except for the terms of the compensation and
benefits plans in which the Executive participates, this Agreement and the
Option Agreement entered into pursuant hereto (a) set forth all, and are
intended by each party to be an integration of all, of the promises, agreements
and understandings between the
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parties hereto with respect to the subject matter hereof and (b) supercede all
prior agreements and communications, whether oral or written, between the
Executive and the Company. This Agreement and the Option Agreement shall not be
modified except by written agreement of the Executive and the Company.
23. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one agreement binding on the parties hereto.
24. Severability. Each provision of this Agreement shall be
considered severable and if for any reason any provision that is not essential
to the effectuation of the basic purpose of the Agreement is determined to be
invalid or contrary to any existing or future law, such invalidity shall not
impair the operation of or affect those provisions of this Agreement that are
valid.
25. Headings; Construction. Headings contained in this Agreement
are inserted for reference and convenience only and in no way define, limit,
extend or describe the scope of this Agreement or the meaning or construction of
any of the provisions hereof. As used herein, unless the context otherwise
requires, the single shall include the plural and vice versa, words of any
gender shall include words of any other gender, and "or" is used in the
inclusive sense.
26. Survival of Terms. If this Agreement is terminated for any
reason, the provisions of Sections 8, 9 and 13 shall survive and the Executive
and the Company, as the case may be, shall continue to be bound by the terms
thereof to the extent provided therein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
TELULAR CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------------
Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxx
Chairman Of the Compensation Committee
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