EMPLOYMENT AGREEMENT
EFFECTIVE DATE: January 1, 2005
PARTIES: Multiband Corporation
0000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxx 00000 ("Company")
Xxxxx X. Xxxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxx, Xxxxxxxxx 00000 ("Executive")
RECITALS:
A. Company is engaged in the specialized and highly competitive
business of innovative communication, data and entertainment technologies to
bring added value and convenience to its customers. Serving businesses and
consumers nationwide, the Company integrates a wide range of services, including
high speed internet, local-long distance telephone service, digital cable
television, computer networking, office telephony, video surveillance and
related activities.
B. Executive has been employed as an executive officer of the Company
pursuant to an employment agreement which terminated December 31, 2004.
C. Company and Executive desire to continue Executive's employment by
the Company under the terms and conditions stated in this Agreement.
AGREEMENTS:
NOW, THEREFORE, in consideration of the mutual promises herein
contained, Executive and Company agree as follows:
ARTICLE 1
EMPLOYMENT OF EXECUTIVE
1.1 Employment. Subject to the other provisions of this Agreement,
Company hereby agrees to employ Executive to serve as its Chief Executive
Officer, and Executive hereby agrees to employment with Company for a 36-month
term commencing on the effective date of this Agreement, and automatically
renewing thereafter for 12-month periods, unless terminated by either party
under the provisions of Section 3.1. During his employment, Executive agrees to
serve as a member of Company's Board of Directors.
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1.2 Duties.
(a) Executive agrees, during his employment, to devote
his reasonable, full-time efforts to the business of
Company. Executive shall perform those duties and
responsibilities that are reasonably and customarily
associated with the position of Chief Executive
Officer of Company. Subject to the provisions of this
Agreement, Executive shall be granted such powers and
authority as are reasonably and customarily
associated with his position; and
(b) Executive shall, at all times during his employment
with Company comply with Company's reasonable
standards, regulations and policies as determined or
set forth by the Board of Directors of Company from
time to time and as applicable to executive employees
of Company. Executive shall report to, and be subject
to the direction of, Company's Board of Directors.
1.3 Outside Activities. Company acknowledges and agrees that from time
to time Executive may serve as a member of the Board of Directors of one or more
business or nonprofit entities other than Company; provided, however, that
Executive shall provide Company's Board of Directors with information about each
proposed directorship, including time required by such directorship, whether
such directorship may involve conflicts of interest with Company or its
interests, and any other factors Executive considers material respecting such
directorship. Company's Board of Directors shall promptly consider all
submissions by Executive pursuant to this Section 1.3. Company's Board of
Directors may request in good faith that Executive not accept a particular
directorship, or more than a specific number of directorships, or that Executive
resign from a particular directorship, and Executive agrees to honor such
requests. Company acknowledges the relationships and activities set forth on
Attachment A.
ARTICLE 2
COMPENSATION AND BENEFITS
2.1 Salary. Executive's annual salary, which shall be paid by Company
in accordance with Company's payroll cycle, shall be the gross amount of
$250,000 per year, less withholding for taxes, FICA and any other deductions
required by law or authorized by Executive. Such salary shall annually be
subject to adjustment as the Board of Directors of Company may determine.
2.2 Performance Bonus. Subject to the provisions of Article 3, for the
period beginning on the effective date of this Agreement and ending on December
31, 2005, and for each year thereafter during which Executive is employed by
Company pursuant to this Agreement, Executive shall be eligible for a
performance bonus (the "Performance Bonus") pursuant to a plan established by
the Board of Directors. The Performance Bonus for each calendar year
("Performance Period") of Executive's employment shall be up to 50% of
Executive's aggregate base salary for such Performance Period, with 50% of such
Performance Bonus being based on objective criteria established by the Board and
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50% being based on the Board's subjective evaluation of Executive's performance.
The Performance Bonus shall be paid as soon as practicable, following completion
of Company's audited financial statements for the Performance Period in
question. Performance Bonuses shall be a part of each renewal period of this
Agreement after the expiration of the Agreement's initial three-year term. In
the event that Executive's employment terminates pursuant to Section 3.1(b), (e)
or (g), Executive shall be paid a Performance Bonus, to the extent earned or
awarded, for the number of full calendar quarters (if fewer than four) during
which Executive is employed by Company. Such partial-year Performance Bonus
shall be based on that pro rata portion of Executive's then current annual
salary which is paid through the date during the calendar quarter during which
Executive is employed, and the percentage performance goal achievement for the
portion of the calendar year ending on such termination date. Any such
partial-year Performance Bonus shall be paid as soon as practicable, following
calculation of the amount thereof, after the termination of Executive's
employment pursuant to Section 3.1(b), (e) or (g).
2.3 Benefits. In addition to cash compensation, Executive shall receive
such benefits as are made available to executive officers of Company in the
discretion of Company's Board of Directors, subject to Executive satisfying any
eligibility requirements respecting such benefits. Such benefits may include but
are not limited to health insurance, dental insurance, 401(k), defined
contribution pension plan, disability plans and deferred compensation
agreements. Company is not obligated to provide or continue any of these
benefits to executive officers of Company, and may, without any prior notice,
discontinue any such benefit already provided or as may be provided in the
future, in the discretion of Company's Board of Directors; provided, however,
that Executive shall not be singled out for exclusion from any plan available to
other executive officers of Company.
2.4 Vacation. Executive shall be entitled to paid vacation each year in
accordance with Company policies established by the Board of Directors from time
to time.
2.5 Expenses. During the term of this Agreement, Executive shall be
entitled to prompt reimbursement by Company for all reasonable, ordinary and
necessary business related expenses (including without limitation,
out-of-pocket, office-related expenses, travel, entertainment and long distance
telephone charges) incurred by Executive (in accordance with the policies and
procedures established by Company from time to time) in the performance of his
duties and responsibilities under this Agreement; provided, however, that
Executive shall properly account for such expenses in accordance with federal,
state and local tax requirements and Company's policies and procedures.
ARTICLE 3
TERMINATION
3.1 Events of Termination. Executive's employment:
(a) May be terminated by mutual written agreement of the parties.
(b) Shall terminate immediately upon the death of Executive.
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(c) Except as otherwise provided in subparagraphs (iii) and (iv)
and (v) below, may be terminated immediately by Company upon
written notice to Executive for "Cause," which shall mean the
following:
(i) Commission of (I) a felony, (II) a crime involving
moral turpitude, or (III) an act or omission
involving dishonesty, disloyalty or fraud;
(ii) Conduct that has brought or could, in the judgment of
the Board of Directors, reasonably be expected to
bring Company into substantial public disgrace or
disrepute;
(iii) Substantial failure to perform duties in accordance
with this Agreement, or as reasonably directed by the
Board of Directors and which are consistent with
Executive's position of, or responsibilities as,
Chief Executive Officer, which, if capable of being
cured, is not cured, in the judgment of the Board of
Directors, by Executive within 30 days following
written notice thereof sent by or on behalf of the
Board of Directors;
(iv) Violation of any material Company policy, which, if
capable of being cured, is not cured in the judgment
of the Board of Directors, by Executive within 30
days following written notice thereof sent by or on
behalf of the Board of Directors; or
(v) A material violation of this Agreement, which, if
capable of being cured, is not cured, in the judgment
of the Board of Directors, by Executive within 30
days following written notice thereof sent by or on
behalf of the Board of Directors.
(d) May be terminated by Executive on 180 days' written notice
from Executive to the Board of Directors.
(e) May be terminated without cause by Company on 180 days'
written notice sent to Executive by or on behalf of the Board
of Directors. In the event of termination of Executive's
employment pursuant to this Section 3.1(e), and assuming
Executive's compliance with the provisions of Section 3.3 and
Articles 4 and 5 of this Agreement, Executive shall be
entitled to receive severance pay in the form of salary
continuation of his then base salary for the lesser of 12
months from the effective date of Executive's termination or
the remaining term of Executive's employment under this
Agreement.
(f) May be terminated by Company immediately upon written notice
to Executive if Executive is disabled (meaning that Executive
is unable to perform the essential functions of his position
with or without reasonable accommodation that is not an undue
hardship to Company for a period of 90 days during any 12
consecutive month period).
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For purposes of paragraphs (e) and (g) above, the phrase "remaining term of his
employment" shall mean the three-year period commencing January 1, 2005, if
termination of Executive occurs prior to January 1, 2008, and shall mean the
calendar year during which termination of Executive's employment occurs,
thereafter.
3.2 Compensation Upon Termination of Executive's Employment. In the
event that Executive's employment with Company terminates other than pursuant to
Section 3.1(b), (e) or (g), the following provisions shall govern as applicable:
(a) If termination occurs pursuant to Section 3.1(a), the
agreement of the parties shall control; and
(b) If termination occurs pursuant to Section 3.1(c), (d), or (f),
all benefits and compensation shall terminate as of the
termination date.
All payments made to Executive under Section 3.1(e) or (g) or this Section 3.2
shall be reduced by amounts required to be withheld in accordance with federal,
state and local laws and regulations in effect at the time of payment.
3.3 Return of Company Property. In the event of termination of
Executive's employment, all corporate documents, records, files, credit cards,
computer disks and tapes, computer access card, codes and keys, file access
codes and keys, building and office access cards, codes and keys, materials,
equipment and other property of Company that are in Executive's possession shall
be returned to Company at its principal business office within five days after
the date of termination of Executive's employment. Executive may copy, at
Executive's expense, documents, records, materials and information of Company
only with Company's express written permission.
ARTICLE 4
CONFIDENTIAL INFORMATION
4.1 Definition. "Confidential Information" as used in this Article 4
means information that is (i) not known to the general public and (ii)
proprietary to Company and material to Company's business, or that Company is
obligated to treat as proprietary, including information related to Company's
subsidiaries and affiliated corporations. Confidential Information shall
include, without limitation:
(a) Trade secret information about Company and its products and
services;
(b) "Inventions, plans and ideas" mean any discoveries, ideas,
plans and improvements (whether or not they are in writing or
reduced to writing or embodied solely in practices of Company)
or works of authorship (whether or not they are or can be
patented, copyrighted or reduced to another form of property
right) that Executive makes, authors, or conceives (either
alone or with others) and that: concern Company's business or
Company's research or development or planning that can be
demonstrated to relate to Company's then-current business and
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any planned business which Company is actively exploring; or
result from any work Executive performs for Company; or use
Company's trade secret information; or are developed on
Company's time;
(c) Customer Lists;
(d) Information concerning Company's business, research, product
and service development, or business plans of every kind and
nature; and
(e) Information concerning Company's volumes, pricing, the terms
on which it does business, and any other information that
Company reasonably considers or treats as Confidential
Information, or that Executive actually knows or reasonably
should know that Company considers or treats as Confidential
Information, will be presumed to be Confidential Information
(whether Executive or others originated it and regardless of
how Executive obtained it).
4.2 Use Prohibited. Except as required in his duties to Company,
Executive will never knowingly, either during or after his employment by
Company, use or disclose Confidential Information to any person not authorized
by Company to receive it, excluding Confidential Information (i) which becomes
publicly available through a source other than Executive, (ii) which is made
public by Company, (iii) which is received by Executive after termination of
this Agreement from a source who did not obtain the information directly or
indirectly from Company and who was not, to Executive's knowledge, bound by a
confidentiality obligation to Company, (iv) as to which disclosure thereof
Company has consented to in writing, or (v) which Executive is compelled to
disclose in any judicial or administrative proceeding.
Promptly upon termination of Executive's employment with Company,
Executive will turn over to Company all records, documents, materials and any
compositions, articles, devices, apparatus and other items that disclose,
describe or embody Confidential Information, including all copies and
reproductions thereof, in Executive's possession, regardless of who prepared
them.
4.3 Violation by Executive. Violation of Section 4.2 by Executive shall
subject Executive to those legal and equitable remedies of Company set forth in
Article 6. In addition, Company may seek a restraining order, injunctive relief,
and cease making severance payments to Executive until the matter of Executive's
breach of Article 4 is determined. If it is determined by the final,
nonappealable order of a court of competent jurisdiction that Executive has
breached Article 4, Company shall be relieved of further severance payments to
Executive, and Executive shall repay to Company all severance payments
previously received.
ARTICLE 5
COMPETITIVE ACTIVITIES PROHIBITED
5.1 Restrictive Covenants. Executive agrees that during his employment
with Company and for a period of 12 months after his employment with Company
terminates (regardless of whether Executive's employment terminated voluntarily
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or involuntarily) Executive will not alone, or in any capacity with another
firm, individual or person:
(a) Directly or indirectly engage in any commercial activity that
competes with the business of Company, or any affiliate of
Company ("Affiliate").
(b) Directly or indirectly solicit or do business in competition
with Company with any customer or prospective customer of
Company or any Affiliate at the termination of Executive's
employment with whom Executive had personal contact within the
12 months preceding his termination.
(c) In any way interfere or attempt to interfere with Company's or
any Affiliate's relationships with any of its then-current
customers, suppliers, vendors or investors.
(d) Employ or attempt to employ any of Company's or any
Affiliate's employees in any competitive capacity.
For purposes hereof, the term "Affiliate" shall mean any person or entity
controlling Company or under common control with Company, whether as a result of
common ownership or through contractual arrangements. Without limiting the
foregoing, Affiliates shall include entities that have management agreements
with Company or any other Affiliate, entities of which Company or any Affiliate
is the general partner or a managing partner and any entity in which Company or
any Affiliate has a substantial (10% or greater) investment interest and engaged
in a business substantially similar to that of Company. Subject to the express
provisions of this section, for purposes hereof, the term "control" shall be
interpreted in the same manner as under the Securities Exchange Act of 1934.
5.2 Exception. Nothing in Section 5.1 shall restrict Executive's
employment by, or association with, or doing business with an entity, venture or
enterprise that engages in a business with a product or service competitive with
any product or service of Company or any Affiliate so long as Executive's
employment or association with such entity, venture or enterprise is limited to
work that does not directly involve products or services that compete with any
product or service offered by Company at the date of Executive's termination.
5.3 Violation by Executive. Violation of Section 5.1 by Executive shall
subject Executive to those legal and equitable remedies of Company set forth in
Article 6. In addition, Company may seek a restraining order, injunctive relief,
and cease making severance payments to Executive until the matter of Executive's
breach of Article 5 is determined. If it is determined that Executive has
breached Article 5, Company shall be relieved of further severance payments to
Executive, and Executive shall repay to Company all severance payments
previously received.
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ARTICLE 6
CERTAIN COMPANY REMEDIES
6.1 Certain Company Remedies. The parties acknowledge that Company will
suffer irreparable harm if Executive breaches Sections 3.3, 4.2, or 5.1 of this
Agreement, either during or after its term. Accordingly, Company shall be
entitled to any right or remedy it may have, under this Agreement or otherwise,
at law or equity, including but not limited to, an injunction, enjoining or
restraining Executive from any violation of Sections 3.3, 4.2, or 5.1 of this
Agreement.
6.2 Payment of Fees and Expenses. If either party initiates or becomes
a party to a formal proceeding in law or equity, involving this Agreement, and
if either party obtains a substantial portion of the relief requested by that
party (the "prevailing party") as determined by a court of competent
jurisdiction, then the non-prevailing party shall pay all of its and the
prevailing party's reasonable costs and expenses, including reasonable
attorneys' fees and expenses, incurred with respect to such proceeding. If
neither party obtains a substantial portion of the relief requested, each shall
bear its/his own expenses.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification. As to acts or omissions of Executive as a
director, officer, employee, or agent of Company, Company shall indemnify
Executive, and his legal representatives and heirs, and advance expenses,
including litigation costs, as they are incurred to the maximum extent permitted
by Section 302A.521 of the Minnesota Business Corporation Act, as such Section
may be subsequently amended, subject to any limitations on such indemnification
established by Company's Articles of Incorporation or Bylaws from time to time.
ARTICLE 8
MISCELLANEOUS
8.1 Governing Law. This Agreement shall be governed according to the
laws of the State of Minnesota.
8.2 Successors. This Agreement is personal to Executive and Executive
may not assign or transfer any part of his rights or duties hereunder, or any
compensation due to him hereunder, to any other person. This Agreement may be
assigned by Company.
8.3 Waiver. The waiver by Company or Executive of the breach or
nonperformance of any provision of this Agreement by the other party will not
operate or be construed as a waiver of any future breach or nonperformance under
any provision of this Agreement.
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8.4 Notices. Any and all notices referred to herein shall be deemed
properly given only if in writing and delivered personally, by facsimile
transmission (with receipt confirmed electronically) or sent postage prepaid, by
certified mail, return receipt requested, as follows:
(a) To Company by notice to the Chairman of the Board of Directors
of Company (FAX: 000-000-0000) and to Xxxxxxxxxx & Xxxxx,
P.A., 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxx,
Xxxxxxxxx 00000, Attention: Xxxx X. Xxxxx (FAX: 000-000-0000);
and
(b) To Executive at his mailing address as it then appears on the
records of Company, it being the duty of the Executive to keep
Company informed of his current mailing address (or FAX
number) at all times.
The date on which notice to Company or Executive shall be deemed to have been
given as provided above shall be the date on the certified mail return receipt,
if mailed, and the date on which the electronic FAX confirmation is faxed.
Personal delivery to Executive shall be deemed to have occurred on the date
notice was delivered to Executive personally or deposited in a mail box or slot
or left with security or administrative personnel, at Executive's residence by a
representative of Company or any messenger or delivery service.
8.5 Entire Agreement; Modification. This Agreement supersedes any and
all prior oral and written understandings, if any, between the parties relating
to the subject matter of this Agreement. The parties agree that this Agreement
sets forth the entire understanding and agreement between the parties and is the
complete and exclusive statement of the terms and conditions thereof, that there
are no other written or oral agreements in regard to the subject matter of this
Agreement. This Agreement shall not be changed or modified except by a written
document signed by the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
February __, 2005.
MULTIBAND CORPORATION
By
------------------------------
Its Chairman of the Board
--------------------------------
Xxxxx X. Xxxxxx
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ATTACHMENT A
DISCLOSURES OF CERTAIN ACTIVITIES PURSUANT TO SECTION 1.3
Chairman of the Board, CorVu Corporation
