AM COMMUNICATIONS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of July 1,
2002, by and between AM Broadband Services, Inc., a Delaware corporation
("Company") and Xxxxxx X.X. Xxxxxx, an individual residing at 0000 XX 00xx
Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxx 00000 ("Employee").
WHEREAS, the Employee has substantial experience in the field of
network design, construction and engineering services for cable, data and
broadband systems; and
WHEREAS, the Company is in the business of network design, construction
and engineering services for cable, data and broadband systems; and
WHEREAS, the Company desires to employ the Employee and the Employee
desires to be employed by the Company, in the capacity and upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, and intending to be legally bound, the parties,
agreed as follows:
1. Employment and Term. From the date hereof through the term of this
Agreement the Employee shall be employed in the position of Vice President -
Development of AM Communications, Inc. The Company is a wholly-owned subsidiary
of AM Communications, Inc. ("AM"). The initial term of employment under this
Agreement shall commence as of July 1, 2002, and expire on June 30, 2005;
provided, however, that this Agreement shall automatically renew on July 1,
2005, and on July 1 of each succeeding year for renewal terms of one year each
unless either Employee or the Company gives contrary written notice to the other
party hereto not less than sixty (60) days before the scheduled expiration of
the Term of this Agreement. The initial term and the renewal terms are
collectively referred to herein as the "Term" of this Agreement.
2. Duties. The Employee shall devote substantially all of his working
time and his best efforts to the Company and his position, which shall include
such duties as AM's CEO or the General Manager of the Company may from time to
time reasonably direct that are reasonably consistent with the Employee's
education, experience and background. During the Term of this Agreement,
Employee shall report directly to the General Manager of the Company and there
shall be no material increase or decrease in the duties and responsibilities of
the Employee other than as provided herein, unless the parties otherwise agree
in writing.
3. Other Business Activities. The Employee may engage, directly or
indirectly, during the Term, in other business activities or pursuits; provided,
however, that such activities shall not, other than in an incidental manner,
interfere with or detract from the performance of Employee's responsibilities
and obligations pursuant to this Agreement and shall not be related to the
Business of the Company in a manner that violates the provisions of Section 10
of this Agreement.
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4. Compensation.
(a) Salary. The Company shall pay to the Employee during the Term of
this Agreement a base salary at an annual rate of One Hundred Fifty Thousand
Dollars ($150,000) with such subsequent increases in salary during the Term of
this Agreement as may be authorized by the Compensation and Stock Option
Committee of the Board. In determining salary increases, the Compensation and
Stock Option Committee may compensate the Employee for increases in the cost of
living and may also provide for performance or merit increases. Participation in
deferred compensation, bonus, discretionary bonus, retirement and other employee
benefit plans in the fringe benefits shall not reduce the salary payable to the
Employee under this Section 4(a).
(b) Commissions. At the end of each fiscal year during the initial
Term, Employee shall be paid a commission equal to 2.5% of the gross revenue of
AM's Broadband Products Division attributable to sales of AM's Omni2000 line of
products to AT&T Broadband that have been arranged or facilitated by Employee.
Prior to the completion of any such sale, the General Manager of AM's Broadband
Products Division will verify that Employee is eligible for a commission on such
sale. The commission shall be paid within ninety (90) days following the end of
the Company's fiscal year in which the commission is earned
(c) Retention Bonus. The Employee shall receive a retention bonus in
the amount of $250,000 payable in two installments. The first installment of
$125,000.00 shall be paid on September 30, 2002, and the second installment of
$125,000.00 shall be paid on March 31, 2003. If Employee's employment with the
Company is terminated for any reason before the expiration of the initial Term,
Employee shall be responsible for the reimbursement to the Company of that
portion of the Retention Bonus that is proportionate to the remainder of the
initial Term at the time that Employee's employment is terminated. Employee's
reimbursement obligation shall be reflected in a promissory note substantially
similar to the one attached hereto as Exhibit A.
(d) Stock Option Awards. As of the effective date of this Agreement the
Employee shall be awarded 500,000 stock options. All stock options shall be for
shares of AM and be issued from an authorized stock option plan of AM, at an
exercise price which shall equal the fair market value of AM's stock as of the
date of issuance, which shall be determined in accordance with the provisions of
the stock option plan under which the options are issued. For purposes of this
paragraph 4(d) "fair market value of the AM's stock as of the date of issuance"
shall mean the average of closing bid price and ask price as quoted on the OTC
Bulletin Board of the NASD, Inc. on such date.
(e) Vehicle Allowance. During the Term, the Company shall provide
Employee with a vehicle allowance of $650 per month.
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5. Other Benefits and Perquisites; Business Expenses.
(a) Other Benefits and Perquisites. The Employee shall be entitled to
participate in any plan of the Company relating to stock options, pension,
profit sharing, group life insurance, medical or dental coverage, education or
other retirement or employee benefit plans or arrangements that the Company has
adopted or may adopt for the benefit of its employees or executive officers. The
Employee shall also be entitled to participate in, or enjoy the benefit of, any
other fringe benefits or prerequisites that are now or may be or become
applicable to the Company's executive employees.
(b) Business Expenses. During the term of the Employee's employment by
the Company, the Company shall promptly reimburse the Employee for all
reasonable and customary expenses incurred by the Employee in performing
services for the Company, including all expenses of travel, food and lodging
expenses while away from home on business or at the request of and in the
service of the Company, provided that such expenses are incurred and accounted
for in accordance with the reimbursement policies and procedures established by
the Company.
6. Voluntary Absences; Vacations. The Employee shall be entitled,
without loss of pay, to be absent voluntarily for reasonable periods of time
from the performance of the duties and responsibilities under this Agreement.
All such voluntary absences shall count as paid vacation time, unless the Board
otherwise approves. The Employee shall be entitled to an annual paid vacation
equal to that accorded to other executive employees of the Company, or such
longer period as the Board may approve. The timing of paid vacations shall be
scheduled in a reasonable manner by the Employee.
7. Termination of Employment. The Employee's employment may be
terminated without any breach of this Agreement only under the following
circumstances:
(a) Death. The Employee's employment shall terminate upon his death.
(b) Disability. The Company may terminate the Employee's employment
because of disability. For this purpose, "Disability" shall mean the inability
of the Employee to perform his duties under this Agreement because of physical
or mental illness or incapacity for a continuous period of one hundred twenty
(120) days, or more that one hundred twenty (120) days in the aggregate during
any 365-day period, during which the Employee shall have been absent from his
duties under this Agreement on a substantially full-time basis.
(c) Cause. The Company may terminate the Employee's employment for
Cause. For purposes of this Agreement, the Company shall have "Cause" to
terminate the Employee's employment only in the event of (1) the failure by the
Employee to substantially perform his duties hereunder (other than any such
failure resulting from the Employee's inability to perform such duties as a
result of physical or mental illness or incapacity) or any such actual or
anticipated failure after the delivery of a Notice of Termination, as defined in
Section 7(e) after delivery to the Employee of a written demand for substantial
performance that specifically identifies the manner in which the Company
believes that the Employee has not substantially performed his duties and a
reasonable opportunity to cure; (2) misconduct by the Employee that causes
substantial and material injury to the business and operations of the Company,
the continuation of which, in the reasonable judgment of the Board, will
continue to substantially and materially injure the business and operations of
the Company in the future; (3) habitual intoxication or drug addiction; or (4)
conviction of the Employee of a felony. The Employee shall not be deemed to have
been terminated for Cause unless the Employee shall have been provided with (i)
a reasonable notice setting forth the reasons that the Company believes
constitute Cause for the termination of his employment; and (ii) a Notice of
Termination as defined in Section 7(e), from the Company finding that, in the
reasonable good faith opinion of the CEO or such other executive officer
designated by the Company, Cause for the termination exists and specifying the
particulars thereof in reasonable detail.
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(d) Termination by the Employee. The Employee may terminate his
employment at any time without cause by giving sixty (60) days prior written
notice to the Company. The Employee may terminate his employment for cause only
in the event of a material default by Company under the provisions of this
Agreement and the failure of Company to cure such default within a reasonable
period of time after Company has received written notice of such asserted
default.
(e) Notice of Termination. Any termination of the Employee's employment
by the Company or by the Employee (other than termination pursuant to Section
7(a) or 7(b) hereof) shall be communicated to the other party by a written
Notice of Termination. Any Notice of Termination given by a party shall specify
the particular termination provision of this Agreement relied upon by such party
and shall set forth in reasonable detail the facts and circumstances relied upon
as providing a basis for the termination under the provision so specified.
(f) Termination Date. The Termination Date shall mean (1) if the
Employee's employment is terminated by his death, the date of his death; (2) if
the Employee's employment is terminated pursuant to Section 7(b) hereof, the
date specified in the Notice of Termination, which shall be after the expiration
of the 120-day period specified in that subsection; (3) if the Employee's
employment is terminated by the Company for Cause, the date specified in the
Notice of Termination; (4) if terminated by Employee under Section 7(d), sixty
(60) days following the date on which the Notice of Termination is given; or (5)
if the Employee's employment is terminated for any other reason, thirty (30)
days following the date on which the Notice of Termination is given.
8. Compensation Upon Termination of Employment.
(a) Termination because of Death, for Cause or by Employee. If the
Employee's employment is terminated because of his death, by the Company for
Cause or by the Employee, the Company shall pay the Employee his salary and
provide the applicable benefits through the Termination Date and the Company
shall have no further obligation to the Employee hereunder.
(b) Termination because of Disability. If the Employee's employment is
terminated by the Company because of Disability under Section 7(b) hereof, the
Company shall pay the Employee his salary and provide the applicable benefits
through the Termination Date and the Company shall have no further obligation to
the Employee hereunder.
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(c) Termination without Cause. If (i) in breach of this Agreement, the
Company shall terminate the Employee's employment other than (A) for Cause or
(B) because of Disability; or (ii) if this Agreement is terminated by the
Employee for cause as set forth in Section 7(d); then:
(1) The Company shall pay the Employee his salary through the
Termination Date and all other unpaid and pro rata amounts to which the Employee
is entitled as of the Termination Date under any compensation plan or program of
the Company, including, without limitation, any incentive bonus payable under an
incentive bonus plan for executive officers adopted by the Company or any other
discretionary bonus approved by the Board, and all accrued vacation time;
(2) The Company shall make severance payments to the Employee in
lieu of any further salary payments hereunder for periods after the Termination
Date equal to the Employee's then current salary and payable in installments in
accordance with the Company's normal payroll practice for a period which is the
lesser of: (i) twelve (12) months after the Termination Date, or (ii) the
remaining Term of the Agreement;
(3) In addition to the severance payments to the Employee, the
following shall apply: (A) the Employee shall continue to participate in, and
accrue benefits under, all retirement, pension, profit sharing and other
deferred compensation plans of the Company for a period which is the lesser of:
(i) twelve (12) months after the Termination Date, or (ii) the remaining Term of
the Agreement, as if the termination of employment of the Employee had not
occurred (with the Employee being deemed to receive for the purposes of such
plans the Employee's then current salary (at the time of his termination) under
Section 2(a) and (b) of this Agreement), except to the extent that such
continued participation and accrual is expressly prohibited by law, or to the
extent such plan constitutes a "qualified plan" under Section 401 of the
Internal Revenue Code of 1986, as amended ("Code"), by the terms of the plan, in
which case the Company shall provide the Employee a substantially equivalent,
unfunded, non-qualified benefit; (B) the Employee shall be entitled to continue
to receive all other employee benefits and then existing fringe benefits
referred to in Section 4(a) and (b) hereof for a period which is the lesser of:
(i) twelve (12) months after the Termination Date, or (ii) the remaining Term of
the Agreement as if the termination of employment had not occurred; and (C) all
insurance or other provisions for indemnification, defense or hold-harmless of
officers or directors of the Company that are in effect on the date the Notice
of Termination is sent to the Employee shall continue for the benefit of the
Employee with respect to all of his acts and omissions while an officer or
director as fully and completely as if such termination had not occurred, and
until the final expiration or running of all periods of limitation against
action which may be applicable to such acts or omissions; and
(4) The liquidated amount and other benefits provided for in this
Section 8(c) shall not be reduced by any compensation or benefits that the
Employee may receive for other employment with another employer or through
self-employment after termination of employment with the Company.
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(d) Cost of Enforcement. In the event the Employment of the Employee is
terminated by the Company because of Disability or without Cause, and the
Company fails to make timely payment of the amounts owed to the Employee under
this Agreement, the Employee shall be entitled to reimbursement for all
reasonable costs, including attorney's fees, incurred by the Employee in taking
action to collect such amounts or otherwise to enforce this Agreement. Such
reimbursement shall be in addition to all rights to which the Employee is
otherwise entitled under this Agreement.
9. Confidentiality. In consideration of the willingness of the Company
to employ the Employee and the compensation to be paid and benefits to be
received therefor, and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the Employee agrees as follows:
(a) The Company Owns All of the Employee's Work. All improvements,
discoveries, inventions, designs, documents, licenses and patents, or other data
devised, conceived, made, developed, obtained, filed, perfected, acquired, or
first reduced to practice, in whole or in part, or in the regular cause of
employment by the Employee during the term of this Agreement, and related in any
way to the Business, including development and research, of the Company or any
subsidiary or affiliate engaged in business substantially similar to that of the
Company shall be promptly disclosed to the Company. The Employee hereby assigns
and transfers to the Company all his right, interest and title thereto, and such
improvements, discoveries, inventions, designs, documents, licenses and patents,
or other data shall become the property of the Company. During the term of this
Agreement and at any time thereafter, upon request of the Company, the Employee
will join and render assistance in any proceedings and execute any papers
necessary to file and prosecute applications for, and to acquire, maintain and
enforce, letters patent, trademarks, registrations and/or copyrights, both
domestic and foreign, with respect to such improvements, discoveries,
inventions, designs, documents, licenses and patent, or other data as required
for vesting and maintaining title to same in the Company.
(b) Non-Disclosure of Confidential Information. The Employee agrees and
acknowledges that the term "Confidential and Proprietary Information" shall mean
any and all information not in the public domain, in any form, emanating from or
relating to the Company and its subsidiaries and affiliates, including, but not
limited to, trade secrets, technical information, costs, designs, drawings,
processes, systems, methods of operation and procedures, formulae, test data,
know-how, improvements, price lists, financial data, code books, invoices and
other financial statements, computer programs, discs and printouts, sketches,
and plans (engineering, architectural or otherwise), customer lists, telephone
numbers, names, addresses, information about equipment and processes (including
specifications and operating manuals), or any other complication of information
written or unwritten that is used in the business of the Company or any
subsidiary or affiliate that gives the Company or any subsidiary or affiliate
any opportunity to obtain an advantage over competitors of the Company who do
not know or use such information. The Employee agrees and acknowledges that all
Confidential and Proprietary Information, in any form, and all copies and
extracts thereof, is and are and shall remain the sole and exclusive property of
the Company and, upon termination of his employment with the Company, the
Employee hereby agrees to return to the Company the originals an all copies of
any Confidential and Proprietary Information provided to or acquired by the
Employee during the period of his employment. Except as ordered by a court of
competent jurisdiction, the Employee expressly agrees never to utilize or
disclose to any person (except to other Company employees, and then only on a
"need to know" basis) or entity any Confidential and Proprietary Information
either during the term of this Agreement or at any time after termination of his
employment, except with the express written authorization and consent of the
Company.
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(c) Customer's Information. The Employee understands and acknowledges
that each customer of the Company or its subsidiaries or affiliates will
disclose information that will be within the Company's control in connection
with the Company's furnishing of services to its customer. The Employee
covenants and agrees to hold such information in the strictest confidence and
shall treat such information in the same manner and be obligated by the
provisions of this Agreement as if such information were Confidential and
Proprietary Information, as defined in Section 9(b) hereof.
10. Covenant Not to Compete; Non-solicitation. In consideration of
Employee's compensation and benefits to be received hereunder, any for other
good and valuable consideration from Company, the receipt and adequacy of which
is hereby acknowledged, the Employee agrees as follows:
(a) Non-Compete. The During the term of employment and for a period of
eighteen (18) months after the termination of the Employee's employment by the
Company, the Employee shall not directly or indirectly own, manage, operate,
control or be employed by or participate in the ownership, management, operation
or control of any business in the United States which performs services for, or
seeks to perform services for any Customer Project (as defined in Paragraph
10(b). The Employee shall not, during the term of this Agreement, have any other
paid employment other than with a subsidiary of the Company, except with the
prior approval of the Board. The Employee may hold not more than five percent
(5%) of the outstanding securities of any class of any publicly-traded
securities of a company that is engaged in activities referenced in this Section
10.
(b) Non-Solicitation. For a period of eighteen (18) months after the
termination of the Employee's employment by the Company, the Employee will not
solicit or service, directly or indirectly, business on Employee's own behalf,
or on behalf of any person or legal entity with whom Employee may be associated
as employee, partner, associate, principal, agent or in any other capacity, from
any Customer Project, whether or not Employee had significant dealings with that
Customer Project. This paragraph prohibits solicitation of, and sales to,
Customer Projects of any and all products or services that would compete with
those normally provided by the Company at the time Employee leaves the Company.
Any dealings in products or services that are not competitive with those
normally provided by the Company are not prohibited by this paragraph. Employee
will not solicit or seek to influence, directly or indirectly, any employee,
contractor, or agent of the Company to terminate his relationship with the
Company. For purposes of this Section 10, "Customer Project" shall mean any
project which: (I) the Company has an existing contract to perform services
under at the time of the termination of this Agreement; (ii) the Company has bid
to obtain a contract for in the 12 months preceding the termination of this
Agreement, or (iii) the Company had formed an intention to submit a bid to
perform services for any time prior to the termination of this Agreement and
which the Company actually submits a bid for within the 120 day period following
termination of this Agreement. Following termination of this Agreement, if
Employee, or a person or an entity that directly or indirectly employs Employee
enters into a contract for a Customer Project to provide products or services
that would compete with those normally provided by Company, it will be deemed
prima facie evidence of a violation of this paragraph 10(b).
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(c) Enforcement. In the event the Company seeks enforcement in the
courts of any of the covenants contained in this Section 10, the term of the
provisions of Paragraphs 10(a) and 10(b) shall continue in effect, and the
eighteen (18) month period of post-employment restrictions referred to above as
to the specific covenants violated by Employee shall be extended by a period of
time equal to that period beginning when any violation of the provisions of this
Section 10 began and ending when the activities constituting such violation
shall have finally terminated in good faith, or when there has been a final
adjudication by the trial court as to the enforcement of the covenants,
whichever is earlier.
11. Indemnity. Employee agrees to hold harmless, defend and indemnify
the Company, any and all of its subsidiaries, affiliates, and their respective
officers, shareholders and directors, from and against any and all demands,
claims, actions or causes of action by any governmental body or any other third
party, and any and all losses, damages, settlements, awards, judgments and
defense costs and expenses, including attorney's fees, brought against the
Company or any of its subsidiaries, affiliates, or their respective officers,
shareholders and directors as a result of:
(a) Employee's failure to file correct and accurate personal
federal and state tax returns and/or the nonpayment or
incorrect payment of the appropriate amount of taxes, or other
governmental assessments; or
(b) Employee's actual or alleged breach of any agreement between
the Employee, or an entity formerly or presently owned or
controlled by Employee, and any third party, including, but
not limited to, any former employer of Employee.
12. Amendments or Additions; Action by Board. No amendments or
additions to the Agreement shall be binding unless in writing and signed by all
parties thereto. The prior approval by a majority affirmative vote of the full
Board shall be required in order for the Company to authorize any amendments or
additions to this Agreement, to give any consents or waivers of provisions of
this Agreement, or to take any other action under this agreement including any
Notice of Termination.
13. Litigation; Arbitration.
(a) Consent to Suit. Subject to the provisions of Section 13(b), any
legal proceeding arising out of or relating to this Agreement shall be
instituted in a state or federal court of general jurisdiction located in the
Commonwealth of Pennsylvania, and the Employee hereby consents to the personal
and exclusive jurisdiction of such court and hereby waives any objection that
the Employee may have to the laying of venue of any such proceeding and any
claim or defense of inconvenient forum. If an action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to recover, in addition to any other relief, reasonable
attorney's fees, costs and disbursements. In the event the Company institutes
litigation in connection with the enforcement of the terms and provisions of
this Agreement, and in the event that the Company obtains a preliminary or
permanent injunction or a judgment for damages, the Company, in addition to any
other sums or equitable relief to which it may be entitled, shall be entitled to
an award against the Employee in an amount equal to all fees and costs incurred
by the Company in connection with such litigation, including without limitation
all court costs, costs of investigation and reasonable attorneys' fees incurred
in connection with the litigation
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(b) Arbitration. Subject to the last sentence of this Section 13(b), if
any dispute arises over the terms of this Agreement between the parties to this
Agreement, either Employee or the Company may submit the dispute to binding
arbitration within thirty (30) days after such dispute arises, to be governed by
the evidentiary and procedural rules of the American Arbitration Association
(Commercial Arbitration). Employee and Company shall mutually select one (1)
arbitrator within ten (10) days after a dispute is submitted to arbitration. In
the event that the parties do not agree on the identity of the arbitrator within
such period, the arbitrator shall be selected by the American Arbitration
Association. The arbitrator shall hold a hearing on the dispute in Philadelphia,
Pennsylvania within thirty (30) days after having been selected and shall issue
a written opinion within fifteen (15) days after the hearing. The arbitrator
shall also decide on the allocation of the costs of the arbitration to the
respective parties, but Employee and Company shall each be responsible for
paying the fees of their own legal counsel, if legal counsel is obtained. Either
Employee or Company, or both parties, may file and seek enforcement of the
decision of the arbitrator as a final, binding and unappealable judgment in a
court of appropriate jurisdiction. Notwithstanding the foregoing provisions of
this Section 13(b) to the contrary, matters in which an equitable remedy or
injunctive relief is sought by a party shall not be required to be submitted to
arbitration, if the party seeking such remedy or relief objects thereto, but
shall instead be subject to the provisions of Section 13 (a) above.
14. Miscellaneous.
(a) Notices. Any notice required or permitted hereunder shall be given
in writing and shall be personally delivered or mailed by first class registered
or certified mail, postage prepaid, return-receipt-requested, sent by express
delivery with a nationally-recognized courier service, or transmitted by
facsimile, telegram or telex, addressed to the Company or the Employee at the
address set forth below or at such other addresses as such party may designate
by five business day advance written notice to the other party.
Each notice or communication that shall have been transmitted in
the manner described above, or that shall have been delivered to a telegraph
company, shall be deemed sufficiently given, served, sent or received for
purposes at such time as it is sent to the addressee (with the return receipt,
delivery receipt or (with respect to a telex) the answer back being deemed
conclusive, but not exclusive, evidence of such sending) or at such time as
delivery is refused by the addressee upon presentation. Notices shall be sent to
the following:
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(i) if to the Company, to:
AM Communications, Inc.
0000 XX Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopier: (000) 000-0000
(ii) if to the Employee, to:
Xxxxxx X.X. Xxxxxx
0000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Telecopier: ____________________
(b) Severability. Nothing in this Agreement shall be construed so as to
require the commission of any act contrary to law and wherever there is any
conflict between any provision of this Agreement and any law, statute,
ordinance, order or regulation, the latter shall prevail, but in such event any
necessary action will be taken to bring it within applicable legal requirements.
If any provision of this Agreement should be held invalid or unenforceable, the
remaining provisions shall be unaffected by such a holding.
(c) Complete Agreement. This Agreement contains the entire Agreement and
understanding between the parties relating to the subject matter hereof, and
supersedes any prior understandings, agreements or representations by or between
the parties, written or oral, relating to the subject matter hereof.
(d) Successors or Assigns. This Agreement and the rights and
obligations of the parties hereto shall bind and inure to the benefit of any
successor or successors of the Company by way of reorganization, merger or
consolidation and any assignee of all or substantially all of its business
assets, but except as to any such successor or assignee of the Company, neither
this Agreement nor any rights or benefits hereunder may be assigned by the
Company or the Employee. However, in the event of the death of the Employee all
rights to receive payments hereunder shall become rights of the Employee's
estate.
(e) Section Headings. The section headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
(g) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
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(h) Waiver. The waiver of the breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other or
subsequent breach of this Agreement.
(i) Set-Off Rights. Notwithstanding anything to the contrary contained
herein or in any document executed and delivered by the Company, Nex-Link
Acquisition Corp., a Delaware corporation ("Sub"), and/or AM Communications,
Inc., a Delaware corporation ("Parent") in connection with that certain
Agreement and Plan of Merger ("Agreement of Merger") dated June 3, 2002 by and
between the Company, Sub, Nex-Link Communication Project Services, LLC, a
Florida limited liability company ("NLCPS"), and all the members of NLCPS, the
Company, Sub and/or the Parent shall have the right and each is hereby
authorized, to the fullest extent permitted by law, at any time, and from time
to time, to set-off and apply any and all amounts owed by the Employee to the
Company, Sub and/or the Parent hereunder or under the Agreement of Merger, or
under any other document executed and delivered by the Employee under the
Agreement of Merger against any obligation of the Company, Sub and/or the Parent
to the Employee hereunder or under the Agreement of Merger, or under any
document executed and delivered by the Company, Sub and/or the Parent under the
Agreement of Merger. The Company agrees promptly to notify the Employee after
any such setoff and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the
Company, Sub and/or the Parent under this provision are in addition to other
rights and remedies (including without limitation other rights of set-off) which
the Company, Sub and/or the Parent may have.
15. Employee Acknowledgement. EMPLOYEE REPRESENTS THAT HE HAS HAD AMPLE
OPPORTUNITY TO REVIEW THIS AGREEMENT AND TO CONSULT WITH LEGAL COUNSEL AND A TAX
ADVISOR IN REGARD TO THIS AGREEMENT AND THAT HE HAS READ AND UNDERSTANDS THIS
AGREEMENT. EMPLOYEE ACKNOWLEDGES THAT HE UNDERSTANDS THAT IT CONTAINS IMPORTANT
CONDITIONS OF THE EMPLOYMENT AND THAT IT EXPLAINS POSSIBLE CONSEQUENCES, BOTH
FINANCIAL AND LEGAL, IF EMPLOYEE BREACHES THE AGREEMENT. EMPLOYEE IS FULLY AWARE
OF THE LEGAL EFFECT OF THIS AGREEMENT AND HAS ENTERED INTO IT FREELY AND
VOLUNTARILY AND BASED ON HIS OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR
PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the day and year first above written.
AM BROADBAND SERVICES, INC. EMPLOYEE
By: By:
-------------------------------- -------------------------------
X. Xxxxx Xxxxx Xxxxxx X.X. Xxxxxx
Vice President & General Manager
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JOINDER
AM Communications, Inc. hereby joins in the execution of this Agreement
specifically to agree with the provisions of Section 4(d).
AM COMMUNICATIONS, INC.
By:
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C. Xxxxx Xxxxx
Vice President & General Manager
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Exhibit A
PROMISSORY NOTE
US $250,000.00 July 1, 2002
FOR VALUE RECEIVED, the undersigned, Xxxxxx X.X. Xxxxxx, an individual
residing at 0000 XX 00xx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxx 00000 (the "Maker"),
promises to pay to AM Broadband Services, Inc., a Delaware corporation (the
"Payee"), at such place as the Payee may later designate in writing, in lawful
money of the United States, the principal sum of Two Hundred Fifty Thousand
United States dollars ($250,000.00) and to pay interest from the date hereof on
such principal amount as is from time to time outstanding, in accordance with
the terms set forth herein.
This Note is being executed and delivered pursuant to Section
4(c) of the Employment Agreement between Maker and the Payee dated July 1, 2002
(the "Agreement.
1. Principal. The principal balance of this Note shall become
due and payable in three equal, annual installments of thirty-three percent
(33%) each with payment of each installment to be made on July 1 of each year,
commencing July 1, 2003 (each installment date individually referred to as an
"Anniversary Date")
2. Interest. Interest shall accrue on the unpaid principal
balance of this Note at the minimum per annum rate in effect on the date of this
Note that is required to avoid the imputation of compensation income to Maker
under sections 7872 and 1274(d) of the Internal Revenue Code of 1986, as
amended. Interest shall be paid annually and at maturity if not forgiven as
provided herein.
3. Application of Payment. Each payment hereunder shall be
made in lawful tender of the United States and shall be applied first to any
accrued but unpaid interest on this Note and the balance to the unpaid
principal. Prepayment of the principal balance of this Note, together with any
accrued and unpaid interest, may be made in whole or in part at any time without
penalty.
4. Employment Requirement. The benefit of the forgiveness of
principal and interest as provided for in Section 5 of this Note while Maker
remains in the employment of the Payee is not transferable by Maker and is
conditioned upon the future performance of substantial services by Maker. For
purposes of this Note, Maker shall be considered to remain in the employment of
the Payee for so long as Maker renders services as a full-time employee of the
Payee and is not in breach of the Employment Agreement.
5. Loan Forgiveness. Notwithstanding any other provision of
this Note the principal balance and accrued but unpaid interest on this Note
shall be subject to forgiveness as follows: as long as Maker continues in
employment with the Payee, the principal balance and accrued but unpaid interest
on this Note shall be forgiven proportionate to the percentage of Term of the
Agreement that has been completed (as measured on a daily basis). Provided the
Maker remains employed continuously by the Payee until June 30, 2005, the entire
principal amount and accrued interest shall be forgiven on such date. In
addition, the entire outstanding principal balance and all accrued but unpaid
interest on this Note shall be forgiven upon termination of Maker's employment
with the Payee before the end of the term of the Note: (y) by reason of his
death or disability (as provided in Section 7(a) or Section 7(b) of the
Employment Agreement) or (z) termination of Maker's employment by the Payee
without Cause.
6. Events of Acceleration, Following the Maker's cessation of
employment with the Payee for a reason that does not require forgiveness
pursuant to Section 5 hereof, the entire unpaid principal sum of this Note shall
become immediately due and payable upon one or both of the following events:
(a) The failure of Maker to pay any installment of
principal and accrued interest when due and the continuation of such default for
thirty (30) days; or
(ii) The insolvency of Maker, the commission of any
act of bankruptcy by Maker, the execution by Maker of a general assignment for
the benefit of creditors, the filing by or against Maker of any petition and in
bankruptcy or any petition for relief under the provisions of the Federal
Bankruptcy Act or any other state or fedora] law for the relief of debtors and
the continuation of such petition without dismissal for a period of (30) days or
more, the appointment of a receiver or trustee to take possession of any
property or assets of Maker, or the attachment of or execution against any
property or assets of Maker.
7. Collection. Maker shall pay all costs of collection and
reasonable attorneys' fees and other professional fees and expenses paid or
incurred by any holder hereof or any other person incurring the same in
enforcing the obligations of Maker hereunder.
8. Notice. Whenever any notice is required or is desired to be
given pursuant to this Note by any holder hereof the same shall be deemed
sufficiently effected when delivered in accordance with the Agreement.
9. Binding Effect. The provisions of this Note shall be
binding upon Maker and his heirs, administrators, executors and successors, and
shall inure to the benefit of the holder(s) from time to time of this Note, and
such holder's successors and assigns. This promissory note cannot be assigned by
Maker.
10. Waiver. No previous waiver and no failure or delay by the
Payee in acting with respect to the term of this Note shall constitute a waiver
of any breach, default, or failure of condition under this Note or the
obligations secured thereby. A waiver of any term of this Note or of any of the
obligations secured thereby must be made in writing and shall be limited to the
express terms of such waiver. Maker hereby waives presentment, demand for
payment, and diligence in taking any action to collect any sums owing under this
Note or in proceeding against any of the rights or interests in or to properties
securing payment of this Note.
11. Conflicting Agreements. In the event of any
inconsistencies between the terms of this Note and the terms of any other
document related to the loan evidenced by this Note, the terms of this Note
shall prevail.
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12. Governing Law This Note shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania, without
reference to the conflict of law provisions thereof.
IN WITNESS WHEREOF, the Maker has caused this Note to be executed as of the day
and year first above written.
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Xxxxxx X.X. Xxxxxx
ATTEST:
By:_____________________________
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