EMPLOYMENT AGREEMENT
AGREEMENT dated July 23, 1998 between XXXXXXX X. XXXXXXX residing at
0000 Xxxxxx Xxxxxx Xxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 ("Executive"), and
PARKERVISION, INC., a Florida corporation having its principal office at 0000
Xxxxxxxxxx Xxx, Xxxxxxxxxxxx, Xxxxxxx 00000 ("Company").
WHEREAS, the Company and Executive reached an oral agreement on May 22,
1998 with respect to Executive's employment by the Company;
WHEREAS, Executive commenced employment with the Company on June 15,
1998; and
WHEREAS, the Company and Executive desire to evidence their agreement
in writing and to provide for the employment of Executive by the Company on the
terms set forth herein;
IT IS AGREED:
1. Employment, Duties and Acceptance
1.1 The Company confirms the employment of Executive
commencing June 15, 1998 and continuing through the date hereof. The Company
hereby employs Executive commencing July 23, 1998 as its President and Chief
Operating Officer ("COO"). Executive shall report directly to the Chairman of
the Board and Chief Executive Officer of the Company ("CEO"). All of Executive's
powers and authority in any capacity shall at all times be subject to the
direction and control of the CEO and the Company's Board of Directors.
1.2 The Board and the CEO may assign to Executive such general
management and supervisory responsibilities and executive duties for the Company
or any subsidiary of the Company, including serving as a director, as are
consistent with Executive's status as President and COO. The Company and
Executive acknowledge that Executive's primary functions and duties as President
and COO shall be the overall supervision of, and oversight over, all the
operations and employees (other than the CEO) of the Company and its
subsidiaries and divisions; provided, however, that Executive shall not
supervise or oversee the operations or employees of the Company's advanced
research and development or investor and public relations departments.
1.3 Executive accepts such employment and agrees to devote
substantially all of his business time, energies and attention to the
performance of his duties hereunder. Nothing herein shall be construed as
preventing Executive from making and supervising personal investments, provided
they will not interfere with the performance of Executive's duties hereunder or
violate the provisions of paragraph 5.4 hereof.
1.4 Promptly after the execution of this Agreement, the
Company shall expand its Board of Directors from six to seven members and elect
Executive to serve as a director until the next annual meeting of shareholders
and until his successor is duly elected and qualified.
2. Compensation and Benefits
2.1 The Company shall pay to Executive a salary at the annual
rate of $250,000 during the term hereof. Executive's compensation shall be paid
in equal, periodic installments in accordance with the Company's normal payroll
procedures.
2.2 The Company shall also pay to Executive on or prior to
April 30 of each year (commencing April 30, 1999 and continuing on each April 30
thereafter) during the term of this Agreement, and on the April 30 following the
termination of Executive employment pursuant to Sections 3.2, 3.3 or 3.5 hereof
Payment Date, a bonus (Bonus) for services rendered during the Company's fiscal
year immediately preceding the Payment Date ("Bonus Year") equal to 5% of the
increase, if any, from (i) the Company's "Pre-Tax Operating Income" (as defined
below) for the Company's fiscal year immediately preceding the Bonus Year
("Prior Year") to (ii) Pre-Tax Operating Income for the Bonus Year. "Pre-Tax
Operating Income" shall mean the Company's consolidated net income before taxes,
interest, and any other charges included in the "Other Interest or Expense" line
item (or similar caption) on the Company's Income Statement, but after
depreciation and amortization, in each case without giving effect to any
extraordinary loss or gain, as determined by the Company's independent public
accountants based on the audited financial statements of the Company. When
determining the Bonus, there shall be deemed to be an "increase" in Pre-Tax
Operating Income to the extent the Pre-Tax Operating Income in the Bonus Year is
less of a negative number than the Pre-Tax Operating Income in the Prior Year.
The Bonus shall be pro-rated if Executive was not employed by the Company for
the full Bonus Year. Such pro-ration shall be accomplished by first calculating
the Bonus based on Pre-Tax Operating Income for the full Bonus Year and then
multiplying it by a fraction, the numerator of which is the number of calendar
months or portions thereof worked by Executive during the Bonus Year and the
denominator of which is 12 (the resulting product being referred to as the
"Pro-Rated Bonus").
2.3 As additional compensation for services to be rendered
by Executive hereunder:
(a) The Company hereby issues to Executive options
to purchase 250,000 shares of the Common Stock of the Company ("Common Stock")
at a price of $21.375 per share ("Vesting Options"), as evidenced by a Stock
Option Agreement of even date herewith between the Company and Executive.
Vesting Options to purchase 25,000 shares of Common Stock shall vest on December
31, 1998 and Vesting Options to purchase 50,000, 60,000, 70,000 and 45,000
shares of common Stock shall vest, respectively, on December 31st of each of the
next four years, and will remain exercisable until June 15, 2008, except as set
forth in the Stock Option Agreement.
(b) The Company also hereby issues to Executive
options to purchase an additional 250,000 shares of Common Stock at a price of
$21.375 per share ("Acceleration Options" and, together with the "Vesting
Options," the "Agreement Options"), as evidenced by a second Stock Option
Agreement of even date herewith between the Company and Executive. The
Acceleration Options will vest on December 15, 2003, but vesting shall be
accelerated based on either the Company generating certain levels of gross
profit and/or the Common Stock attaining certain price levels, and will remain
exercisable until June 15, 2008, except as set forth in the Stock Option
Agreement.
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(c) The shares of Common Stock underlying the
Agreement Options shall be included on a Registration Statement on Form S-8 to
be filed by the Company on or prior to August 31, 1998, to the extent it is
legally permissible to include such shares.
2.4 Executive shall be entitled to such medical, disability,
life insurance (of no less than $1,000,000), retirement and other benefits as
are generally afforded to other senior executives of the Company, subject to
applicable waiting periods and other conditions.
2.5 Executive shall be entitled to three weeks of vacation in
each calendar year and to a reasonable number of other days off for religious
and personal reasons (in addition to national holidays observed by the Company
generally).
2.6 The Company will pay or reimburse Executive for all
transportation, hotel and other expenses reasonably incurred by Executive on
business trips and for all other ordinary and reasonable out-of-pocket expenses
actually incurred by him in the conduct of the business of the Company against
itemized vouchers submitted with respect to any such expenses and approved in
accordance with customary procedures.
3. Term and Termination
3.1 The term of this Agreement commences as of June 15, 1998
and shall continue until December 31, 2003, unless sooner terminated as herein
provided.
3.2 If Executive dies during the term of this Agreement, this
Agreement shall thereupon terminate, except that the Company shall pay to the
legal representative of Executive's estate (i) the base salary due Executive
pursuant to paragraph 2.1 hereof through the date of Executive's death, (ii) the
Pro-Rated Bonus with respect to the Bonus Year in which the Agreement is
terminated, (iii) all valid expense reimbursements through the date of the
termination of this Agreement, and (iv) all accrued but unused vacation pay.
3.3 The Company, by notice to Executive, may terminate this
Agreement if Executive shall fail because of illness or incapacity to render,
for three consecutive months, services of the character contemplated by this
Agreement. Notwithstanding such termination, the Company shall pay to Executive
(i) the base salary due Executive pursuant to paragraph 2.1 hereof through the
date of such notice, less any amount Executive receives for such period from any
Company-sponsored or Company-paid source of insurance or disability compensation
or government program, (ii) the Pro Rated Bonus with respect to the Bonus Year
in which the Agreement is terminated, (iii) all valid expense reimbursements
through the date of the termination of this Agreement, and (iv) all accrued but
unused vacation pay.
3.4 The Company, by notice to Executive, may terminate this
Agreement for cause. As used herein, "Cause" shall mean: (a) the refusal or
failure by Executive to carry out specific directions of the Board or the CEO
which are of a material nature and consistent with his status as President and
COO, or the refusal or failure by Executive to perform a material part of
Executive's duties hereunder; (b) the commission by Executive of a material
breach of any of the provisions of this Agreement; (c) fraud or dishonest action
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by Executive in his relations with the Company or any of its subsidiaries or
affiliates, or with any customer or business contact of the Company or any of
its subsidiaries or affiliates ("dishonest" for these purposes shall mean
Executive's knowingly or recklessly making of a material misstatement or
omission for his personal benefit); or (d) the conviction of Executive of any
crime involving an act of moral turpitude. Notwithstanding the foregoing, no
"Cause" for termination shall be deemed to exist with respect to Executive's
acts described in clauses (a) or (b) above, unless the Company shall have given
written notice to Executive specifying the "Cause" with reasonable particularity
and, within ten calendar days after such notice, Executive shall not have cured
or eliminated the event or behavior giving rise to such "Cause" or, if a cure
cannot reasonably be completed within ten days, Executive shall not have
commenced and be diligently pursing such cure, which, in any event, is completed
within 30 days after such notice; provided, however, that a repeated breach
after notice and cure of any provision of clauses (a) or (b) above involving the
same or substantially similar actions or conduct shall be grounds for
termination for "Cause" without any additional notice from the Company.
Notwithstanding termination for "Cause," the Company shall pay to Executive (i)
the base salary due Executive pursuant to paragraph 2.1 hereof through the date
of such notice, less any amount Executive receives for such period from any
Company-sponsored or Company-paid source of insurance, disability compensation
or government program, (ii) all valid expense reimbursements through the date of
the termination of this Agreement, and (iii) all accrued but unused vacation
pay.
3.5 (a) The Company, upon ten days notice to Executive, may
terminate this Agreement for any reason other than pursuant to paragraphs 3.2,
3.3 or 3.4 (" Without Cause Termination").
(b) The Executive, by notice to the Company, may
terminate this Agreement if a "Good Reason" exists. For purposes of this
Agreement, "Good Reason" shall mean the occurrence of any of the following
circumstances without the Executive's prior express written consent: (i) a
substantial and material adverse change in the nature of Executive's title,
duties or responsibilities with the Company that represents a demotion from his
title, duties or responsibilities as in effect immediately prior to such change;
(ii) Executive is not nominated to serve as a director by the Company or is
removed from service as a director of the Company (other than for cause); (iii)
a material breach of this Agreement by the Company; (iv) a failure by the
Company to make any payment to Executive when due, unless the payment is not
material and is being contested by the Company, in good faith; (v) an occurrence
of an "Acceleration Event" occurs within the meaning of the Stock Option
Agreement for the Vesting Options; (vi) a liquidation, bankruptcy or
receivership of the Company; or (vii) a person other than Mr. Xxxxxxx Xxxxxx
becomes the CEO, other than by reason of Xx. Xxxxxx'x death or disability.
Notwithstanding the foregoing, (A) any notice of termination based on
circumstances described in (v) or (vii) above must be given to the Company
within 30 days of the circumstance occurring, and (B) no Good Reason shall be
deemed to exist with respect to the Company's acts described in clauses (i),
(ii), (iii) or (iv) above, unless the Executive shall have given written notice
to the Company specifying the Good Reason with reasonable particularity and,
within ten calendar days after such notice, the Company shall not have cured or
eliminated the event or behavior giving rise to such Good Reason or, if a cure
cannot reasonably be completed within ten days, the Company shall not have
commenced and be diligently pursuing such cure, which, in any event, is
completed within 30 days after such notice; provided, however, that a repeated
breach after notice and cure of any provision of clauses (i), (ii), (iii) or
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(iv) above involving the same or substantially similar actions or conduct shall
be grounds for termination for Good Reason without any additional notice from
the Executive.
(c) In the event of a Without Cause Termination
or if Executive terminates this Agreement for Good Reason pursuant to the
provisions of this paragraph 3.5, the Company shall pay to Executive (or in the
case of his death after such termination, the legal representative of
Executive's estate or such other person or persons as Executive shall have
designated by written notice to the Company), (i) for a period of 18 months
after termination of this Agreement, all salary required under paragraph 2.1
and, to the extent legally permissible, benefits required under paragraph 2.4
hereof and (ii) the Pro-Rated Bonus with respect to the Bonus Year in which
Executive's employment is terminated.
3.6 If Executive's employment hereunder is terminated for any
reason, then Executive shall, at the Company's request, resign as a director of
the Company and all of its subsidiaries, effective upon the occurrence of such
termination.
4. Executive Indemnity
4.1 The Company agrees to indemnify Executive and hold
Executive harmless against all losses, damages, costs, expenses (including,
without limitation, reasonable attorneys' fees) and liabilities (other than
settlements to which the Company does not consent, which consent shall not be
unreasonably withheld) (collectively, "Losses") reasonably incurred by Executive
in connection with any claim, action, proceeding or investigation brought
against or involving Executive with respect to, arising out of or in any way
relating to Executive's employment with the Company or Executive's service as a
director of the Company; provided, however, that the Company shall not be
required to indemnify Executive for Losses incurred as a result of Executive's
intentional misconduct or gross negligence (other than matters where Executive
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the Company's best interests). Executive shall promptly notify the
Company of any claim, action, proceeding or investigation under this paragraph
and the Company shall be entitled to participate in the defense of any such
claim, action, proceeding or investigation and, if it so chooses, to assume the
defense with counsel selected by the Company; provided that Executive shall have
the right to employ counsel to represent him (at the Company's expense) if the
representation of both the Company and Executive would be inappropriate because
of actual or potential conflicts of interest between the parties. The Company
shall not settle or compromise any claim, action, proceeding or investigation
without Executive's consent, which consent shall not be unreasonably withheld;
provided, however, that such consent shall not be required if the settlement
entails only the payment of money by the Company and either the Executive is
released from all liability at the time of the settlement or the Company fully
indemnifies Executive in connection therewith in a manner reasonably
satisfactory to Executive. The Company further agrees to advance any and all
expenses (including, without limitation, the fees and expenses of counsel)
reasonably incurred by the Executive in connection with any such claim, action,
proceeding or investigation, provided Executive first enters into an appropriate
agreement for repayment of such advances if indemnification is found not to have
been available.
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5. Protection of Confidential Information; Non-Competition
5.1 Executive acknowledges that:
(a) As a result of his employment with the Company,
Executive has obtained and will obtain secret and confidential information
concerning the business of the Company and its subsidiaries and affiliates
(referred to collectively in this paragraph 5 as the "Company"), including,
without limitation, information with respect to the Company's patents, patent
applications and other proprietary rights, trade secrets and "know-how,"
finances, and customer and client relationships ("Confidential Information").
(b) The Company will suffer substantial damage which
will be difficult to
compute if, during the period of his employment with the Company or thereafter,
Executive should enter a business competitive with the Company or divulge
Confidential Information.
(c) The provisions of this Agreement are reasonable
and necessary for the protection of the business of the Company.
5.2 Executive agrees that he will not at any time, either
during the term of this Agreement or thereafter, divulge to any person or entity
any Confidential Information obtained or learned by him as a result of his
employment with, or prior retention by, the Company, except (i) in the course of
performing his duties hereunder, (ii) with the Company's express written
consent; (iii) to the extent that any such information is in the public domain
other than as a result of Executive's breach of any of his obligations
hereunder; or (iv) where required to be disclosed by court order, subpoena or
other government process. If Executive shall be required to make disclosure
pursuant to the provisions of clause (iv) of the preceding sentence, Executive
promptly, but in no event more than three business days after learning of such
subpoena, court order, or other government process, shall notify, by personal
delivery or by electronic means, confirmed by mail, the Company and, at the
Company's expense, Executive shall: (a) take all reasonably necessary and lawful
steps required by the Company to defend against the enforcement of such
subpoena, court order or other government process, and (b) permit the Company to
intervene and participate with counsel of its choice in any proceeding relating
to the enforcement thereof.
5.3 Upon termination of his employment with the Company,
Executive will promptly deliver to the Company all memoranda, notes, records,
reports, manuals, drawings, blueprints and other documents (and all copies
thereof, including copies in electronic format or media) relating to the
business of the Company and all property associated therewith, which he may then
possess or have under his control; provided, however, that Executive shall be
entitled to retain copies of such documents reasonably necessary to document his
financial relationship (both past and future) with the Company.
5.4 During the period commencing on the date hereof and ending
on the two-year anniversary of the date Executive's employment hereunder is
terminated (except for termination by Executive for Good Reason, in which case
the period shall end on the 18-month anniversary), Executive, without the prior
written permission of the Company, shall not, anywhere in the world, (i) be
employed by, or render any services to, any person, firm or corporation engaged
in any business which is directly or indirectly in competition with the Company
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("Competitive Business"); (ii) engage in any Competitive Business for his or its
own account; (iii) be associated with or interested in any Competitive Business
as an individual, partner, shareholder, creditor, director, officer, principal,
agent, employee, trustee, consultant, advisor or in any other relationship or
capacity; (iv) employ or retain, or have or cause any other person or entity to
employ or retain, any person who was employed or retained by the Company during
the year prior to the date Executive\'92s employment is terminated; or (v)
solicit, interfere with, or endeavor to entice away from the Company, for the
benefit of a Competitive Business, any of its customers or other persons with
whom the Company has a contractual relationship. Notwithstanding the foregoing,
nothing in this agreement shall preclude Executive from (a) investing his
personal assets in the securities of any corporation or other business entity
which is engaged in a Competitive Business if such securities are traded on a
national stock exchange or in the over-the-counter market and if such investment
does not result in his beneficially owning, at any time, more than 2.0% of the
publicly-traded equity securities of such Competitive Business.
5.5 If Executive commits a breach, or threatens to commit a
breach, of any of the provisions of Sections 5.2 or 5.4, the Company shall have
the right and remedy:
(a) to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed by Executive that the services being rendered hereunder
to the Company are of a special, unique and extraordinary character and that any
such breach or threatened breach will cause irreparable injury to the Company
and that money damages will not provide an adequate remedy to the Company; and
(b) to require Executive to account for and pay
over to the Company all monetary damages suffered by the Company as the result
of any transactions constituting a breach of any of the provisions of Sections
5.2 or 5.4, and Executive hereby agrees to account for and pay over such damages
to the Company.
Each of the rights and remedies enumerated in this Section 5.5 shall be
independent of the other, and shall be severally enforceable, and such rights
and remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or equity.
In connection with any legal action or proceeding arising out of or
relating to this Agreement, the prevailing party in such action or proceeding
shall be entitled to be reimbursed by the other party for the reasonable
attorneys' fees and costs incurred by the prevailing party.
5.6 If any provision of Sections 5.2 or 5.4 is held to be
unenforceable because of the scope, duration or area of its applicability, the
tribunal making such determination shall have the power to modify such scope,
duration, or area, or all of them, and such provision or provisions shall then
be applicable in such modified form.
5.7 The provisions of this paragraph 5 shall survive the
termination of this Agreement for any reason.
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6. Miscellaneous Provisions
6.1 All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when (i) delivered
personally to the party to receive the same, or (ii) when mailed first class
postage prepaid, by certified mail, return receipt requested, addressed to the
party to receive the same at his or its address set forth below, or such other
address as the party to receive the same shall have specified by written notice
given in the manner provided for in this Section 6.1. All notices shall be
deemed to have been given as of the date of personal delivery or mailing
thereof.
If to Executive:
Xxxxxxx X. Xxxxxxx
0000 Xxxxxx Xxxxxx Xxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
With a copy to:
Xxxxx X. Main, Esq.
Holland & Knight LLP
0 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
If to the Company:
ParkerVision, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxxxx, Xxxxxxx 00000
With a copy to:
Xxxxx Xxxx Xxxxxx, Esq.
Xxxxxxxx Mollen & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
6.2 Prior to or simultaneously with commencing employment,
Executive shall execute such customary agreements regarding assignment of
inventions as are executed by the Company's employees generally.
6.3 This Agreement, the Stock Option Agreements executed
simultaneously herewith and the agreements referred to in Section 6.2 above set
forth the entire agreement of the parties relating to the employment of
Executive and are intended to supersede all prior negotiations, understandings
and agreements. No provisions of this Agreement, the Stock Option Agreements or
the agreements referred to in Section 6.2 above may be waived or changed except
by a writing by the party against whom such waiver or change is sought to be
8
enforced. The failure of any party to require performance of any provision
hereof or thereof shall in no manner affect the right at a later time to enforce
such provision.
6.4 All questions with respect to the construction of this
Agreement, and the rights and obligations of the parties hereunder, shall be
determined in accordance with the law of the State of Florida applicable to
agreements made and to be performed entirely in Florida.
6.5 This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the Company. This Agreement shall not
be assignable by Executive, but shall inure to the benefit of and be binding
upon Executive's heirs and legal representatives.
6.6 Should any provision of this Agreement become legally
unenforceable, no other provision of this Agreement shall be affected, and this
Agreement shall continue as if the Agreement had been executed absent the
unenforceable provision.
6.7 If, during the term hereof, Executive is nominated to
serve as a director of the Company but fails to be elected, he shall nonetheless
be invited to attend each meeting of the Board of Directors of the Company
through the remainder of the term hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
-----------------------------------
XXXXXXX X. XXXXXXX
PARKERVISION, INC.
By:________________________________
Xxxxxxx Xxxxxx, Chairman of the Board
and Chief Executive Officer
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