EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement") is made and
entered into by and between Worldwide Wireless Systems Inc., a Delaware
Corporation (the "Company") and Xxxxx X. Xxxxxxx (the "Executive").
N O W , T H E R E F O R E ,
In consideration of the mutual covenants and agreements herein set
forth, the parties hereby agree as follows:
Section 1. Employment. The Company hereby agrees to employ the
Executive as its Chief Executive Officer and President, and the Executive hereby
accepts such employment in accordance with the terms of this Agreement and the
terms of employment applicable to regular employees of the Company. In the event
of any conflict or ambiguity between the terms of this Agreement and terms of
employment applicable to regular employees, the terms of this Agreement shall
control.
Section 2. Duties of Executive. In his capacity as President and CEO,
the Executive shall have overall management responsibility for the Company's
affairs as described in the bylaws of the Company and such other duties and
projects as may be assigned by the board of directors of the Company. Without
limitation, the Executive's duties shall include:
o Managing the activities of the Company in a manner intended to
achieve the goals and objectives for the Company as determined
by its Board of Directors, including the identification and
realization of new revenue streams for the Company, and
satisfaction of other financial requirements.
o Overall responsibility for the retention of appropriate senior
staff for the Company.
The Executive shall devote his entire productive time, ability and
attention to the business of the Company and shall perform all duties in a
professional, ethical and businesslike manner. The Executive will not, during
the term of this Agreement, directly or indirectly engage in any other business,
either as an employee, employer, consultant, principal, officer, director,
advisor, or in any other capacity, either with or without compensation, without
the prior written consent of the Company.
Section 3. Compensation. The Executive will be paid compensation during
this Agreement as follows:
a. Base Salary. A base salary of one hundred forty thousand
dollars ($140,000) per year until completion of an initial
public offering by the Company or six months after the
effective date of this Agreement, whichever occurs first, and
thereafter one hundred sixty thousand dollars ($160,000) per
year, payable in installments according to the Company's
regular payroll schedule. The base salary shall be adjusted at
the end of each year of employment at the discretion of the
board of directors.
b. Stock Options. The Executive shall receive options to purchase
175,000 shares of the Company's Common Stock at an exercise
price equal to the current fair market value thereof. The
options will vest ratably to permit the exercise of options to
purchase 33,333 shares (as well as the exercise of previously
exercisable options) in each calendar year commencing with
calendar year 1999, will expire ten years after grant,
and will be subject to the terms and conditions of a stock
option plan to be adopted by the Company. Unless otherwise
agreed by the Executive or the Executive causes such options
to be ineligible for such classification, the Company shall
cause such options to qualify as incentive stock options
pursuant to Section 422 of the Internal Revenue Code.
Section 4. Benefits.
a. Holidays. The Executive will be entitled to at least eight (8)
paid holidays each calendar year and two (2) personal days.
The Company will notify the Executive on or about the
beginning of each calendar year with respect to the holiday
schedule for the coming year. Personal holidays, if any, will
be scheduled in advance subject to requirements of the
Company. Such holidays must be taken during the calendar year
and cannot be carried forward into the next year. The
Executive will not be entitled to any personal holidays during
the first six months of employment.
b. Vacation. Following the first six months of employment, the
Executive shall be entitled to twenty one (21) paid vacation
days each year.
c. Sick Leave. The Executive shall be entitled to sick leave and
emergency leave according to the regular policies and
procedures of the Company. Additional sick leave or emergency
leave over and above paid leave provided by the Company, if
any, shall be unpaid and shall be granted at the discretion of
the board of directors.
d. Medical and Group Life Insurance. The Company agrees to
include the Executive in the group medical and hospital plan
of the Company and provide group life insurance for the
Executive at no charge to the Executive in the amount equal to
three times base salary during this Agreement. The Executive
shall be responsible for payment of any federal or state
income tax imposed upon these benefits.
e. Pension and Profit Sharing Plans. The Executive shall be
entitled to participate in any pension or profit sharing plan
or other type of plan adopted by the Company for the benefit
of its officers and/or regular employees.
f. Expense Reimbursement. The Executive shall be entitled to
reimbursement for all reasonable expenses, including travel
and entertainment, incurred by the Executive in the
performance of the Executive's duties. The Executive will
maintain records and written receipts as required by the
Company policy and reasonably requested by the board of
directors to substantiate such expenses.
Section 5. Term and Termination; Confidentiality; Non-Competition.
a. Term. The Initial Term of this Agreement shall commence on
August 17, 1998 and shall continue in effect through December
31, 2001. Thereafter, the Agreement shall be renewed upon the
mutual agreement of the Executive and the Company. This
Agreement and the Executive's employment may be terminated at
the Company's discretion during the Initial Term, provided
that the Company shall pay to the Executive an amount equal to
payment at the Executive's base salary rate for the
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remaining period of the Initial Term, plus an amount equal to
One Hundred percent (100%) of the Executive's annual base
salary in effect at the time of termination. In the event of
such termination, the Executive shall be entitled to any
incentive salary payment or any other compensation then in
effect, prorated or otherwise.
b. Termination by the Company. This Agreement and the Executive's
employment may be terminated by the Company at its discretion
after the initial term, provided that the Company shall pay to
the Executive an amount equal to Seventy Five percent (75%) of
the Executive's then applicable annual base salary. In the
event of such a discretionary termination, the Executive shall
be entitled to receive any incentive salary payment or any
other compensation then in effect, prorated or otherwise.
c. Termination by the Executive. This Agreement may be terminated
by the Executive at the Executive's discretion by providing at
least thirty (30) days prior written notice to the Company. In
the event of termination by the Executive pursuant to this
subsection, the Company may immediately relieve the Executive
of all duties and immediately terminate this Agreement,
provided that the Company shall pay the Executive at the then
applicable annual base salary rate to the termination date
included in the Executive's original termination notice which
shall not exceed thirty (30) days without the prior consent of
the Company.
d. Termination for Breach. In the event that the Executive is in
breach of any material obligation owed the Company in this
Agreement, habitually neglects the duties to be performed
under this Agreement, engages in any conduct which is
dishonest, damages the reputation or standing of the Company,
or is convicted of any criminal act or engages in any act of
moral turpitude, then the Company may terminate this Agreement
upon five (5) days notice to the Executive. In event of
termination of the agreement pursuant to this subsection, the
Executive shall be paid only at the then applicable annual
base salary rate up to and including the date of termination.
The Executive shall not be paid any incentive salary payments
or other compensation, prorated or otherwise.
e. Acquisition. In the event the Company is acquired, or is the
non-surviving party in a merger, or sells all or substantially
all of its assets, this Agreement shall not be terminated and
the Company agrees to use its best efforts to ensure that the
transferee or surviving company is bound by the provision of
this Agreement.
f. Confidential Information. The Executive agrees that during the
term of employment the Executive will become privy to
confidential information at both clients of the Company and
the Company itself. The Executive agrees that all work
product, as defined below, in any form (the "Work Product"),
created by the Executive while employed by the Company (or
created upon or after termination of employment with the
Company in the event that the Executive breaches this
paragraph or paragraph 5(g) of this Agreement) is the
exclusive property of the Company, or of the client of the
Company in instances when the Company is engaged in contracts
which specifically vest ownership of such work product in the
Company's client. For purposes of this Agreement, Work Product
means all of the work, materials and products created for or
on behalf of the Company in whole or part by the Executive or
others (whether
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or not the particular work, materials and/or products are ever
completed and whether or not they were developed by the
Executive in conjunction with others), including but not
limited to (i) computer software (in object code, source code
and commented source code form), (ii) all flow charts and
technical, design, functional and other specifications
therefore, (iii) all graphical user interface(s), date of
display(s) and screen display(s) of such software, (iv) all
documentation for such software, (v) all sound recording,
pictorial, graphic, audio/visual and/or literary works and all
other art, designs and technology (including icons)
incorporated in such documentation or incorporated or
generated by such software, and (vi) all enhancements,
modifications, alterations, improvements, corrections,
revisions, upgrades, new versions of and other changes to
computer software, documentation and other works and materials
including those set forth above. In no case shall Executive
own any copyrights to software or other product developed or
acquired while employed by the Company. The Executive agrees
that during the term of his employment by the Company and
thereafter, he shall not copy, permit access by, or divulge to
any other person, firm, partnership or corporation any
customer lists or records, marketing plans, financial
statements, development plans, trade secrets, software,
proprietary information or product information of the Company
which the Company may impart to the Executive or which the
Executive may acquire (including confidential information
obtained by the Executive while working with, at, or for
clients of the Company) during his employment by the Company
("Information"), except to the extent the Executive is
specifically authorized by the Company to do so; and he shall
not use any Information for any purpose other than the
performance of services on behalf of the Company. In addition,
the Executive also agrees to honor any and all confidentiality
agreements entered into with clients of the Company whether
signed by the Executive or by the Company on behalf of the
Executive. The Executive agrees that upon termination of his
employment by the Company at any time and for any reason, he
shall immediately return to the Company all materials and/or
documents bearing the Company name, as well as any Work
Product, Information and all copies thereof in his possession
or under his control.
g. Non-Disclosure; Non-Competition Agreement. The Executive
agrees that any knowledge or information gained through access
to the Company's clients, contacts or liaisons is proprietary
and may not be used to compete with the Company. The Executive
agrees not to solicit employment or consulting arrangements
from or with any clients of the Company while employed by the
Company or while subject to the non-competition provisions set
forth herein without the consent of the Company which may be
withheld in its sole discretion. Without the Company's prior
written approval, the Executive agrees that during the term of
his employment by the Company, he shall not directly or
indirectly work for, advise, be a consultant to, or otherwise
participate in any business which sells any product or
services which compete in any way with those provided by the
Company (including, but not limited to, the development or
sale of Internet services, Internet products, software,
support, technical service, or consulting services in the
Internet services business) similar to those sold by the
Company and which might reasonably be expected to compete in
any way with the Company, or with any Company product or
system. If this Agreement is terminated by the Executive
pursuant to Paragraph 5(c) or by the Company pursuant to
Paragraph 5(d), the covenant described in the immediately
preceding sentence shall extend for one (1)
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year after termination of employment. It is of the essence of
this Agreement that, in addition to all other rights and
remedies of the Company hereunder, the Company, following
termination of the Executive's employment, is entitled to a
total period of twelve (12) months during which the Executive
does not compete with the Company. Accordingly, the date on
which the non-competition restriction otherwise would expire
shall be extended by one (1) full week for each week or any
portion thereof during which the Executive shall have failed
in whole or in any part to honor and abide by the terms and
provisions of this paragraph.
h. Remedies on Default of Paragraphs 5(f) and 5(g). If the
Employee breaches the provisions of paragraphs 5(f) or 5(g) of
this Agreement, the Company shall have the right to institute
such legal proceedings as it deems necessary to prevent
further breach of this Agreement, including, without
limitation, an action for injunctive or equitable relief, and
to recover damages for any past breach. In the event that the
Company brings an action for equitable or injunctive relief,
the Executive agrees not to assert that the Company has an
adequate remedy at law, and hereby irrevocably waives any such
defense. If the Company prevails in those proceedings, the
Executive will pay for the Company's costs and expenses of
suit and enforcement, including reasonable attorneys' fees. If
the Executive prevails in those proceedings, the Company will
pay the Executive's costs and expenses of suit, including
reasonable attorneys' fees.
Section 6. Notices. Any notice required by this Agreement or given in
connection with it, shall be in writing and shall be given to the appropriate
party by personal delivery or by certified mail, postage prepaid, or recognized
overnight delivery services;
If to the Company: Worldwide Wireless Systems Inc.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Executive: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx #00X
Xxx Xxxx, Xxx Xxxx 00000
Section 7. Final Agreement. This Agreement terminates and supersedes
all prior understandings or agreements on the subject matter hereof. This
Agreement may be modified only by a further writing that is duly executed by
both parties.
Section 8. Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the state of New York.
Section 9. Headings. Headings used in this Agreement are provided for
convenience only and shall not be used to construe meaning or intent.
Section 10. No Assignment. Neither this Agreement nor any or interest
in this Agreement may be assigned by the Executive without the prior express
written approval of the Company, which may be withheld by the Company at the
Company's absolute discretion.
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Section 11. Severability. If any term, covenant or condition of this
Agreement or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement, or the
application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Agreement shall be
valid and be enforced to the fullest extent permitted by law.
Section 12. Arbitration. The parties agree that they will use their
best efforts to amicably resolve any dispute arising out of or relating to this
Agreement. Any controversy, claim or dispute that cannot be so resolved shall be
settled by final binding arbitration in accordance with the rules of the
American Arbitration Association and judgment upon the award rendered by the
arbitrator or arbitrators may be entered in any court having jurisdiction
thereof. Any such arbitration shall be conducted in New York, NY, or such other
place as may be mutually agreed upon by the parties. Within fifteen (15) days
after the commencement of the arbitration, each party shall select one person to
act as arbitrator, and the two arbitrators so selected shall select a third
arbitrator within ten (10) days of their appointment. Each party shall bear its
own costs and expenses and an equal share of the arbitrator's expenses and
administrative fees of arbitration.
Section 13. Superseding Prior Agreements. This Agreement supersedes all
prior agreements related to the Executive's employment by the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 17th day of August, 1998.
Worldwide Wireless Systems Inc.
By: /s/Xxxxx Xxxxxx /s/Xxxxx X. Xxxxxxx
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Xxxxx Xxxxxx Xxxxx X. Xxxxxxx
Duly Authorized
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