Exhibit 10.15
EMPLOYMENT AGREEMENT
OF XXXXXXX X. XXXXXXX
WITH
PHASECOM, INC.
THIS EMPLOYMENT AGREEMENT (this "Agreement"), made and entered into
effective as of the 1st day of January, 2000, by and between PHASECOM, INC., a
Delaware corporation (hereinafter the "Corporation"), and XXXXXXX X. XXXXXXX
(hereinafter "Pezzola").
RECITALS
A. The Corporation has employed Pezzola as General Counsel.
B. In connection with Pezzola's employment with the Corporation, the
Corporation and Pezzola desire to enter into this Employment Agreement according
to the terms and conditions set forth below.
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT DUTIES.
a. GENERAL. The Corporation hereby agrees to employ Pezzola, and
Pezzola hereby agrees to accept employment with the Corporation, on the terms
and conditions hereinafter set forth.
b. CORPORATION'S DUTIES. The Corporation shall allow Pezzola to, and
Pezzola shall, perform responsibilities normally incident to the position of
General Counsel, commensurate with his background, education, experience and
professional standing. The Corporation shall provide Pezzola with such office
equipment, supplies, customary services, office, and cooperation suitable for
the performance of his duties at his current office location.
x. XXXXXXX'X DUTIES. Unless otherwise agreed to by the parties, Pezzola
shall serve as General Counsel of the Corporation. Pezzola shall devote such
amount of his productive time, attention, energy and skill to the business of
the Corporation as shall be deemed appropriate, upon consultation with the
Chairman of the Board up to thirty (30) hours per week. Pezzola shall report
directly to the Chairman of the Board. Pezzola shall inform the Chairman of the
Board of any other positions that he takes with any other entity. Pezzola duties
shall be
performed primarily in California at his current office location.
2. TERM. The initial term of this employment is three (3) years.
Thereafter, this Agreement may be renewed by Pezzola and the Corporation on such
terms as the parties may agree to in writing. Absent written notice to the
contrary given at least thirty (30) days prior to the end of the initial three
(3) year employment term, this Agreement will be automatically renewed for
consecutive one (1) year extensions. Should the term of employment not be
renewed after the expiration of the first three (3) year term, Pezzola shall be
entitled to nine (9) months salary as severance, in exchange for a release as to
any and all claims Pezzola may have against the Corporation.
3. COMPENSATION. Pezzola shall be compensated as follows:
a. FIXED SALARY. Pezzola shall receive a fixed annual salary of Two
Hundred Two Thousand Five Hundred Dollars ($202,500). The Corporation agrees to
review the fixed salary on, or before, January 1, 2001, and thereafter at the
end of each calendar year during the employment term based upon Pezzola's
services and the financial results of the Corporation, and to make such
increases as may be determined appropriate in the sole discretion of the
Corporation's Chief Executive Officer or Board of Directors.
b. PAYMENT. Pezzola's fixed salary shall be payable on a semi-monthly
basis, in accordance with the Corporation's usual payroll practices.
c. BONUS COMPENSATION.
X. Xxxxxxx shall be entitled to a bonus of Twenty-five Thousand Dollars
($25,000), as and when the Corporation files a registration statement with the
Securities and Exchange Commission to issue securities to the public (a "public
offering."); and
B. During the Employment Term, Pezzola shall participate in each bonus
plan adopted by the Corporation's Board of Directors. Commencing in 2000,
Pezzola shall be entitled to receive an annual bonus equal to (i) fifteen
percent (15%) of his annual base salary should the Corporation meet eighty
percent (80%) of its plan as presented to the Board in January of each year,
during the term of Pezzola's employment ("Yearly Plan"); (ii) fifty percent
(50%) of his annual base salary should the Corporation meet its Yearly Plan; and
(iii) ninety percent (90%) of his annual base salary should the Corporation meet
one hundred twenty percent (120%) of its Yearly Plan, with the bonus prorated if
the Yearly Plan is met between eighty percent (80%) and one hundred percent
(100%); or between one hundred percent (100%) and one hundred twenty percent
(120%). For purposes of this Section, the meeting of the Yearly Plan shall be
based upon the actual revenues set forth by management and the Compensation
Committee for each applicable year (each compared to the revenues and other
items projected in the Yearly Plan). Pezzola shall be entitled to receive an
additional annual bonus based on his performance and that of the Company each
year as determined by the Board of this Corporation,
or its Compensation Committee. The bonus shall be prorated should Pezzola's
employment terminate prior to the full calendar year.
d. STOCK OPTIONS. Pezzola shall be eligible for stock options that may
be awarded by the Corporation, from time to time, in recognition of Pezzola's
contribution to the Corporation's success.
e. VACATION. Pezzola shall accrue paid vacation at the rate of
twenty-five (25) days for each twelve (12) months of employment. Pezzola shall
be compensated at his usual rate of compensation during any such vacation.
Pezzola shall be entitled to paid holidays as generally given by the
Corporation. Pezzola shall receive sick leave or disability leave in accordance
with the terms of the Corporation's standard sick leave or disability leave
policy.
f. BENEFITS. During the employment term, Pezzola and his dependents
shall be entitled to participate in any group plans or programs maintained by
the Corporation for any employees relating to group health, disability, life
insurance and other related benefits as in effect from time to time. Pezzola
shall also be entitled to Director and Officer ("D&O") insurance in such amounts
and coverage and such indemnification provisions as are afforded other officers
and directors of the Corporation. Benefits under this Section 3.f. will be paid
by the Corporation.
g. EXPENSES. The Corporation shall reimburse Pezzola for his normal and
reasonable expenses incurred for travel, entertainment and similar items in
promoting and carrying out the business of the Corporation in accordance with
the Corporation's general policy as adopted by the Corporation's management from
time to time. In addition, Pezzola shall be reimbursed for the reasonable costs
associated with one cellular telephone and shall be entitled reimbursement for
such reasonable continuing professional education, memberships and
certifications as are deemed normal and appropriate for General Counsel. As a
condition of payment or reimbursement, Pezzola agrees to provide the Corporation
with copies of all available invoices and receipts, and otherwise account to the
Corporation in sufficient detail to allow the Corporation to claim an income tax
deduction for such paid item, if such item is deductible. Reimbursements shall
be made on a monthly, or more frequent, basis.
4. CONFIDENTIALITY AND COMPETITIVE ACTIVITIES. Pezzola agrees that during the
employment term he is in a position of special trust and confidence and has
access to confidential and proprietary information about the Corporation's
business and plans. Pezzola agrees that he will not directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, or in any similar individual or
representative capacity, engage or participate in any business that is in
competition, in any manner whatsoever, with the Corporation. Notwithstanding
anything in the foregoing to the contrary, Pezzola shall be allowed to invest as
a shareholder in publicly traded companies, or through a venture capital firm or
an investment pool.
5. TRADE SECRETS.
a. SPECIAL TECHNIQUES. It is hereby agreed that the Corporation has
developed or acquired certain products, technology, unique or special methods,
manufacturing and assembly processes and techniques, trade secrets, special
written marketing plans and special customer arrangements, and other proprietary
rights and confidential information and shall during the employment term
continue to develop, compile and acquire said items (all hereinafter
collectively referred to as the "Corporation's Property"). It is expected that
Pezzola will gain knowledge of and utilize the Corporation's Property during the
course and scope of his employment with the Corporation, and will be in a
position of trust with respect to the Corporation's Property.
b. CORPORATION'S PROPERTY. It is hereby stipulated and agreed that the
Corporation's Property shall remain the Corporation's sole property. In the
event that Pezzola's employment is terminated, for whatever reason, Pezzola
agrees not to copy, make known, disclose or use, any of the Corporation's
Property without the Corporation's prior written consent. In such event, Pezzola
further agrees not to endeavor or attempt in any way to interfere with or induce
a breach of any prior proprietary contractual relationship that the Corporation
may have with any employee, customer, contractor, supplier, representative, or
distributor for nine (9) months after any termination of this Agreement. Pezzola
agrees upon termination of employment to deliver to the Corporation all
confidential papers, documents, records, lists and notes (whether prepared by
Pezzola or others) comprising or containing the Corporation's Property. Pezzola
recognizes that violation of covenants and agreements contained in this Section
5 may result in irreparable injury to the Corporation which would not be fully
compensable by way of money damages.
6. TERMINATION.
a. GENERAL. The Corporation may terminate this Agreement without cause,
on ninety (90) days written notice. Pezzola may voluntarily terminate his
employment hereunder upon ninety (90) days' advance written notice to the
Corporation.
b. TERMINATION FOR CAUSE. The Corporation may immediately terminate
Pezzola's employment at any time for cause. Termination for cause shall be
effective from the receipt of written notice thereof to Pezzola specifying the
grounds for termination and all relevant facts. Cause shall be deemed to
include: (i) material neglect of his duties or a significant violation of any of
the provisions of this Agreement, which continues after written notice and a
reasonable opportunity (not to exceed thirty (30) days) in which to cure; (ii)
fraud, embezzlement, defalcation or conviction of any felonious offense; or
(iii) intentionally imparting confidential information relating to the
Corporation or any of the Corporation's subsidiaries, or their business, to
competitors or to other third parties other than in the course of carrying out
his duties hereunder. The Corporation's exercise of its rights to terminate with
cause shall be without
prejudice to any other remedy it may be entitled at law, in equity, or under
this Agreement . c. TERMINATION UPON DEATH OR DISABILITY. This
Agreement shall automatically terminate upon Pezzola's death. In addition, if
any disability or incapacity of Pezzola to perform his duties as the result
of any injury, sickness, or physical, mental or emotional condition continues
for a period of thirty (30) business days (excluding any accrued vacation)
out of any one hundred twenty (120) calendar day period, the Corporation may
terminate Pezzola's employment upon written notice. Payment of salary to
Pezzola during any sick leave shall only be to the extent that Pezzola has
accrued sick leave or vacation days. Pezzola shall accrue sick leave at the
same rate generally available to the Corporation's employees. x.
XXXXXXXXX PAY. If this Agreement is terminated by the Corporation without
cause pursuant to Section 6.a. (above) the Corporation shall pay Pezzola a
severance fee equal to the greater of (a) the full amount of the compensation
that he could have expected under this Agreement, as and when payable under
this Agreement, without deduction except for tax withholding amounts, through
the end of the term; or (b) nine (9) months of his then-current salary
without bonus, subject to tax withholding amounts. If this Agreement is
terminated by the Corporation for cause pursuant to Section 6.b, the
Corporation shall pay to Pezzola a severance fee equal to three (3) months of
his then-current salary without bonus, subject to tax withholding amounts, in
exchange for a release as to any and all claims Pezzola may have against the
Corporation. There shall be a three (3) month severance in the event that
this Agreement is terminated voluntarily by Pezzola. During the time period
for which Pezzola is receiving severance pay, he shall remain as an employee
of the Corporation in a non-policy making role, and his options shall
continue to vest.
7. CORPORATE OPPORTUNITIES.
a. DUTY TO NOTIFY. In the event that Pezzola, during the employment
term, shall become aware of any material and significant business opportunity
directly related to any of the Corporation's significant businesses, Pezzola
shall promptly notify the Corporation's Chairman of the Board of such
opportunity. Pezzola shall not appropriate for himself or for any other person
other than the Corporation, or any affiliate of the Corporation, any such
opportunity unless, as to any particular opportunity, the Board of Directors of
the Corporation fails to take appropriate action within thirty (30) days.
Pezzola's duty to notify the Corporation and to refrain from appropriating all
such opportunities for thirty (30) days shall neither be limited by, nor shall
such duty limit, the application of the general law of California relating to
the fiduciary duties of an agent or employee.
b. FAILURE TO NOTIFY. In the event that Pezzola fails to notify the
Corporation of, or so appropriates, any such opportunity without the express
written consent of the Corporation,
Pezzola shall be deemed to have violated the provisions of this Section
notwithstanding the following:
i. The capacity in which Pezzola shall have acquired such
opportunity; or
ii. The probable success in the Corporation's hands of such
opportunity.
8. MISCELLANEOUS.
a. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties with respect to the subject matters
herein, and supersedes and replaces any prior agreements and understandings,
whether oral or written between them with respect to such matters. The
provisions of this Agreement may be waived, altered, amended or repealed in
whole or in part only upon the written consent of both parties to this
Agreement.
b. NO IMPLIED WAIVERS. The failure of either party at any time to
require performance by the other party of any provision hereof shall not affect
in any way the right to require such performance at any time thereafter, nor
shall the waiver by either party of a breach of any provision hereof be taken or
held to be a waiver of any subsequent breach of the same provision or any other
provision.
c. PERSONAL SERVICES. It is understood that the services to be
performed by Pezzola hereunder are personal in nature and the obligations to
perform such services and the conditions and covenants of this Agreement cannot
be assigned by Pezzola. Subject to the foregoing, and except as otherwise
provided herein, this Agreement shall inure to the benefit of and bind the
successors and assigns of the Corporation.
d. SEVERABILITY. If for any reason any provision of this Agreement
shall be determined to be invalid or inoperative, the validity and effect of the
other provisions hereof shall not be affected thereby, provided that no such
severability shall be effective if it causes a material detriment to any party.
e. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, applicable to contracts
between California residents entered into and to be performed entirely within
the State of California.
f. NOTICES. All notices, requests, demands, instructions or other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given upon delivery, if
delivered personally, or if given by prepaid telegram, or mailed first-class,
postage prepaid, registered or certified mail, return receipt requested, shall
be deemed to have been given seventy-two (72) hours after such delivery, if
addressed to the other party at the addresses as set forth on the signature page
below. Either party hereto may change the address to which such communications
are to be directed by giving written notice to the other party hereto of such
change in the manner above provided.
g. MERGER, TRANSFER OF ASSETS, OR DISSOLUTION OF THE CORPORATION. This
Agreement shall not be terminated by any dissolution of the Corporation
resulting from either merger or consolidation in which the Corporation is not
the consolidated or surviving corporation or a transfer of all or substantially
all of the assets of the Corporation. In such event, the rights, benefits and
obligations herein shall automatically be assigned to the surviving or resulting
corporation or to the transferee of the assets.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PHASECOM, INC. XXXXXXX X. XXXXXXX
a Delaware corporation 00 Xxxxxxxxx Xxxxx
00000 Xxxxxxx Xxxxx Xxxx., Xxx. 000 Xxxxxxx, XX 00000
Xxxxxxxxx, XX 00000
By: /s/ Xxxxxx Xxxx /s/ Xxxxxxx X. Xxxxxxx
------------------------------- ---------------------------
Xxxxxx Xxxx, Chief Executive (Signature)
Officer
