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EXHIBIT 10.45
EMPLOYMENT AGREEMENT
This Agreement ("Agreement") is made and entered into effective the
21st day of June, 1999, by and between XXX.Xxx, Inc., a Delaware corporation
(the "Company") and Xxxx Xxxxxxxxx (the "Executive").
WHEREAS, the Company is engaged in the business of developing and
providing telecommunications, data transmission, internet, cable television and
other services to truckstops, truck drivers and truck fleet owners; and
WHEREAS, Employee desires to work for the Company under the terms of
this Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Executive and the Company agree as follows:
1. Term of Agreement. The term of this Agreement shall commence as of
the date and year first above written (the "Effective Date") and shall remain in
effect for the duration of the Executive's employment with the Company
(hereinafter "Term of Agreement"). The Executive's employment with the Company
and the Term of Agreement shall continue until terminated with or without cause
by either party immediately upon giving the other party written notice thereof,
or upon verbal notice confirmed thereafter in writing. Nothing herein shall be
understood as modifying or otherwise altering the Executive's at-will
relationship or in any other way creating a contract of employment with the
Executive for any stated term.
2. Position and Responsibilities. The Executive shall be employed as
Vice President, Sales of the Company. As Vice President, Sales, the Executive
shall report to the President of the Company and initially shall be responsible
for all aspects of sales and involved in formulating the marketing strategy of
the Company. Subject to Section 5(e)(ii), the Company may change the Executive's
duties and responsibilities from time to time in its sole discretion. While so
employed, the Executive agrees to devote his full working time and attention to
carrying out his duties and responsibilities under this Agreement and shall use
his best efforts, skills and abilities to further the interests of the Company.
While employed by the Company, the Executive may not work for any other entity,
in any capacity, without the prior express written consent of the Company. The
Company hereby consents to the following activities, provided such activities do
not, as determined by the Company in its discretion, interfere with the
Executive's performance of his obligations to the Company: (i) limited
consulting services for Freightliner and XX Xxxxxxxx; and (ii) service for
civic, educational or charitable organizations and trade associations. In
addition: (i) Executive may serve on the board of directors of Micro Modulation
Data Systems; and (ii) Executive may, with the prior consent of the Company not
to be unreasonably withheld, serve on the board of directors or board of
advisors of one additional corporation not engaged in the business of developing
or providing telecommunications, data transmission, internet, cable television
or other competitive services to
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truckstops, truck drivers or truck fleet owners. The Executive agrees to comply
with all policies, standards and regulations of the Company now existing or
hereafter promulgated.
3. Location. The Executive acknowledges that he will work out of the
Company's headquarters in Coral Springs, Florida. The Executive further
acknowledges that the Company may, in its discretion, change the location at
which the Executive is required to perform his duties under this Agreement. In
the event the Company does require the Executive to change his residence during
the Term of Agreement, the Company shall reimburse the Executive for reasonable
moving expenses, including reasonable realtor fees incurred in selling
Executive's home in the Coral Springs area, moving expenses for Executive's
household items, and other expenses associated with the relocation.
4. Compensation and Related Matters.
(a) Salary. During the Term of Agreement, the Company shall
pay to the Executive a salary at a rate of One Hundred Sixty Thousand Dollars
($160,000.00) per annum in equal installments on the fifteenth and last day of
each month in arrears, which salary may be increased in the sole discretion of
the Compensation Committee of the Board of Directors (the "Compensation
Committee") from time to time based on periodic performance reviews (the "Base
Salary").
(b) Bonus. Beginning on July 1, 1999, for each fiscal year
during the Term of Agreement, the Executive shall be eligible for an incentive
bonus for such fiscal year (a "Bonus") upon satisfaction (as determined by the
Compensation Committee in its discretion) of goals and objectives specified by
the Chief Executive Officer of the Company. The goals and objectives for the
fiscal year beginning July 1, 1999 shall be mutually agreed to by the Executive
and the Compensation Committee prior to June 30, 1999 or as soon as
administratively possible thereafter. The Executive's Bonus shall be targeted at
forty percent (40%) of Executive's then-current Base Salary (the "Target
Amount") and calculated based on the guidelines set forth in Exhibit A.
Notwithstanding the foregoing, the Executive's Bonus for the fiscal year
beginning July 1, 1999 shall be at least 20% of Executive's Base Salary.
(c) Stock Options. The Company shall grant a nonqualified
stock option to the Executive substantially in the form of the nonqualified
stock option award agreement attached hereto as Exhibit B, which generally
provides that the Company shall grant Executive nonqualified stock options for
80,000 shares of common stock at an exercise price of Five Dollars ($5) per
share. The options will vest subject to Executive's continued employment with
the Company, the terms of the Company's equity compensation plan and the award
agreement evidencing the options at the following schedule: 16,000 shares will
vest on the Effective Date; an additional 16,000 share will vest on the first
anniversary of the Effective Date; an additional 16,000 shares will vest on the
second anniversary of the Effective Date, an additional 16,000 shares will vest
on the third anniversary of the Effective Date; and the last 16,000 shares will
vest on the fourth anniversary of the Effective Date. In addition, to the extent
that other senior-level management of the Company are granted stock options
during the Term of Agreement, the Board will consider granting additional
options to the Executive in the sole discretion of the Board.
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(d) Moving and Related Expenses. The Company shall reimburse
the Executive for reasonable moving and related expenses associated with the
Executive's relocation to the Coral Springs, Florida area, provided such
expenses are incurred and accounted for in accordance with the policies and
procedures established by the Company, as follows: (i) reasonable realtor fees
incurred in selling the Executive's house in Oregon; (ii) moving expenses for
the Executive's household items; (iii) travel expenses in transporting the
Executive and his immediate family to Florida; and (iv) a lump sum payment of
$15,000 for living and miscellaneous expenses associated with the relocation.
Reimbursements under subsections (i), (ii) and (iii) of this Section shall be
paid within ten (10) days of the Executive providing the Company with
documentation in a form reasonably satisfactory to the Company; the payment
provided for in subsection (iv) shall be made to the Executive within 15 days of
relocation to Florida. All amounts paid to the Executive under this Section 4(d)
shall be grossed up as necessary to compensate the Executive for any taxes
incurred by Executive with respect to the receipt of the same.
(e) Business Expenses. During the Term of Agreement, the
Company shall reimburse the Executive for all reasonable business expenses
incurred by the Executive in performing services hereunder, including travel
expenses while away from home on business, provided that such expenses are
incurred and accounted for in accordance with the policies and procedures
established by the Company.
(f) Vacation. In addition to all paid Company holidays, the
Executive shall be entitled to up to fifteen (15) business days paid vacation in
each full calendar year and accrued in accordance with Company policy. Any
vacation days accrued, but not used, in any calendar year shall be forfeited
without payment therefor. The Executive shall be entitled to a pro rata portion
of his vacation entitlement for the calendar year 1999.
(g) Other Benefits. The Executive shall be eligible to
participate in the Company's retirement and welfare benefit plans under the
terms and conditions established by the applicable plan documents.
(h) Joint Venture. The Company acknowledges that Executive
currently has relationships with Freightliner and XX Xxxxxxxx (hereinafter
collectively referred to as the "Identified Parties") and that the Identified
Parties may be interested in forming a joint venture or entering into various
new projects with the Company. In the event the Company enters into a
transaction with the Identified Parties within six (6) months of the Effective
Date, the Company and the Executive will negotiate an appropriate economic
reward for the Executive's services in creating such new opportunity.
5. Termination.
(a) Termination during the Term of Agreement. The Company
shall have the right to terminate the Executive's employment at any time with or
without Cause (as
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defined in Section 5(e) below). The Executive shall have the right to terminate
his employment at any time with or without Good Reason (as defined in Section
5(e) below).
(b) Termination without Cause; Termination for Good Reason.
During the Term of Agreement, if the Company terminates the employment of the
Executive without Cause (as defined in Section 5(e) below, including, but not
limited to, termination without Cause after a change in control of the Company)
or the Executive terminates his employment for Good Reason (as defined in
Section 5(e) below), the Term of Agreement shall terminate immediately
thereafter and:
(i) the Company shall pay the Executive the portion
of his Base Salary in effect at the time of termination as he may be entitled to
receive for services rendered prior to the date of such termination;
(ii) the Company shall pay the Executive for any
accrued but unused vacation;
(iii) subject to Section 6 and provided that the
termination occurs within twenty-four (24) months of the Effective Date, the
Company shall pay the Executive, at the end of each month for the first six (6)
months following the date on which the Executive executes the release described
in Section 6 below (the "Severance Period"), an amount equal to one-twelfth
(1/12) of his Base Salary;
(iv) subject to Section 6 and provided that the
termination occurs within twenty-four (24) months of the Effective Date, if the
Executive timely elects to continue coverage under the Company's health care
plan, pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, ("COBRA"), the Company shall pay Employee at the end of each month
during the Severance Period an amount equal to the monthly premium for the COBRA
coverage so elected. At such time as the Executive becomes eligible for coverage
under another employer's group health plan, all benefits under this Section
5(b)(iv) shall cease immediately. If the Executive fails to notify the Company
that he is eligible for other health coverage within thirty (30) days of
becoming eligible for such coverage, the Executive shall be considered in breach
of this Agreement and shall be required to repay to the Company all payments
made under this Section 5(b)(iv);
(v) subject to Section 6 and provided that the
termination occurs within twenty-four (24) months of the Effective Date,
notwithstanding anything to the contrary in this Agreement, the nonqualified
stock option in Section 4(c) shall continue to vest as if the Executive were
actively employed during the Severance Period; and
(vi) subject to Section 6 and provided that the: (i)
termination occurs after the second anniversary of the Effective Date; (ii)
Executive relocates to the Pacific Northwest within six (6) months of said
termination; and (iii) no other entity or organization is providing Executive
with relocation assistance, the Company shall reimburse the Executive for
reasonable moving and related expenses associated with the Executive's
relocation to the
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Pacific Northwest, provided such expenses are incurred and accounted for in
accordance with the policies and procedures established by the Company, as
follows: (a) reasonable realtor fees incurred in selling the Executive's house
in Florida; (b) moving expenses for the Executive's household items; (c) travel
expenses in transporting the Executive and his immediate family to the Pacific
Northwest. Reimbursements under subsections (i), (ii)) and (iii) of this Section
5(b)(vi) shall be paid within ten (10) days of the Executive providing the
Company with documentation in a form reasonably satisfactory to the Company. All
amounts paid to the Executive under this Section 5(b)(vi) shall be grossed up as
necessity to compensate the Executive for any taxes incurred by Executive with
respect to the receipt of the same.
(c) Termination for Death, Retirement or Disability. During
the Term of Agreement, if the Executive's employment is terminated by the death,
Disability or Retirement (as defined in Section 5(e) below) of the Executive,
the Term of Agreement shall terminate immediately thereafter and the Company
shall pay the Executive or his beneficiary such compensation as is set forth in
Sections 5(b)(i) and 5(b)(ii) herein.
(d) Termination by the Executive without Good Reason or
Termination by the Company for Cause. During the Term of Agreement, if the
Executive terminates his employment without Good Reason (as defined in Section
5(e) below), or the Company terminates the Executive's employment for Cause (as
defined in Section 5(e) below), the Term of Agreement shall terminate
immediately thereafter and the Company shall pay the Executive or his
beneficiary such compensation as is set forth in Sections 5(b)(i) and 5(b)(ii)
herein.
(e) Definitions.
(i) Cause. For purposes of this Agreement, the term
"Cause" shall be limited to the following events: (i) theft, embezzlement or
other similar act by the Executive of any tangible or intangible asset of the
Company or any customer, supplier or investor of the Company if, in the good
faith determination of the Board, such act causes or is likely to cause material
damage to the business or reputation of the Company; (ii) commission of a
felony, or other crime involving moral turpitude by the Executive, (whether or
not the Executive is prosecuted and convicted) if, in the good faith
determination of the Board, such act causes or is likely to cause material
damage to the business or reputation of the Company; or (iii) willful failure by
the Executive to follow the instructions of the Board, to the extent such
instructions are reasonably related to the business of the Company, are given in
good faith to promote the interest of the Company, would not require the
Executive to commit any illegal act and are not given to provide the Company
with cause for terminating the Executive, and if such failure has continued for
thirty (30) days after Executive has been notified in writing by the Company of
the nature of Executive's failure to follow such instructions. This definition
of Cause shall not create in the Executive any right to employment or cause of
action on account of termination of the Executive's employment with the Company
without Cause.
(ii) Good Reason. For purposes of this Agreement, the
term "Good Reason" shall be limited to the following events: (i) a material
breach by the Company of this
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Agreement; or (ii) a material diminution in the Executive's title, duties or
responsibilities, provided that the Executive has given the Company written
notice of his objection to this diminution and the Company has failed to adjust
the Executive's title, duties or responsibilities to correct any such diminution
within thirty (30) days.
(iii) Disability. For purposes of this Agreement, the
Executive's employment with the Company shall be deemed to have terminated on
account of "Disability" on the date on which the Executive is eligible to
receive, and commences receipt of, benefits under the Company's program of
long-term disability insurance.
(iv) Retirement. For purposes of this Agreement, the
term "Retirement" means the Executive's election to separate from service with
the Company upon or after having attained the normal retirement age specified in
the Company's tax-qualified retirement plan.
6. Condition on Payment of Benefits: The Executive agrees that he shall
be entitled to payments and benefits under the terms of Section 5(b)(iii),
5(b)(iv) and 5(b)(v) above, as applicable, only if he executes a complete and
general release in a form substantially comparable to the release set forth in
Exhibit C hereto and incorporated herein by reference or in such other form as
is determined to be necessary or desirable by the Company in its discretion,
which release shall at least contain a release by the Executive and any
beneficiary of the Executive entitled to receive all or any portion of the
benefits specified in such Sections of any claims arising from the Executive's
employment or associations with the Company or otherwise existing against the
Company and its officers, directors, agents, employees, shareholders, and
representatives at the time of execution of the release.
7. Representations.
(a) The Executive warrants and represents that the Executive's
performance of all of the terms of this Agreement and as an employee does not
and will not breach any agreement to keep in confidence proprietary information
acquired by the Executive in confidence or in trust prior to the Executive's
employment by the Company. The Executive represents that the Executive has not
entered into, and agrees not to enter into, any agreement either oral or written
in conflict herewith.
(b) The Executive warrants and represents that the Executive
has not brought and will not bring with the Executive to the Company, or use in
the performance of the Executive's responsibilities for the Company, any
materials or documents of a former employer which are not generally available to
the public, unless the Executive has obtained written authorization from the
former employer or other owner for their possession and use and provided the
Company with a copy of such authorization.
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(c) The Executive understands that during the Executive's
employment for the Company the Executive is not to breach any obligation of
confidentiality that the Executive has to a former employer or any other person
or entity.
8. Other Agreements. This Agreement supersedes all prior agreements and
understandings, oral or written, between the Company and the Executive with
respect to the subject matter hereof. Notwithstanding the foregoing, Executive
will adhere to and honor all obligations to the Company as described in the
Confidentiality and Assignment of Inventions Agreement attached hereto as
Exhibit D and executed simultaneously herewith.
9. Amendment. No change, modification, termination or attempted waiver
of any of the provisions of this Agreement shall be binding upon any party
hereto unless reduced to writing and signed by the party against whom
enforcement is sought.
10. Assignment. The Company shall have the right to assign this
contract to a successor or surviving entity, and all covenants and agreements
hereunder shall inure to the benefit of and be enforceable by or against its
successors and assigns. The Executive's obligations under this Agreement shall
not be transferable by assignment or otherwise by the Executive and any attempt
to do any of the foregoing shall be null and void.
11. Counterparts. Any number of counterparts of this Agreement may be
signed and delivered, each of which shall be considered an original and all of
which, together, shall constitute one and the same instrument.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without reference to its
conflict of law provisions.
13. Venue. Any litigation under this Agreement may be brought by the
Company in the State of Florida, notwithstanding that the Executive is not at
that time a resident of the State of Florida and cannot be served process within
that state. The Executive hereby irrevocably consents to the jurisdiction of the
courts of Florida (whether federal or state courts) over his or her person.
14. Binding Effect. The provisions of this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their heirs,
assigns and successors in interest.
15. Withholding of Taxes. The Company may withhold from any payments
made under this Agreement all federal, state, city, or other taxes as shall be
required pursuant to any law, regulation or ruling.
16. Headings. The headings contained in this Agreement are for
reference purposes only and shall not be deemed interpretation of this
Agreement.
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17. Representation. The Executive represents and warrants that the
performance of the Executive's duties under this Agreement, and the execution of
this Agreement by him, will not violate any agreement between the Executive and
any other person, firm, partnership, Company or any other organization.
18. Notices. Any notice given to either party hereto shall be in
writing and shall be deemed to have been given when delivered personally or sent
by certified or registered mail, postage prepaid, return receipt requested, duly
and properly addressed to the party concerned at the address indicated below or
to such changed address as party may subsequently give notice of:
If to the Company:
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
If to the Executive, to Executive's last known address as shown on the
Company's records, which currently is listed as
X.X. Xxx 0000
Xxxxx Xxxxxxx, Xxxxxxx 00000
with a facsimile copy thereof to Executive's counsel at (541)
344-0845 and a further copy to:
X.X. Xxxxxxxxx, Esq.
1165 Xxxxxxx
Xxxxxx, Xxxxxx 00000
19. Arbitration. The parties agree that any and all disputes that they
have with one another which arise out of the Executive's employment or under the
terms of this Agreement shall be resolved through final and binding arbitration,
as specified herein. This shall include, without limitation, disputes relating
to this Agreement, the Executive's employment by the Company or the termination
thereof, claims for breach of contract or breach of the covenant of good faith
and fair dealing, and any claims of discrimination or other claims under any
federal, state or local law or regulation now in existence or hereinafter
enacted and as amended from time to time concerning in any way the subject of
Executive's employment with the Company or its termination. The only claims not
covered by this Section 19 are claims for benefits under the workers'
compensation laws or claims for unemployment insurance benefits, which will be
resolved pursuant to those laws. Binding arbitration will be conducted in
Broward County, Florida, in accordance with the rules and regulations of the
American Arbitration Association. Each party will bear one half of the cost of
the arbitration filing and hearing fees, and the cost of the arbitrator. The
Executive understands and agrees that the arbitration shall be instead of any
civil litigation and that the arbitrator's decision shall be final and binding
to the fullest extent permitted by law and enforceable by any court having
jurisdiction thereof.
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20. Mitigation. The Executive shall not be obligated to seek other
employment in mitigation of the amounts payable pursuant to Sections 5(b)(iii)
and 5(b)(iv) and, except as specifically provided in Section 5(b)(iv), any such
employment obtained by the Executive shall not reduce or affect the amounts
payable under Sections 5(b)(iii) and 5(b)(iv).
21. Waiver of Breach. Any waiver of any breach of this Agreement shall
not be construed to be a continuing waiver or consent to any subsequent breach
on the part either of the Executive or of the Company.
22. Severability. To the extent any provision of this Agreement or
portion thereof shall be invalid or unenforceable, it shall be considered
deleted therefrom and the remainder of such provision and of this Agreement
shall be unaffected and shall continue in full force and effect.
23. Survival. The Executive and the Company agree that the provisions
of Sections 6-23 herein shall survive the termination of this Agreement and the
termination of the Executive's employment hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
THE EXECUTIVE:
/s/ Xxxx Xxxxxxxxx (Seal)
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Xxxx Xxxxxxxxx
THE COMPANY:
XXX.XXX, INC.
By: /s/ Xxxxx Xxxxxxxx
--------------------------------
Xxxxx Xxxxxxxx, President
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EXHIBIT A
Calculation of Bonus
The Executive's entitlement to a Bonus will be calculated based on his
achievement of the Sales Goals and, Corporate Goals and General Goals set by the
Compensation Committee of the Company each year. The portion of the Target
Amount to which the Executive is entitled as a Bonus will be calculated as
follows:
1. Sales Goals. 60% of the Target Amount for a given year will be based
on achievement of Sales Goals. If the Executive achieves from 91% to
100% of the Sales Goals, he will receive at least 60% of the Target
Amount (the "Sales Target Bonus"). In the event the Executive achieves
less than 91% or more than 100% of the Sales Goals, the amount of the
Sales Target will be calculated as follows:
85% or less of Sales Goals: 0% of the Sales Target
86 - 90% of Sales Goals: 86 - 90% of the Sales Target
91 - 100% of Sales Goals: 100% of the Sales Target
101 - 120% of Sales Goals: 125% of the Sales Target
121% or more of Sales Goals: 135% of the Sales Target
2. Corporate Goals. 40% of the Target Amount for a given year will be
based on achievement of Corporate Goals. If the Executive achieves from
91% to 100% of the Corporate Goals, he will receive at least 40% of the
Target Amount (the "Corporate Target"). In the event the Executive
achieves less than 91% or more than 100% of the Corporate Goals, the
amount of the Corporate Target will be calculated as follows:
85% or less of Corporate Goals: 0% of the Corporate Target
86 - 90% of Corporate Goals: 86 - 90% of the Corporate Target
91 - 100% of Corporate Goals: 100% of the Corporate Target
101 - 120% of Corporate Goals: 125% of the Corporate Target
121% or more of Corporate Goals: 135% of the Corporate Target
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