EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this the 1st day of July, 2003, by and between
Breda Telephone Corp., an Iowa Corporation, hereinafter referred to as "Breda",
and Xxx Xxxxxxxx, the Chief Operations Officer and Co-Chief Executive Officer,
hereinafter referred to as "Xxx".
WHEREAS, Xxx is presently employed by Breda pursuant to an Employment
Agreement dated the 1st day of April, 2002, and
WHEREAS, the parties hereto desire to terminate that agreement and enter
into a new agreement based on the terms and conditions set forth below.
NOW, therefore in consideration of the mutual covenants and obligations
hereinafter set forth, the parties agree as follows:
1. Termination of Old Employment Agreement. The parties hereto agree that
the old Employment Agreement shall be terminated concurrently with the execution
of this agreement and shall be of no further force or effect. The parties hereto
waive and release all rights that they may have under the old Employment
Agreement as of the date hereof.
2. Employment and Duties. Breda employs Xxx in the capacity as Chief
Operations Officer and Co-Chief Executive Officer, subject to the control of the
Board of Directors. Xxx shall perform such other and additional duties as shall
be assigned to him from time to time by such Board of Directors.
3. Compensation. During the term of this agreement, Breda shall pay Xxx a
salary and bonus as follows:
(a) Salary. Bob's yearly salary for the year beginning the 1st day
of January, 2003, to the 31st day of December, 2003, shall be
$87,500.00. Bob's yearly salary for the year beginning the 1st
day of January, 2004, to the 31st day of December, 2004, shall
be $90,000.00. Bob's yearly salary for the year beginning the
1st day of January, 2005, to the 31st day of December, 2005,
shall be $92,500.00. Bob's yearly salary will be payable in
accordance with Breda's regular payroll procedures.
(b) Bonus. The system for determining a bonus for Xxx has been
established by the Board of Directors. For the year beginning
the 1st day of January, 2003, and ending the 31st day of
December, 2003, a copy of the procedure is attached hereto and
marked as "Attachment A", and made a part hereof. The final
determination as to the amount of the bonus rests solely in
the discretion of the Board of Directors. However, the Board
does hereby agree that the methodology and procedures will
follow the general guidelines as outlined in the "Attachment
A".
E-1
(c) Additional Bonus. The year beginning the 1st day of January,
2004, and ending the 31st day of December, 2004, and for the
year beginning the 1st day of January, 2005, and ending the
31st day of December, 2005, the amount of bonus that Xxx can
earn will increase by 5% to 25% of his annual salary. This
additional bonus will be determined by measuring (i) cash flow
generated from operations; and (ii) value added calculations.
4. Other Employee Benefits. Xxx shall be entitled to all employee benefits
extended, from time to time, to all full time employees of Breda.
5. Extent of Service. Xxx shall devote his entire attention and energy to
the business and affairs of Breda, and should not be engaged in any other
business activity, whether or not such business activity is a pursuit for gain,
profit or other pecuniary advantage, unless Breda consents to Bob's involvement
in such business activity. This restriction shall not be construed as preventing
Xxx from investing his assets in a form or manner that would not require Bob's
services in the operation of any of the company in which such investments are
made.
6. Term. The term of this agreement shall be for three years, beginning on
the 1st day of January, 2003, and ending on the 31st day of December, 2005.
7. Termination Without Cause. Breda may terminate this agreement at any
time, without cause, by giving thirty (30) days written notice to Xxx. In that
event, if requested by Xxxxx, Xxx shall continue to render his services and
shall be paid his regular compensation up to the date of termination. In
addition, Xxx shall be paid on the date of termination the severance allowance
equal to the amount remaining to be paid under this contract.
Xxx xxx terminate this agreement, at any time, by giving sixty (60) days
notice to Breda. In that event, Breda shall pay Xxx his compensation up to the
date of termination. Xxx shall not be entitled to any severance payment and will
not be considered for any performance upon his voluntary termination.
8. Termination for Cause. Breda may terminate this agreement for cause
upon five (5) days written notice to Xxx stating the reason for said
termination. Matters which would be considered terminable for cause would
include, but not be limited to:
(a) Fraud or theft;
(b) Falsifying records;
(c) Refusal to carry out a specific order of the Board of
Directors;
(d) Abuse, discrimination, or harassment of another employee;
(e) Unauthorized dissemination of records or information;
(f) Divulging confidential information;
(g) Possession of illegal drugs or weapons while on Breda
property;
(h) Conviction of a crime, the nature of which would be calculated
to render an employee undesirable as a co-manager and
detrimental to the best interest of the company; and
E-2
(i) Using or possessing intoxicants or narcotics of any kind while
on company premises or being at work under the influence of
such substances.
9. Illness or disability. If Xxx is absent from his employment by reason
of illness or other incapacity for more than twenty-six (26) consecutive weeks,
Breda may, after such twenty-six (26) consecutive weeks, but only if Xxx then
fails to return to active employment with Breda, terminate Bob's employment by
furnishing him with notice of termination. Breda shall pay Xxx compensation
during any period of illness or incapacity in accordance with Breda's sick pay
policy then in effect.
10. Death. If Bob's employment terminates by reason of his death, Breda
shall only be obligated to make the payments required under its pension plan.
11. Restrictive Covenants. During the term of this agreement, and for a
period of one (1) year hereafter, Xxx shall not, either as an individual or on
his own account, or as a partner, joint venture, employee, agent, officer,
director or shareholder, directly or indirectly (a) enter into or engage in any
business competitive with that of Breda within fifty (50) mile area in which
Breda is then doing business; and (b) solicit or attempt to solicit any of
Breda's customers with the intent or purpose to perform services for such
customers which are the same or similar to those provided to the customer by
Breda, or to sell to such customers goods which are the same or similar to those
provided to customers by Breda.
12. Confidential Information. Xxx acknowledges and agrees that all
information of a technical or business nature, such as know how, trade secrets,
business plans, data, processes, techniques, customer information, inventions,
discoveries and devices, acquired by Xxx in the course of his employment under
this agreement, is valuable, proprietary information of Breda. Xxx agrees that
such confidential information whether in written, verbal or model form shall not
be disclosed to anyone outside of the employment of Breda, without Breda's
written consent.
13. Return of Documents. Upon the termination of Bob's employment with or
without cause, Xxx shall immediately return and deliver to Breda and shall not
retain any originals or copies of any books, papers, price lists, customer
contacts, bids, customer lists, files, notebooks or any other documents
containing any of the confidential information or otherwise relating to Bob's
performance of duties under this agreement. Xxx further acknowledges and agrees
that all such documents are Breda's sole and exclusive property.
14. Expenses. Xxx is authorized to incur only such expenses for promoting
and continuing Breda's business as Breda may from time to time deem reasonable
and appropriate. Breda will reimburse Xxx for all such expenses upon Bob's
presentation of receipts and an itemized accounting therefore.
15. Construction of Agreement. This agreement shall be interpreted,
constructed and governed by and under the laws of the State of Iowa. If any
provision or clause of this agreement or the application thereof to either party
is held to be invalid by a court of competent
E-3
jurisdiction, then such provision shall be severed therefrom and such invalidity
shall not effect any other provision of this agreement.
(a) In the event that the provisions of paragraph 11 shall ever be
deemed to exceed the time or geographical limits permitted by
applicable law, then such provision shall be reformed to the
maximum time and geographical limits permitted by applicable
law.
(b) The representations, warranties, covenants and agreements of
the parties shall be revived continuously during the Term, or
in consideration of the compensation paid to Xxx, and shall
survive the termination of this agreement.
(c) This agreement contains the entire agreement between the
parties hereto with respect to the subject matter hereof, and
there are no understandings, representations or warranties of
any kind between the parties except as expressly set forth
herein.
(d) Neither this agreement nor any right or obligation of Xxx
hereunder may be assigned by Xxx without the prior written
consent of Breda.
(e) Subject thereto, this agreement and the covenants and
conditions herein contained shall enure to the benefit of and
shall be binding upon the parties hereto and their respective
successors and permitted assigns.
BREDA TELEPHONE CORP.
7/1/03 /S/ Xxxxxxxx Xxxxxxxx
------------- --------------------------------
Date By Xxxxxxxx Xxxxxxxx, President
7/1/03 /S/ Xxx Xxxxxxxx
------------- --------------------------------
Date Xxx Xxxxxxxx
E-4
"Attachment A"
Performance Bonus Rating
Calendar Year Results
Title: COO / Co-CEO
Period in Review: January 1, 2003 to December 31, 2003, with bonuses
certified by May 1, 2003
Eligibility: COO / Co-CEO on payroll through December 31st of each year
Initial Reviewers: Board of Directors Compensation Committee
Approval: Full Board of Directors
Payout Timing: Following Annual Stockholders' Meeting
Company Performance Measures
Key Stakeholders: Below As Expected Above
(0 pts.) (1 pts.) (2 pts.)
Prioritize time to be more responsive to
business and management decisions _______ __________ ________
Develop COO and CFO position to take more
responsibility for day-to day operation _______ __________ ________
Employees _______ __________ ________
Board of Directors
Maintain operating revenue _______ __________ ________
Pursuit of new products, services and
opportunities _______ __________ ________
Develop company wide goals _______ __________ ________
Below As Expected Above
(0 pts.) (3 pts.) (6 pts.)
Develop successful program for Xxxxxxx
which will include successful launching
of Voice in Xxxxxxx Project _______ __________ ________
Total Performance Bonus _______ __________ ________
Max Bonus Potential 0% 10% 20%
E-5
Comments:_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Key Manager Annual Performance Bonus recommendation for the year of _________,
by the Compensation Committee Directors (signatures / dates below).
_____________________________ ________________________________
_____________________________ ________________________________
E-6
