Exhibit 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of July 1, 2005 by and between Wi-Tron,
Inc., a Delaware corporation, with offices located at 00 Xx Xxxxxx Xx, Xxxxxxx,
XX 00000 (the "Company"), and Xxxxxxxxx Xxxxx, an individual residing at 00 Xxxx
Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxx 00000 (the "Executive").
WITNESSETH :
WHEREAS, the Company desires to secure the unique experience, ability and
services of the Executive upon the terms and conditions hereinafter set forth
and to prevent any other competitive business from securing his services;
WHEREAS, the Executive desires to render services to the Company upon the
terms and conditions hereinafter set forth; and
WHEREAS, the Executive desires to release Company from any and all claims
arising from accrued and unpaid compensation due Executive prior to the date of
this Agreement; and
NOW, THEREFORE, the parties mutually agree as follows:
1. Employment. The Company hereby employs Executive and the Executive hereby
accepts such employment, as the Vice President-Business Development of the
Company, subject to the terms and conditions set forth in this Agreement.
2. Duties. The Executive shall serve as Vice President-Business Development of
the Company and shall properly perform such duties as may be assigned to him
from time to time by the Board of Directors of the Company. If requested by the
Company, the Executive shall serve on the Board of Directors or any committee
thereof without additional compensation. During the term of this Agreement, the
Executive shall devote substantially all of his business time to the performance
of his duties hereunder unless otherwise authorized by the Board of Directors.
Executive agrees to be examined annually by a physician at the Company's
expense.
3. Term of Employment. The term of the Executive's employment shall be for a
period commencing on the date hereof through June 30, 2008, subject to earlier
termination by the parties pursuant to Sections 4, 6 and 7 hereof (the "Term").
The Term of this Agreement shall be automatically extended for additional one
(1) year renewals, unless either party notifies to other in writing at least
ninety (90) days prior to the expiration of the then existing Term of its
intention not to extend the Term.
4. Compensation of Executive.
4.1 Salary.
(a) Company shall pay to Executive the following annual compensation for
his services hereunder, less such deductions as shall be required to be withheld
by applicable law and regulations: a base salary of $80,000 per annum (the "Base
Salary"). All salaries payable to Executive shall be paid at such regular
weekly, biweekly or semi-monthly time or times as the Company makes payment of
its regular payroll in the regular course of business.
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(b) Company shall issue to Executive 500,000 shares of the Company's
common stock.
(c) Company shall issue to Executive (i) 300,000 employee incentive stock
options (ISOs) and 200,000 non-qualified stock options (NSO's that vest
immediately at an exercise price of $.20, and additional shares will be granted
during each of the next two years at exercise prices determined at the time of
issuance by the Board of Directors and in accordance with the 2005 Stock Option
Plan.
4.2 Release. The Executive hereby forgives and releases the Company from
any and all claims by Executive against Company arising from any and all accrued
and unpaid salary prior to the date of this Agreement.
4.3 Discretionary Bonus. During the Term and in addition to the annual
salary set forth in Section 4.1 above, the Executive shall be entitled to such
bonus compensation as the Board of Directors of the Company may determine from
time to time in its sole discretion payable in cash, options and/or in capital
stock of the Company ranging between $1.00 and $20,000.
4.4 Expenses. During the Term, the Company shall provide the Executive
with an allowance for all reasonable and necessary business travel expenses and
other bona fide disbursements incurred by the Executive on behalf of the
Company, in performance of the Executive's duties hereunder.
4.5 Benefits. The Executive shall be permitted during the Term to
participate in any hospitalization or disability insurance plans, health
programs, pension plans, bonus plans or similar benefits that may be available
to other executives of the Company to the extent the Executive is eligible under
the terms of such plans or programs. The Company agrees to provide the Executive
with a paid health insurance plan.
4.6 Change of Control.
(a) In the event that there occurs a "Change of Control" (as defined
below) during the term of this Agreement and as a result thereof the Executive
resigns or this Agreement is terminated, the Company expressly agrees that upon
such resignation or termination, the Company shall pay to the Executive a sum
equal to one year salary. As used herein, the term "Change of Control" shall
mean, subject to Section 4.6(b) hereof, either
(i) a sale of all or substantially all of the assets of the Company
other than by way of a public offering of the Company's securities,
(ii) a merger or consolidation of the Company, whereby the holders of
equity securities of the Company prior to the transaction, hold less
than 50% of the total voting power of the surviving corporation, or
(iii) the sale or transfer of shares of the Company by the Company and/or
any one or more of its shareholders, in one transaction or a series
of transactions, to one or more parties under circumstances whereby
the holders of equity securities of the Company prior to the
transaction, hold less than 50% of the total voting power of the
surviving corporation.
(b) Notwithstanding anything set forth herein to the contrary, in the
event that the Executive, as a member of the Company's Board of Directors, votes
in favor of any of the transactions described in either Section 4.7(i) or
4.7(ii) below, then in such event, there shall not be deemed to have occurred a
"Change of Control" for the purposes of this Agreement.
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(c) Change of Control shall not refer in any way to transactions whereby
Xxxx Xxxxx Xxx or his chosen successor was appointed Chief Executive Officer of
the Company and issued Series C Convertible Preferred Stock.
4.7 Acceleration of Compensation. In the event that either: (i) a tender
offer for shares of the Company's Common Stock is made, which tender is not
approved by the Company's Board of Directors and a majority of the Company's
outstanding stock is tendered thereunder, or (ii) a Board of Directors, not
recommended by management is empaneled, then and in either of those events, one
year salary shall be immediately due and payable to the Executive
5. Vacations. The Executive shall be entitled to a vacation of four (4) weeks
per year, during which period his salary shall be paid in full. The Executive
shall take his vacation at such time or times as the Executive and the Company
shall determine is mutually convenient.
6. Disability of the Executive. If the Executive is incapacitated or disabled by
accident, sickness or otherwise (including, without limitation, as a result of
abuse of alcohol or other drugs or controlled substances) so as to render the
Executive mentally or physically incapable of performing the services required
to be performed under this Agreement for a period of ninety (60) consecutive
days or longer or for any one hundred ninety (90) days in any period of three
hundred sixty (360) consecutive days (a "Disability"), the Company may, at that
time or any time thereafter, at its option, terminate the employment of the
Executive under this Agreement immediately upon giving the Executive notice to
that effect. In the event of the Disability of the Executive, the Executive
shall receive severance compensation equal to six months salary. The Company
will provide the Executive with disability insurance.
7. Termination.
7.1 Termination for Cause. The Company may terminate the employment of the
Executive and all of the Company's obligations under this Agreement at any time
for Cause (as hereinafter defined) by giving the Executive notice of such
termination, with reasonable specificity of the details thereof. "Cause" shall
mean (i) the Executive's misconduct could reasonably be expected to have a
material adverse effect on the business and affairs of the Company, (ii) the
Executive's disregard of lawful instructions of the Company's Board of Directors
consistent with the Executive's position relating to the business of the Company
or neglect of duties or failure to act, which, in each case, could reasonably be
expected to have a material adverse effect on the business and affairs of the
Company, (iii) the commission by the Executive of an act constituting common law
fraud, or a felony, or criminal act against the Company or any affiliate thereof
or any of the assets of any of them, (iv) conviction of a crime involving moral
turpitude or (v) the Executive's material breach of any of the agreements
contained herein. A termination pursuant to Section 7.1(i), (ii)or (v) shall
take effect fifteen (15) days after the giving of the notice contemplated hereby
unless the Executive shall, during such fifteen (15) day period, remedy to the
satisfaction of the Board of Directors of the Company the misconduct, disregard
or breach specified in such notice; provided, however, that such termination
shall take effect immediately upon the giving of such notice if the Board of
Directors of the Company shall, in its sole discretion, have determined that
such misconduct, disregard or breach is not remediable (which determination
shall be stated in such notice). A termination pursuant to Section 7.1(iii) or
(iv) shall take effect immediately upon the giving of the notice contemplated
hereby.
7.2 Termination without Cause. The Company may terminate the employment of
the Executive and all of the Company's obligations under this Agreement (except
as hereinafter provided) at any time during the Term without Cause (hereinafter,
"Not for Cause") by giving the Executive written notice of such termination, to
be effective fifteen (15) days following the giving of such written notice.
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7.3 Termination for Good Reason; Resignation. The Executive may (i) resign
or (ii) terminate his employment and all of his obligations under this Agreement
at any time during the Term for Good Reason (as hereinafter defined) by giving
the Company notice of such termination, with reasonable specificity of the
details thereof, to be effective fifteen (15) days following the giving of such
written notice. Good Reason shall mean the occurrence of any of the following
events or conditions:
(i) (A) the assignment to the Executive of any duties materially
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2 of this Agreement, or (B) any
other action by the Company which results in a material diminution in such
position, authority, duties or responsibilities, other than an insubstantial and
inadvertent action which is remedied by the Company promptly after receipt of
notice thereof given by the Executive; or (ii) any failure by the Company to
comply with the provisions of Section 4 or 5 of this Agreement, other than an
insubstantial and inadvertent failure which is remedied by the Company promptly
after receipt of notice thereof given by the Executive; or (iii) the Company's
requiring the Executive to be based at any office or location outside a fifteen
(15) mile radius from the Company's principal executive offices, except for
travel reasonably required in the performance of the Executive's
responsibilities; or (iv) any purported termination by the Company of the
Executive's employment otherwise than as permitted by this Agreement, it being
understood that any such purported termination shall not be effective for any
purpose of this Agreement.
For purposes of this subsection, any good faith determination of Good
Reason made by the Executive shall be conclusive.
For convenience of reference, the date upon which any termination of the
employment of the Executive pursuant to Sections 6 or 7 shall be effective shall
be hereinafter referred to as the "Termination Date".
8. Effect of Termination of Employment.
(a) Upon the termination of the Executive's employment for Cause, neither
the Executive nor the Executive's beneficiaries or estate shall have any further
rights under this Agreement or any claims against the Company arising out of
this Agreement, except the right to receive (i) the unpaid portion of the Base
Salary computed on a pro rata basis to the Termination Date (the "Unpaid Salary
Amount"), and (ii) reimbursement for any expenses for which the Executive shall
not have theretofore been reimbursed, as provided in Section 4.4 (the "Expense
Reimbursement Amount").
(b) Upon the termination of the Executive's employment by the Company Not
for Cause or by the Executive for Good Reason, neither the Executive nor the
Executive's beneficiaries or estate shall have any further rights under this
Agreement or any claims against the Company arising out of this Agreement,
except the right to receive (i) the Unpaid Salary Amount, (ii) the Expense
Reimbursement Amount, and (iii) severance compensation equal to six months
salary.
(c) In the event the Executive resigns from the employment by the Company
prior to the end of the Term, neither the Executive nor the Executive's
beneficiaries or estate shall have any further rights under this Agreement or
claims against the Company arising out of this Agreement except the right to
receive (i) the Unpaid Salary Amount, and (ii) the Expense Reimbursement Amount.
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Notwithstanding the preceding provisions of this Section 8, in the event
the payments to be received by the Executive would constitute an "excess
parachute payment" under the Internal Revenue Code of 1986, and applicable
regulations as then in effect, then such payments shall be reduced accordingly
so as not to constitute an "excess parachute payment."
9. Disclosure of Confidential Information. The Executive recognizes that he has
had and will continue to have access to secret and confidential information
regarding the Company, including but not limited to its customer list, products,
formulae, know-how, and business and marketing plans ("Confidential
Information"). The Executive acknowledges that such information is of great
value to the Company, is the sole property of the Company, and has been and will
be acquired by his in confidence. In consideration of the obligations undertaken
by the Company herein, the Executive will not, at any time, during or after his
employment hereunder, reveal, divulge or make known to any person, any
Confidential Information acquired by the Executive during the course of his
employment. The provisions of this Section 9 shall survive the Executive's
employment hereunder for a period of three years.
10. Covenant Not To Compete.
(a) The Executive recognizes that the services to be performed by him hereunder
are special, unique and extraordinary. The parties confirm that it is reasonably
necessary for the protection of Company that the Executive agree, and
accordingly, the Executive does hereby agree, that he shall not, directly or
indirectly, at any time during the term of the Agreement and the "Restricted
Period" (as defined in Section 10(e) below):
(i) except as provided in Subsection (c) below, be engaged in the linear power
amplifier industry or provide technical assistance, advice or counseling
regarding the linear power amplifier industry in any state in the United States
or any other country in which the Company or any affiliate thereof is engaged in
business, either on his own behalf or as an officer, director, stockholder,
partner, consultant, associate, employee, owner, agent, creditor, independent
contractor, or co-venturer of any third party; or
(ii) employ or engage, or cause or authorize, directly or indirectly, to be
employed or engaged, for or on behalf of himself or any third party, any
employee or agent of Company or any affiliate thereof.
(b) The Executive hereby agrees that he will not, directly or indirectly, for or
on behalf of himself or any third party, at any time during the term of the
Agreement and during the Restricted Period solicit any customers of the Company
or any affiliate thereof.
(c) If any of the restrictions contained in this Section 10 shall be deemed to
be unenforceable by reason of the extent, duration or geographical scope
thereof, or otherwise, then the court making such determination shall have the
right to reduce such extent, duration, geographical scope, or other provisions
hereof, and in its reduced form this Section shall then be enforceable in the
manner contemplated hereby.
(d) This Section 10 shall not be construed to prevent Executive from owning,
directly or indirectly, in the aggregate, an amount not exceeding one percent
(1%) of the issued and outstanding voting securities of any class of any company
whose voting capital stock is traded on a national securities exchange or on the
over-the-counter market other than securities of the Company.
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(e) The term "Restricted Period," as used in this Section 10, shall mean the
period of the Executive's actual employment hereunder plus: (i) in the event
that this Agreement expires or the Executive is terminated for Cause, the thirty
six (36) months after the Termination Date or (ii) in the event that the
Executive is terminated without Cause, for Good Reason or for a Disability,
twelve (12) months after the Termination Date.
(f) The provisions of this Section 10 shall survive the end of the Restricted
Period as provided in Section 10(e) hereof.
11. Miscellaneous.
11.1 Injunctive Relief. The Executive acknowledges that the services to be
rendered under the provisions of this Agreement are of a special, unique and
extraordinary character and that it would be difficult or impossible to replace
such services. Accordingly, the Executive agrees that any breach or threatened
breach by him of Sections 9 or 10 of this Agreement shall entitle the Company,
in addition to all other legal remedies available to it, to apply to any court
of competent jurisdiction to seek to enjoin such breach or threatened breach.
The parties understand and intend that each restriction agreed to by Executive
hereinabove shall be construed as separable and divisible from every other
restriction, that the unenforceability of any restriction shall not limit the
enforceability, in whole or in part, of any other restriction, and that one or
more or all of such restrictions may be enforced in whole or in part as the
circumstances warrant. In the event that any restriction in this Agreement is
more restrictive than permitted by law in the jurisdiction in which Company
seeks enforcement thereof, such restriction shall be limited to the extent
permitted by law.
11.2 Assignments. Neither the Executive nor the Company may assign or
delegate any of their rights or duties under this Agreement without the express
written consent of the other.
11.3 Entire Agreement. This Agreement constitutes and embodies the full
and complete understanding and agreement of the parties with respect to the
Executive's employment by the Company, supersedes all prior understandings and
agreements, whether oral or written, between the Executive and the Company, and
shall not be amended, modified or changed except by an instrument in writing
executed by the party to be charged. The invalidity or partial invalidity of one
or more provisions of this Agreement shall not invalidate any other provision of
this Agreement. No waiver by either party of any provision or condition to be
performed shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same time or any prior or subsequent time.
11.4 Binding Effect. This Agreement shall inure to the benefit of, be
binding upon and enforceable against, the parties hereto and their respective
successors, heirs, beneficiaries and permitted assigns.
11.5 Headings. The headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.6 Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered, sent by registered or
certified mail, return receipt requested, postage prepaid, or by private
overnight mail service (e.g. Federal Express) to the party at the address set
forth above or to such other address as either party may hereafter give notice
of in accordance with the provisions hereof. Notices shall be deemed given on
the sooner of the date actually received or the third business day after
sending.
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11.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey without giving effect to
such State's conflicts of laws provisions and each of the parties hereto
irrevocably consents to the jurisdiction and venue of the federal and state
courts located in the State of New Jersey, County of Somerset.
11.8 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one of the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.
WI-TRON, INC
By: /s/ Xxxx Xxxxx Xxx
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Xxxx Xxxxx Xxx, President
By: /s/ Xxxxxxxxx X. Xxxxx
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Xxxxxxxxx Xxxxx
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