EXHIBIT 10.14
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into this 28th day of April, 2004, to be effective as of April 28, 2004 between
TASER International, Incorporated (the "Company"), located at 0000 Xxxx XxXxxxx
Xxxxx, Xxxxx 0, Xxxxxxxxxx, Xxxxxxx 00000 and Xxxxxx Xxxxxxxx (the "Executive").
RECITALS:
WHISEAS, the Company wishes to provide for the employment of Executive as
its Chief Financial Officer for the term, and on the conditions, set forth
herein; and
WHISEAS, Executive desires to be assured of certain minimum compensation
from Company for Executive's services during the term hereof and to be
protected, and compensated, in the event of any change in the control affecting
the Company; and,
WHISEAS, Company desires reasonable protection of Company's confidential
business and technical information which has been developed by the Company in
recent years at substantial expense.
NOW, THISEFORE, in consideration of the mutual promises contained herein,
the Company and Executive each intend to be legally bound, covenant and agree as
follows:
1. EMPLOYMENT. Upon the terms and conditions set forth in this Agreement,
Company hereby employs Executive as its Chief Financial Officer, and Executive
accepts such employment. Except as expressly provided herein, the termination of
this Agreement by either party shall also terminate Executive's employment by
Company.
2. DUTIES. Executive shall devote his full-time and best efforts to the
Company and shall fulfill the duties of his position which shall include such
duties as may, from time to time, be assigned to him by the Chief Executive or
Board of Directors of the Company, provided such duties are reasonably
consistent with Executive's education, experience and background.
3. TERM. Subject to the provisions of Sections 6 and 11 hereof, Executive's
employment shall commence on the effective date hereof ("Employment Date") and
continue for a period of one year, but shall be automatically extended, unless
otherwise terminated in accordance herewith, for additional consecutive one year
term on each anniversary date, thereafter, unless either party gives written
notice to the other of termination in accordance herewith. In any event, the
Agreement shall automatically terminate, without notice, when Executive reaches
70 years of age. If employment is
continued after the age of 70 by mutual agreement, it shall be terminable
at will by either party.
4. COMPENSATION.
(a) 2004-2005 Annual Base Salary. For services rendered under this
Agreement during the first year of this Agreement, Company shall pay
Executive a minimum Base Salary ("Base Salary") (Base Salary shall mean
regular cash compensation paid on a periodic basis exclusive of any and
all benefits, bonuses or other incentive payments made or obligated by
Company to Executive hereunder) at an annual rate of $200,000, payable in
accordance with existing payroll practices of the Company.. In subsequent
years, based upon extensions of this Agreement, Executive's Base Salary
shall be adjusted annually based upon a performance and compensation
review conducted by the Compensation Committee of the Company's Board of
Directors and negotiated and mutually agreed to, in good faith, between
Executive and the Company's Board of Directors. Such review will be based
upon both individual and Company performance and shall be completed by the
anniversary date of each subsequent year. The foregoing 2004-2005 minimum
Base Salary for Executive shall not prohibit Company's Board of Directors
(or the Compensation Committee of Company's Board of Directors ), to set
Executive's Base Salary during such initial one year term at an annual
rate greater than that prescribed above; however in no instance shall
Executive's Base Salary be less than that set forth above.
(b) Annual Year-End Cash Bonus. Executive shall also be eligible
to earn an annual year-end cash bonus which shall be determined by a
review at the discretion of the Company's Board of Director.
(c) Fringe Benefits. In addition to the compensation and incentive
payments payable to Executive as provided in Sections 4(a) and (b) above:
(i) Vacation. Executive shall be entitled to four (4) weeks
paid vacation each calendar year. All such paid vacation
shall accumulate, so that if Executive's full vacation
is not taken in a particular calendar year, any unused
portion shall be carried into subsequent years; however,
such accumulation shall not exceed an aggregate of four
(4) calendar weeks.
(ii) Long Term Disability. The Company shall also maintain
(so long as such insurance is available at commercially
standard rates) long-term disability policy on Executive
providing for the payment to age 65 of benefit
equivalent to seventy percent (70%) of Executive's
annual Base Salary in the event Executive becomes
permanently disabled as defined in Section 6(b)(ii).
(iii) Other Benefits. The Executive shall be entitled to participate
in all other benefit programs offered by the Company to its
full-time executive employees, including, but not limited to,
health, medical, dental and eye care.
5. BUSINESS EXPENSES. The Company shall, in accordance with, and to the
extent of, its policies in effect from time to time, bear all customary business
expenses (including the advancement of certain expenses) incurred by the
Executive in performing his duties as an executive of the Company, provided that
Executive accounts promptly such expenses to Company in the manner prescribed
from time to time by the Company.
6. TERMINATION. Subject to the respective continuing obligations of the
parties pursuant to Sections 7, 8, 9, 10,11, 12 and 13, this Agreement may be
terminated prior to the expiration of its then remaining applicable term only as
follows:
(a) By the Company. The Company may terminate this Agreement under the
following circumstances:
(i) For "Cause". Company may terminate this Agreement on thirty
(30) days written notice to Executive for "cause", including,
fraud, misrepresentation, theft or embezzlement of Company
assets, material intentional violations of law or Company
policies, or a material breach of the provisions of this
Agreement, including specifically the repeated failure to
perform his duties as required by Section 2 hereof after
written notice of such failure from Company; however, in the
event of termination related to Executive's performance,
Executive's termination shall only be effective upon the
expiration of a sixty (60) day cure period following a lack of
corrective action having been undertaken by Executive during
said cure period.
(ii) Without "Cause". The Company may terminate this Agreement upon
twelve (12) months written notice without "cause." The Base
Salary compensation due and owing by the Company to Executive
following either of such early terminations of this Agreement
shall be paid as set forth at Section 7(a)(iv) hereof.
(b) Death and Disability.
(i) Death. If Executive should die during the term of this
Agreement, this Agreement shall thereupon terminate; provided,
however, that the Company shall pay to the Executive's
beneficiary or estate the compensation provided in Section
7(a)(ii) below.
(ii) Permanent Disability. In the event the Executive should become
permanently disabled during the term of this Agreement, this
Agreement shall also terminate. For the purposes hereof, a
permanent disability shall mean that disability resulting from
injury, disease or other cause, whether mental or physical,
which incapacitates the Executive from performing his normal
duties as an employee, appears to be permanent in nature and
contemplates the continuous, necessary and substantially
complete loss of all management and professional activities
for a continuous period of six (6) months.
(iii) Partial Disability. If the Executive should become partially
disabled, he shall be entitled to his salary as provided
herein for a period of nine (9) months. At the end of said
period of time, if such Executive remains partially disabled,
the disabled Executive's salary shall be reduced according to
the amount of time the disabled Executive is able to devote to
the Company's business.
(iv) Temporary Disability. In the event the Executive should become
disabled, but such disability is not permanent, as defined
above, such disabled Executive shall be entitled to his salary
for a period of nine (9) months. If such temporary disability
continues longer than said period of time, then the disabled
Executive shall be deemed to have become permanently disabled
for the purposes of this Agreement at the end of said nine (9)
month period.
7. COMPENSATION PAYABLE FOLLOWING EARLY TERMINATION.
(a) In the event of any termination pursuant to Section 6, Executive's
Base Salary shall be paid as follows:
(i) In the event of termination pursuant to Section 6(a)(i) (for
"cause"), Executive's Base Salary shall continue to be paid on
a semi-monthly basis for sixty
(60) days from the effective date of such termination and
Executive shall also be entitled to continue to participate in
those benefit programs provided by subsections 4(e)(iv-viii)
(inclusive), for twelve (12) months following such
termination, at Executive's expense;
(ii) In the event of termination of this Agreement by reason of
Executive's death, Executive's Base Salary shall terminate as
of the end of the eighteenth (18th) month following the
Executive's death;
(iii) In the event of termination of this Agreement by reason of
disability, Executive's Base Salary shall be terminated as of
the end the eighteenth (18th) month period following
Executive's inability to perform his duties occurs; and
(iv) In the event of any termination by the Company pursuant to
Section 6(a)(ii) (without "cause"), Executive's Base Salary
shall be continued to be paid on a semi-monthly basis, but
shall terminate at the end of the twelve (12) month period
following such written notice of termination by the Company.
In lieu of such continued semi-monthly Base Salary, the
Company and Executive may agree to a lump-sum distribution to
Executive pursuant to such termination in a form, substance
and manner mutually acceptable to Company and Executive,
pursuant to a written Severance Agreement then mutually
negotiated between the Company and Executive in connection
with such termination.
(b) In the event of termination by reason of Executive's death,
disability, termination without cause, or any Change in Control, as
defined at Section 11:
(i) Executive shall receive a pro rata portion (prorated through
the last day Base Salary is payable pursuant to clauses
(a)(ii), (a)(iii) and (a)(iv), respectively) of any bonus or
incentive payment (for the year in which death, disability or
termination occurred), to which he would have been entitled
had he remained continuously employed for the full fiscal year
in which death, disability or termination occurred and
continued to perform his duties in the
same manner as they were performed immediately prior to the
death, disability or termination;
(ii) The right to exercise any unexpired and non-vested stock
options previously granted Executive shall immediately vest
and accelerate; and
(iii) Any and all payments owing to Executive arising from a
termination of this Agreement resulting from a permanent or
partial disability of Executive shall first be provided and
paid pursuant to the Company's existing disability policy, as
then in effect, but shall be further supplemented to the
extent provided by this Agreement but all such payments due
and owing to Executive arising from such permanent or partial
disability shall not be cumulative or aggregated.
8. CONFIDENTIAL INFORMATION.
(a) For purposes of this Section 8, the term "Confidential Information"
means information which is not generally known and which is
proprietary to Company, including: (i) trade secret information
about Company and its services; and (ii) information relating to the
business of Company as conducted at any time within the previous two
(2) years or anticipated to be conducted by Company, and to any of
its past, current or anticipated products, including, without
limitation, information about Company's research, development,
services, purchasing, accounting, engineering, marketing, selling,
leasing or servicing. All information which Executive has a
reasonable basis to consider Confidential Information or which is
treated by Company as being Confidential Information shall be
presumed to be Confidential Information, whethis originated by
Executive, or by others, and without regard to the manner in which
Executive obtains access to such information.
(b) Executive will not during the term of this Agreement and following
expiration or termination of this Agreement, use or disclose any
Confidential Information to any person not employed by Company
without the prior authorization of Company and will use reasonably
prudent care to safeguard, protect and to prevent the unauthorized
disclosure of, all of such Confidential Information.
9. INVENTIONS.
(a) For purposes of this Section 9, the term "Inventions" means
discoveries, improvements and ideas (whethis or not in writing or
reduced to practice) and works of authorship, whethis or not
patentable or copyrightable: (1) which relate directly to the
business of Company, or to Company's actual or demonstrably
anticipated research or development; (2) which result from any work
performed by Executive for Company; (3) for which equipment,
supplies, facilities or trade secret information of Company is
utilized; or (4) which were conceived or developed during the time
Executive was obligated to perform the duties described in Section
2.
(b) Executive agrees that all Inventions made, authored or conceived by
Executive, either solely or jointly with others, during Executive's
employment with Company (except as otherwise provided above), shall
be the sole and exclusive property of Company. Upon termination of
this Agreement, Executive shall turn over to a designated
representative of Company all property in Executive's possession and
custody belonging to Company. Executive shall not retain any copies
or reproductions of correspondence, memoranda, reports, notebooks,
drawings, photographs or other documents relating in any way to the
affairs of Company which came into Executive's possession at any
time during the term of this Agreement.
Executive is hereby notified that this Agreement does not apply to any
invention for which no equipment, supplies, facility, or trade secret
information of Company was used and which was developed initially on the
Executive's own time and: (1) which does not relate: (a) directly to the
business of Company; or (b) to Company's actual or demonstrably anticipated
research or development; or (2) which does not result from any work performed by
Executive for the Company.
10. NON-COMPETITION. Executive agrees that for a period of eighteen (18)
months following termination of this Agreement for any reason (except in the
case of termination of this Agreement pursuant to Section 11 because of a Change
in Control or any Business Combination or any termination of this Agreement
without cause), he will not directly or indirectly, alone or as a partner,
officer, director, or shareholder of any other firm or entity, engage in any
commercial activity in the United States in competition with any part of
Company's business: (a) that was under the Executive's management or supervision
during the last year of employment by Company; or (b) with respect to which
Executive has Confidential Information as defined in Section 8 of this
Agreement.
11. "BUSINESS COMBINATION" OR "CHANGE IN CONTROL".
(a) Change in Control. For purposes of this Section 11, a "Business
Combination" or "Change in Control" with respect to, or concerning,
the Company shall mean the following:
(i) the sale, lease, exchange or other transfer, directly or
indirectly of all or substantially all of the assets of the
Company (in one transaction or in a series of related
transactions) to a person or entity that is not controlled by
the Company;
(ii) the approval by the shareholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company;
(iii) a merger or consolidation to which the Company is a party if
the shareholders of the Company immediately prior to effective
date of such merger or consolidation have "beneficial
ownership" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")),
immediately following the effective date of such merger or
consolidation, of securities of the surviving corporation
representing: (A) more than 50%, but not more than 80%, of the
combined voting power of the surviving corporation's then
outstanding securities ordinarily having the right to vote at
elections of directors, unless such merger or consolidation
has been approved in advance by the Incumbent Directors; or
(B) 50% or less of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having
the right to vote at elections of directors (regardless of any
approval by the Incumbent Directors);
(iv) any person becomes after the effective date of this Agreement
the "beneficial owner" (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of: (A) 20% or more,
but not 50% or more, of the combined voting power of the
Company's outstanding securities ordinarily having the right
to vote at elections of directors, unless the transaction
resulting in such ownership has been approved in advance by
the Incumbent Directors; or (B) 50% or more of the combined
voting power of the Company's
outstanding securities ordinarily having the right to vote at
elections of directors (regardless of any approval by the
Incumbent Directors);
(v) the Incumbent Directors cease, for any reason, to constitute
at least a majority of the Company's Board; or
(vi) a change in control of the Company of a nature that would be
required to be reported pursuant to Section 13 or 15(d) of the
Exchange Act, whether or not the Company is then subject to
such reporting requirements.
(b) Incumbent Directors. For purposes of this Section 11, the term
"Incumbent Directors" shall mean any individual who is a member of
the Board of the Company on the effective date of this Agreement, as
well as any individual who subsequently becomes a member of the
Board whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
then Incumbent Directors (either by specific vote or by approval of
the Proxy Statement of the Company in which such individual is named
as a nominee for director without objection to such nomination).
(c) Executive's Option to Terminate This Agreement. It is expressly
recognized by the parties that a Business Combination would
necessarily result in material alteration or diminishment of
Executive's position and responsibilities. Therefore, if, during the
term of this Agreement, there shall occur, with or without the
consent of Company, any Business Combination or Change in Control,
Executive shall have an exclusive option to terminate this Agreement
on twenty (20) calendar days' notice to the Company.
(d) Compensation Payable to Executive Upon Termination Following a
Change in Control. It is expressly recognized that Executive's
position with Company and agreement to be bound by the terms of this
Agreement represent a commitment in terms of Executive's personal
and professional career which cannot be reduced to monetary terms,
and thus, necessarily constitutes a forbearance of options now and
in the future open to Executive in Company's areas of endeavor.
Accordingly, in the event Executive elects to terminate this
Agreement in connection with any Business Combination or Change in
Control under this Section 11:
(i) Executive shall be under no obligation whatever to seek other
employment opportunities during any period between termination of
this Agreement under this Section 11 and the expiration of
Executive's then unexpired term of this Agreement as it existed at
the time of termination, or twenty-four (24) months, whichever is
longer, and Executive shall not be obligated to accept any other
employment opportunity which may be offered to Executive during such
period;
(ii) During such unexpired term of this Agreement, or for twelve
(12) months thereafter, whichever is longer, Executive shall
continue to receive on a semimonthly basis, Executive's Base Salary
then in effect upon the date of such notice to the Company
hereunder;
(iii) In lieu of the continued cash compensation provided in Section
11(d)(ii) above, Executive may elect, in writing, to receive from
the Company a lump sum cash settlement in an amount equal to 199% of
Executive's then existing Base Salary for twelve (12) months (at the
rate in effect immediately prior to such Business Combination);
provided, however, Executive's election to receive a lump sum cash
settlement from the Company, in lieu of the semi-monthly payments
specified above, shall occur and be paid within 90 days of the
termination of this Agreement arising from any such Business
Combination or any Change in Control.
(iv) Executive's termination of this Agreement by reason of a
Change in Control described in this Section 11 and the receipt by
Executive of any amounts pursuant to subsection 11(d), shall not
preclude Executive' continued employment with Company, or the
surviving entity in any Business Combination, on such terms as shall
then be mutually negotiated between Company (or any such surviving
entity) and Executive following such termination;
(v) The right to exercise all unexpired and non-vested stock
options in favor of Executive shall immediately vest and accelerate;
(vi) Executive shall be entitled to continue to participate in
those benefit programs and perquisites provided by subsection 4(c)
hereof, for twelve (12) months following termination, at the
Company's expense; and
(vii) Notwithstanding any other provisions of this Agreement, or any
other agreement, contract or understanding heretofore, or hereafter,
entered into between the Company and Executive, if any "payments"
(including without limitation, any benefits or transfers of property
or the acceleration of the vesting of any benefits) and the nature
of compensation under any arrangement that is considered contingent
on a change in control for purpose of Section 2800 of the Internal
Revenue Code of 1986, as amended (the "Code"), together with any
other payments that Executive has the right to receive from the
Company, or any corporation that is a member of an "affiliated
group" (as defined in Section 1504A of the Code without regard to
Section 1504B of the Code), of which the Company is a member, would
constitute a "parachute payment" (as defined in Section 2800 of the
Code), the aggregate amount of such payments shall be reduced to
equal the largest amount as would result in no portion of such
payments being subject to the excise tax imposed by Section 4999 of
the Code; provided however, Executive shall be entitled to designate
and select among such payments that will be reduced, and/or
eliminated, in order to comply with the forgoing provision of the
Code.
12. NO ADEQUATE REMEDY. The parties declare that is impossible to measure in
money the damages which will accrue to either party by reason of a failure to
perform any of the obligations under this Agreement. Therefore, if either party
shall institute any action or proceeding to enforce the provisions hereof, such
person against whom such action or proceeding is brought hereby waives the claim
or defense that such party has an adequate remedy at law, and such person shall
not urge in any such action or proceeding the claim or defense that such party
has an adequate remedy at law.
13. MISCELLANEOUS.
(a) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of all successors and assigns of the Company,
whether by way of merger, consolidation, operation of law,
assignment, purchase or other acquisition of substantially all of
the assets or business of Company and shall only be assignable under
the foregoing circumstances and shall be deemed to be materially
breached by Company if any such successor or assign does not
absolutely and unconditionally assume all of Company's obligations
to Executive hereunder. Any such successor or assign shall be
included in the term "Company" as used in this Agreement.
(b) Notices. All notices, requests and demands given to, or made,
pursuant hereto shall, except as otherwise specified herein, be in
writing and be delivered or mailed to any such party at its address
which:
(i) In the case of Company shall be:
TASER International, Incorporated
0000 Xxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxx, LLP
1600 Pioneer Tower
000 XX Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
(ii) In the case of the Executive shall be:
Xxxxxx Xxxxxxxx
0000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Either party may, by notice hereunder, designate a change of address. Any
notice, if mailed properly addressed, postage prepaid, registered or certified
mail, shall be deemed dispatched on the registered date or that stamped on the
certified mail receipt, and shall be deemed received within the fifth business
day thereafter, or when it is actually received, whichever is sooner.
(c) Captions. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation
of this Agreement.
(d) Governing Law. The validity, construction and performance of this
Agreement shall be governed by the laws of the State of Arizona. Any
dispute involving or affecting this agreement, or the services to be
performed shall be determined and resolved by binding arbitration in
the County of Maricopa, State of Arizona, in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association.
(e) Construction. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(f) Waivers. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any
right or remedy hereunder preclude any other or further exercise
thereof or the exercise of any right or remedy granted hereby or by
any related document or by law.
(g) Modification. This Agreement may not be, and shall not be, modified
or amended except by a written instrument signed by both parties
hereto.
(h) No Conflicting Business. Executive agrees that he will not, during
the term of this Agreement, transact business with the Company
personally, or as an agent, owner, partner, shareholder of any other
entity; provided, however, Executive may enter into any business
transaction that is, in the opinion of the Company's Board of
Directors, reasonable, prudent or beneficial to the Company, so long
as any such business transaction is at arms-length as though between
independent and prudent individuals and is ratified and approved by
the designated members of the Company's Board of Directors.
(i) Entire Agreement. This Agreement constitutes the entire Agreement
and understanding between the parties hereto in reference to all the
matters herein agreed upon; provided, however, that this Agreement
shall not deprive Executive of any other rights Executive may have
now, or in the future, pursuant to law or the provisions of Company
benefit plans.
(j) Counterparts. This Agreement shall be executed in at least two
counterparts, each of which shall constitute an original, but both
of which, when taken together, will constitute one in the same
instrument.
(k) Amendment. This Agreement may be modified only by written agreement
executed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered the day and year first above written.
TASER INTERNATIONAL, INCORPORATED
________________________________
Its: Chief Executive Officer
EXECUTIVE
__________________________________
Xxxxxx Xxxxxxxx
