EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of the 22nd day of
November, 1999, is by and between Xxx Corporation., a Nebraska corporation (the
"Company"), and Xxxxx X. Xxxxxxxx ("Employee"). TULSAT Corporation, an Oklahoma
corporation ("TULSAT"), joins this Agreement only for the purpose of
guaranteeing the obligations of the Company hereunder.
RECITALS
WHEREAS, Employee was a stockholder of Diamond W Investments, Inc.
("Diamond") and is a party to that certain Agreement and Plan of Merger of even
date herewith (the "Merger Agreement") by and among the Company, Diamond,
ADDvantage Media Group, Inc. ("AMG") and TULSAT whereby Diamond has been merged
with and into the Company and Employee and the other shareholder, Xxxxxxx X.
Xxxxxxxx, of Diamond has received AMG preferred stock and a promissory note in
exchange for his shares of the capital stock of Diamond;
WHEREAS, the parties have agreed in the Merger Agreement that, as a
condition to the Closing of the merger contemplated thereby, the Company and
Employee shall enter into this Agreement; and
WHEREAS, it is the intention of the parties that all of Employee's rights,
duties and commitments regarding his employment shall be governed by this
Agreement exclusively.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions set forth herein, the parties hereto do hereby agree as follows:
1. Employment. The Company hereby employs Employee, and Employee
hereby agrees to serve, on the terms and conditions described herein. Employee
shall serve in the position and shall perform the duties more fully described on
Exhibit A hereto. Employee agrees to perform such other duties as shall from
time to time be reasonably assigned to him by the Board of Directors of the
Company which shall be reasonably related to those duties ordinarily performed
bya person in such capacity. Employee further agrees to report periodically to
the President and the Vice President of the Company or such other Company
officer or executive designated by the Board of Directors of the Company and to
use his best efforts to promote the interests of the Company, and to devote his
full time and attention during normal business hours to the business and affairs
of the Company.
2. Term of Employment. Employee's employment hereunder shall be for the
period which shall commence on the date hereof and shall continue until
November 1, 2004.
3. Compensation.
(a) Salary and Incentive Compensation. Employee shall be paid an
annual salary of $85,000 during the Term of Employment. Employee shall
be entitled to such increases in his salary as the Board of Directors of
the Company shall determine in its sole discretion. Employee shall be
entitled to participate in such incentive compensation plans or programs
as the Company's Board of Directors may elect to adopt for the benefit of
all management personnel of the Company.
(b) Business Expenses. Employee shall be entitled to
reimbursement of his reasonable and necessary out-of-pocket expenses
incurred by Employee on behalf of the Company upon the presentation to the
Company of an itemized account of all of such expenditures. Such expenses
shall be substantiated by vouchers, receipts or similar documentation.
(c) Benefits. Employee shall be entitled to participate in the
pension, profit sharing, bonus, life insurance, hospitalization, major
medical, and other employee benefit plans of the Company that may be in
effect from time to time (hereinafter sometimes referred to collectively
as "Benefits"), to the extent the Employee is eligible under the terms of
those plans.
(d) Vacation and Sick Leave. Employee shall be entitled to
vacation and sick leave in accordance with the Company's policies.
4. Covenants and Commitments of Employee.
(a) Confidentiality. The term "Confidential Information" shall
include, without limitation, the Company's financial, marketing and sales
information, vendor, customer and client lists, contracts and licenses,
trade secrets, business arrangements, computer programs and related
business methods and practices. Employee recognizes and agrees that
Confidential Information is proprietary to the Company. Employee agrees
that he will not use for himself or for others or disclose or authorize
disclosure to others any Confidential Information. All documents,
including all copies thereof, and all other tangible property (including,
without limitation, magnetic tapes and disks) made by or made available to
Employee in the course of Employee's employment, whether or not such
tangible items contain Confidential Information are and will be the
property of the Company and will be delivered by Employee to the Company
immediately upon the termination of his employment with the Company.
Employee's obligations specified in this Section shall not apply, and
Employee shall have no further obligations with respect to any items of
Confidential Information which:
(i) are disclosed in a printed publication available to the
public, are described in an issued patent anywhere in the world, are
otherwise in the public domain at the time of disclosure, or become
publicly known through no wrongful act on the part of Employee who
received such Confidential Information;
(ii) become known to Employee through disclosure by sources
other than the Employee, which sources have the right to disclose
such Confidential Information; and
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iii) are disclosed pursuant to the requirement of a
government agency or any law requiring disclosure thereof, provided
that the Company is provided with prior written notice of any such
disclosure.
A breach of the foregoing obligations shall not be absolved by the subsequent
occurrence of any of the above exceptions.
(b) Solicitation of Customers. Employee agrees that during his
employment by the Company and for a period of two (2) years (one (1) year
in the event termination of employment is by the Company without cause or
by the Employee for good reason) thereafter, he will not directly or
indirectly:
(i) solicit any person or entity with whom the Company
conducts business during the period of Employee's employment with
the Company for the purpose of selling any products which are
competitive with the products sold by the Company or of providing
any services which are competitive with the services provided by the
Company, including services heretofore provided by Diamond; or
(ii) accept any order or contract from any person or entity
with whom the Company conducts business during the period of
Employee's employment with the Company for the purpose of selling
products or providing the types of services which are competitive
with those sold or provided by the Company.
(c) Restriction. During his employment by the Company and for a
period of three (3) years thereafter (one (1) year in the event
termination of employment is by the Company without cause or by the
Employee for good reason), Employee shall not, directly or indirectly,
own, operate, participate in or be connected with, as an officer,
consultant, employee, partner, stockholder or otherwise, any business,
individual, partnership, firm, corporation or other entity engaged in any
business engaged in by the Company including, but not limited to,
manufacturing, remanufacturing, selling or distributing products which are
competitive with the products of the Company, or providing services which
are competitive with the services provided by the Company. Nothing herein
shall prohibit Employee from owning not more than five percent (5%) of the
outstanding shares of a publicly held corporation if such ownership does
not involve managerial or operational responsibility. The restrictions
described in this paragraph shall apply only with respect to the market
areas in which the Company has operations or employees or has otherwise
conducted business as of the date of termination of the employment of
Employee with the Company. Employee agrees that the foregoing
restrictions are reasonable both as to time and geographical extent given
the nature and scope of the Company's present business. Upon any event of
default under the Promissory Note of even date herewith issued to the
Shareholder and his spouse pursuant to the Merger Agreement, the
restrictions contained in this Section 1(b) and (c) shall cease and be of
no further force or effect if (i) the maker of the Promissory Note has not
cured or remedied such default within 30 days after receipt of written
notice thereof, and (ii) if Shareholder and his spouse are still the
holders of the Promissory Note (i.e., they have not assigned, transferred
or negotiated the Promissory Note to a third party without recourse). Any
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failure by the maker to make payments under the Promissory Note because of
a breach by the Shareholder or his spouse of the restrictions contained in
this Agreement or in such Employment Agreement, as applicable, shall not
be deemed an event of default under the Promissory Note for these
purposes.
(d) Work Product. Employee agrees that any invention,
enhancement, process, method, design and any other creation (hereinafter
"Product") that Employee may develop, invent, discover, conceive or
originate, along or in conjunction with any other person during business
hours or on behalf of the Company, during the term of the Employee's
employment, and for a period of twelve (12) months thereafter, that
relates to the business of the Company now or hereafter carried on by it,
or to the use of any product involved therein, shall be the exclusive
property of the Company. Employee understands and agrees that in partial
consideration of Employee's employment for the compensation received, and
for continued employment, all such products shall be the exclusive
property of the Company and thus subject to patent, copyright,
registration or other legal protective custody by the Company. The
Company shall have the authority and this instrument shall operate:
(1) to give the Company authority to execute, sell and deliver as the act
of the Employee, any license agreement, contract, assignment or other
instrument in writing that may be necessary or proper; and (2) to convey
to the Company the entire right, title and interest in and to any such
product. Employee further agrees that, during the term of his employment
and any time thereafter, Employee shall cooperate with the Company and its
counsel in the prosecution and/or defense of any litigation which may
arise in connection with any product referred to in this paragraph.
(e) Enforcement. The invalidity or non-enforceability of this
Section 4 in any respect shall not affect the validity or enforceability
of this Section 4 in any other respect or of any other provisions of this
Agreement. In the event that any provision of this Section 4 shall be
held invalid or unenforceable by a court of competent jurisdiction by
reason of the geographic or business scope or the duration thereof, such
invalidity or unenforceability shall attach only to the scope or duration
of such provision and shall not affect or render invalid or unenforceable
any other provision of this agreement, and, to the fullest extent
permitted bylaw, this Agreement shall be construed as if the geographic or
business scope or the duration of such provision had been more narrowly
drafted so as not to be invalid or unenforceable.
5. Termination. The Term of Employment and any and all other rights of
the Employee under this Agreement or otherwise as an employee of the Company
will terminate (except as otherwise provided in this Section 5): (i) upon the
death of the Employee; (ii) upon the disability of the Employee (as defined in
Section 5(a)(i)) immediately upon notice from either party to the other, (iii)
for cause (as defined in Section 5(a)(ii)) immediately upon notice from the
Company to Employee or at such later time as the notice may specify, or (iv) for
good reason (as defined in Section 5(a)(iii)) upon not less than thirty days'
prior notice from the Employee to the Company.
(a) Definitions. The following terms as used in this Section 5
shall have the definitions set forth below:
(i) Definition of Disability. For purposes of Section 5, the
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Employee will be deemed to have a "disability" if, for physical or
mental reasons, the Employee is unable or incapable to perform the
essential functions of the Employee's duties under this Agreement
for 120 consecutive days, or 180 days during any twelve-month
period, as determined in accordance with this Section 5(a)(i). Such
inability or incapacity shall be documented to the reasonable
satisfaction of the Board of Directors of the Company by appropriate
correspondence from registered physicians reasonably satisfactory to
the Board of Directors.
(ii) Definition of "For Cause". For purposes of Section 5,
the phrase "for cause" means: (i) the Employee has committed a
willful serious act, such as embezzlement against the Company or
other wrongful act intending to enrich himself at the expense of
the Company or conviction of a felony, (ii) the Employee has engaged
in conduct that has caused demonstrable and serious injury, monetary
or otherwise, to the Company, (iii) the Employee, in carrying out
his duties hereunder, has been guilty of willful gross neglect or
willful gross misconduct, resulting in either case in material harm
to the Company, or (iv) the Employee has refused to carry out his
duties in gross dereliction of duty and, after receiving written
notice to such effect from the President, the Employee fails to cure
the existing problem within 30 days.
(iii) Definition of "Good Reason". For purposes this
Section 5, "good reason" shall mean
(1) any material breach of this Agreement by the
Company of which the Company has been provided written notice
by the Employee and has failed to cure within 30 days after
receipt of such notice;
(2) a material diminution of the duties or
responsibilities of Employee from those that are outlined in
Exhibit A hereto;
(3) the material reduction or elimination of the
compensation to which Employee is otherwise entitled under the
terms of Section 3 above; or
(4) mandatory relocation from Deshler, Nebraska.
(b) Termination Pay. Effective upon the termination of this
Agreement, the Company will be obligated to pay the Employee (or, in the
event of his death, his designated beneficiary as defined below) only such
compensation as is provided in this Section 5(b), and in lieu of all other
amounts and in settlement and complete release of all claims the Employee
may have against the Company. For purposes of this Section 5(b), the
Employee's designated beneficiary will be such individual beneficiary or
trust, located at such address, as the Employee may designate by notice to
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the Company from time to time or, if the Employee fails to give notice to
the Company of such a beneficiary, the Employee's estate. Notwithstanding
the preceding sentence, the Company will have no duty, in any
circumstances, to attempt to open an estate on behalf of the Employee, to
determine whether any beneficiary designated by the Employee is alive or
to ascertain the address of any such beneficiary, to determine the
existence of any trust, to determine whether any person or entity
purporting to act as the Employee's personal representative (or the
trustee of a trust established by the Employee) is duly authorized to act
in that capacity, or to locate or attempt to locate any beneficiary,
personal representative, or trustee.
(i) Termination by the Employee for Good Reason or by the
Company without Cause. If the Employee terminates this Agreement
for good reason or the Company terminates this Agreement without
cause at any time during the term of employment, the Company will
pay the Employee an amount equal to 100% of the amount of Employee's
then annual salary. Such amount shall be paid to Employee in
monthly installments over a period of twelve months from the
effective date of termination of employment and the Company's
obligations with respect thereto shall be conditioned on Employee's
compliance with his post-termination obligations, covenants and
commitments hereunder.
(ii) Voluntary Termination by Employee or Termination by the
Company for Cause. If the Employee voluntarily terminates his
employment with the Company without good reason, or the Company
terminates this Agreement for cause, the Employee will be entitled
to receive his salary only through the date such termination is
effective, which shall be 30 days after Employee's receipt of
written notice from the Company of such termination, which notice
shall describe in reasonable detail the facts and circumstance
constituting the cause for such termination.
(iii) Termination upon Disability. If this Agreement is
terminated by either party as a result of the Employee's disability,
as determined under Section 5(a)(i), the Company will pay the
Employee his salary through the remainder of the calendar month
during which such termination is effective and if Employee is then
covered by disability insurance which is payable by reason of such
disability, for such additional period, if any, (but not more than
90 days) before Employee begins to receive payments under such
insurance by reason of his disability.
(iv) Termination upon Death. If this Agreement is terminated
because of the Employee's death, the Employee will be entitled to
receive his salary through the end of the calendar month in which
his death occurs.
(v) Benefits. The Employee's accrual of, or participation in
plans providing for, the Benefits will cease at the effective date
of the termination of this Agreement, and the Employee will be
entitled to accrued Benefits pursuant to such plans only as provided
in such plans.
6. Notices. The address of Employee for the purposes of notices
hereunder shall be his last address as shown on the records of the Company.
Notice by mail shall be by certified or registered mail, postage and
certification or registration charges prepaid. The effective date of notice by
mail shall be three days after mailing or the date of receipt, whichever shall
first occur.
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7. Other Agreements. Employee warrants to the Company that he has no
obligations inconsistent herewith, that the execution and performance of this
Agreement by him will not constitute a breach of any other Agreement by which he
is bound, and that he does not possess any trade secret or confidential
information related to the business of the Company which he is prohibited from
disclosing to the Company or using for its benefit.
8. Miscellaneous. The language of this Agreement and all parts hereof
shall in all cases be construed as a whole, according to its fair meaning, and
not strictly for or against either party hereto. No waiver of any provision
hereof by any party hereto shall be binding unless such waiver shall be
evidenced by a writing signed by such party. This Agreement may not be modified
in any manner except by instruments in writing signed by both parties hereto.
The headings of the various paragraphs this Agreement are solely for the purpose
of convenience and shall not be relied upon in construing any provision hereof.
For purposes of this Agreement, the term "Company" shall include its
predecessor, Diamond, and its parent and sibling companies, AMG and TULSAT.
9. Separability. If any provision of this Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by the decision of any arbitrator or by any court of
competent jurisdiction, the Employee and the Company shall either meet and
negotiate substitute provisions or promptly request the court to substitute
provisions for those rendered or declared illegal or unenforceable to preserve
the original intent of this Agreement to the extent legally possible, but all
other provisions of this Agreement shall remain in full force and effect.
10. Injunction. In the event of breach of any provisions of this
Agreement, the Company shall be entitled to seek damages if determinable but it
is hereby agreed that any such remedy at law is inadequate as to a breach of
Section 4 of this Agreement, and thus, the Company shall also be entitled to
injunctive relief. Such a breach shall cause the applicable restrictive time
period stated herein to be extended to run from the date of full compliance with
any court-ordered injunction. The prevailing party shall be entitled to
reasonable attorney's fees. The remedies herein provided shall be cumulative
and no single remedy shall be construed as exclusive of any other or of any
remedy provided at law. Failure of the Company to exercise any remedy at any
time shall not operate as a waiver of the right of the Company to exercise any
remedy for the same or subsequent breach at any time thereafter.
EXECUTED in counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same Agreement, as of the date
herein first above written.
XXX CATV CORPORATION:
By: \s\ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, Vice President
TULSAT CORPORATION:
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By: \s\ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, President
\s\ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
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EXHIBIT A
JOB DESCRIPTION
JOB TITLE: President of Xxx CATV Corporation.
DUTIES: Management of principal operating activities of XXX CATV
Corporation, subject to direction and oversight of the Board of
Directors of Xxx CATV Corporation and executive management of the
parent companies, TULSAT Corporation and ADDvantage Media Group,
Inc.
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