Exhibit 10.1
SERVICES AGREEMENT
AGREEMENT dated as of November 2, 1998 between AM COMMUNICATIONS, INC.,
a Delaware corporation (the "Company"), and XXX XXXXXX (the "Executive").
WHEREAS, the Company and the Executive desire that the Executive serve
as Chairman of the Board of Directors of the Company, on the terms hereinafter
provided.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
Definitions
The following terms, when utilized herein, shall have the meanings
indicated:
Board: The term "Board" means the Company's Board of Directors.
Permanent Disability: The term "Permanent Disability" refers to the
Executive being unable, for a period of 120 continuous days, to perform his
customary duties hereunder due to his physical or mental incapacity. A
determination of Permanent Disability by a physician designated by the Company
will be conclusive and binding on the parties.
ARTICLE II
Retention; Services
2.1 Engagement. The Board will promptly take all necessary action to
cause the Executive to be appointed to the Board and to be elected to serve as
the Chairman of the Board. While the Executive will not be employed by the
Company, but will instead be a non-employee member of the Board, he will be
actively and extensively involved in the business, management and affairs of the
Company. Executive hereby accepts such engagement and agrees to devote
substantial working time and his best efforts to the Company's business and
affairs. During the term hereof, the Executive shall not engage in or be
connected with any other business pursuits which are directly competitive with
the Company, unless authorized in writing by the Board. The Company confirms
that the Executive's position as a director of C-Cor is not deemed competitive.
2.2 Responsibilities. The Executive's duties and responsibilities
hereunder shall include the following:
(a) Active involvement in the management of the Company's business
and affairs.
(b) Development and execution (after approval by the Board) of
growth strategies for the Company's existing business and new business
opportunities, it being the aim and expectation of the parties that the new
business opportunities will ultimately constitute a majority of the Company's
business activities.
(c) Identification of new products and acquisition opportunities.
(d) Utilization of the Company's corporate structure to market
technologies, products and services offered by India Nest, Inc. ("Nest").
(e) Such other executive duties and responsibilities as may be from
time to time assigned to the Executive by the Board.
2.3 Annual Performance Review. The Board will institute a formal
process pursuant to which the Board will annually review and evaluate the
Executive's performance hereunder. The results of such performance review will
be shared with the Executive.
ARTICLE III
Compensation
3.1 Stock Options. The Board will adopt, subject to stockholder
approval, the AM Communications, Inc. 1998 Stock Option Plan (the "Plan"). The
Plan will be submitted by the Board, with its recommendation, to the
stockholders for approval at the Company's 1998 Annual Meeting. The Executive
acknowledges having received and reviewed the Plan.
Subject to approval of the Plan by the stockholders, the Company hereby
grants to the Executive, as compensation for the services to be provided
hereunder, an option to acquire 5,000,000 shares of the Company's Common Stock,
at a per share exercise price equal to the fair market value of the stock on the
date of grant. Such option shall be issued pursuant to and shall be subject to
the terms, conditions and provisions of the Plan, and will have the following
terms:
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(a) The option will have a term of ten years, subject to early
termination upon any termination of this Agreement or as otherwise provided in
the Plan.
(b) The option will become first exercisable in three equal annual
installments, with the first such installment becoming exercisable on the first
anniversary of the date of grant.
3.2 Business Expenses. The Executive will be reimbursed for business
expenses incurred by him in connection with his services hereunder, in
conformance with the Company's normal policies and procedures.
3.3 No Other Salary or Benefits. As a non-employee, the Executive will
receive no salary for his services hereunder, nor will he be eligible for any
employee benefits, except as specified above or as otherwise designated by the
Board in its discretion.
ARTICLE IV
Term
This Agreement shall become effective, and the engagement hereunder
shall commence, on the date the Executive is elected to the Board and shall
thereafter continue for three years unless earlier terminated pursuant to
Article V hereto. After the initial three-year term, this Agreement shall
continue indefinitely until terminated by either party by written notice to the
other.
ARTICLE V
Termination of Agreement
5.1 Death or Permanent Disability. This Agreement shall automatically
terminate, without act by any party, upon the death or Permanent Disability of
the Executive.
5.2 Termination for Cause. This Agreement may at any time be terminated
by the Company for cause, which for the purposes of this Agreement shall mean
one or more of the following:
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(a) dishonesty, in any material respect, which the Board reasonably
determines to be materially detrimental to the Company;
(b) Executive being convicted of a felony; or
(c) material deficiency in the performance of duties or gross
insubordination hereunder, or breach of the Executive's commitments referenced
in Article VI hereto; provided, that in order to terminate this Agreement
pursuant to this subparagraph (c), the Company shall give ninety days prior
written notice to the Executive, and such notice of termination shall not be
effective if, at the end of such ninety day period, all such deficiencies and
breaches shall theretofore have been fully cured.
ARTICLE VI
Other Matters
6.1 Engineering Services. The Company and Nest, which is an affiliate
of the Executive, have or are about to enter into an agreement pursuant to which
Nest will provide certain designated engineering and other services to the
Company. The Executive will use his best efforts to insure that Nest performs
all of its duties and obligations under such agreement.
6.2 Capital Infusion. As part of the Executive's responsibilities
hereunder, the Executive will study the advisability of the Company divesting
its CATV business, and will make a recommendation to the Board with respect
thereto. In the event that the Company determines to retain this business, the
Executive, or an investor group designated by Executive, will purchase common
stock from the Company for an aggregate cash purchase price of $500,000. Such
stock will be issued and sold to the Executive at a per share price equal to the
stock's then market price.
ARTICLE VII
Miscellaneous
7.1 Notices. All notices or other communications to be given under this
Agreement shall be in writing and shall be deemed given when personally
delivered at, or three days after mailing with adequate postage by certified
mail, return receipt requested, to the following addresses:
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If to the Company:
AM Communications, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: President
If to the Executive:
or to such other address as the person to be notified shall have specified in
the manner indicated in this Paragraph 7.1.
7.2 Binding Arbitration. In the event of any dispute in connection with
this Agreement, the Company and the Executive agree to resolve such disputes
solely by binding arbitration under the rules of the American Arbitration
Association in Philadelphia, Pennsylvania. Each party consents to the entry of
judgment confirming the results of the arbitration in the courts of the
Commonwealth of Pennsylvania.
7.3 Binding Effect; Etc. This Agreement shall be binding upon and inure
to the benefit of the parties hereto, and their respective heirs, personal
representatives, successors and assigns; except that it shall not be assignable
by the Executive. This Agreement and the terms and provisions hereof shall be
construed in accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and date first above written.
AM COMMUNICATIONS, INC..
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, President
/s/ Xxx Xxxxxx
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XXX XXXXXX
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