EMPLOYMENT AGREEMENT
Exhibit
10.6
THIS
AGREEMENT
is by
and between MICROWAVE
SATELLITE TECHNOLOGIES, INC.,
a New
Jersey corporation with corporate offices located in Hawthorne, New Jersey
(“MST”) and XXXXX
X. XXXXXXXXX
(“Executive”).
WHEREAS,
MST is
being acquired by Telkonet, Inc. (the “Acquisition”);
WHEREAS,
prior
to the Acquisition, MST was a corporation owned by Executive; and
WHEREAS,
subject
to the Acquisition being completed (the “Effective Date”), MST desires to employ
Executive, and Executive desires to be employed by MST.
NOW
THEREFORE,
MST
hereby employs Executive, and Executive hereby accepts employment with MST
on
the following terms and conditions:
1. Duties.
MST
hereby employs Executive in the capacity of President and Chief Executive
Officer. In such capacity, Executive shall perform the duties of a president
and
chief executive officer in a professional, supervisory and managerial nature
solely for the benefit of MST and pertaining to the business and affairs
of MST
as determined by the Board of Directors and/or the Executive Committee of
MST.
Executive shall report directly to Telkonet, Inc.’s Chief Executive Officer (the
“Telkonet CEO”). Executive’s duties and responsibilities shall also include, but
not be limited to, the following:
(a) Serve
as
the chief executive officer of MST’s operations and provide leadership for MST’s
activities;
(b) Oversee
all MDU and, after a transition period as determined by the Telkonet CEO,
all
the hotel and motel operations of MST and Telkonet, Inc. In conjunction with
the
2006 planning process, the Executive and the Telkonet CEO and/or his designees
will define the geographic boundaries and managed solution offerings to be
the
Executive’s responsibility;
(c) Hire,
compensate, discipline and terminate MST staff within the approved budget,
establish job descriptions, duties and responsibilities of all MST staff
in
accordance with MST Bylaws, and the policies and procedures of MST, perform
regular evaluations of all MST staff, determine the level of compensation
of
such staff on the basis of such evaluations, within the approved budget and
in
accordance with the policies of MST and have primary responsibility for the
day-to-day operations of MST;
(d) Alert
and
advise the Board of Directors and/or the Executive Committee about reasonably
significant matters needing their attention and action;
(e) Serve
as
the representative of MST in activities related to its objectives and
policies;
(f) Direct
the coordination of the activities of MST committees and projects;
(g) Oversee,
under the direction of the Board of Directors and with the assistance of
MST’s
outside certified public accountant (the “MST Accountant”), the custody and use
of all funds, securities, property and, generally, all assets of MST and
the
deposit of the funds of MST;
(h) Oversee
the preparation of a proposed annual budget of MST;
(i) Oversee
the receipt and disbursement of MST funds in accordance with the adopted
budget
of MST;
(j) Supervise
the sales, installation and support of all MST subscriber acquisition
activities;
(k) Oversee,
develop and expand all aspects of MST’s business, sales and production
operations;
(l) Present
an annual financial report to the Board of Directors;
(m) Present
to the Board of Directors an annual report of all activities of
MST;
(n) Negotiate,
evaluate and execute all contracts, agreements and commitments arising in
the
ordinary course of MST’s business for and on behalf of MST, consistent with the
duties and responsibilities set forth above;
(o) Make
expenditures consistent with the approved budget of MST; and
(p) Implement
all Board directives and perform all such other duties that may be assigned
from
time-to-time by the Board of Directors in its discretion.
2. Term.
The term
of this Agreement (the “Term”) shall commence on the Effective Date and shall
expire on December 31, 2008, unless terminated as provided in Section 6 or
extended by the written mutual consent of the parties.
3. Extent
of Services.
During
the Term and any extension thereof, Executive shall devote his full time
and
efforts to the performance, to the best of his abilities, of such duties
and
responsibilities inherent in the position of President and Chief Executive
Officer, as described in Section 1 above, and as the Board of Directors and/or
the Officers of MST shall determine, consistent therewith.
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4. Compensation.
(a) Salary.
Executive shall be paid Two Hundred Fifty Thousand Dollars ($250,000.00)
on an
annualized basis in accordance with MST’s normal payroll practices, and subject
to all lawfully required withholding.
(b) Executive
Participation in MST Staff Benefits Plans.
Following the Effective Date, Executive shall be entitled to participate
in any
group health programs and other benefit and incentive plans, which may be
instituted from time-to-time for MST employees, and for which Executive
qualifies under the terms of such plans. All such benefits shall be provided
on
the same terms and conditions as generally apply to all other MST employees
under these plans and may be modified by MST from time-to-time.
(c) Expenses.
Subject
to approval by the Telkonet CEO, Executive shall be reimbursed by MST for
all
ordinary, reasonable, customary and necessary expenses incurred by him in
the
performance of his duties and responsibilities as President. Executive agrees
to
prepare documentation for such expenses as may be necessary for MST to comply
with the applicable rules and regulations of the Internal Revenue Service.
MST
will provide an auto for the Executive’s business use.
5. Vacation.
At full
pay and without any adverse effect to his compensation, provided all other
terms
and conditions of this Agreement are satisfied, Executive shall be entitled
to
three (3) weeks of vacation for each full calendar year during the term of
this
Agreement. Executive agrees to schedule his vacation leave in advance upon
written notice to the Telkonet CEO and at a time with minimum disruption
to MST.
Carryover of vacation days in excess of one week is subject to the prior
approval of the CEO of Telkonet.
6. Termination.
This
Agreement shall terminate in accordance with Section 2 of this Agreement,
or
upon the first to occur of any of the following events:
(a) The
bankruptcy or dissolution of MST;
(b) The
death
of Executive;
(c) The
mutual consent of Executive and MST;
(d) “Cause”
exists for termination. For purposes of this Agreement, “cause” shall include,
but not be limited to, the following: (1) theft, fraud, embezzlement, dishonesty
or other similar behavior by Executive; (2) any material breach by Executive
of
any provision of this Agreement; (3) any habitual neglect of duty or misconduct
of Executive in discharging any of his duties and responsibilities under
this
Agreement; (4) any conduct of Executive which is detrimental to or embarrassing
to MST, including, but not limited to, Executive being indicated or convicted
of
a felony or any offense involving moral turpitude; or (5) any default of
Executive’s obligations hereunder, or any failure or refusal of Executive to
comply with the policies, rules and regulations of MST, which default, failure
or refusal is not cured within a reasonable time (but not to exceed thirty
(30)
days) after written notification thereof to Executive by MST. If cause exists
for termination, Executive shall be entitled to no further compensation,
except
for accrued leave and vacation and except as may be required by applicable
law.
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7. Surrender
of Books and Papers.
Upon
termination of this Agreement (irrespective of the time, manner, or cause
of
termination, be it for cause or otherwise), Executive shall immediately
surrender to MST all books, records, or other written papers or documents
entrusted to him or which he has otherwise acquired pertaining to MST and
all
other MST property in Executive’s possession, custody or control.
8. Inventions
and Patents.
Executive agrees that Executive will promptly from time-to-time fully inform
and
disclose to MST any and all ideas, concepts, copyrights, copyrightable material,
developments, inventions, designs, improvements and discoveries of whatever
nature that Executive may have or produce during the term of Executive’s
employment under this Agreement that pertain or relate to the then current
business of MST (the “Creations”), whether conceived by Executive alone or with
others and whether or not conceived during regular working hours. All Creations
shall be the exclusive property of MST and shall be “works made for hire” as
defined in 17 U.S.C. §101, and MST shall own all rights in and to the Creations
throughout the world, without payment of royalty or other consideration to
Executive or anyone claiming through Executive. Executive hereby transfers
and
assigns to MST (or its designee) all right, title and interest in and to
every
Creation. Executive shall assist MST in obtaining patents or copyrights on
all
such inventions, designs, improvements and discoveries being patentable or
copyrightable by Executive or MST and shall execute all documents and do
all
things necessary to obtain letters of patent or copyright, vest the MST with
full and exclusive title thereto, and protect the same against infringement
by
others, and such assistance shall be given by Executive, if needed, after
termination of this Agreement for whatever cause or reason. Executive hereby
represents and warrants that Executive has no current or future obligation
with
respect to the assignment or disclosure of any or all developments, inventions,
designs, improvements and discoveries of whatever nature to any previous
Employer, entity or other person and that Executive does not claim any rights
or
interest in or to any previous unpatented or uncopyrighted developments,
inventions, designs, improvements or discoveries.
9. Trade
Secrets, Non-Competition and Non-Solicitation.
(a) Trade
Secrets.
Contemporaneous with the execution of this Agreement and during the term
of
employment under this Agreement, MST shall deliver to Executive or permit
Executive to have access to and become familiar with various confidential
information and trade secrets of MST and Telkonet, Inc., including without
limitation, data, production methods, customer lists, product format or
developments, other information concerning the business of MST and Telkonet,
Inc., and other unique processes, procedures, services and products of MST
and
Telkonet, Inc., which are regularly used in the operation of the business
of the
MST and Telkonet, Inc. (collectively, the “Confidential Information”). Executive
shall not disclose any of the Confidential Information that he receives from
MST, Telkonet, Inc. or their clients and customers in the course of his
employment with MST, directly or indirectly, nor use it in any way, either
during the term of this Agreement or at any time thereafter, except as required
in the course of employment with MST. Executive further acknowledges and
agrees
that Executive owes MST and Telkonet, Inc., a fiduciary duty to preserve
and
protect all Confidential Information from unauthorized disclosure or
unauthorized use. All files, records, documents, drawings, graphics, processes,
specifications, equipment and similar items relating to the business of MST
and/or Telkonet, Inc., whether prepared by Executive or otherwise coming
into
Executive’s possession in the course of his employment with MST, shall remain
the exclusive property of MST and Telkonet, Inc. and shall not be removed
from
the premises of MST and/or Telkonet, Inc. without the prior written consent
of
MST and/or Telkonet, Inc. unless removed in relation to the performance of
Executive’s duties under this Agreement. Any such files, records, documents,
drawings, graphics, specifications, equipment and similar items, and any
and all
copies of such materials which have been removed from the premises of MST
and/or
Telkonet, Inc., shall be returned by Executive to MST. Executive further
acknowledges that the covenants of Executive herein are intended to include
the
protection of the confidential information of MST's and Telkonet, Inc.’s
customers and clients, that come into the possession of Executive as a result
of
his employment with MST, and that such customers and clients of MST shall
be
entitled to rely on and enforce these covenants against Executive for their
own
benefit.
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(b) Non-Competition.
Executive acknowledges that he will be provided with and have access to the
Confidential Information, the unauthorized use or disclosure of which would
cause irreparable injury to MST, that MST’s willingness to enter into this
Agreement is based in material part on Executive’s agreement to the provisions
of this Section 9(b)
and that
Executive’s breach of the provisions of this Section would materially and
irreparably damage MST. In consideration for MST’s disclosure of Confidential
Information to Executive, Executive’s access to the Confidential Information,
and the salary paid to executive by MST hereunder, Executive agrees that
during
Executive’s employment with MST under this Agreement and for one (1) year after
the termination of Executive’s employment and regardless whether such
termination is with or without cause, Executive shall not, directly or
indirectly, either as an executive, employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, advisor or
in any
other individual or representative capacity, engage or participate in any
business that is in competition in any manner whatsoever with the Restricted
Business (as defined herein) in New York City and any Major Metropolitan
areas
MST has committed and deployed, or undertaken significant development of,
its
managed solution. “Restricted Business” means (1) any business conducted by MST
at any time prior to, or during Executive’s employment pursuant to this
Agreement, and (2) any other related or similar business conducted by MST
or
Telkonet, Inc. during Executive’s employment with MST under this
Agreement.
(c) Reasonableness
of Restrictions.
Executive acknowledges that the restrictions set forth in Section
9(b)
of this
Agreement are reasonable in scope and necessary for the protection of the
business and goodwill of MST. Executive agrees that should any portion of
the
covenants in Section
9
be
unenforceable because of the scope thereof or the period covered thereby
or
otherwise, the covenant shall be deemed to be reduced and limited to enable
it
to be enforced to the maximum extent permissible under the laws and public
policies applied in the jurisdiction in which enforcement is
sought.
(d) Soliciting
Executives.
Executive shall not during the term of this Agreement or for a period of
one (1)
year after termination of Executive’s employment hereunder for any reason,
whether by resignation, discharge or otherwise, either directly or indirectly,
employ, enter into agreement with, or solicit the employment of, Executives
of
MST or Telkonet, Inc. for the purpose of causing them to leave the employment
of
MST or Telkonet, Inc. or take employment with any business that is in
competition in any manner whatsoever with the business of MST or Telkonet,
Inc.
(e) Injunctive
Relief; Extension of Restrictive Period.
In the
event of a breach of any of the covenants by Executive or MST contained in
this
Agreement, it is understood that damages will be difficult to ascertain,
and
either party may petition a court of law or equity for injunctive relief
in
addition to any other relief which Executive or MST may have under the law,
including but not limited to reasonable attorneys’ fees.
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10. Miscellaneous.
(a) This
Agreement shall be binding upon the parties and their respective heirs,
executors, administrators, successors and assigns. Executive shall not assign
any part of his rights under this Agreement without the prior written consent
of
MST.
(b) This
Agreement contains the entire agreement and understanding between the parties
and supersedes any and all prior understandings and agreements between the
parties regarding Executive’s employment.
(c) No
modification hereof shall be binding unless made in writing and signed by
the
party against whom enforcement is sought. No waiver of any provisions of
this
Agreement shall be valid unless the same is in writing and signed by the
party
against whom it is sought to be enforced, unless it can be shown through
custom,
usage or course of action.
(d) This
Agreement is executed in, and it is the intention of the parties hereto that
it
shall be governed by, the laws of the State of New Jersey.
(e) The
provisions of this Agreement shall be deemed to be severable, and the invalidity
or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
(f) Any
notice or communication permitted or required by this Agreement shall be
in
writing and shall become effective upon personal service, or service by wire
transmission, which has been acknowledged by the other party as being received,
or two (2) days after its mailing by certified mail, return receipt requested,
postage prepaid addressed as follows:
(1) If
to
MST, to the then Chair of the Board at the Chair’s last recorded address on the
records of MST, with a copy to the general counsel for MST.
(2) If
to
Executive, to:
Xxxxx
Xxxxxxxxx
000-000
Xxxxxx Xxxx
Xxxxxxxxx,
Xxx Xxxxxx 00000
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IN
WITNESS WHEREOF,
MST and
Executive have executed this Agreement as of the Effective Date.
|
MICROWAVE
SATELLITE
TECHNOLOGIES,
INC.
By:_____________________________
Name:
Title:
|
EXECUTIVE
By:____________________________________
Xxxxx X.
Xxxxxxxxx
|
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