Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of September 1, 2006 by and between
Wi-Tron, Inc., a Delaware corporation, with offices located at 00 XxXxxxxx Xx,
Xxxxxxx, XX 00000 (the "Company"), and Xxxxxxxx X. Xxxxx, an individual residing
at 00 Xxxxxxxx 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 salaries due Executive prior to the date of this
Agreement;
NOW, THEREFORE, the parties mutually agree as follows:
Section 1. Employment. The Company hereby employs Executive and the Executive
hereby accepts such employment, as a Vice President-Product Development of the
Company, subject to the terms and conditions set forth in this Agreement.
Section 2. Duties. The Executive shall serve as Vice President-Product
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.
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.
Section 3. Term of Employment. The term of the Executive's employment shall be
for a period of three years commencing on September 1, 2006, subject to earlier
termination by the parties pursuant to Sections 4, 6 and 7 hereof. 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.
Section 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"). There will be a review of the salary each year. Any annual salary
increase will not exceed 10%. 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. The Executive
will retain all customary benefits;
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(b) Company shall issue to Executive a three-year warrant for the purchase
of 1,000,000 shares of the Company's common stock, exercisable at $.20 per share
(the "Warrant");
(c) Company will provide an option, in exchange for the Warrant, providing
for payment of $200,000 in cash, to be paid in quarterly installments of $50,000
beginning September 30, 2006. The company will in exchange, receive proportional
amount of warrants, 250,000 warrants for each payment of $50,000. The Executive
may choose to exercise the warrants in lieu of quarterly payment and will inform
the company 10 days prior to any sale.
(d) Once the $200,000 has been paid in full, this contract will revert to
a consulting agreement at a monthly amount of $5000, for 12 months. The
consulting rate for any additional work agreed to beyond the 24 hours worked
weekly, will be based on an hourly rate of $65 per hour. While consulting for
the Company, the Executive will retain all of the customary benefits allowed
under his regular employment.
(e) Company shall extend the exercise date on the 1,050,000 stock options
currently beneficially owned by the Executive to May 2008.
(f) Company will issue to the employee 132,246 shares of common stock as
replacement for the "Xxxxxxxxx Stock."
4.2 Release. Executive hereby forgives and releases 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 automobile expenses and reimburse the Executive 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 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.
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Section 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.
Section 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 (90)
consecutive days or longer or for any one hundred eighty (120) 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 twelve
months salary. The Company will provide disability insurance.
Section 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.
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.
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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".
Section 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 twelve 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.
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."
Section 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.
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Section 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.
(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.
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Section 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.
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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.
WI-TRON, INC
By: /s/ Xxx Xxxxxxxxx
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Xxx Xxxxxxxxx, CEO
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
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