EXHIBIT 10.14
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of October
1,2004 (the "Effective Date") between Xxxxxxx X. Xxxxxx ("Employee") and Winncom
Technologies Corp., a Maryland corporation (the "Company"). For purposes of this
Agreement, each of Employee and the Company is individually referred to as a
"Party", and Employee and the Company are referred to collectively as the
"Parties".
Recital
-------
The Company desires to retain the services of Employee and Employee has
offered to provide services to the Company pursuant to the terms of this
Agreement.
Agreement
---------
In consideration of the premises and of the mutual covenants included in
this Agreement, the Parties agree as follows:
1. Services. The Company retains Employee, and Employee shall perform
services for the Company as set forth in this Agreement on behalf of the Company
for the period and under the terms and conditions set forth in this Agreement.
2. Term. This Agreement shall be for a two and one half year period
commencing on the Effective Date, subject, however, to review and termination as
provided herein.
3. Duties. Employee shall perform the following services for the Company:
3.1 Employee shall serve as President and Chief Executive Officer of
the Company, or in such other position as determined by the Company's Board Of
Directors (the "Board"), subject to the direction of the Board, and in that
capacity shall work with the Company to pursue the Company's plans as directed
by the Board. "). In the event the Board directs Employee to act in a different
capacity other than as the Chief Executive Officer will effect a non-cause
termination of this Agreement and Employee shall be entitled to receive
severance equal to the balance due Employee per the terms of this Agreement. The
Parties agree to negotiate in good faith the continuation of the employment
relationship of Employee with Company following the Term upon such terms as the
Parties may agree; provided however, that in the event that either Party does
not desire to continue the employment relationship beyond the Term, that Party
shall deliver notice to the other Party of that intention on or before 90 days
prior to the expiration of the Term and the Parties shall not be obligated to
negotiate the continuation of the employment relationship. If the employment
relationship does not continue beyond the Term, Employee agrees to reasonably
cooperate with Company and with respect to the transition of the new management
in the operations previously performed by Employee.
3.2 During the term of this Agreement, Employee shall devote all of
Employee's business time to the performance of Employee's duties under this
Agreement. Without limiting the foregoing, Employee shall perform services on
behalf of the Company for at least 40 hours per week and Employee shall be
available at the request of the Company at other times, including weekends and
holidays, to meet the needs and requests of the Company's customers. Other than
through a change in control, acquisition, consolidation, reorganization or
1
merger, in the event the Board directs Employee to act in a capacity different
than as the Chief Executive Officer of the Company the employee will have thirty
days from the effective date of such directed new capacity to effect a non-cause
termination of this Agreement. If Employee elects to effect a non-cause
termination of this Agreement pursuant to the terms hereof, Employee shall be
entitled to receive severance equal to the balance due Employee per the terms of
this Agreement payable on a biweekly basis over the remaining term of this
Agreement.
3.3 During the term of this Agreement, Employee will not engage in any
other activities or undertake any other commitments that conflict with or take
priority over Employee's responsibilities and obligations to the Company and the
Company's customers, including without limitation those responsibilities and
obligations incurred pursuant to this Agreement.
3.4 As an officer of the Company, Employee shall have the right to
review all intercompany charges.
4. Compensation. The Company shall pay Employee for the performance of
services pursuant to this Agreement as follows:
4.1 Commencing as of the Effective Date and continuing until December
31, 2006 , the Company shall pay Employee for the performance of services
pursuant to this Agreement a salary at an annual rate of $385,000 (the "Base
Salary").
4.2 The Company shall pay the Employee a bonus for the period from
October 1, 200 through December 31, 200 and for the periods January 1, 2005
through December 31, 2005, and January 1, 2006 through December 31, 2006 (the
"Bonus") if the Employee meets the criteria set forth in Exhibit A attached
hereto for the respective periods. The amount of the Bonus shall be as set forth
in Exhibit A for each set of criteria set forth in Exhibit A. The Bonus paid
under this Section 4.2 shall not be payable until the completion of the annual
audit by the Company's designated auditors but shall be payable within 60 days
after the completion of the audit of ARC Wireless Solutions,, Inc. (the
"Parent"), for the respective fiscal years pursuant to this Agreement
4.3 Any payments that the Company is required to make to the Employee
pursuant to this Agreement shall be reduced by (i) such amounts as are required
to be withheld with respect to those amounts under and for the purposes of any
of the applicable tax and other laws or regulations, and (ii) such amounts as
Employee may owe to the Company at any time and from time to time.
5. Reimbursement Of Expenses. Employee shall be reimbursed for reasonable
expenses incurred on behalf of the Company in the performance of Employee's
duties and services pursuant to this Agreement. Employee shall provide the
Company with a written invoice containing a detailed description of expenses
incurred not later than the 30th day following the calendar month in which the
expenses were incurred on behalf of the Company. The Company shall pay this
invoice within 30 days of its receipt.
6. Additional Benefits:
6.1. Employee shall be entitled to take reasonable amounts of paid
time off for vacation and other personal reasons.
6.2. Employee and his family, if any, shall be entitled to receive
such benefits under medical insurance plans, life and disability insurance and
otherwise, as are offered to all other officers of Company including an
Executive Physical performed by an independent medical doctor selected by
Employee.
2
7. Termination.
7.1 Employee may terminate this Agreement at any time without further
liability or obligation hereunder if the Company has breached a material
provision of this Agreement or the Company has otherwise materially breached any
other obligation to Employee, such termination to be effected by Employee's
giving the Company written notice of termination, including a description of the
specific breach or breaches that are the basis for that termination, at least 30
days prior to the date for termination and the Company's failure to cure the
breach prior to the date set for termination in that notice.
7.2 At the option of the Company, this Agreement may be terminated for
cause, with such termination to be effected by the Company's giving Employee
written notice of termination, including the specific "cause" or "causes" upon
which the Company is basing its notice of termination and steps necessary to
cure the breach. Notice shall be given at least 30 days prior to the date for
termination except for (iii)(A) and (B) defined below. The term "for cause"
shall include termination of employment as a result of any of the following: (i)
a breach by Employee of a material provision of this Agreement; or (ii) a breach
by Employee of any other material obligation of Employee to the Company; or
(iii) as a result of a determination by the Board, acting reasonably, that the
Employee has (A) committed a criminal act or an act constituting moral
turpitude, or (B) committed any fraudulent act, or (C) breached the Employee's
fiduciary duty to the Company. With respect to any breach for which a
termination notice is given, except for a breach pursuant to Section 6.2
(iii)(A) or 6.2(iii)(B), to the extent the Company believes the breach can be
cured in a manner that the Company believes it would be in the Company's
interest for the Employee to remain employed pursuant to this Agreement, the
Company's notice of termination shall state the manner in which it believes the
Employee should cure the breach.
7.3 The Company may terminate this Agreement for any reason by giving
30 days' written notice of termination at any time after this Agreement has been
in effect for at least six months, which notice shall include a commitment to
pay Employee's compensation in accordance with terms of this Agreement that
would be payable during the remaining term of this Agreement at the times
provided for in this Agreement It is further understood that in the event the
Agreement is terminated per this Section 7.3. that any other outstanding amounts
owing to Employee by Company as of the date of termination shall be paid in full
to Employee no later than 60 days from the date of termination.
7.4 In the event Employee's employment terminates, for any reason,
Employee agrees to return to the Company all Company documents (and all copies
thereof), any other Company property in Employee's possession or control, and
any materials of any kind that contain or embody any proprietary or confidential
material of the Company. In addition, all unaccrued salary obligations of the
Company to Employee shall cease as of the date of termination except as
otherwise expressed herein.
7.5 Non-Compete: Employee acknowledges and recognizes the highly
competitive nature of Company's business and that Employee's duties hereunder
justify reasonably restricting Employee's future employment activities following
any termination of employment with Company. Employee agrees that while Employee
is employed with Company, and for a period of one year following termination of
employment with Company, Employee will not reveal any proprietary or trade
secret information regarding Company that is not already available to the
public.
3
8. Representations And Warranties.
8.1. The Company represents and warrants to Employee as follows: (i)
the Company has been duly formed as a corporation under the laws of the State of
Maryland; and (ii) the execution of this Agreement has been duly authorized by
the Company and does not require the consent of or notice to any party not
previously obtained or given.
8.2. Employee represents and warrants to the Company that the
execution of this Agreement and the performance of Employee's obligations
hereunder do not require the consent of or notice to any party not previously
obtained or given, and there is nothing that prohibits or restricts the
execution by Employee of this Agreement or his performance of the obligations
hereunder.
9. Covenants. Each of Employee and the Company covenants to diligently and
skillfully do and perform the acts and duties required herein.
10. Miscellaneous.
10.1. Entire Agreement. This Agreement constitutes the entire
Agreement between the Parties with respect to the subject matter of this
Agreement and supersedes all prior and contemporaneous agreements between the
Parties with respect to the subject matter of this Agreement.
10.2. Notice. All notices, requests, demands, directions and other
communications ("Notices") concerning this Agreement shall be in writing and
shall be mailed or sent by telecopier or facsimile to the applicable Party at
the address of such Party set forth below in this Section 9.2. When mailed, each
such Notice shall be sent by first class, certified mail, return receipt
requested, enclosed in a postage prepaid wrapper, and shall be effective on the
fifth business day after it has been deposited in the mail. When sent by
telecopier or facsimile, each such Notice shall be effective on the day on which
it is sent provided that it is sent on a business day and further provided that
it is sent prior to 5:00 p.m., local time of the Party to whom the Notice is
being sent, on that business day; otherwise, each such Notice shall be effective
on the first business day occurring after the Notice is sent. When sent by
telecopier, Notice shall be supplemented by overnight courier; provided that
failure to send by overnight courier shall not cause a Notice by telecopier to
be considered invalid. Each such Notice shall be addressed to the Party to be
notified as shown below:
The Company: Winncom Technologies Corp.
c/o Xxxxxxx X. Xxxx
00000 X. 00xx Xxx.
Xxxxx Xxxxx, Xxxxxxxx 00000-0000
Facsimile No. (000) 000-0000
Employee: Xxxxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxx 00000
Facsimile No. (000) 000-0000
Either Party may change its address for purposes of this Section 10.2 by giving
the other Party written notice of the new address in the manner set forth above.
4
10.3. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, and if any provision of this Agreement shall be or becomes
prohibited or invalid in whole or in part for any reason whatsoever, that
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remaining portion of that provision or the
remaining provisions of this Agreement.
10.4 Non-Assignability. It is understood that this Agreement has been
entered into personally by the Parties. Neither Party shall have the right to
assign, transfer, commute, encumber or dispose of any duties, rights or payments
due hereunder, which duties, rights and payments with respect hereto, are
expressly declared to be non-assignable and non-transferable, being based upon
the personal services of Employee, and any attempted assignment or transfer
shall be null and void and without binding effect on either Party; provided,
however, that the Company may assign this Agreement to any affiliate or to any
entity into which it merges or with which it becomes consolidated.
10.5. Non-Waiver. The waiver of either Party of a breach or violation
of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach or violation of any provision of this Agreement.
10.6. Amendment. No amendment or modification of this Agreement shall
be deemed effective unless and until it has been executed in writing by the
parties to this Agreement. No term or condition of this Agreement shall be
deemed to have been waived, nor shall there be any estoppel to enforce any
provision of this Agreement, except by a written instrument that has been
executed by the Party charged with such waiver or estoppel.
10.7. Headings. The headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its
interpretation.
IN WITNESS WHEREOF, this Agreement is executed on the dates set forth
below to be effective as of the Effective Date.
EMPLOYEE:
Date:________________________ /S/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx, individually
WINNCOM TECHNOLOGIES CORP.
Date:________________________ By: /S/ Xxxxxxx X. Xxxx
------------------------------
Name: Xxxxxxx X. Xxxx
Position: Chief Executive Officer
5
Exhibit A
---------
Bonus Criteria
--------------
2004
---------------------------------------- --------------------------------------
Earnings (Net Profit) Bonus
---------------------------------------- --------------------------------------
$900,000 and higher $90,000
---------------------------------------- --------------------------------------
$700,000 and higher $70,000
---------------------------------------- --------------------------------------
$500,000 and higher $50,000
---------------------------------------- --------------------------------------
$250,000 and higher $25,000
---------------------------------------- --------------------------------------
2005 10% of Net Profit earned by Winncom
2006 10% of Net Profit Earned by Winncom
6
