1
EXHIBIT 10.2.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Employment Agreement") is entered into
as of the 31st of July, 1997, between XXXXXXX X. XXXXXX (the "Employee") and
TRANSCRYPT INTERNATIONAL, INC., a Delaware corporation (the "Company").
The Company wishes to employ the Employee as President and Chief
Executive Officer of the Company on the terms set forth in this Employment
Agreement, and the Employee wishes to accept such employment on such terms.
THEREFORE, in consideration of the mutual promises set forth herein, it
is mutually agreed between the parties as follows:
Section 1. EMPLOYMENT AND TERM. The Company hereby employs the Employee
and the Employee hereby accepts employment as President and Chief Executive
Officer of the Company on the terms of this Employment Agreement, commencing as
of the date hereof and continuing until December 31, 1999 unless terminated
earlier in accordance with the provisions of Section 5 hereof.
Section 2. DUTIES AND AUTHORITY. The Employee's duties shall be as
determined by the Board of Directors and Chairman of the Board of Directors.
Section 3. COMPENSATION.
(a) Base Salary. The Employee will receive a base salary
during the term of this Employment Agreement of $200,000 per year
("Base Salary"), which shall be payable in approximately equal biweekly
installments. Base salary will be subject to annual review and can be
increased with concurrence of the Board of Directors.
(b) Bonus. The Employee shall receive an annual bonus in an
amount to be determined by the Company's Board of Directors if the
Company meets or exceeds the projections of the Company's performance
set forth in the Strategic Plan distributed quarterly to the Board of
Directors. At a minimum, Employee shall receive a quarterly bonus equal
to 20% of his salary if the Company meets its quarterly sales goal and
20% of his salary if the Company meets quarterly profit goal. Such
bonus shall be due and payable on or before the 30th day following the
close of the Company's quarter.
(c) Additional Benefits. The Employee will also receive such
additional employee benefits as the Company may from time to time make
available to its executive officers, including paid vacations, pension
benefits, qualified profit-sharing plans, employee group insurance,
disability insurance and personal life insurance premium not to exceed
Rate sheet presently quoted per transcrypt obtained policy from Mass
Mutual. Benefits will be at least equal to those received as of the
date of this Employment Agreement.
1
2
(d) Withholdings. All payments made to the Employee pursuant
to this Employment Agreement shall be reduced by all required federal,
state and local withholdings for taxes and similar charges and by all
contributions or payments required to be made by the Employee in
connection with any employee benefit plan maintained by the Company.
Section 4. REIMBURSEMENT FOR EXPENSES. The Employee is expected to
incur certain expenses on behalf of the Company for travel, promotion,
telephone, entertainment and similar items. The Company will reimburse the
Employee for all ordinary, necessary and reasonable amounts of such expenses
incurred by the Employee, which amounts shall be payable promptly upon receipt
of reasonable written documentation signed by the Employee itemizing such
expenses.
Section 5. EARLY TERMINATION OF TERM. This Employment Agreement shall
terminate prior to the date of termination set forth in Section 1 above upon the
first to occur of:
(a) the determination by the Board of Directors that the
Employee has become disabled and shall not be able to continue his
service to the Company; or
(b) the Employee's death; or
(c) the Employment Agreement is terminated by the Company by
reason of the Employee's continuing willful neglect of his duties under
this Employment Agreement, the theft or misappropriation of the
company's assets by the Employee or fraud of the Employee under the
Company.
Section 6. RESTRICTIVE COVENANT. The Employee shall execute,
concurrently with this Employment Agreement, a Noncompete Agreement in the form
attached hereto as Exhibit "A". "On File"
Section 8. AMENDMENTS. No change, modification, waiver, discharge,
amendment or addition to this Employment Agreement shall be binding unless it is
in writing and signed by the Company and the Employee.
Section 9. ENTIRE AGREEMENT This Employment Agreement contains the
entire understanding and agreement between the Company and the Employee and
supersedes any prior agreements between them pertaining to the Employee's
employment with the Company. There are no representations, warranties, promises,
covenants or understandings between the Company and the Employee with respect to
such employment other than those expressly set forth in this Employment
Agreement.
2
3
This Employment Agreement takes precedence over other conflicting agreements
with Employee.
Section 10. GOVERNING LAW. This Employment Agreement shall be governed
by the substantive laws of the State of Nebraska.
Section 11. NONASSIGNABILITY; SUCCESSORS. The obligations of the
Employee under this Employment Agreement are not assignable by him. Except as
provided in the immediately preceding sentence, this Employment Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
successors.
Section 12. NOTICES. Any notice required to be given in writing by any
party to this Employment Agreement may be personally delivered or mailed by
registered or certified mail to the last known address of the party to be
notified. Any such notice personally delivered shall be effective upon delivery
and any such notice mailed shall be effective four business days after the date
of mailing, by registered or certified mail with postage prepaid to the last
known address of the party to be notified.
Section 13. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Employment Agreement shall not affect the other
provisions of this Employment Agreement, and this Employment Agreement shall be
construed in all respects as if such invalid or unenforceable provision were
omitted.
Section 14. HEADINGS. The section and other headings contained in this
Employment Agreement are for reference purposes only and shall not affect the
interpretation of this Employment Agreement.
Section 15. CONSTRUCTION. Whenever required by the context, references
to the singular shall include the plural, and the masculine gender shall include
the feminine gender.
IN WITNESS WHEREOF, the Company has caused this Employment Agreement to
be executed on its behalf and the Employee has signed his name hereto, effective
as of the date first written above.
TRANSCRYPT INTERNATIONAL, INC.
a Delaware corporation
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------
Printed Name Xxxxx X. Xxxxxxxxx
-------------------------
Its Chairman, Compensation Committee
----------------------------------
/s/ XXXXXXX X. XXXXXX
-------------------------------------
XXXXXXX X. XXXXXX, Employee
3
4
EXHIBIT "A"
NONCOMPETE AGREEMENT
TRANSCRYPT INTERNATIONAL, INC., a Delaware corporation (the "Company")
(for the purposes of this Noncompete Agreement, the term "Company" shall include
affiliates of Transcrypt International, Inc.) and XXXXXXX X. XXXXXX ("Employee")
agree as follows:
1 . In consideration of the Company employing Employee as set forth in
that certain Employment Agreement (the "Agreement") of even date hereto executed
by and among the Company and Employee, Employee hereby agrees to adhere to the
following terms and conditions:
Employee expressly covenants and agrees that at not time during the
effective time of the Agreement will it for itself or on behalf of any
other person, partnership, firm, association or corporation in any
territory in which the Employee is acting pursuant to the Agreement (1)
open or operate a business which would be a competitor of the Company,
(2) act as an employee, agent, advisor or consultant of any then
existing competitor of the Company, (3) solicit or accept business from
any of the Company's competitors, unless authorized by the Company, (4)
divert any business from the Company by influencing or attempting to
influence any present customers or the Company or (5) attempt to attract
any supplier away from the Company or use its information regarding the
Company's suppliers in any way which would detrimentally affect the
Company. Employee further covenants and agrees that for two years
following the termination of the Agreement, whether such termination is
voluntary or involuntary, he will not for himself or on behalf of any
other person, partnership, firm, association or corporation in any
territory in which the Company has done business during the 12 months
immediately prior to the Agreement's termination (1) directly or
indirectly solicit or accept business from any of the Company's present
customers or customers it serviced in said territory within the last 12
months of the effective term of the Agreement (2) divert any business
from the Company by influencing or attempting to influence any present
customers of the Company or (3) attempt to attract any supplier away
from the Company or use its information regarding the Company's
suppliers in any way which would detrimentally affect the Company.
2. By signing this agreement, Employee expressly acknowledges that the
territorial limitations, duration and scope of this agreement are fair and
reasonable. This Noncompete Agreement shall survive the termination of the
Agreement.
3. Employee further agrees that the Company shall be entitled to
maintain proceedings in any court of competent jurisdiction, either at law or in
equity, for any breach of this agreement by Employee to enforce the specific
performance of this
4
5
agreement and/or to obtain damages for any breach thereof, and without regard to
any or all remedies sought by the Company, the Company shall be entitled to
recover reasonable attorney's fees incurred in enforcing this agreement.
4. This agreement supersedes any prior agreement between the Employee
and the Company pertaining to the subject hereof. In the event that any portion
of this agreement is declared invalid or illegal by final judgment of any court
of competent jurisdiction, the remainder of this agreement shall remain in full
force and effect, notwithstanding the invalidity or illegality of the other
portion.
5. This agreement shall be governed by the laws of the State of
Nebraska.
6. This agreement may be executed in duplicate counterparts, each of
which shall be deemed to be an original, and all of which shall constitute one
in the same agreement.
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed as of the 23rd day of July, 1997.
TRANSCRYPT INTERNATIONAL, INC.
a Delaware corporation
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------
Printed Name Xxxxx X. Xxxxxxxxx
-------------------------
Its Chairman, Compensation Committee
----------------------------------
-------------------------------------
XXXXXXX X. XXXXXX, Employee
5
