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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of April 4, 1997, by and between
XXXXXXX COMMUNICATIONS CORPORATION, an Iowa corporation (the "Corporation"),
and XXXXXX X. XXXXXXX (the "Employee").
RECITALS
The Corporation and the Employee acknowledge the following:
A. The Employee has valuable expertise and experience which will enable
him to provide valuable business and management services to the Corporation.
B. The Corporation desires to assure itself of the Employee's services and
the Employee desires to make his services available to the Corporation on the
terms and conditions set forth below.
AGREEMENTS
In consideration of the mutual covenants and agreements set forth in this
Agreement, the parties agree as follows:
1. Employment. The Corporation employs the Employee and the Employee
accepts employment with the Corporation on the terms and conditions set forth
in this Agreement.
2. Term. The original term of the Employee's employment hereunder shall
commence on the date of this Agreement and continue until April 4, 1999, and
renew automatically from year to year thereafter, unless terminated earlier
pursuant to paragraph 6 of this Agreement or unless written notice is given by
either party to the other at least 90 days before the end of the original term
or any renewal term that such employment shall cease as of the end of such term
(the "Employment Period").
3. Duties. The Employee will initially serve as the Corporation's Chief
Executive Officer and will perform the duties specified in the Corporation's
By-Laws and specified by the Board of Directors from time to time. The
Employee will devote his entire business time, effort, skill and attention to
such employment.
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4. Compensation.
(a) Base Salary. The Employee shall receive a base annual salary of
$130,000, payable in regular and equal semi-monthly installments ("Base
Salary").
(b) Salary Adjustment. The Compensation Committee of the Board of
Directors (the "Compensation Committee") will review at least annually the
Employee's Base Salary to determine whether it should be increased.
(c) Incentive Bonus. During the term of this Agreement, the Employee
will be eligible to participate in an incentive compensation program to be
developed by the Compensation Committee. The terms and conditions of such
program, including the amount of any bonus payable to the Employee, and the
performance objectives to be met for a bonus to be paid, will be in the sole
discretion of the Compensation Committee.
(d) Stock Options. The Corporation and the Employee have, upon the
execution of this Agreement, executed and delivered the Stock Option Agreement
attached to this Agreement as Annex A.
5. Fringe Benefits.
(a) Group Insurance. The Employee will be eligible to participate in
the Corporation's group insurance programs on the same terms and conditions as
are available to other employees of the Corporation generally.
(b) Vacation. The Employee will be entitled to receive four weeks of
paid vacation annually. Such vacation shall be taken at such times and in such
intervals as are mutually acceptable to the Employee and the Corporation.
(c) Automobile. The Corporation will provide the Employee with full use
of an automobile (retail price not to exceed $30,000) owned or leased by the
Corporation for use in carrying out his duties for the Corporation and for use
in such personal business as he deems appropriate. The Corporation agrees to
provide adequate insurance for the automobile and occupants and to pay
maintenance costs necessary to keep the automobile in good operating condition.
(d) Generally. In addition to the benefits described above, the
Corporation will provide the Employee with the same fringe benefits as are
enjoyed by other employees of the Corporation generally.
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6. Termination of Employment. If the Employee's employment is terminated
by the Corporation for any reason other than Cause (as defined herein), the
Employee will be entitled to continue to receive, as his exclusive severance
benefit, his then Base Salary for a period equal to the period of
noncompetition described in section 7(b) after the date of such termination.
If the Employee's Employment is terminated by the Employee or is terminated by
the Corporation with Cause, the payments for compensation and vested rights to
fringe benefits shall be pro rated to the date of termination. "Cause" shall
mean death, disability which, in the opinion of the Board of Directors, renders
the Employee unable to perform his duties under this Agreement, fraud,
dishonesty, acts of negligence in the course of employment, misrepresentation
to the shareholders or Board of Directors, the commission of an act
constituting a felony or the Employee's failure to follow and/or perform a
specific directive of the Board of Directors.
7. Noncompetition. The parties agree that the Corporation's customer
contacts and relations are established and maintained at great expense and by
virtue of the Employee's employment with the Corporation, the Employee will
have unique and extensive exposure to and personal contact with the
Corporation's customers, and that he will be able to establish a unique
relationship with those individuals and entities that will enable him, both
during and after employment, to unfairly compete with the Corporation. The
parties further agree that the Corporation's customers and business contacts
are a small percentage of the total number of organizations, associations and
individuals who are customers or potential customers for companies offering the
same or similar services and products offered by the Corporation. Further, the
parties agree that the terms and conditions of the following restrictive
covenants are reasonable and necessary for the protection of the Corporation's
business, trade secrets and confidential information and to prevent great
damage or loss to the Corporation as a result of action taken by the Employee.
The Employee acknowledges that the noncompete restrictions and nondisclosure of
confidential information restrictions contained in this Agreement are
reasonable and the consideration provided for herein is sufficient to fully and
adequately compensate the Employee for agreeing to such restrictions.
(a) During Term of Employment. The Employee hereby covenants and agrees
that, during his employment with the Corporation, he shall not, directly or
indirectly, either individually or as an employee, officer, principal, agent,
partner, shareholder, owner, trustee, beneficiary, co-venturer, distributor or
consultant or in any other capacity, participate in, become associated with,
provide assistance to, engage in or have a financial or other interest in any
business, activity or enterprise which is competitive with the Corporation or
any successor or assign of the Corporation. The ownership of less than a 2%
interest in a corporation whose shares are traded in a recognized stock
exchange or traded in
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the over-the-counter market, even though that corporation may be a competitor
of the Corporation, shall not be deemed financial participation in a
competitor.
(b) Upon Termination of Employment. Employee agrees that during a
period after termination of his employment with the Corporation equal to six
months, if such termination occurs prior to October 4, 1997, a period of months
equal to his employment term if such termination occurs on or after October 4,
1997 but prior to April 4, 1998 and a period of two years if such termination
occurs on or after April 4, 1998, he will not, directly or indirectly, either
individually or as an employee, officer, agent, partner, shareholder, owner,
trustee, beneficiary, co-venturer, distributor, consultant or in any other
capacity:
(i) Canvass, solicit or accept from any person or entity who is an
"Active Customer" of the Corporation any business in competition with the
business of the Corporation or the successors or assigns of the Corporation.
"Active Customer" shall mean any account which received within the twelve
months prior to the Employee's termination of employment, any products or
services supplied by or on behalf of the Corporation and any prospective
account which was under active solicitation by the Corporation during the
final twelve months of Employee's employment with the Corporation.
(ii) Request or advise any of the Active Customers, suppliers or
other business contacts of the Corporation who currently have or have had
business relationships with the Corporation within twelve months preceding the
date of the Employee's termination of employment, to curtail or cancel any of
their business or relations with the Corporation.
(iii) Induce or attempt to induce any employee, officer, director,
sales representative, consultant or other personnel of the Corporation to
terminate his relationship or breach his agreements with the Corporation.
(iv) Participate in, become associated with, provide assistance to,
engage in or have a financial or other interest in any business, activity or
enterprise within the "Restricted Territory" which is competitive with the
business of the Corporation or any successor or assign of the Corporation;
provided, however, that the ownership of less than 2% of the stock of a
corporation whose shares are traded in a recognized stock exchange or traded in
the over-the-counter market, even though that corporation may be a competitor
of the Corporation, shall not be deemed financial participation in a
competitor. For purposes of this Agreement, the "Restricted Territory" shall
mean the Continental United States.
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8. Confidential Information. The parties agree that the Corporation's
Customers, business connections, customer lists, procedures, operations,
techniques, trade secrets, proprietary information and other aspects of its
business (the "Confidential Information") are established at great expense and
protected as Confidential Information and provide the Corporation with a
substantial competitive advantage in conducting its business. The parties
further agree that by virtue of the Employee's employment with the Corporation,
he will have access to, and be entrusted with, secret, confidential and
proprietary information, and that the Corporation would suffer great loss and
injury if the Employee would disclose this information or use it to compete
with the Corporation. Therefore, the Employee agrees that during the term of
his employment, and (a) until such time as the Confidential Information becomes
generally available to the public through no fault of the Employee, (b) until
such time as the Confidential Information no longer provides benefit to the
Corporation or (c) for a period of two years after the expiration of the
Employment Period, whichever occurs sooner, the Employee will not, directly or
indirectly, either individually or as an employee, officer, agent, partner,
shareholder, owner, trustee, beneficiary, co-venturer, distributor, consultant
or in any other capacity, use or disclose, or cause to be used or disclosed,
any Confidential Information acquired by the Employee during his employment
with the Corporation whether owned by the Corporation prior to or discovered
and developed by the Corporation subsequent to the Employee's employment, and
regardless of the fact that the Employee may have participated in the discovery
and the development of that information.
9. Relationship with Suppliers. The parties agree that the profitability
and goodwill of the Corporation depends on continued, amicable relations with
its suppliers and the Employee agrees, during his employment with the
Corporation and for two years thereafter, he will not cause, request or advise
any suppliers of the Corporation to curtail or cancel their business with the
Corporation.
10. Common Law of Torts and Trade Secrets. The parties agree that nothing
in this Agreement shall be construed to limit or negate the common law of torts
or trade secrets where it provides the Corporation with broader protection than
that provided herein.
11. Inventions and Improvements. The Employee agrees that every
improvement, invention, process, technique, apparatus, method, manufacturing
system, computer program, design or other creation that the Employee may
invent, discover, conceive or originate by himself or in conjunction with any
other person that relates in any respect to the business of the Corporation
now or hereafter carried on by it shall be the exclusive property of the
Corporation. The Employee understands and agrees that in partial consideration
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of his employment for the compensation herein stated, all such developments,
inventions, improvements, products, processes, apparatuses, methods, designs
and other creations shall be the exclusive property of the Corporation. If the
Employee shall fail to make or refuse to make an assignment to the Corporation
of any development, invention, improvement, process, apparatus, technique,
method, computer program, design or other creation heretofore referred to, the
Corporation shall have the authority, and this Agreement shall operate to give
the Corporation authority to execute, seal and deliver, as the act of the
Employee, any license, any license agreement, contract, assignment or other
instrument in writing that may be necessary or proper to convey to the
Corporation the entire right, title and interest in and to said invention or
development heretofore referred to. The Employee hereby agrees to hold the
Corporation and its assigns harmless by reason of the Corporation's acts
pursuant to this paragraph. The Employee further agrees that, during the term
of this Agreement and at any time thereafter whenever reasonably necessary for
the protection of the Corporation, he shall cooperate with and be compensated
by the Corporation and its counsel in the prosecution and/or defense of any
litigation at the cost of the Corporation which may arise in connection with
the inventions or other creations referred to above, without any liability or
cost to the Employee.
12. Specific Performance. The parties acknowledge and agree that breach
of this Agreement by the Employee would cause irreparable damage to the
Corporation and that monetary damages alone would not provide the Corporation
with an adequate remedy for breach of this Agreement. Therefore, if any
controversy arises concerning the rights or obligations of the Employee under
this Agreement, such rights or obligations shall be specifically enforced by an
injunction order issued by a court of competent jurisdiction. Such remedy,
however, shall be cumulative and nonexclusive and shall be in addition to any
other remedy to which the parties may be entitled.
13. Sale, Consolidation or Merger. In the event of a consolidation or
merger of the Corporation with or into another corporation or entity, or the
sale of substantially all of the operating assets of the Corporation to another
corporation, entity or individual, the successor-in-interest shall be deemed to
have assumed all liabilities of the Corporation under this Agreement.
14. Waiver. The failure of either party to insist, in any one or more
instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or a relinquishment of any right granted hereunder
or of the future performance of any such term, covenant or condition.
15. Severability. In the event that any provision shall be held to be
invalid or unenforceable for any reason whatsoever, it is agreed such
invalidity or unenforceability shall not affect any other provision of this
Agreement and the
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remaining covenants, restrictions and provisions hereof shall remain in full
force and effect and any court of competent jurisdiction may so modify the
objectionable provision as to make it valid, reasonable and enforceable.
Furthermore, the parties specifically acknowledge the covenants and agreements
contained in sections 7 and 8 hereof are separate agreements.
16. Amendment. This Agreement may only be amended by an agreement in
writing signed by all of the parties hereto.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Iowa.
18. Benefit. This Agreement shall be binding upon and inure to the
benefit of and shall be enforceable by and against the Corporation, its
successors and assigns, and the Employee, his heirs, beneficiaries and legal
representatives. It is agreed that the rights and obligations of the Employee
may not be delegated or assigned except as specifically set forth in this
Agreement.
XXXXXXX COMMUNICATIONS CORPORATION
BY /s/ Xxx X. Xxxxxxx
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Xxx X. Xxxxxxx, Chairman
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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