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EXHIBIT 10.12
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as
of the 9th day of September, 1999, (the "Effective Date") by and between TRITON
NETWORK SYSTEMS, INC. (the "Company"), a Florida corporation, and Xxxxx Xxxxxx
(the "Employee").
BACKGROUND
The Company desires to continue to retain the services of the Employee,
and the Employee desires to continue to be retained by the Company, on the terms
and conditions set forth in this Agreement. During the term of his employment as
an Employee (but not as a consultant) pursuant to this Agreement, the Employee
will serve as Chairman of the Board of Directors and, in his capacity as an
employee, will report to the Chief Executive Officer.
The Employee recognizes and agrees that during the course of his
employment with the Company he will have substantial contacts with various
Customers and Potential Customers of the Company and will have access to the
Company's confidential business information and trade secrets. The Employee
acknowledges that the restrictive covenants contained in this Agreement are
reasonable and reasonably necessary to protect the Company's relationships with
its Customers and Potential Customers as well as its confidential business
information and trade secrets.
Accordingly, in consideration of the mutual promises, terms and
conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
TERMS
1. EMPLOYMENT: EMPLOYMENT TERM. The Company hereby continues to employ
the Employee, and the Employee hereby accepts continued employment by the
Company upon the terms and conditions set forth in this Agreement. The Employee
agrees to devote his full business time, energy, skills and best efforts to such
employment. The Employee shall not, directly or indirectly, alone or as a member
of a partnership, or as an officer, director, employee or agent of any other
person, firm or business organization engage in any other business activities or
pursuits requiring his personal service that materially conflict with his duties
hereunder or the diligent performance of such duties. The Employment Term shall
expire on May 1, 2000 or the date of an Initial Public Offering "IPO"),
whichever occurs first. Notwithstanding the above, the Parties agree that the
Company may terminate Employee's employment prior to expiration of the
Employment Term, for any reason, or no reason, with or without cause, upon
written notice to the Employee.
2. CONSULTING SERVICES. Upon the termination of the Employee's
employment with the Company, either at the expiration of the Employment Term, or
earlier, the Company will retain the services of Employee as a consultant for a
period beginning on the date of the
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termination of the Employee's employment hereunder and continuing through August
1, 2001, unless there is a "Change in Control" of the Company "Change of
Control"). In the event of a Change of Control which occurs at any time during
the first six (6) months of the Employee's status as a Consultant, the Company
will continue to pay consulting fees to Employee for the balance of said six (6)
month period. In the event of a Change of Control which occurs after the
Employee's first six (6) months as a consultant, the Employee's status as a
Consultant shall terminate on the effective date of the Change of Control, and
the Company shall have no further obligations to Employee. Upon becoming a
consultant, the employee will make himself available to consult with the
Company's Board of Directors but he will not be expected to consult exclusively
for, or on a full time basis with, the Company. The Employee will also not be
prohibited from pursuing other employment opportunities while serving as a
consultant, provided that it does not violate any terms of this Agreement.
3. COMPENSATION.
3.1 SALARY. During his employment hereunder, the Employee shall be
paid a base salary prorated at a rate equivalent to an annual salary of one
hundred and seventy-five thousand dollars ($175,000), payable in such
installments as the Company pays its other employees ("Base Salary"). Employee
shall also be paid a bonus in the amount of twenty percent (20%) of the
Employee's Base Salary, prorated on an annualized basis, if the Company's
financial performance for the fiscal year meets or exceeds the goals which have
been set by the Board of Directors. The goals for the current fiscal year which
have been set by the Board of Directors shall be attached hereto as Exhibit A.
While serving as a consultant following the expiration of the Employment Term,
the Employee shall be compensated as set forth in Section 3.5.
3.2 STOCK OPTIONS: RESTRICTED STOCK. As an incentive for the
Employee's services under this Agreement, the Employee has been granted options
to purchase one hundred thousand (100,000) shares of TRITON common stock,
exercisable at $2.50 per share, all of which will vest on August 1, 2001. The
stock options referenced in this Section 3.2 are in addition to the shares of
TRITON common stock which have previously been sold to Employee, and which are
in escrow and subject to a lapsing repurchase right held by the Company (the
"Restricted Stock"). The Company hereby agrees that so long as the Employee has
not been terminated for "Cause," the Restricted Stock will continue to vest
(i.e., the repurchase right will continue to lapse) as long as Employee remains
an employee or consultant or remains willing to serve as a consultant.
3.3 BENEFITS. During his period of employment hereunder, the
Employee shall be entitled to participate in the Company's health benefits and
vacation policy as are available and consistent with the Company's policies
related to such benefits.
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3.4 EXPENSE REIMBURSEMENT. The Employee shall, upon submission of
adequate documentary evidence satisfactory to the Company, be entitled to
reimbursement of reasonable out-of-pocket expenses incurred in the performance
of his duties hereunder in accordance with policies established by the Company,
provided that each such expenditure is of a nature deductible under Section 162
of the Internal Revenue Code of 1986, as amended, on the federal income tax
return of the Company as a business expense and not as deductible compensation
to the Employee.
3.5 CONSULTING FEES. During the first six (6) months of his service
as a consultant, Employee shall be paid consulting fees in the amount of
$14,583.33 per month, payable in monthly installments. During the remaining
period of his service as a consultant, ending August 1, 2001, Employee shall be
paid consulting fees in the amount of two thousand five hundred dollars ($2,500)
per month, payable in such installments as the Company pays its employees. There
shall be no bonus during the period of service as a consultant. The benefits
identified in Section 3.3 shall continue only during the first six (6) months of
Employee's service as a consultant.
4. TERMINATION.
4.1 WITHOUT CAUSE. Employee's services as an employee may be
terminated by either party prior to the end of the Employment Term, at any
time, for any reason or no reason, with written notice. If the Company should
terminate the Employee's employment, without Cause, at any time during the Term,
the Company (i) will pay the Employee all accrued but unpaid Base Salary, all
accrued but unpaid bonus, and all incurred but unpaid expense reimbursements
which are payable to Employee pursuant to this Agreement ("Severance Payment")
up to and including the effective date of termination and (ii) will engage the
Employee as a consultant on the terms set forth in Sections 2 and 3.5.
Additionally, if the Employee is terminated without Cause, and the Company fails
for any reason to engage the Employee as a consultant as set forth above, or the
Company for any reason, with or without Cause, terminates the Employee's
services as a consultant, then any unvested restricted stock and stock options
held by Employee will be subject to immediate vesting, and Employee may exercise
any unexercised stock options held by him.
4.2 FOR CAUSE. Termination for "Cause" shall only apply during
Employee's status as an Employee, but not as a Consultant. As used here,
termination for "Cause" shall mean only the following:
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A. Illegal acts (other than minor traffic violations,
misdemeanors, or other acts that do not result in criminal conviction) including
theft or embezzlement.
B. An intentional violation of published written policies of the
Company or an intentional violation of any Confidentiality or Proprietary
Information Agreement with the Company which causes demonstrable and substantial
harm to the Company.
C. Irresponsible or unauthorized acts of a willful nature in the
performance of duties which cause demonstrable and substantial harm to the
Company or continuing failure, after written warning, to follow the reasonable
written directions of the Board of Directors.
Notwithstanding the foregoing, Employee will not be deemed to have
been terminated for Cause without (i) reasonable written notice to him setting
forth the reasons for the Company's intention to terminate for Cause, and (ii)
an opportunity for him, together with his counsel, if any, to be heard before
the Company's Board of Directors.
5. PAYMENT AND OTHER PROVISIONS UPON TERMINATION FOR CAUSE. If the
Employee's employment with the Company is terminated by the Company for Cause,
then the Employee shall not be entitled to Severance Payments and, in lieu
thereof, on or before the Employee's last day of employment with the Company,
the Company shall pay to the Employee his Base Salary, if any, earned but
unpaid up to the date of termination plus benefits, if any, earned but unpaid up
to the date of termination, and shall reimburse the Employee for any expenses to
which the Employee is due reimbursement under Section 3 hereof. In addition, the
Employee shall retain the right to exercise any vested by unexercised stock
options in accordance with the Option Plan.
6. RESTRICTIVE COVENANTS. In order to induce the Company to enter into
this Employment Agreement, and as a material condition of his employment by the
Company, the Employee acknowledges that the Company has a legitimate business
interest in protecting the goodwill, confidential information, advantageous
business relationships, trade secrets, business methods and other valuable and
confidential aspects of the Company and its subsidiaries and affiliated
companies. In order to protect the Company's legitimate business interests, the
Employee agrees as follows:
6.1 NONDISCLOSURE OF CONFIDENTIAL INFORMATION. The Employee
acknowledges and agrees that the Confidential Information (as defined below) is
a valuable, special and unique asset of the Company's business. Employee
acknowledges receipt and delivery of the Confidential Information and
specialized training, received during the course of his employment with the
Company. Accordingly, except in connection with the performance of his duties
hereunder, the Employee shall not at any time during or subsequent to the term
of his employment (i) disclose, directly or indirectly, to any person, firm,
corporation, partnership, association or other entity, any proprietary or
confidential information relating to the Company;
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or (ii) utilize such information for any reason or purpose whatsoever.
"Confidential Information" includes but is not limited to, any information
concerning the Company's financial condition or prospects, the Company's
customers or potential customers' business or financial information of the
customers or potential customers obtained during the course of Employee's
employment with the Company, the design, development, manufacture, marketing or
sale of the Company's products or the Company's methods of operating its
business. Confidential Information shall not include information which, at the
time of disclosure, is known or available to the general public by publication
or otherwise through no act or failure to act on the part of the Employee.
The Employee acknowledges that the above-defined Confidential
Information constitutes "trade secrets" as defined in the Florida Uniform Trade
Secrets Act (Chapter 688, Florida Statutes), and all remedies provided
thereunder shall, in addition but not by way of limitation, be available to the
Company in the event of breach or threatened breach by the Employee.
6.2 COMPETITION. During the Restricted Period (as defined below) and
within the Restricted Area (as defined below), the Employee will not,
individually or in conjunction with others, directly or indirectly, enter into
or engage in any business which competes directly or indirectly with the
business of the Company as conducted at any time during the Restricted Period,
on the Employee's own behalf or in the service of or on behalf of others as
principal, partner, officer, director, manager, employee or shareholder (other
than as holder of less than 1% of the outstanding capital stock of a publicly
traded corporation), by soliciting, intentionally inducing or influencing any
person, partnership, corporation or other entity which has a business
relationship with the Company to discontinue or reduce the extent of such
relationship with the Company. The "business of the Company" shall be construed
to mean production and/or sale or licensing of Broadband Wireless Equipment.
6.3 NON-SOLICITATION AND NON-DISPARAGEMENT. During the Restricted
Period the Employee, on his own behalf or on behalf of any other person,
partnership, corporation or other entity, will not directly or indirectly,
recruit or hire any other employee, agent or consultant of the Company or
encourage any other employee, agent or consultant to terminate his or her
relationship with the Company. Further, the Employee agrees that he will not, at
any time, make disparaging comments about the Company, its Officers, or
Directors.
6.4 RETURN OF CONFIDENTIAL INFORMATION. Upon termination of the
Employee's employment, for whatever reason and whether voluntary or involuntary,
or at any time at the request of the Company, the Employee shall promptly return
all Confidential Information in the possession or under the control of the
Employee to the Company and shall not retain any copies or other reproductions
or extracts thereof. The Employee shall at any time at the request of the
Company destroy or have destroyed all memoranda, notes, reports, and documents,
whether in "hard copy" form or as stored on magnetic or other media, and all
copies and other reproductions
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and extracts thereof, prepared by the Employee and shall provide the Company
with a certificate that the foregoing materials have in fact been returned or
destroyed.
6.5 BOOKS AND RECORDS. All books, records and accounts of the
Company, whether prepared by the Employee or otherwise coming into the
Employee's possession, shall be the exclusive property of the Company and shall
be returned immediately to the Company upon termination of the Employee's
employment or upon the Company's request at any time.
6.6 CONSTRUCTION. It is agreed by the parties hereto that if any
portion of the above restrictive covenants are held to be unreasonable,
arbitrary, against public policy, or for any other reason unenforceable, the
covenants herein shall be considered diminishable both as to time and geographic
area; and each month for the specified period shall be deemed a separate period
of time, and the restrictive covenants shall remain effective so long as the
same is not unreasonable, arbitrary or against public policy. The parties hereto
agree that in the event any court determines the specified time period or the
specified geographic area to be unreasonable, arbitrary or against public
policy, a lesser period or geographic area which is determined to be reasonable,
nonarbitrary and not against public policy shall be enforced against the
Employee.
6.7 CALCULATION OF TIME. The time period covered by the restrictive
covenants contained in this Section 6 shall not include any period(s) of
violation of any restrictive covenant or any period(s) of time required for
litigation brought by the Company to enforce any covenant.
6.8 DISGORGEMENT. The Employee covenants and agrees that if it is
proven by virtue of a judgment from a Court of competent jurisdiction that the
Employee has violated any of the covenants or agreements set forth in this
Section 6, the Company shall be entitled to an accounting and repayment of all
profits, compensation, commission, remuneration or other benefits that the
Employee has realized, directly or indirectly, or may realize as a result of or
in connection with such violation. These remedies shall be in addition to, and
not in limitation of, any injunctive relief or other rights or remedies to which
the Company may be entitled at law, in equity or under this Agreement.
6.9 DEFINITIONS. As used in this Section 6,
6.9.1 The "Company" includes any parent, subsidiary or affiliated
company of the Company.
6.9.2 The "Restricted Period" commences on the Effective Date of
this Agreement and terminates on August 1, 2001.
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6.9.3 The "Restricted Area" is the United States and any other
location where the Company conducts business during the Restricted Period,
including by telephone, telecopy, e-mail or other forms of communication.
6.10 INDEPENDENT COVENANTS. The covenants set forth in this Section
6 shall be construed as an agreement independent of any other provision in this
Agreement, and the existence of any potential or alleged claim or cause of
action of the Employee against the Company, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by the Company
of the covenants contained herein. An alleged or actual breach of the Agreement
by the Company shall not be a defense to enforcement of the provisions of this
Section 6. It is acknowledged and agreed that the provisions of this Section 6
shall survive the termination of this Agreement.
6.11 INJUNCTION/SPECIFIC PERFORMANCE: SETOFF. The Employee
acknowledges that if it were to breach any of the provisions of this Section 6,
it would result in an immediate and irreparable injury to the legitimate
business interests of the Company which cannot be adequately or reasonably
compensated at law. Therefore, the Employee agrees that the Company shall be
entitled, if any such breach shall occur or be threatened or attempted, if it so
elects, to a decree of specific performance and to a temporary and permanent
injunction enjoining and restraining such breach, either directly or indirectly,
and that such right to injunction shall be cumulative to whatever other remedies
for actual damages the Company may possess. The Employee further agrees that the
Company may set off against or recoup from any amounts due under the Purchase
Agreement to the extent of any losses incurred by the Company as a result of any
breach by the Employee of the provisions of this Section 6. If any action is
brought by the Company pursuant to this Section 6, the prevailing party shall be
entitled to recover costs and reasonable attorneys' fees incurred in such
action, the amount of such reasonable attorneys' fees to be determined by the
court and not a jury.
7. INTELLECTUAL PROPERTY. As between the Employee and the Company, all
products, designs, styles, processes, discoveries, materials, ideas, creations,
inventions and properties, whether or not furnished by the Employee, created,
developed, invented or used in connection with the Employee's employment with
the Company or the business of the Company under this Agreement will be the sole
and absolute property of the Company for any and all purposes whatsoever in
perpetuity, whether or not conceived, discovered and/or developed during regular
working hours. The Employee will not have, and will not claim to have, under
this Agreement or otherwise, any right, title or interest of any kind or nature
whatsoever in or to any such products, processes, discoveries, material ideas,
creations, inventions and properties which are related to the Company's
business.
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8. MISCELLANEOUS
8.1 REPRESENTATION OF THE EMPLOYEE. The Employee represents and
warrants to the Company that the Employee is not party to or bound by any
employment agreement, noncompetition agreement or confidentiality agreement with
any person or entity other than the Company and its affiliates.
8.2 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any person other than the parties hereto and their
respective successors and permitted assigns.
8.3 ENTIRE AGREEMENT. This Agreement (including the documents
attached hereto) constitutes the entire agreement between the parties hereto and
supersedes any prior understandings, agreements, or representations by or
between the parties hereto, written or oral, to the extent they related in any
way to the subject matter hereof.
8.4 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. The Employee may not assign either this Agreement or any
of its rights, interests, or obligations hereunder without the prior written
approval of the Company.
8.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.6 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.7 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if it is sent
by registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If to the Employee:
Xx. Xxxxx Xxxxxx
000 Xxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000.
(000) 000-0000
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If to the Company:
Triton Network Systems, Inc.
Attn: Xxxxxx X. Xxxxxxx
0000 XxxxxXxxx Xxxxxx
Xxxxxxx, XX 00000
(000) 000-0000
Facsimile: (000) 000-0000
Any party hereto may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, facsimile transmission, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim, or other communication shall
be deemed to have been duly given unless and until it actually is received by
the intended recipient; provided, however, that if notice is sent by U.S. mail
it shall be deemed received on the fifth (5th) business day after it is sent.
Any party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other party
notice in the manner herein set forth.
8.8. GOVERNING CHOICE OF LAW. This Agreement shall be governed by
and construed in accordance with the domestic laws of the State of Florida
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Florida or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Florida.
8.9. AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by all
parties hereto. No waiver by any party of any default misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
8.10. SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
8.11. CONSTRUCTION. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no
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presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
8.12. SUBMISSION TO JURISDICTION. Each of the parties hereto submits
to the jurisdiction of any state or federal court sitting in Orange County,
Florida, in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court. Each party also agrees not to bring
any action or proceeding arising out of or relating to this Agreement in any
other court, Each of the parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety,
or other security that might be required of any other parties with respect
thereto.
8.13. ATTORNEYS' FEES. If litigation shall be brought to enforce or
interpret any provision contained herein, the prevailing party shall be entitled
to its reasonable attorney's fees (including those for negotiations, trial and
appeals) and disbursements incurred by the prevailing party in such litigation.
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This Agreement has been executed by the parties as of the date first above
written.
Company:
TRITON NETWORK SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Chairman
Employee:
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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