EMPLOYMENT AGREEMENT
THIS AGREEMENT made effective as of the 10th day of March, 2004 (the
"Effective Date") by and between GoAmerica, Inc., a Delaware corporation with
its principal place of business at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000 (the "Company"), and Xxxxxx Xxxxxxxx (the "Employee").
WITNESSETH:
WHEREAS, the Company desires to secure the continued employment of the
Employee in accordance with the provisions of this Agreement; and
WHEREAS, the Employee desires and is willing to accept continued
employment with the Company in accordance herewith; and
WHEREAS, the Company and the Employee previously executed a retention
letter agreement dated September 12, 2003 (the "Retention Agreement"); and
WHEREAS, the Company and the Employee desire the Employee to take a
more active role in the financial and day to day operations of the Company.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Term. The Company hereby agrees to employ the Employee and the Employee
hereby agrees to serve the Company pursuant to the terms and conditions of this
Agreement as Vice President, Chief Financial Officer, or in such alternate
position which the Company shall determine in its discretion with a title of no
less than "Vice President" in an area of the Employee's competency, for an
initial term commencing as of 1:00 p.m. on the Effective Date hereof and
expiring on the second anniversary thereof (the "Initial Term"), unless sooner
terminated in accordance with the terms hereof. On the expiration of the Initial
Term and on each yearly anniversary thereof, the Agreement shall automatically
renew for an additional one-year period (the "Renewal Term"), unless sooner
terminated in accordance with the provisions of Section 5 or unless either party
notifies the other party in writing of its intentions not to renew this
Agreement not less than sixty (60) days prior to such expiration date or
anniversary, as the case may be. Notwithstanding anything to the contrary in
this Agreement, if either party elects prior to September 12, 2004 to terminate
the Employee's employment other than for cause, the notice period shall be no
less than ninety (90) days prior to termination.
2. Positions and Duties. The Employee's duties hereunder shall be those which
shall be prescribed from time to time by the Board of Directors of the Company
(the "Board of Directors") in accordance with the bylaws of the Company. The
Employee will hold, such other executive offices in the Company and its
subsidiaries to which he may be elected, appointed or assigned by the Board of
Directors from time to time and will discharge such executive duties in
connection therewith. The Employee shall devote his full working time, energy
and skill (reasonable absences for vacations and illness excepted), to the
business of the Company as is necessary in order to perform such duties
faithfully, competently and diligently; provided, however, that notwithstanding
any provision in this Agreement to the contrary, the Employee shall not be
precluded from devoting reasonable periods of time required for serving as a
member of boards of companies which have been approved by the Board of Directors
or participating in non-business organizations so long as such memberships or
activities do not interfere with the performance of the Employee's duties
hereunder.
3. Compensation. During the term of this Agreement, the Employee shall receive,
for all services rendered to the Company hereunder, the following (hereinafter
referred to as "Compensation"):
(a) Base Salary. For the term hereof, the Employee shall be paid an annual
base salary equal to $165,000. The Employee's annual base salary shall be
payable in equal installments in accordance with the Company's general salary
payment policies but no less frequently than monthly. Such base salary shall be
reviewed, and any increases in the amount thereof shall be determined, by the
Board of Directors or its compensation committee (the "Compensation Committee")
at the end of each calendar year of employment during the term hereof. Such base
salary may be decreased if done in conjunction with similar pro rata decreases
in base salary for other executives within the Company.
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(b) Bonuses. The Employee shall be eligible for and may receive bonuses.
The amount of such bonuses, if any, shall be solely within the discretion of the
Board of Directors or the Compensation Committee.
(c) Incentive Compensation. The Employee shall be eligible for awards from
the Company's incentive compensation plans, including without limitation any
stock option plans, applicable to high level executive officers of the Company
or to key employees of the Company or its subsidiaries, in the discretion of the
Board of Directors or the Compensation Committee thereof.
(d) Automobile Allowance. The Company shall provide to the Employee a
fixed automobile allowance of five hundred dollars ($500.00) per month to be
used by Employee for automobile financing payments, insurance and related taxes
during the term of this Agreement. In addition, automobile expenses incurred in
connection with the performance of the Employee's duties hereunder with respect
to tolls, gasoline and automobile maintenance are the responsibility of the
Company and shall be paid by the Company.
(e) Benefits. The Employee and his "dependents", as that term may be
defined under the applicable benefit plan(s) of the Company, shall be included,
to the extent eligible thereunder, in any and all plans, programs and policies
which provide benefits for employees and their dependents. Such plans, programs
and policies may include health care insurance, long-term disability plans, life
insurance, supplemental disability insurance, supplemental life insurance,
holidays and other similar or comparable benefits made available to the
Company's employees.
(f) Expenses. Subject to and in accordance with the Company's policies and
procedures, the Employee hereby is authorized to incur, and, upon presentation
of itemized accounts, shall be reimbursed by the Company for, any and all
reasonable and necessary business-related expenses, which expenses are incurred
by the Employee on behalf of the Company or any of its subsidiaries.
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4. Absences. The Employee shall be entitled to vacations of no less than four
(4) weeks per calendar year, absences because of illness or other incapacity,
and such other absences, whether for holiday, personal time, or for any other
purpose, as set forth in the Company's employment manual or current procedures
and policies, as the case may be, as same may be amended from time-to-time.
5. Termination. In addition to the events of termination and expiration of this
Agreement provided for in Section 1 hereof, the Employee's employment hereunder
may be terminated only as follows:
(a) Without Cause. Except as provided otherwise herein, the Company may
terminate the Employee's employment hereunder without cause only upon action by
the Board of Directors, and upon no less than sixty (60) days prior written
notice to the Employee. Except as provided otherwise herein, the Employee may
terminate employment hereunder without cause upon no less than sixty (60) days
prior written notice to the Company.
(b) For Cause, by the Company. The Company may terminate the Employee's
employment hereunder for cause immediately and with prompt notice to the
Employee, which cause shall be determined in good faith solely by the Board of
Directors. "Cause" for termination shall include, but is not limited to, the
following conduct of the Employee:
(i) Material breach of any provision of this Agreement by the
Employee, which breach shall not have been cured by the Employee within sixty
(60) days of receipt of written notice of said breach;
(ii) Misconduct as an employee of the Company, including but not
limited to: misappropriating any funds or property of the Company; attempting to
willfully obtain any personal profit from any transaction in which the Employee
has an interest which is adverse to the interests of the Company; or any other
act or omission which substantially impairs the Company's ability to conduct its
ordinary business in its usual manner;
(iii) Unreasonable neglect or refusal to perform the duties assigned
to the Employee under or pursuant to this Agreement;
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(iv) Conviction of a felony (including pleading guilty or no contest
to a felony or lesser charge which results from plea bargaining); or
(v) Any other act or omission which subjects the Company or any of
its subsidiaries to substantial public disrespect, scandal or ridicule.
(c) For Good Reason by Employee. Prior to September 12, 2004, the Employee
may terminate employment hereunder for good reason upon ninety (90) days notice.
From September 12, 2004 through the Term of this Agreement, the Employee may
terminate employment hereunder for good reason immediately and with prompt
notice to the Company. "Good Reason" for termination by the Employee shall
include the following conduct of the Company:
(i) Material breach of any provision of this Agreement by the
Company, which breach shall not have been cured by the Company within sixty (60)
days of receipt of written notice of said breach (changes in base salary
pursuant to section 3(a) hereof shall not constitute Good Reason);
(ii) Failure to maintain the Employee in a position commensurate
with that referred to in Section 1 of this Agreement; provided however, that the
Employee may be removed as Chief Financial Officer, provided further, that the
Employee shall be maintained in a position with a title of no less than "Vice
President" in an area of the Employee's competency; or
(iii) A requirement that the Employee perform his duties hereunder
(other than (A) business travel consistent with that required of employees with
similar positions at other companies similar in size and stage of development to
the Company, and (B) activities required in connection with the sale or merger
of the Company, provided that such activities are not required for more than
three consecutive months) at a location outside of a 50 mile radius from
Hackensack, New Jersey.
(d) The period of active employment of the Employee hereunder shall
terminate automatically in the event of his death.
(e) Disability. In the event that the Employee shall be unable to perform
duties hereunder for a period of one hundred eighty (180) consecutive calendar
days or one hundred eighty (180) work days within any 360 consecutive calendar
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days, by reason of disability as a result of illness, accident or other physical
or mental incapacity or disability, the Company may, in its discretion, by
giving written notice to the Employee, terminate the Employee's employment
hereunder as long as the Employee is still disabled on the effective date of
such termination. (f) Mutual Agreement. This Agreement may be terminated at any
time by mutual agreement of the Employee and the Company.
6. Compensation in the Event of Termination. In the event that the Employee's
employment pursuant to this Agreement terminates prior to the end of the term of
this Agreement for a reason provided in Section 5 hereof, the Company shall pay
the Employee compensation as set forth below:
(a) By Employee for Good Reason; By Company Without Cause. In the event
that the Employee's employment hereunder is terminated by the Employee for good
reason pursuant to Section 5(c) hereof; or by the Company without cause pursuant
to Section 5(a) hereof, then:
(i) if terminated prior to September 12, 2004, the Company shall
continue to pay to the Employee his annual base salary and all other
compensation and benefits provided for in Section 3 hereof (except those
benefits which the Company may not properly provide, pursuant to applicable
Company benefit plan, policy or law) for a period of three months in the same
manner as before termination in exchange for reasonable transition duties that
shall decrease regularly during such three month period; and
(ii) if terminated after September 12, 2004, the Company shall pay
the Employee that amount of severance provided to executive officers under the
Company's severance policy in effect at the time of termination.
(iii) Notwithstanding the terms of any stock option agreement to
which the Employee is a party to the contrary, (A) the Employee shall continue
to vest in stock options for the period equal to pay periods correlative to the
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payments provided in subsection 5(i) or 5(ii) above, as applicable, as if he
remained an employee of the Company, and (B) the Employee may exercise any
vested options at any time prior to the ninety first (91st) day after
termination. Notwithstanding the foregoing, if the Employee is so terminated
prior to September 12, 2004, the Company shall immediately accelerate the
vesting of all of the Employee's unvested stock options and the Employee may
exercise all of stock options at any time prior to the two hundred forty first
(241st) day after termination;
(iv) all other compensation and benefits provided for in Section 3
of this Agreement shall cease upon final payment of all severance or its
equivalent due the Employee hereunder; and
(v) the payments, rights and entitlements described in Sections
6(a)(i) hereof, if any, shall only be made if the Employee shall first have
executed and delivered to the Company its standard release with respect to his
employment hereunder and the termination of such employment.
(b) By Company Upon Termination of Agreement Due to Employee's Death or
Disability. In the event of the Employee's death or if the Company shall
terminate the Employee's employment hereunder for disability pursuant to Section
5(e) hereof then:
(i) the Company shall continue to pay the base salary payable
hereunder at the then current rate for one (1) year after the termination of
employment to the Employee or his personal representative, as applicable;
(ii) in the event of a termination pursuant to Section 5(e) hereof,
if eligible, Employee shall be entitled to benefits under any salaried long-term
disability plan of the Company covering the Employee then in effect; and
(iii) all other compensation and benefits provided for in Section 3
of this Agreement shall cease upon such termination.
(c) By Company For Cause or By Employee Without Good Reason. In the event
that:
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(i) the Company shall terminate the Employee's employment hereunder
for cause pursuant to Section 5(b) hereof; or (ii) the Employee shall terminate
employment hereunder without "good reason" as defined in Section 5(c) hereof,
then the Employee's rights hereunder shall cease as of the effective date of the
termination, including, without limitation, the right to receive the Base Salary
and all other compensation or benefits provided for in this Agreement, except
that the Company shall pay the Employee salary and other Compensation which may
have been earned and is due and payable but which has not been paid as of the
date of termination.
7. Effect of Termination. In the event of expiration or early termination of
this Agreement as provided herein, neither the Company nor the Employee shall
have any remaining duties or obligations hereunder except that:
(d) The Company shall:
(i) pay the Employee's accrued salary and any other accrued benefits
under Section 3 hereof;
(ii) reimburse the Employee for expenses already incurred in
accordance with Section 3(e) hereof;
(iii) to the extent required by law, pay or otherwise provide for
any benefits, payments or continuation or conversion rights in accordance with
the provisions of any benefit plan of which the Employee or any of his
dependents is or was a participant;
(iv) pay the Employee or his beneficiaries any compensation due
pursuant to Section 6 hereof;
(v) if applicable, abide by the terms of Section 6(a)(i) hereof; and
(e) The Employee shall remain bound by the terms of Section 8 hereof and Exhibit
A attached hereto, and, if applicable, the terms of Section 6(a)(i) hereof.
8. Restrictive Covenant. (a) The Employee acknowledges and agrees that he has
access to secret and confidential information of the Company and its
subsidiaries and that the following restrictive covenant is necessary to protect
the interests and continued success of the Company. Except as otherwise
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expressly consented to in writing by the Company, until the termination of the
Employee's employment (for any reason and whether such employment was under this
Agreement or otherwise) and thereafter for twelve (12) months (the "Restricted
Period"), the Employee shall not, directly or indirectly, acting as an employee,
owner, shareholder, partner, joint venturer, officer, director, agent,
salesperson, consultant, advisor, investor or principal of any corporation or
other business entity:
(i) request or otherwise attempt to induce or influence,
directly or indirectly, any present customer or supplier, or prospective
customer or supplier, of the Company, or other persons sharing a business
relationship with the Company, to cancel, limit or postpone their business with
the Company, or otherwise take action which might be to the material
disadvantage of the Company; or
hire or solicit for employment, directly or indirectly, or
induce or actively attempt to influence, any employee of the Company or any
Affiliate, as such term is defined in the Securities Act of 1933, as amended, to
terminate his or her employment or discontinue such person's consultant,
contractor or other business association with the Company.
If the Employee violates any of the restrictions contained in
Section 8(a) above, the Restrictive Period shall be increased by the period of
time from the commencement of any such violation until the time such violation
shall be cured by the Employee to the satisfaction of the Company, and the
Company may withhold any and all payments, except salary, otherwise due and
owing to the Employee under this Agreement.
(b) In the event that the Restrictive Period set forth in Section 8(a) of this
Agreement is deemed to be unreasonably restrictive in any court proceeding, the
court may reduce such Restrictive Period to the extent that it deems reasonable
under the circumstances.
(c) The Employee, as a condition of his continued employment, acknowledges and
agrees that he has reviewed and signed and will continue to be bound by all of
the provisions set forth in Exhibit A attached hereto, which is incorporated
herein by reference and made a part hereof as though fully set forth herein,
during the term of this Agreement, and any time hereafter.
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(d) The Employee acknowledges and agrees that in the event of a breach or
threatened breach of the provisions of this Section 8 by Employee the Company
may suffer irreparable harm and therefore, the Company shall be entitled, to the
extent permissible by law, immediately to cease to pay or provide the Employee
any compensation being, or to be, paid or provided to him pursuant to Sections 3
or 6 of this Agreement, and also to obtain immediate injunctive relief
restraining the Employee from conduct in breach or threatened breach of the
covenants contained in this Section 8. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of damages from the
Employee.
9. Directors and Officers Liability Insurance. During the term of this
Agreement, the Company shall maintain standard directors and officers liability
insurance in a face amount of no less than $10,000,000.
10. No Conflicts. The Employee has represented and hereby represents to the
Company that the execution, delivery and performance by the Employee of this
Agreement do not conflict with or result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default under any
contract, agreement or understanding, whether oral or written, to which the
Employee is a party or of which the Employee is or should be aware and that
there are no restrictions, covenants, agreements or limitations on his right or
ability to enter into and perform the terms of this Agreement, and agrees to
save the Company harmless from any liability, cost or expense, including
attorney's fees, based upon or arising out of any such restrictions, covenants,
agreements, or limitations that may be found to exist.
11. Waiver. The waiver by a party hereto of any breach by the other party hereto
of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by a party hereto.
12. Assignment. This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of the Company, and the Company shall be obligated to
require any successor to expressly assume its obligations hereunder. This
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Agreement shall inure to the benefit of and be enforceable by the Employee or
his legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. The Employee may not assign any of his
duties, responsibilities, obligations or positions hereunder to any person and
any such purported assignment by him shall be void and of no force and effect.
13. Notices. Any notices required or permitted to be given under this Agreement
shall be sufficient if in writing, and if personally delivered or when sent by
first class certified or registered mail, postage prepaid, return receipt
requested--in the case of the Employee, to his residence address as set forth
below, and in the case of the Company, to the address of its principal place of
business as set forth below, in care of the Board of Directors--or to such other
person or at such other address with respect to each party as such party shall
notify the other in writing.
14. Construction of Agreement.
(a) Governing Law. This Agreement shall be governed by and its provisions
construed and enforced in accordance with the internal laws of the State of New
Jersey without reference to its principles regarding conflicts of law.
(b) Severability. In the event that any one or more of the provisions of
this Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality or enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
(c) Headings. The descriptive headings of the several paragraphs of this
Agreement are inserted for convenience of reference only and shall not
constitute a part of this Agreement.
15. Entire Agreement. This Agreement and Exhibit A hereto and certain portions
of the Retention Agreement until September 12, 2004 contain the entire agreement
of the parties concerning the Employee's employment and all promises,
representations, understandings, arrangements and prior agreements on such
subject are merged herein and superseded hereby. The provisions of this
Agreement may not be amended, modified, repealed, waived, extended or discharged
except by an agreement in writing signed by the party against whom enforcement
of any amendment, modification, repeal, waiver, extension or discharge is
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sought. No person acting other than pursuant to a resolution of the Board of
Directors shall have authority on behalf of the Company to agree to amend,
modify, repeal, waive, extend or discharge any provision of this Agreement or
anything in reference thereto or to exercise any of the Company's rights to
terminate or to fail to extend this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and attested by its duly authorized officers, and the Employee has set
his hand, all as of the day and year first above written. ATTEST: GoAmerica,
Inc.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxx
----------------------------- -------------------------------
Xxxxx X. Xxxxx Xxxxxx X. Xxxx
Vice President, General Counsel and Secretary Chief Executive Officer
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
WITNESS: EMPLOYEE
/s/ Xxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxxxxx
------------------------------------ ------------------------------------
Xxxxxx X. Xxxxxxxx
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
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