EXHIBIT 2.3
EMPLOYMENT AGREEMENT
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This Agreement is made this 29 day of May 1998, between Westower
Corporation, a Washington corporation (the "Company"), and Xxxxxxx X. Xxxxxxxx
("Employee").
W I T N E S S E T H:
WHEREAS, the Company is acquiring all of the issued shares of MJA
Communications Corp., a Florida corporation ("MJA"), by which Employee has
previously been employed (the "Share Exchange Agreement");
WHEREAS the Company desires to continue employing Employee and Employee
desires to accept such employment by the Company effective on the Closing Date
under the Share Exchange Agreement ("Exchange Date") subject to the terms and
conditions contained herein;
WHEREAS, in serving as an employee of the Company, Employee will be in a
position in which Employee will participate in the use and development of
confidential proprietary information about the Company's, its subsidiaries' and
affiliates' present and future products, its customers and suppliers and the
methods which the Company and its employees use in competition with other
companies, as to which the Company desires to protect fully its rights;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in consideration of the
promises and the mutual covenants and agreements herein set forth, the parties
agree as follows:
1. Employment. The Company hereby employs Employee as the Company's
Senior Vice President and as Chairman and Chief Executive Officer of MJA, and
Employee accepts such employment with the Company and with MJA, subject to the
terms and conditions set forth herein. Employee shall perform all duties and
services regularly incident to the positions of Senior Vice President of the
Company, and Chairman and Chief Executive Officer of MJA, and Employee shall
perform such other duties and services as may be prescribed by the Bylaws of the
Company or established by the President or the Board of Directors of the Company
from time to time; provided, however, that (1) Employee's duties will not
require him to relocate his residence from South Florida and (2) the duties and
services Employee will be asked to provide will be at minimum of the nature of
his position as the Chief Executive Officer of MJA with the added
responsibilities for Company. In addition,
when elected to the Board of Directors of the Company, Employee will faithfully
serve on such Board of Directors until his death, resignation or removal from
the Board. During his employment hereunder, Employee shall devote his best
efforts and attention, on a full-time basis, to the performance of the duties
required of him as an employee of the Company. For the purpose of this
Agreement, "full-time basis" means not less than 75 percent of the time Employee
spends working for both Company and others. Company acknowledges that Employee
is the CEO of other entitites.
2. Compensation. As compensation for services rendered by Employee
hereunder, Employee shall receive:
(a) An annual salary of $150,000, or such higher salary as shall be
determined by the Company at Employee's annual evaluation and compensation
review;
(b) Insurance and other benefits equivalent to the benefits provided
other employees of the Company and at Employee's employment classification;
(c) 4 weeks of vacation;
(d) Participation, when eligible, in the Company's retirement plan as
such plan may be amended or modified by the Company from time to time;
(e) Reimbursement for all reasonable expenses incurred by Employee in
the performance of his duties under this Agreement, provided that Employee
submits verification of such expenses in accordance with the policies of the
Company;
(f) Participation, when eligible, in any compensation incentive
program of the Company, if any, as such plan may be amended or modified by the
Company from time to time;
(g) Reimbursement of relocation expenses if Employee is required to
work at a facility more than fifty (50) miles distant from his current
residence;
(h) the reasonable cost of Employee's automobile cost and professional
membership dues; and
(i) The same additional compensation that the Company pays to other
employees' for serving on its Board of Directors.
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For the balance of calendar year 1998, Employee will continue to be paid by
X.X. Xxxxxxxx, Inc., the common paymaster for MJA prior to the Exchange Date.
On or before a day of payroll disbursement, Company will pay X.X. Xxxxxxxx, Inc.
the direct cost of gross wages, FUTA, employer's share of FICA , state
unemployment taxes, worker's compensation, medical insurance, dental insurance,
disablity insurance, and group term life insurance for Employee. For employees
of MJA, on or before a day of payroll disbursement, MJA will pay X.X. Xxxxxxxx,
Inc. the gross wages, FUTA, employer's share of FICA , state unemployment taxes,
worker's compensation, automobile, medical insurance, dental insurance,
disablity insurance, and group term life insurance for such employees. X.X.
Xxxxxxxx, Inc. agrees that Company and MJA may, on 3 business days' notice and
during normal business hours, have their certified public accountant audit the
books and records of X.X. Xxxxxxxx, Inc. to determine any overpayment by MJA or
Company to X.X. Xxxxxxxx, Inc. For the purpose of this Agreement, "direct cost"
will not include any overhead of or markup by X.X. Xxxxxxxx, Inc.
The Company agrees to effectuate Employee's election to its Board of
Directors at its next Board meeting and to propose his name to its Shareholders
as a member of the Company's Board of Directors in the solicitation of
shareholder votes at the Company's next annual meeting.
Prior to the end of each calendar year of this Agreement, the Company may
review with Employee his compensation hereunder. Any increase in salary or
changes in fringe benefits agreed upon by Employee and the Company at such
annual review shall become effective the following January 1 unless otherwise
agreed to by the Company and Employee.
3. Confidential Information and Trade Secrets.
3.1 Employee recognizes that Employee's position with the Company requires
considerable responsibility and trust, and, in reliance on Employee's loyalty,
the Company may entrust Employee with highly sensitive confidential, restricted
and proprietary information involving Trade Secrets and Confidential
Information.
3.2 For purposes of this Agreement, a "Trade Secret" is any scientific or
technical information, design, process, procedure, formula or improvement that
is valuable and not generally known to competitors of the Company, its
subsidiaries and affiliates. "Confidential Information" is any data or
information, other than Trade Secrets, that is important, competitively
sensitive, and not generally known by the public, including, but not limited to,
the Company's strategic and business plans, business prospects, training
manuals, product development plans, bidding and pricing
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procedures, market strategies, internal performance statistics, financial data,
confidential personnel information concerning employees of the Company, supplier
data, operational or administrative plans, policy manuals, and terms and
conditions of contracts and agreements and such similar information relating to
subsidiaries and affiliates of the Company. The terms "Trade Secret" and
"Confidential Information" shall not apply to information which is (i) already
in Employee's possession (unless such information was obtained by Employee from
the Company, its subsidiaries, or its affiliates or was obtained by Employee in
the course of Employee's employment by the Company, its subsidiaries, or its
affiliates), (ii) received by Employee from a third party with no restriction on
disclosure, or (iii) required to be disclosed by any applicable law.
3.3 Except as required to perform Employee's duties as an employee,
Employee will not use or disclose any Trade Secrets or Confidential Information
of the Company during employment, at any time after termination of employment
and prior to such time as they cease to be Trade Secrets or Confidential
Information through no act of Employee in violation of this Section 3.
3.4 Upon the request of the Company and, in any event, upon the
termination of employment hereunder, Employee will surrender to the Company all
memoranda, notes, records, drawings, manuals or other documents pertaining to
the Company's business, Employee's employment (including all copies thereof) or
the business of the Company's subsidiaries or affiliates. Employee will also
leave with the Company all materials involving any Trade Secrets or Confidential
Information of the Company. All such information and materials, whether or not
made or developed by Employee, shall be the sole and exclusive property of the
Company, and Employee hereby assigns to the Company all of Employee's right,
title and interest in and to any and all of such information and materials.
4. Covenant Not to Compete.
4.1 Employee hereby covenants and agrees with the Company that during the
period which is the longer of (a) three years, (b) the term of his employment
with the Company or (c) eighteen (18) months after the termination of his
employment, for any reason, with or without cause, Employee will not, except as
expressly permitted hereunder, directly or indirectly (i) operate, develop or
own any interest other than the ownership of less than 5% of the equity
securities of a publicly traded company, in any business which has significant
activities (viewed in relation to the business of the Company, its subsidiaries
or affiliates), or has announced intentions to focus significant resources,
relating to any business in which the Company, its affiliates, and its
subsidiaries is currently engaged and the business of building, owning,
managing,
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leasing or operating towers for wireless carriers or other similar entities (a
"Business"); (ii) compete with the Company or its subsidiaries and affiliates in
the operation or development of any Business within the North America (Canada,
Mexico, and the United States of America); (iii) be employed by any business
which owns, manages, or operates a Business; (iv) interfere with, solicit,
disrupt or attempt to disrupt any past, present or prospective relationship,
contractual or otherwise, between the Company, or its subsidiaries or
affiliates, and any customer, client, supplier or employee of the Company, or
its subsidiaries or affiliates; or (v) solicit any employee of the Company, or
its subsidiaries or affiliates, to leave their employment with the Company or
its subsidiaries or affiliates, as the case may be, or hire any such employee to
work for a Business. Employee shall not be entitled to circumvent the provisions
of this Section 4.1 by entering into a relationship with a Business as a
consultant, director, advisor, or otherwise, which has the effect of competing
with the Company, its affiliates or subsidiaries.
4.2 If a judicial determination is made that any of the provisions of this
Section 4 constitutes an unreasonable or otherwise unenforceable restriction
against Employee, the provisions of this Section 4 shall be rendered void only
to the extent that such judicial determination finds such provisions to be
unreasonable or otherwise unenforceable. In this regard, the parties hereto
hereby agree that any judicial authority construing this Agreement shall be
empowered to sever any portion of the territory or prohibited business activity
from the coverage of this Section 4 and to apply the provisions of this Section
4 to the remaining portion of the territory or the remaining business activities
not so severed by such judicial authority. Moreover, notwithstanding the fact
that any provisions of this Section 4 are determined not to be specifically
enforceable, the Company shall nevertheless be entitled to recover monetary
damages as a result of the breach of such provision by Employee. The time period
during which the prohibitions set forth in this Section 4 shall apply shall be
tolled and suspended as to Employee for a period equal to the aggregate quantity
of time during which Employee violates such prohibitions in any respect.
5. Specific Enforcement. Employee specifically acknowledges and
agrees that the restrictions set forth in Sections 3 and 4 hereof are reasonable
and necessary to protect the legitimate interest of the Company and that the
Company would not have employed Employee in the absence of such restrictions.
Employee further acknowledges and agrees that any violation of the provisions of
Sections 3 or 4 hereof will result in irreparable injury to the Company, that
the remedy at law for any violation or threatened violation of such Sections
will be inadequate and that in the event of any such breach, the Company, in
addition to any other remedies or damages available to it at law or in equity,
shall be entitled to temporary injunctive relief before
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trial from any court of competent jurisdiction as a matter of course and to
permanent injunctive relief without the necessity of proving actual damages. The
existence of any claim or cause of action on the part of Employee against the
Company, whether arising from this Agreement or otherwise, shall not constitute
a defense to the granting or enforcement of this injunctive relief. If the
Company is required to enforce any of its rights under this Agreement, the
Company shall be entitled to recover from Employee all reasonable attorneys'
fees, court costs and other expenses incurred by the Company in connection with
the enforcement of those rights.
6. Incentive Stock Options for Employee; Employee Discretion to
Distribute Shares, Stock Options and Distribution from Bonus Pool for MJA's
Employees. MJA's employees will receive credit in any of the Company's employee
benefit plans for their years of service of MJA pre-Exchange Date, and MJA's
employees will not have any waiting period or pre-existing conditions in order
to continue their health insurance coverage. In addition, the Company will grant
Employee an option to purchase 10,000 shares, effective and priced on the
Exchange Date, of the Company's common stock pursuant to Westower Corporation
1998 Stock Incentive Compensation Plan or such successor option plan as the
Company and its shareholders may adopt (the "Plan"). In addition, the Company
agrees that as part of his employment hereunder as the Chief Executive Officer
for MJA, the Company will do what is reasonably necessary for the Employee to
distribute in his sole discretion the following compensation to employees of
MJA.
(a) For each employee who has been continuously employed by MJA for one
year as of May 1, 1998, 100 shares of the Company's common stock provided that
such stock will be issued pursuant to the Plan by the earlier of the date 15
business days after the Company files an S-8 with the Securities and Exchange
Commission for the Plan or July 15, 1998.
(b) For each of the three years after the Exchange Date, a bonus pool equal
to ten (10) percent of the net pre-tax earnings (if any) of MJA in such year,
with net pre-tax earnings of MJA measured allocating Employee's compensation
hereunder as a cost of the Company and measured according to Generally Accepted
Accounting Principles, consistently applied, as reflected in the financial
statements for the Company prepared by its certified public accountants, without
any allocation to MJA for overhead of the Company and its subsidiaries other
than MJA. This obligation of the Company will survive the termination of this
Agreement, but the distributions made after the effective date of any such
termination will be made by the successor Chief Executive Officer for MJA and
not Xxxxxxx X. Xxxxxxxx.
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(c) In addition to whatever other compensation is provided for in this
Agreement, options pursuant to the Plan to purchase one or more shares of the
Company's common stock, effective and priced on the date of the grant, to
employees of MJA who have worked at MJA continuously for one year as of May 1,
1998; provided, however, that (i) the total number of options distributed
pursuant to the terms of this provision will in no event confer on such
employees any rights to purchase more than 100,000 shares of the Company's
common stock in the aggregate by all employees of MJA selected by Employee to
receive any such options and (ii) Employee will remain liable to the Company for
damages resulting from all options distributed to employees of MJA to purchase
in excess of 100,000 shares. All such options will be exercisable within 10
years and become vested in employees of MJA according to the following schedule:
On the first anniversary of the Exchange Date, thirty three per cent (33%) of
the total shares granted; on the second anniversary of the Exchange Date;
thirty-three percent (33%) of the total shares granted; and on the third
anniversary of the Exchange Date, the remaining thirty-four per cent (34%) of
the total shares granted. This obligation of the Company will survive the
termination of this Agreement, but the distributions made after the effective
date of such termination will be made by the successor Chief Executive Officer
for MJA and not Xxxxxxx X. Xxxxxxxx.
All options granted hereunder or in connection with Employee's employment
hereunder shall constitute "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), to
the extent permitted under the Code and applicable rulings and regulations, or,
in Employee's discretion, nonqualified stock options.
7. Term of Agreement. This Agreement shall be effective as of the
Exchange Date and shall continue for a term of three (3) years from the Exchange
Date unless terminated by either party in the manner set forth herein. This
Agreement shall be automatically renewed for successive one (1) year terms
unless written notice of termination is given by either party at least 90 days
prior to the end of the then current term.
8. Termination Upon Death or Disability of the Employee. In the event
the Employee dies during the term of this Agreement, or the Employee is disabled
and unable to perform his duties in any material respect for a period of six (6)
months, this Agreement shall immediately terminate and neither the Employee nor
the Company shall have any further obligations hereunder, except that the
Company shall continue to be obligated under Section 2 hereof for any unpaid
salary, accrued benefits or
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unreimbursed expenses owed to Employee or his estate that have accrued but not
been paid as of the Termination Date.
9. Termination by Employee. Employee may at any time terminate his
employment by giving the Company sixty (60) days prior written notice of his
intent to terminate the Agreement, unless the termination is because of Changed
Circumstances as set forth in Section 11. At the Termination Date, the Company
shall have no further obligation to Employee and Employee shall have no further
rights or obligations hereunder, except as set forth in Sections 3 and 4 above,
and except for the Company's obligation under Section 2 hereof for unpaid
salary, accrued benefits or unreimbursed expenses that have accrued but have not
been paid as of the Termination Date, unless termination is because of Changed
Circumstances, as set forth in Section 11.
10. Termination for Cause. The Company shall have the right at any time
to terminate Employee's employment immediately for cause, which shall include
any of the following reasons: Employee's violation of the provisions of Sections
3 or 4 of this Agreement, gross neglect of duty, conviction under a state or
federal law involving commission of a crime against the Company, its
subsidiaries and affiliates (for purposes of this Section 10, the "Westower
Group") or a felony, willful failure or refusal to carry out lawful duties or
directions of the President or the Board of Directors of the Company reasonably
consistent with such duties, or the willful engaging by the Employee in gross
misconduct materially injurious to the Westower Group.
Employee's obligations under Sections 3 and 4 hereof shall survive the
termination of the Agreement pursuant to this Section 10. In the event
Employee's employment hereunder is terminated in accordance with this Section,
the Company shall have no further obligation to make any payments to Employee
hereunder except for unpaid salary, accrued benefits or unreimbursed expenses
that have accrued but have not been paid as of the Termination Date.
Notwithstanding the foregoing, any termination of Employee shall not be
considered a termination for cause and shall be considered a termination without
cause pursuant to Section 11 hereof, if such termination is effected without:
(1) 5 calendar days' notice to Employee setting forth the reasons for Company's
intention to terminate for cause; (2) an opportunity for Employee, together with
his counsel, to be heard before the Board of Directors of the Company; and (3)
delivery to the Employee of a notice of termination from the Board of Directors
of the Company finding that in the good faith opinion of the Board of Directors
of the Company there exists cause to terminate Employee pursuant to this Section
10.
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11. Termination by Company Without Cause or by Employee for Changed
Circumstances. The Company may terminate the employment relationship with
Employee without cause (which shall not include a termination pursuant to
Sections 8, 9 or 10) by giving Employee 15 days prior written notice. Employee
may terminate the employment relationship with the Company for Changed
Circumstances by giving the Company 15 days prior written notice. The term
"Changed Circumstances" as used in this Section 11 means (i) a reduction in
Employee's base salary and benefits, (ii) a material reduction in the scope of
Employee's authority and/or responsibilities, (iii) during the first three years
following the Exchange Date, a change in the Company's management under which
Xxxxxxx X. Xxxxxxxx is no longer the Company's Senior Vice President and MJA's
Chairman and Chief Executive Officer, (iv) a change in the control of the
Company, and/or (v) breach of the Agreement by the Company which the Company
fails to cure after 30 days' written notice to the Company. In the event the
employment relationship is terminated by the Company without cause or by
Employee for Changed Circumstances during the term hereof, the Company shall pay
Employee all accrued benefits and unreimbursed expenses owed to Employee that
have accrued but have not been paid as of the Termination Date. The Company
shall also continue to pay to Employee all salary and benefits hereunder until
May 31, 2001. Such payments shall be made in accordance with Employee's regular
salary schedule. Payment of the severance benefits set forth herein shall be
subject to the execution and delivery of a Separation Agreement the terms of
which will reasonably be determined by the parties. The Company's obligations
pursuant to this Section 11 shall terminate immediately upon any violation of
Section 4 or the taking of any other action by Employee that would have the
effect of declaring the provisions of Section 4 not enforceable.
12. Assignment.
(a) The rights and benefits of Employee under this Agreement, other
than accrued and unpaid amounts due under Section 2 hereof, are personal to him
and shall not be assignable. Discharge of Employee's undertakings in Sections 3
and 4 hereof shall be an obligation of Employee's executors, administrators, or
other legal representatives or heirs.
(b) This Agreement may not be assigned by the Company except to an
affiliate of the Company, provided, however, that if the Company shall merge or
effect a share exchange with or into, or sell or otherwise transfer
substantially all its assets to, another corporation, the Company shall assign
its rights hereunder to that corporation and cause such corporation to assume
the Company's obligations under this Agreement.
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13. Notices. Any notice or other communications under this Agreement
shall be in writing, signed by the party making the same, and shall be delivered
personally or sent by certified or registered mail, postage prepaid, addressed
as follows:
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If to Employee: Xxxxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxx
Xxxx Xxxxx Xxxxxxx, XX 00000
If to the Company: Westower Corporation
0000 000xx Xxxxx X.X.
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Mr. Xxxxx Xxxxx
or to such other address as may hereafter be designated by either party hereto.
All such notices shall be deemed given on the date received.
14. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Washington. Employee agrees that the
federal and state courts located in King County, Washington will have exclusive
jurisdiction over any dispute relating to Employee's employment by the Company,
its affiliates, and its subsidiaries. Employee consents to the personal
jurisdiction of such courts over Employee with respect to such disputes.
15. Enforcement Costs. If any civil action, arbitration, or other legal
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, or default, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees, sales and use taxes, court cost,
and all expenses if not taxable court costs (including, without limitation, all
such fees, taxes, costs, and expenses incident to arbitration, appellate,
bankruptcy, and post-judgment proceedings), incurred in that civil action,
arbitration or legal proceeding, in addition to any other relief to which such
party may be entitled. Attorneys' fees shall include, without limitation,
paralegal fees, investigative fees, administrative costs, sales and use taxes,
and all other charges billed by the attorney to the prevailing party.
16. Equitable Remedies. Each of the parties acknowledges that the parties
will be irreparably damaged (and damages at law would be an inadequate remedy)
if this Agreement is not specifically enforced. Therefore, in the event of a
breach or threatened breach by any party of any provision of this Agreement,
then the other parties shall be entitled, in addition to all other rights or
remedies, to an injunction restraining such breach, without being required to
show any actual damage or to post an injunction bond, and/or to a decree for
specific performance of the provisions of this Agreement.
17. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid, but if any one
or more
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of the provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability for any such provisions in every other respect and of the
remaining provisions of this Agreement shall not be in any way impaired.
18. Entire Agreement. This Agreement contains the entire agreement of the
parties hereto with respect to the subject matter contained herein. There are no
restrictions, promises, covenants, or undertakings, other than those expressly
set forth herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter. This
Agreement may not be changed except by a writing executed by the parties.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the day
and year first above written.
COMPANY:
WESTOWER CORPORATION
By: /s/ Xxxxx Xxxxx
______________________________
Title: CHIEF FINANCIAL OFFICER
________________________
Attest:
_________________________________
Title: Secretary
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxxx
________________________________
Xxxxxxx X. Xxxxxxxx
ACCEPTED AND AGREED AS ITS OBLIGATIONS IN PARAGRAPH 2:
X.X. XXXXXXXX, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
_____________________________
Name: XXXXXXX X. XXXXXXXX
________________________
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Title: PRESIDENT
_______________________
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