EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into on May 31,
2002, by and between Xxxx Xxxxx, an individual ("Executive"), and California
Amplifier, Inc., a Delaware corporation (the "Company").
RECITALS:
A. It is the desire of the Company to assure itself of the
continued services of the Executive by engaging the Executive to perform
such services under the terms hereof.
B. The Executive desires to commit himself to serve the Company on
the terms herein provided.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements set forth below the parties hereto agree
as follows:
1. Employment by the Company and Term.
(a) Full Time and Best Efforts. Subject to the terms set
forth herein, the Company agrees to employ Executive as President and Chief
Executive Officer of the Company, and in such other executive capacities as
may be requested from time to time by the Board of Directors of the Company
or a duly authorized committee thereof, and Executive hereby accepts such
employment. Executive shall render such other services for the Company and
corporations controlled by, under common control with or controlling,
directly or indirectly, the Company, and to successor entities and assignees
of the Company ("Company's Affiliates") as the Company may from time to time
reasonably request and as shall be consistent with the duties Executive is
to perform for the Company and with Executive's experience. During the term
of his employment with the Company, Executive will devote his full time and
use his best efforts to advance the business and welfare of the Company, and
will not engage in any other employment or business activities for any
direct or indirect remuneration that would be directly harmful or
detrimental to, or that may compete with, the business and affairs of the
Company, or that would interfere with his duties hereunder.
(b) Duties. Executive shall serve in an executive capacity
and shall perform such duties as are customarily associated with his
position, consistent with the Bylaws of the Company and as reasonably
required by the Company's Board of Directors (the "Board") or by the
Company's Chief Executive Officer.
(c) Company Policies. The employment relationship between the
parties shall be governed by the general employment policies and practices
of the Company, including but not limited to those relating to protection of
confidential information and assignment of inventions, except that when the
terms of this Agreement differ from or are in conflict with the Company's
general employment policies or practices, this Agreement shall control.
(d) Term. The initial term of employment of Executive under
this Agreement shall begin as of date hereof for an initial term ending on
May 30, 2004 (such period, the "Initial Term"), subject to the provisions
for termination set forth herein and renewal as provided in Section 1(e)
below.
(e) Renewal. Unless either party shall have given the other
notice that this Agreement shall not be renewed at least thirty (30) days
prior to the end of the Initial Term, the term of this Agreement shall be
automatically extended for a period of one (1) year, such procedure to be
followed in each such successive year. Each extended term shall continue to
be subject to the provisions for termination set forth herein. Failure by
the company to renew the agreement shall constitute termination without
cause or disability and the Executive shall be eligible for severance in
accordance with section 6 (d) and (f) or if applicable 6 (e) and 6 (f).
2. Compensation and Benefits.
(a) Salary. Executive shall receive for services to be
rendered hereunder a salary at the rate of Twenty Seven Thousand Eighty-
Three Dollars ($27,083) per month payable at least as frequently as monthly
and subject to payroll deductions as may be necessary or customary in
respect of the Company's salaried employees (the "Base Salary"). The Base
Salary will be reviewed by and shall be subject to adjustment at the sole
discretion of the Board of Directors of the Company each year during the
term of this Agreement.
(b) Participation in Benefit Plans. During the term hereof,
Executive shall be entitled to participate in any group insurance,
hospitalization, medical, dental, health, accident, disability or similar
plan or program of the Company now existing or established hereafter to the
extent that he is eligible under the general provisions thereof. The
Company may, in its sole discretion and from time to time, amend, eliminate
or establish additional benefit programs, as it deems appropriate.
Executive shall also participate in all standard fringe benefits offered by
the Company to any of its Executive Officers.
(c) Vacation. Executive shall be entitled to a period of
annual vacation time in accordance with the company's vacation policy, to
accrue pro rata during the course of each such twelve-month period. The
days selected for Executive's vacation must be mutually and reasonably
agreeable to Company and Executive.
3. Bonuses.
The Executive shall be eligible to participate in the Company's
employee bonus program in accordance with the terms of such program (as it
may exist from time to time) and in the discretion of the committee
administering such program.
4. Stock Awards.
The Executive shall be eligible to participate in the Company's
employee stock award plans and shall be eligible for award of stock options
or other stock incentive awards in accordance with the terms of the
Company's stock award plans and in the discretion of the Committee of the
Board administering such plans.
5. Reasonable Business Expenses and Support.
Executive shall be reimbursed for documented and reasonable business
expenses in connection with the performance of his duties hereunder.
Executive shall be furnished reasonable office space, assistance and
facilities.
6. Termination of Employment.
The date, on which Executive's employment by the Company ceases,
under any of the following circumstances, shall be defined herein as the
"Termination Date."
(a) Termination Upon Death. If Executive dies prior to the
expiration of the term of this Agreement, the Company shall (i) continue
coverage of Executive's dependents (if any) under all benefit plans or
programs of the type listed above in paragraph 2(b) herein for a period of
six (6) months, and (ii) pay to Executive's estate the accrued portion of
any salary and vacation earned as of the Termination Date, less standard
withholdings for tax and social security purposes.
(b) Termination Upon Disability. The Company may terminate
Executive's employment in the event Executive suffers a disability that
renders Executive unable to perform the essential functions of his position,
even with reasonable accommodation, as determined by competent medical
authority. After the Termination Date, which in this event shall be the
date upon which notice of termination is given, no further compensation will
be payable under this Agreement except that Executive shall be paid the
accrued portion of any salary and vacation earned as of the Termination Date,
less standard withholdings for tax and social security purposes.
(c) Termination for Cause.
(i) Termination; Payment of Accrued Salary and
Vacation. The Board may terminate Executive's employment with the Company
at any time for Cause, immediately upon notice to Executive of the
circumstances leading to such termination for Cause. In the event that
Executive's employment is terminated for Cause, Executive shall receive
payment for all accrued salary and vacation earned through the Termination
Date, which in this event shall be the date upon which notice of termination
is given. The Company shall have no further obligation to pay severance of
any kind whether under this Agreement or otherwise nor to make any payment
in lieu of giving notice of such termination.
(ii) Definition of Cause. "Cause" means the
occurrence or existence of any of the following with respect to Executive,
as determined by a majority of the directors of the Board:
(a) unsatisfactory performance of Executive's duties or responsibilities,
provided that the Company has given Executive written notice specifying the
unsatisfactory performance of his duties and responsibilities and afforded
the Executive reasonable opportunity for cure, all as determined by a
majority of the directors of the Board; (b) a material breach by Executive
of any of his material obligations hereunder that the Company has given
Executive written notice thereof; (c) willful failure to follow any lawful
directive of the Company consistent with the Executive's position and duties,
after written notice and reasonable opportunity to cure, all as determined
by the Board; (d) a material breach by the Executive of his duty not to
engage in any transaction that represents, directly or indirectly, self-
dealing with the Company or any of its Affiliates which has not been
approved by a majority of the disinterested directors of the Board or of the
terms of his employment; (e) commission of any willful or intentional act
which could reasonably be expected to injure materially the property,
reputation, business or business relationships of the Company or its
customers; or (f) the conviction or the plea of nolo contendere or the
equivalent in respect of a felony involving moral turpitude.
(d) Termination Without Cause or Disability. The Company may
terminate Executive's employment at any time for other than Cause or
disability, by providing written notice to the Executive. In such event
(unless such termination would be covered by Section 6(e) below), the
Company shall pay Executive as severance (i) an amount equal to 24 months of
his then Base Salary, less standard withholdings for tax and social security
purposes, payable over such 24 month term in monthly pro rata payments
commencing as of the Termination Date and (ii) the accrued portion of any
vacation earned, less standard withholdings for tax and social security
purposes. Notwithstanding the foregoing, the Company shall not be obligated
to pay any termination payments under this Section 6(d) above if Executive
breaches the provisions of Sections 7, 8 or 9 below.
(e) Termination following a Change of Control. If, within the
12-month period following a Change of Control (as defined below), the
Company terminates the Executive's employment for other than Cause or
disability or the Executive terminates his employment for Good Reason (as
defined below), then the termination payments provided for under Section
6(d) shall extend for a period of 24 months. In order to terminate his
employment for Good Reason the Executive must give the Company notice of
termination within sixty (60) days of the occurrence of one of the events
included in the definition of Good Reason. In all other respects Section
6(d) shall remain applicable. The following definitions shall apply:
(i) "Change of Control" shall mean the
consummation of the first to occur of (i) the sale, lease or other transfer
of all or substantially all of the assets of the Company to any person or
group (as such term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended); (ii) the adoption by the stockholders of the
Company of a plan relating to the liquidation or dissolution of the Company;
(iii) the merger or consolidation of the Company with or into another entity
or the merger of another entity into the Company or any subsidiary thereof
with the effect that immediately after such transaction the stockholders of
the Company immediately prior to such transaction (or their Related parties)
hold less than 50% of the total voting power of all securities generally
entitled to vote in the election of directors, managers or trustees of the
entity surviving such merger of consolidation; or (iv) the acquisition by
any person or group of more than 50% of the voting power of all securities
of the Company generally entitled to vote in the election of directors of
the Company.
(ii) "Good Reason" shall mean the occurrence of any
one or more of the following without the Executive's express written
consent: (1) the assignment of the Executive to duties materially
inconsistent with the Executive's authority, duties, responsibilities and
status (including offices, titles and reporting requirements) as an officer
of the Company or a material reduction in or alteration to the nature or
status of the Executive's authority, duties or responsibilities, in each
case from those in effect at the date of the occurrence of the Change of
Control; (2) the Company requiring the Executive to be based at a location
which is more than fifty (50) miles further from the Executive's then
current primary residence than such residence is from the Company location
at which the Executive is then working; or (3) a reduction in the
Executive's base salary.
(f) Benefits Upon Termination. All benefits provided under
paragraph 2(b) hereof shall be extended, at Executive's election and cost,
to the extent permitted by the Company's insurance policies and benefit
plans, for 24 months after Executive's Termination Date, except (a) as
required by law (e.g., COBRA health insurance continuation election) or
(b) in the event of a termination described in paragraph 6(a).
(g) Termination by Executive. Executive shall have the right,
at his election, to terminate his employment with the Company upon two
months advance written notice to the Company to that effect; provided,
however, that the Company may in its discretion waive the advance notice
period.
(h) Reduction in Payments. Notwithstanding anything contained
in this Agreement to the contrary, in the event that the payments to the
Executive under this Section 6, either alone or together with other payments
the Executive has a right to receive from the Company, would not be
deductible (in whole or in part) by the Company as a result of such payments
constituting a "parachute payment" (as defined in Section 280G of the
Internal Revenue Code, as amended (the "Code")), such payments shall be
reduced to the largest amount as will result in no portion of the payments
under this Section 6 not being fully deductible by the Company as the result
of Section 280G of the Code. The determination of any reduction in the
payments under this Section 6 pursuant to the foregoing sentence shall be
made exclusively by the firm of independent public accountants serving as
the Company's principal auditors immediately prior to the Termination Date
(whose fees and expenses shall be borne by the Company), and such
determination shall be conclusive and binding on the Company and the
Executive.
7. Proprietary Information Obligations.
During the term of employment under this Agreement, Executive will
have access to and become acquainted with the Company's and the Company's
Affiliates' confidential and proprietary information, including, but not
limited to, information or plans regarding the Company's and the Company's
Affiliates' customer relationships, personnel, or sales, marketing, and
financial operations and methods; trade secrets; formulas; devices; secret
inventions; processes; and other compilations of information, records, and
specifications (collectively "Proprietary Information"). Executive shall
not disclose any of the Company's or the Company's Affiliates' Proprietary
Information directly or indirectly, or use it in any way, either during the
term of this Agreement or at any time thereafter, except as required in the
course of his employment for the Company or as authorized in writing by the
Company. All files, records, documents, computer-recorded information,
drawings, specifications, equipment and similar items relating to the
business of the Company or the Company's Affiliates, whether prepared by
Executive or otherwise coming into his possession, shall remain the
exclusive property of the Company or the Company's Affiliates, as the case
may be, and shall not be removed from the premises of the Company under any
circumstances whatsoever without the prior written consent of the Company,
except when (and only for the period) necessary to carry out Executive's
duties hereunder, and if removed shall be immediately returned to the
Company upon any termination of his employment; provided, however, that
Executive may retain copies of documents reasonably related to his interest
as a shareholder and any documents that were personally owned, which copies
and the information contained therein Executive agrees not to use for any
business purpose. Notwithstanding the foregoing, Proprietary Information
shall not include (i) information which is or becomes generally public
knowledge except through disclosure by the Executive in violation of this
Agreement and (ii) information that may be required to be disclosed by
applicable law.
8. Noninterference.
While employed by the Company and for a period of two (2) years after
termination of this Agreement, Executive agrees not to interfere with the
business of the Company or any Company Affiliate by directly or indirectly
soliciting, attempting to solicit, inducing, or otherwise causing any
employee of the Company or any Company Affiliate to terminate his or her
employment in order to become an employee, consultant or independent
contractor to or for any other employer.
9. Miscellaneous.
(a) Notices. Any notices provided hereunder must be in
writing and shall be deemed effective upon the earlier of two days following
personal delivery (including personal delivery by telecopy or telex), or the
fourth day after mailing by first class mail to the recipient at the address
indicated below:
To the Company:
California Amplifier, Inc.
000 Xxxxx Xxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx, President
Telecopier: (000) 000-0000
To Executive:
___________________________________
___________________________________
___________________________________
Telecopier No: ___________________
or to such other address or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending
party.
(b) Severability. Any provision of this Agreement which is
deemed invalid, illegal or unenforceable in any jurisdiction shall, as to
that jurisdiction and subject to this paragraph be ineffective to the extent
of such invalidity, illegality or unenforceability, without affecting in any
way the remaining provisions hereof in such jurisdiction or rendering that
or any other provisions of this Agreement invalid, illegal, or unenforceable
in any other jurisdiction. If any covenant should be deemed invalid,
illegal or unenforceable because its scope is considered excessive, such
covenant shall be modified so that the scope of the covenant is reduced only
to the minimum extent necessary to render the modified covenant valid, legal
and enforceable.
(c) Entire Agreement. This document constitutes the final,
complete, and exclusive embodiment of the entire agreement and understanding
between the parties related to the subject matter hereof and supersedes and
preempts any prior or contemporaneous understandings, agreements, or
representations by or between the parties, written or oral.
(d) Counterparts. This Agreement may be executed on separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
agreement.
(e) Successors and Assigns. This Agreement is intended to
bind and inure to the benefit of and be enforceable by Executive and the
Company, and their respective successors and assigns, except that Executive
may not assign any of his duties hereunder and he may not assign any of his
rights hereunder without the prior written consent of the Company.
(f) Amendments. No amendments or other modifications to this
Agreement may be made except by a writing signed by both parties. No
amendment or waiver of this Agreement requires the consent of any individual,
partnership, corporation or other entity not a party to this Agreement.
Nothing in this Agreement, express or implied, is intended to confer upon
any third person any rights or remedies under or by reason of this Agreement.
(g) Choice of Law. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the laws
of the State of Delaware without giving effect to principles of conflicts of
law.
10. Attorney's Fees.
In the event of litigation arising under this Agreement or out of or
concerning the Executive's employment or termination by the Company, the
prevailing party shall, in addition to all costs of suit, be entitled to
recover his or her reasonable attorney's fees from the other party.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
the date it is last executed below by either party.
EXECUTIVE
/s/ Xxxx X. Xxxxx
-------------------------
CALIFORNIA AMPLIFIER, INC.
By: /s/ Xxx Xxxxx
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Title: Chairman of the Board
