EXHIBIT 10.6
Executive Employment Agreement
This Executive Employment Agreement (this "Agreement") is made as of
the ___ day of April, 2000 by and between Speedcom Wireless International
Corporation, a Florida corporation (the "Company") and Michael McKinney, a
natural person, ("Mr. McKinney").
WHEREAS, Mr. McKinney has served as the President and Chief Executive
Officer of the Company since its inception in 1994;
WHEREAS, the Company wishes to continue employing Mr. McKinney in such
role;
WHERAS, the Company and Mr. McKinney wish to set forth the terms of Mr.
McKinney's employment and certain additional agreements between Mr. McKinney and
the Company,
NOW, THEREFORE, in consideration of the foregoing recitals and the
representations, covenants and terms contained herein, the parties hereto agree
as follows:
1. Employment Period
The Company will employ Mr. McKinney, and Mr. McKinney will serve the
Company, under the terms of this Agreement for an initial term of three
years commencing as of April 1, 2000 (the "Commencement Date"). On the
third anniversary of the Commencement Date and on each anniversary date
thereafter, the term of this Agreement shall automatically be extended
for an additional period of twelve months; provided, however, that
either party hereto may elect not to so extend this Agreement by giving
written notice to the other party at least 60 days prior to such
anniversary date. Notwithstanding the foregoing, Mr. McKinney's
employment hereunder may be earlier terminated, subject to Section 5
hereof. The period of time between the commencement and the termination
of Mr. McKinney's employment hereunder shall be referred to herein as
the "Employment Period."
2. Duties and Status
The Company hereby engages Mr. McKinney as its President and Chief
Executive Officer and a member of the Company's Executive Committee on
the terms and conditions set forth in this Agreement. During the
Employment Period, Mr. McKinney shall report to the Board of Directors
of the Company and exercise such authority, perform such executive
duties and functions and discharge such responsibilities as are
reasonably associated with Mr. McKinney's position, commensurate with
the authority vested in Mr. McKinney pursuant to this Agreement and
consistent with the governing documents of the Company. These duties
include, but may not be limited to, (i) setting and implementing the
strategic vision of the Company, (ii) managing the day to day business
of the Company, and (iii) identifying and recruiting qualified senior
executives to complete the management team in preparation for an
initial public offering of the Company's common stock. Mr. McKinney
shall work with the Company's Directors to determine what additional
responsibilities Mr. McKinney shall perform, commensurate with Mr.
McKinney's position as the President and Chief Executive Officer of the
Company.
During the Employment Period, Mr. McKinney shall devote substantially
all of his business time (minimum of 5 days per week), skill and
efforts to the business of the Company. Notwithstanding the preceding
sentence, Mr. McKinney may make and manage personal business
investments of his choice and serve on up to three other corporations
(not counting the Company or any affiliates of the Company) of his
choice and serve in any capacity with any civic, educational or
charitable organization, or any trade association, without seeking or
obtaining the approval of the Board of Directors, provided such
activities and service do not materially interfere or conflict with the
performance of his duties hereunder.
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3. Compensation and Benefits
(a) Salary. During the Employment Period, the Company shall pay to Mr.
McKinney, as compensation for the performance of his duties and
obligations under this Agreement, a base salary of US $120,000 per
annum, payable in arrears not less frequently than monthly in
accordance with the normal payroll practices of the Company. Such
base salary shall be subject to review each year for possible
increase by the Board of Directors in its sole discretion, but
shall in no event be decreased from its then existing level during
the Employment Period.
(b) Annual Bonus. During the Employment Period, Mr. McKinney shall
have the opportunity to earn an annual bonus in accordance with a
Company annual bonus program for senior executives. The terms of
any such bonus program shall be as set forth and as determined in
the sole discretion of the Board of Directors, as determined by
corporate policy. Mr. McKinney is not guaranteed a bonus in any
particular year. In the event that the Company has not instituted
an annual bonus program, Mr. McKinney may still earn a bonus at
the discretion of the independent Board of Directors of the
Company. For the year 2000, Mr. McKinney shall be entitled to a
$50,000 bonus if the Company achieves at least $10,000,000 in
sales.
(c) Equity. (i) As part of a prior compensation arrangement with the
Company, Mr. McKinney had been granted 500,000 options to purchase
Company common stock at $3.00 per share (the "Stock Options"),
subject to certain vesting criteria. As partial consideration for
entering into this Agreement, the Company hereby modifies that
grant to Mr. McKinney as follows: 300,000 options to acquire
shares of the common stock of the Company at $3.00 per share shall
vest ratably over the initial three year term of this Agreement
(i.e. 8,333.333 per month for 36 months), or earlier if Mr.
McKinney's employment is terminated without cause or for good
reason (as described in Section 4 hereof) or earlier due to a
change in control, sale of a majority of the common stock or
substantially all of the assets of the Company or merger of the
Company into or with another company (unless such company is less
than 33% of the size (measured by market value) of the Company ).
The remaining 200,000 options shall vest upon either (a) Mr.
McKinney's completion of two additional years (after the initial
three years) with the Company or (b) if Mr. McKinney is terminated
without cause or for good reason or if his contract is not
extended by the Company (at the Company's option) past the initial
three year term. The Stock Options must be exercised by the fifth
anniversary of the date of vesting or shall be forfeited by Mr.
McKinney. The number, kind and strike price of the Stock Options
shall be appropriately and equitably adjusted to reflect any stock
dividend, stock split, spin-off, split-off, extraordinary cash
dividend, recapitalization, reclassification or other major
corporate action affecting the stock of the Company to the end
that after such event Mr. McKinney's proportionate interest in the
Company shall be maintained as before the occurrence of such
event.
(ii) If the Company proposes to sell or permit the transfer of
stock amounting in the aggregate to 50% or more of the outstanding
capitalization of the Company, then Mr. McKinney shall have the
right to require the proposed purchaser to purchase from him the
shares of stock underlying any of the Stock Options, and any
unvested Stock Options shall become vested. Such sale by Mr.
McKinney shall be at the same price and on the same terms and
conditions of the sale of stock triggering Mr. McKinney's right of
sale. The Company shall cause Mr. McKinney to be actually
notified of any proposed sale of stock and the terms and
conditions of such proposed sale covered by this Section 5(c)(ii)
not less than 30 days prior to the date of consummation of the
sale.
(iii) If the Company proposes to file a registration statement
with the U.S. Securities and Exchange Commission, or comparable
non-U.S. regulatory authority, relating to the offer or sale of
stock of the Company to the public, the Company shall cover under
such registration statement, for the benefit of Mr. McKinney, the
sale by Mr. McKinney of the stock of the
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Company underlying the Stock Options, and shall take such other
actions as are necessary or desirable for the stock of the Company
underlying the Stock Options to be freely salable by Mr. McKinney
(subject to any restrictions imposed by the underwriters of such
stock offering).
(iv) In addition to the Stock Options, Mr. McKinney shall be
entitled to receive additional awards under any other stock option
or equity based incentive compensation plan or arrangement adopted
by the Company during the Employment Period for which senior
executives are eligible. The level of Mr. McKinney's participation
in any such plan or arrangement shall be in the sole discretion of
the Company's Board of Directors.
(d) Other Benefits. During the Employment Period, Mr. McKinney shall
be entitled to participate in all of the employee benefit plans,
programs and arrangements of the Company in effect during the
Employment Period which are generally available to senior
executives of the Company, subject to and on a basis consistent
with the terms, conditions and overall administration of such
plans, programs and arrangements. In addition, during the
Employment Period, Mr. McKinney shall be entitled to fringe
benefits and perquisites comparable to those of other senior
executives of the Company, including, but not limited to, 12 days
of vacation pay per year plus 1 sick/personal day, to be used in
accordance with the Company's vacation pay policy for senior
executives.
(e) Business Expenses. During the Employment Period, the Company
shall promptly reimburse Mr. McKinney for all appropriately
documented, reasonable business expenses incurred by Mr. McKinney
in the performance of his duties under this Agreement.
(g) Support Services. The Company shall provide to Mr. McKinney an
office, appropriate for his position with the Company, and
secretarial and other business services at the Company's primary
executive offices. Such offices shall be located within 10 miles
of Sarasota, Florida. Additionally, Mr. McKinney shall have the
use of a company provided wireless telephone for business use on
the ATT plan with 1000 minutes usage per month including long
distance costs.
4. Termination of Employment
(a) Termination for Cause. The Company may terminate Mr. McKinney's
employment hereunder for cause. For purposes of this Agreement and
subject to Mr. McKinney's opportunity to cure as provided in
Section 4(c) hereof, the Company shall have "cause" to terminate
Mr. McKinney's employment hereunder if such termination shall be
the result of:
(i) willful fraud or material dishonesty in connection with Mr.
McKinney's performance hereunder;
(ii) the deliberate or intentional failure by Mr. McKinney to
substantially perform his duties hereunder that results in
material harm to the Company; or
(iii) the conviction for, or plea of nolo contendere to a charge
of, commission of a felony.
(b) Termination for Good Reason. Mr. McKinney shall have the right at
any time to terminate his employment with the Company for any
reason. For purposes of this Agreement and subject to the
Company's opportunity to cure as provided in Section 4(c) hereof,
Mr. McKinney shall have "good reason" to terminate his employment
hereunder if such termination shall be the result of:
(i) a material diminution during the Employment Period in the
Executive's duties, responsibilities, reporting relationship
or title as set forth in Section 2 hereof;
(ii) a breach by the Company of the compensation and benefits
provisions set forth in Section 3 hereof;
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(iii) a material breach by the Company of any of the terms of this
Agreement, other than as specifically provided herein; or
(iv) notice by the Company of non-renewal of the Agreement
pursuant to Section 1 hereof.
(c) Notice and Opportunity to Cure. Notwithstanding the foregoing, it
shall be a condition precedent to the Company's right to terminate
Mr. McKinney's employment for "cause" and Mr. McKinney's right to
terminate his employment for "good reason" that (1) the party
seeking termination shall first have given the other party written
notice stating with specificity the reason for the termination
("breach") and (2) if such breach is susceptible of cure or
remedy, a period of thirty days from and after the giving of
such notice shall have elapsed without the breaching party having
effectively cured or remedied such breach during such 30-day
period, unless such breach cannot be cured or remedied within
thirty days, in which case the period for remedy or cure shall be
extended for a reasonable time (not to exceed thirty days)
provided the breaching party has made and continues to make a
diligent effort to effect such remedy or cure.
(d) Termination Upon Death or Permanent and Total Disability. The
Employment Period shall be terminated by the death of Mr.
McKinney. The Employment Period may be terminated by the Board of
Directors if Mr. McKinney shall be rendered incapable of
performing his duties to the Company by reason of any medically
determined physical or mental impairment that can be reasonably
expected to result in death or that can be reasonably expected to
last for a period of either (1) six or more consecutive months
from the first date of Mr. McKinney's absence due to the
disability or (2) nine months during any twelve-month period (a
"Permanent and Total Disability"). If the Employment Period is
terminated by reason of Permanent and Total Disability of Mr.
McKinney, the Company shall give 30 days' advance written notice
to that effect to Mr. McKinney.
5. Consequences of Termination.
(a) Without Cause or for Good Reason. In the event of a termination of
Mr. McKinney's employment during the Employment Period by the
Company other than for "cause" (as provided for in Section 4(a)
hereof), by Mr. McKinney for "good reason" (as provided for in
Section 4(b) hereof) or due to death or disability (as provided
for in Section 4(d) hereof) the Company shall pay Mr. McKinney (or
his estate) and provide him with the following:
(i) Lump-Sum Payment. A lump-sum cash payment, payable within
30 days after Mr. McKinney's termination of employment,
equal to the sum of the following:
(A) Salary. The equivalent of twelve months (the
"Severance Period") of Mr. McKinney's then-current
base salary; plus
(B) Earned but Unpaid Amounts. Any previously earned but
unpaid salary through Mr. McKinney's final date of
employment with the Company, and any previously earned
but unpaid bonus amounts for any completed fiscal year
prior to the date of Mr. McKinney's termination of
employment.
(ii) Equity. Mr. McKinney shall have 12 months from the date of a
termination of his employment that is subject to this
Section 5 to exercise any stock options granted to him
during the Employment Period. All unvested stock options
shall vest upon a termination without cause, for good reason
or due to death or disability.
(iii) Other Benefits. The Company shall provide continued
coverage for the Severance Period under all health, life,
disability and similar employee benefit plans
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and programs of the Company on the same basis as Mr.
McKinney was entitled to participate immediately prior to
such termination, provided that Mr. McKinney's continued
participation is possible under the general terms and
provisions of such plans and programs. In the event that
Mr. McKinney's participation in any such plan or program is
barred, the Company shall arrange to provide Mr. McKinney
with benefits substantially similar (including all tax
effects) to those which Mr. McKinney would otherwise have
been entitled to receive under such plans and programs from
which his continued participation is barred. In the event
that Mr. McKinney is covered under substitute benefit plans
of another employer prior to the expiration of the Severance
Period, the Company will no longer be obligated to continue
the coverages provided for in this Section 5(a)(iii).
(b) Other Termination of Employment. In the event that Mr. McKinney's
employment with the Company is terminated during the Employment
Period by the Company for "cause" (as provided for in Section 4(a)
hereof) or by Mr. McKinney other than for "good reason" (as
provided for in Section 4(b) hereof), the Company shall pay Mr.
McKinney any earned but unpaid salary and annual bonus amounts for
any completed fiscal year prior to the date of Mr. McKinney's
termination of employment, but only to the extent such amounts are
payable in accordance with the terms of any such bonus plan,
through Mr. McKinney's final date of employment with the Company,
and the Company shall have no further obligations to Mr. McKinney.
(c) Withholding of Taxes. All payments required to be made by the
Company to Mr. McKinney under this Agreement shall be subject only
to the withholding of such amounts, if any, relating to tax,
excise tax and other payroll deductions as may be required by law
or regulation.
(d) No Other Obligations. The benefits payable to Mr. McKinney under
this Agreement are not in lieu of any benefits payable under any
employee benefit plan, program or arrangement of the Company,
except as provided specifically herein, and upon termination Mr.
McKinney will receive such benefits or payments, if any, as he may
be entitled to receive pursuant to the terms of such plans,
programs and arrangements. Except for the obligations of the
Company provided by the foregoing and this Section 5, the Company
shall have no further obligations to Mr. McKinney upon his
termination of employment.
(e) No Mitigation or Offset. Mr. McKinney shall have no obligation to
mitigate the damages provided by this Section 5 by seeking
substitute employment or otherwise and there shall be no offset of
the payments or benefits set forth in this Section 5 except as
provided in Section 5(a)(iii).
6. Change in Control Agreement.
(a) Termination Protection. In the event of the termination of Mr.
McKinney's employment without "cause" (as provided for in Section
4(a) hereof) or for "good reason" (as provided for in Section 7(c)
hereof) following a change in control, Mr. McKinney shall be
entitled to receive the payments and benefits set forth in Section
5(a)(i) through (iii) above.
(b) For purposes of this Agreement, a "change in control" shall be
deemed to have occurred if and when:
(i) individuals who at the date hereof constitute the entire
Board of Directors of the Company (the "Board") and any new
directors whose election by the Board, or whose nomination
for election by the Company's stockholders, shall have been
approved by a vote of at least a majority of the directors
then in office who either were directors at the date hereof
or whose election or nomination
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for election shall have been so approved shall cease for any
reason to constitute a majority of the members of the Board;
(ii) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") shall after the date hereof become the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, of securities of
the Company representing 30% or more of the voting power of
all then outstanding securities of the Company having the
right under ordinary circumstances to vote in an election of
the Board (including, without limitation, any securities of
the Company that any such person has the right to acquire
pursuant to any agreement, or upon exercise of conversion
rights, warrants or options, or otherwise, shall be deemed
beneficially owned by such person);
(iii) there shall be consummated any corporate transaction,
including a consolidation or merger, of the Company in which
the Company is not the continuing or surviving corporation
or pursuant to which shares of the Company's capital stock
are converted into cash, securities or other property, other
than a consolidation or merger of the Company in which the
holders of the Company's voting stock immediately prior to
the consolidation or merger shall, upon consummation of the
consolidation or merger, own at least 50% of the voting
stock; or
(iv) there shall be consummated any sale, lease, exchange or
transfer (in any single transaction or series of related
transactions) of all or substantially all of the assets or
business of the Company.
7. Indemnity and Insurance.
The Company shall, to the fullest extent permitted by law and by its
Certificate of Incorporation and By-laws, indemnify Mr. McKinney and
hold him harmless for any acts or decisions made by him while
performing his duties pursuant to this Agreement, unless such acts or
decisions are made in bad faith or are intentionally harmful to the
welfare of the Company. The Company shall also, to the fullest extent
permitted by law and by its Certificate of Incorporation and By-laws,
indemnify Mr. McKinney and hold him harmless from any legal fees or
expenses incurred by Mr. McKinney arising out of his good faith service
as an officer or agent of the Company.
The Company shall provide that Mr. McKinney is covered by any
Directors' and Officers' insurance that the Company provides to other
senior executives.
8. Notice.
All notices, requests and other communications pursuant to this
Agreement shall be sent by e-mail:
If to Mr. McKinney: [email protected]
If to the Company: [email protected]
9. Waiver of Breach.
Any waiver of any breach of this Agreement shall not be construed to be
a continuing waiver or consent to any subsequent breach on the part of
either Mr. McKinney or of the Company.
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10. Non-assignment; Successors.
Neither party hereto may assign his or its rights or delegate his or
its duties under this Agreement without the prior written consent of
the other party; provided, however, that (i) this Agreement shall inure
to the benefit of and be binding upon the successors and assigns of the
Company upon any sale of all or substantially all of the Company's
assets, or upon any merger, consolidation or reorganization of the
Company with or into any other corporation, all as though such
successors and assigns of the Company and their respective successors
and assigns were the Company; and (ii) this Agreement shall inure to
the benefit of and be binding upon the heirs, assigns or designees of
Mr. McKinney to the extent of any payments due to them hereunder. As
used in this Agreement, the term "Company" shall be deemed to refer to
any such successor or assign of the Company referred to in the
preceding sentence.
11. Severability.
To the extent any provision of this Agreement or portion thereof shall
be invalid or unenforceable, it shall be considered deleted therefrom
and the remainder of such provision and of this Agreement shall be
unaffected and shall continue in full force and effect.
12. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
13. Noncompetition; Nonsolicitation
Mr. McKinney agrees that for a period of six months after the
termination of his employment with the Company (the "Noncompetition
Period"), unless Mr. McKinney is terminated without "cause" or he
terminates for "good reason" (in which case Mr. McKinney shall not be
subject to this section 13), Mr. McKinney will not act as a consultant,
officer or employee of a company engaged in manufacturing, servicing or
selling wireless telecommunications products to commercial entities (a
"Competing Activity"). Mr. McKinney also agrees during the
Noncompetition Period and for one year thereafter, if any, not to
solicit or recruit any employees of the Company to join any other
company or engage in a Competing Activity or to solicit or recruit a
substantial number of employees to work with any company with whom Mr.
McKinney is associated if the departure of the solicited or recruited
employees from the Company would materially harm the Company.
14. Entire Agreement.
This Agreement constitutes the entire agreement by the Company and Mr.
McKinney with respect to the subject matter hereof and except as
specifically provided herein, supersedes any and all prior agreements
or understandings between Mr. McKinney and the Company with respect to
the subject matter hereof, whether written or oral. This Agreement may
be amended or modified only by a written instrument executed by Mr.
McKinney and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of April
____, 2000.
Michael McKinney Speedcom Wireless International Corporation
______________________ By_________________________________________
Its:_______________________________________
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