SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 18, 1997
---------------------------
TROPIC COMMUNICATIONS, INC.
(Exact Name of Registrant as specified in its Charter)
Delaware
(State or other jurisdiction of incorporation)
0-14361 31-1166419
(Commission File Number) (IRS Employer I.D. Number)
3021 Bethel Road, Suite 208, Columbus, Ohio 43220
(Address of Principal Executive Offices, incl. Zip Code)
Registrant's telephone number, incl. Area code: 614-538-0660
<PAGE>
Item 1. Changes in Control of Registrant
On September 18, 1997, Tropic Communications, Inc., a Delaware corporation (the
"Company"), issued 26,900,000 shares of its $.15 par value common stock to the
three shareholders of R.A. Logistics, Inc., Messrs Angel Munoz, Ronald Vimo and
Scott Villanueva, in a tax free stock for stock exchange for 100% of the issued
and outstanding capital stock of R.A. Logistics, Inc. a Delaware corporation
(the "Acquisition"). R.A. Logistics, Inc. is a newly formed holding company
owning 100% of the issued and outstanding capital stock of two subsidiary
corporations, B. Airways, Inc. a Florida corporation and B. Airways Air Cargo,
Inc. a Florida corporation. None of the shareholders of R.A. Logistics, Inc.
individually hold a controlling interest in the Company, and these shareholders
do not have a voting agreement, however, the interests of these shareholders
when aggregated will represent a controlling interest in the Company. These
shareholders have also been appointed to be members of the Company's board of
directors and to serve as the Company's principal executive officers. See
Exhibit 10.91 hereto.
To the best of the knowledge and belief of the Company there are no
existing arrangements or understandings between any shareholder, officer or
director and/or their associates concerning election of directors or other
matters.
Item 2. Acquisition and Disposition of Assets
The Acquisition is the acquisition of significant subsidiary companies
which are anticipated to have a significant effect on the future operations of
the Company. The date of closing is September 18, 1997. The acquisition was a
tax free exchange of voting common stock solely for voting common stock. The
consideration given was 26,900,000 shares of the Company's $.15 par value voting
common stock solely in exchange for 100% of the issued and outstanding capital
stock of the acquired company and its two wholly-owned subsidiaries. The
consideration was distributed to and the capital stock of the acquired company
was received from Messrs Angel Munoz, Ronald Vimo and Scott Villanueva. There
was no relationship between the buyer or sellers and the Company or of any of
their affiliates. The businesses acquired are newly formed to conduct the air
freight conslidation business of Messrs Munoz and Vimo, the Company has acquired
such personal property and furniture and fixtures as is incidental to the
operation of the business but has no interest in and has not assumed any
liabilities associated with any of their prior business or businesses. The
business of B. Airways, Inc. includes a pending application with the the U.S.
Department of Transportation and the Federal Aviation Authority for operation as
a Part 135 all cargo air carrier and a lease for a DC-3 aircraft.
<PAGE>
Item 5. Other Events.
Effective on September 19, 1997, by written action of a majority of
the shareholders, the shareholders elected Messrs Angel Munoz, Ronald Vimo and
Scott Villanueva as directors of the Company to serve as members of the board of
directors until the next annual meeting of shareholders or until their successor
is duly appointed and qualified.
Effective on September 19, 1997 the board of directors of the Company accepted
the resignation of Mr. James B. Dwyer, III, Rev. Jerald K. Rayl and Mr. Thomas
E. Reynolds from their positions as members of the board of directors and
appointed new officers of the Company being Mr. Angel Munoz, President, Mr.
Ronald Vimo, Vice-President, Mr. Scott Villanueva, Secretary and Mr. John E.
Rayl, Treasurer.
The Company has entered into Employment Agreements effective as of September 2,
1997 with Mr. Angel Munoz, President, Mr. Ronald Vimo, Vice-President, Mr. Scott
Villanueva, Secretary. See Exhibits 10.92,10.93 and 10.94 hereto.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements. See Exhibit D to Exhibit 10.91 hereto.
(b) Pro Forma Financial Information. Not required.
(c) Exhibits. The following exhibits are filed as exhibits to the Form
8-K. References in the list of exhibits to the "Company" refer to
Tropic Communications, Inc.
10.91 Stock Exchange Agreement dated as of September 2, 1997.
10.92 Employment Agreement dated as of September 2, 1997 by and
between the Company and Mr.Angel Munoz.
10.93 Employment Agreement dated as of September 2, 1997 by and
between the Company and Mr.Ronald Vimo.
10.94 Employment Agreement dated as of September 2, 1997 by and
between the Company and Mr.Scott Villanueva
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report on Form 8-K to be signed on its behalf by
the undersigned hereunto duly authorized.
DATED: October 3, 1997 TROPIC COMMUNICATIONS, INC.
By: /s/ Scott Villanueva
Scott Villanueva, Secretary
Page 1
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (the "Agreement") is made and entered into as
of the 2nd day of September, 1997 by and between R.A. LOGISTICS, INC. a Delaware
corporation having its principal place of business at 7500 NW 25th Street, Suite
209, Miami, FL 33122 ("TARGET") and ANGEL MUNOZ, RONALD VIMO AND SCOTT
VILLANUEVA (collectively, the "TARGET OWNERS" and together with TARGET as the
"TRANSFERORS"), and TROPIC COMMUNICATIONS, INC., a Delaware corporation
("TROPIC") having its principal executive offices located at 3021 Bethel Road,
Suite 208, Columbus, Ohio 43220.
EXPLANATORY STATEMENT
The TARGET OWNERS own one-hundred percent (100%) of the issued and
outstanding capital stock of TARGET. TARGET is the owner of one-hundred percent
(100%) of the issued and outstanding capital stock of B. AIRWAYS AIR CARGO,
INC., a Florida corporation and B. AIRWAYS, INC., a Florida corporation (the
"TARGET SUBSIDIARIES"). TARGET, the TARGET OWNERS and the TARGET SUBSIDIARIES
are collectively referred to hereafter as the "TARGET GROUP." TROPIC desires to
acquire all of the business of TARGET. In furtherance thereof, it is in the best
interest of the parties for TARGET to be acquired by TROPIC. The parties intend
that the transactions contemplated by this Agreement be accomplished in a
tax-free reorganization under Section 368 of the Internal Revenue Code of 1986,
as amended (the "Code").
NOW THEREFORE, for the mutual consideration set out herein the receipt and
sufficiency of which is hereby acknowledged by the parties hereto, the parties
hereto agree as follows:
1. Exchange and Transfer of Stock. (a) On the terms and subject to the
conditions hereinafter set forth, and in consideration of the below stated
assignment, transfer and delivery of the shares of TARGET, at the closing of the
transactions contemplated herein as provided for in Section 2 hereof (the
"Closing") TARGET OWNERS shall convey at Closing all rights and title to, and
shall assign, transfer, exchange and deliver to TROPIC one hundred percent
(100%) of the issued and outstanding shares of capital stock, common and
preferred, of TARGET (the "TARGET SHARES"), all of which shall be free and clear
of all pledges, liens, claims, dower interests, limitations on voting rights,
charges, security interests and other encumbrances, equities and options of
whatever nature.
(b)On the terms and subject to the conditions hereinafter set forth,
and in consideration of the aforesaid assignment, transfer and delivery of the
TARGET SHARES, at the Closing TROPIC shall issue in the name of, exchange and
deliver to the TARGET OWNERS 26,400,000 shares of common stock of TROPIC, par
value $0.15 per share (the "TROPIC SHARES") each of which shall be duly and
validly authorized, fully paid and non-assessable to be issued in the amounts
and to each TARGET OWNER as more fully set forth on EXHIBIT A hereto. The TROPIC
SHARES to be delivered or reserved hereunder will be restricted against sale or
transfer in accordance with applicable law. The certificates representing the
TROPIC SHARES will be conspicuously legended to denote such restriction, and any
stock transfer agent for TROPIC will be instructed to place "legal stops"
against their transfer.
2.Employment Agreements. At the Closing, the TARGET OWNERS will agree to be
employed by TROPIC, TARGET or by one of their wholly-owned subsidiary companies
pursuant to the terms of the Employment Agreements as set forth at EXHIBIT B
hereto (the "Employment Agreements").
3.The Closing. The Closing of the transactions contemplated by this
Agreement shall take place simultaneously at the offices of TROPIC no later than
30 days from the date of execution of this Agreement, or at such other time or
place as the parties may determine (the "Closing Date").
4.Representations and Warranties of TARGET and TARGET OWNERS.
TARGET and the TARGET OWNERS represent and warrant to TROPIC as follows:
(a)Organization; Good Standing. TARGET is duly organized and validly
exists in good standing as a corporation under the laws of the State of Delaware
and each of TARGET'S wholly-owned subsidiaries are duly organized and validly
existing in good standing as a corporation under the laws of each of their
respective states of incorporation. TARGET has the legal power and authority to
own, operate and lease it's properties and assets and to carry on it's business
as now conducted, and is duly qualified to do business wherever the nature and
location of its business and assets require such qualification.
(b)Capital Stock of TARGET. The authorized capital stock of TARGET
consists of two thousand (2,000) shares of $.01 par value common stock (the
"TARGET COMMON STOCK"), of which one thousand forty-seven (1,047) shares
representing the TARGET SHARES are issued and outstanding. All of the TARGET
SHARES have been validly issued and are fully paid and non-assessable. There are
no preemptive or other subscriptive rights with respect to the TARGET SHARES and
there are no authorized or outstanding equity securities of TARGET other than
the TARGET SHARES. There are no warrants or options outstanding for the purchase
of TARGET COMMON STOCK.
(c)Authorization. TARGET OWNERS have full right, power and authority to
enter into, execute, deliver and perform this Agreement and all corporate
proceedings on the part of TARGET necessary to authorize this Agreement and
consummate the transactions contemplated hereby have been or, as of the Closing
Date, will be taken by them. This Agreement constitutes a valid and binding
agreement of the TARGET OWNERS and TARGET, enforceable in accordance with its
respective terms (subject to applicable bankruptcy, insolvency and other laws
affecting the enforceability of creditors' rights generally and the discretion
of courts in granting equitable remedies).
(d)No Violation. To the knowledge of TRANSFERORS, the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby will not: (i) conflict with, or result in (or with notice or lapse of
time result in) a material breach of the terms of or default under, or violate
in any material respect any provision of law applicable to TRANSFERORS, any
agreement, commitment, contract, instrument, order, decree, ruling or injunction
to which TRANSFERORS are subject or a party or by which any of them is bound, or
the Certificate of Incorporation and Bylaws of TARGET, or (ii) result in the
imposition of any mortgage, security interest, pledge, lien or other encumbrance
on the TARGET SHARES or on any property or assets of TARGET.
(e)Consents. TRANSFERORS shall file all notices and obtain all consents
from any party necessary to effectuate the transfer of TARGET so that the
business of TARGET is maintained.
(f)Assets, Business and Financial Statements. TARGET has delivered to
TROPIC true, correct and complete financial statements (copies of which are
attached hereto as EXHIBIT D) which truly, correctly and completely present
TARGET'S and the TARGET SUBSIDIARIES' financial condition as of the respective
dates presented therein (collectively referred to as the "FINANCIAL
STATEMENTS"). All such FINANCIAL STATEMENTS are correct and complete and have
been prepared from the books and records of the respective company in accordance
with generally accepted accounting principles consistently applied with those
followed in prior periods. TRANSFERORS further jointly and severally warrant
that, the properties of TARGET and of the TARGET SUBSIDIARIES are free and clear
of all mortgages, claims, charges, liens, encumbrances, restrictions, options,
pledges, calls or commitments of any character and any security interest
whatsoever, and that each of TARGET and the TARGET SUBSIDIARIES holds good and
marketable title to all of the assets, properties and rights as reflected
therein and there are no existing agreements, warrants or rights providing for
the sale of, or claims to, any assets, properties, rights or business not
otherwise disclosed in the FINANCIAL STATEMENTS or on EXHIBITS E or F hereto.
(g)Information. All written material furnished or to be furnished by
TRANSFERORS to TROPIC with respect to TARGET does not and will not contain any
statement which is false or misleading with respect to any material fact or omit
any statement needed to make such material not to be false or misleading with
respect to any material fact.
(h)Taxes. Unless otherwise set forth on EXHIBITS E or F, TRANSFERORS
have duly filed all Federal, state and local tax returns and reports related to
themselves and their respective businesses that are required to be filed or
extensions for filing such returns and reports and have been duly filed and that
they have paid all taxes and other governmental charges known to be due
("Taxes") upon their properties, assets, income, franchises, licenses, stock
issuance or transfers or sales related to their business. To the knowledge of
TRANSFERORS there are no unpaid Taxes which are, or which can become, a lien on
their properties and assets except liens for Taxes not yet due and payable,
except as set forth on EXHIBITS E or F hereto. There is not known to TRANSFERORS
any proposed assessment by any taxing authority for additional Taxes applicable
to them. TARGET has not adopted a plan of complete liquidation under the
Internal Revenue Code or entered into any contract to merge or consolidate with
or sell all or any substantial part of it's assets to any other firm or
corporation or changed the character of it's business or businesses.
(i)No Adverse Change. Since the date of the FINANCIAL STATEMENTS as set
forth in subparagraph (f) above, there has not been any adverse change in the
financial condition or in the operations, business, business prospects,
properties or assets, any loan, borrowing or guaranty obligating TARGET or the
TARGET SUBSIDIARIES or any event or condition of any character which has
adversely affected or which does or may adversely affect any of their assets or
impede any of their respective business or businesses.
(j)Litigation. Except as may be set forth on EXHIBIT E, to the
knowledge of the TARGET GROUP, there is no legal, administrative, arbitration or
other proceeding or claim, governmental or administrative investigation or
inquiry pending or, to the knowledge of them threatened against or involving,
any of them or any of their properties, assets, business or financial condition,
or which questions their ability to carry out their obligations hereunder, or
which challenges the transactions contemplated hereby. To the knowledge of the
TARGET GROUP, there is no breach of any agreement, or event which with the lapse
of time would constitute a breach of any agreement that could result in a
lawsuit being instituted against them or TROPIC.
(k)Adverse Agreements. Neither TARGET the TARGET SUBSIDIARIES nor the
TARGET OWNERS are a party to any agreement or instrument or subject to any
charter or other corporate restriction or any judgment, order, writ, injunction,
decree, rule or regulation which materially and adversely affects or may in the
future adversely affect the business, operations, prospects, properties, assets
or condition, financial or otherwise, or the TARGET GROUP'S obligations
hereunder or under any exhibit hereto
(l)Investment Representation. Each TARGET OWNER acknowledges that, upon
transfer to him or her, the TROPIC SHARES will not have been "registered" and,
therefore, will be "restricted securities", as those terms are used under the
Securities Act of 1933, as amended and the rules and regulations promulgated
thereunder (the "Securities Act"). By execution of this Agreement, each TARGET
OWNER agrees, represents and warrants that his or her acquisition of the TROPIC
SHARES hereunder is for investment only, for his or her own account (both of
record and beneficially) and not with a view to "distribution" as that term is
used under the Securities Act. Each TARGET OWNER further acknowledges that
TROPIC shall cause the following legend to be placed on the certificates
representing the TROPIC SHARES:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be sold, transferred, pledged, hypothecated or otherwise disposed of
in the absence of (i) an effective registration statement for such
securities under said act or (ii) an opinion of counsel acceptable to
counsel to the Company that such registration is not required."
5. Representations and Warranties of TROPIC. TROPIC represents and warrants
to TRANSFERORS as follows:
(a)Organization; Good Standing. TROPIC is duly organized and validly
exists in good standing as a business corporation under the laws of the State of
Delaware, with all requisite corporate power and authority to own, operate and
lease its properties and assets and to carry on its business as now conducted.
(b)Authority. TROPIC has taken, or will have taken prior to the Closing
Date, all necessary corporate action to approve the execution, delivery and
performance of this Agreement.
(c)Compliance with Instruments; Consents, Adverse Agreements. Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby will conflict with or result in any violation
of or constitute a default (or an event which with notice or lapse of time or
both could constitute a default) under the provisions of TROPIC'S Certificate of
Incorporation or Bylaws or any material agreement, mortgage, indenture,
franchise, license, permit, consent, approval, authorization, lease or other
instrument, judgment, decree, order, law or regulation by which each is bound or
by which any of their property may be affected.
(d)Governmental and Other Consents, Etc. No consent, approval or
authorization of or declaration or filing with any governmental authority or
other entity on the part of TROPIC is required in connection with the execution
or delivery of this Agreement, or the consummation of the transactions
contemplated hereby. TROPIC is not a party to or subject to any agreement or
instrument, or subject to any charter or other corporate restriction or any
judgment, order, writ, injunction, decree, rule or regulation, which would
affect the consummation of the transactions contemplated by this Agreement.
(e)Capital Stock of TROPIC. On the Closing Date the authorized capital
stock of TROPIC will consist of 50,000,000 shares of common stock, par value
$0.15 per share, of which at the Closing Date no more than thirteen million
three hundred eighty thousand (13,380,000) shares issued and outstanding and/or
have or will be reserved for future issuance, and one million (1,000,000) shares
of preferred stock of which none is issued and outstanding and has or will have
reserved no more than four million (4,000,000) shares of common stock for
issuance upon the exercise of options and warrants.
(f)Taxes. TROPIC has duly filed all Federal, state and local tax
returns and reports related to itself and its business that are required to be
filed or extensions for filing such returns and reports have been duly filed and
it has paid all taxes and other governmental charges known to be due ("Taxes")
upon its properties, assets, income, franchises, licenses, stock issuance or
transfers or sales related to its business. To the knowledge of TROPIC there are
no unpaid Taxes which are, or which can become, a lien on it's properties and
assets except liens for Taxes not yet due and payable. There is not known to
TROPIC any proposed assessment by any taxing authority for additional Taxes
applicable to it. TROPIC has not adopted a plan of complete liquidation under
the Internal Revenue Code.
(g)Litigation. To the knowledge of TROPIC, there are no legal,
administrative, arbitration or other proceedings or claims, governmental or
administrative investigations or inquiries pending or, to the knowledge of
TROPIC, threatened against or involving, it or any of it's properties, assets,
business or financial condition, or which questions its ability to carry out its
obligations hereunder, or which challenges the transactions contemplated hereby
expect as may be disclosed in TROPIC'S Annual Report on SEC Form 10-K for the
fiscal year ending April 30, 1997 (Unaudited), see "Item 3 Legal Proceedings" of
Exhibit F hereto. To the knowledge of TROPIC, there is no breach of any
agreement or event which with the lapse of time would constitute a breach of any
agreement that could result in a lawsuit being filed against it.
(h)Resignation and Election of Directors. Effective as of the CLOSING
DATE, three of the members of the Board of Directors of TROPIC shall have
resigned and TARGET OWNERS each agree to be elected and serve in their stead.
(i)Investment Representation. TROPIC acknowledges that, upon transfer
to it, the TARGET SHARES will not have been "registered" and, therefore, will be
"restricted securities," as those terms are used under the Securities Act of
1933, as amended and the rules and regulations promulgated thereunder (the
"Securities Act"). By execution of this Agreement, TROPIC agrees, represents and
warrants that its acquisition of the TARGET SHARES hereunder is for investment
only, for its own account (both of record and beneficially) and not with a view
to "distribution" as that term is used under the Securities Act. TROPIC further
acknowledges that TARGET shall cause the following legend to be placed on the
certificates representing the TARGET SHARES:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
transferred, pledged, hypothecated or otherwise disposed of in the absence
of (i) an effective registration statement for such securities under said
act or (ii) an opinion of counsel acceptable to counsel to the Company
that such registration is not required."
6. Covenants of TARGET and TARGET OWNERS.
(a)Non-Disclosure of Confidential Terms Hereof. TRANSFERORS shall not
disclose the contents of this Agreement or its financial terms and shall not
issue any public announcement or press release without the prior written consent
of TROPIC.
(b) TARGET Shares. Effective as of the Closing Date, the TARGET SHARES
shall be free and clear of all mortgages, claims, charges, liens, encumbrances,
restrictions, options, pledges, calls or commitments of any character and any
security interest whatsoever, and TARGET OWNERS shall hold good and marketable
title to all such shares.
7. Documents to be Delivered at the Closing.
(a) Deliveries by TROPIC at the Closing. At the Closing, TROPIC shall
deliver to the TARGET OWNERS a stock certificate or stock certificates in the
aggregate amount of twenty six million four hundred thousand (26,400,000) shares
of TROPIC'S $0.15 par value common stock, each certificate to be issued in the
name or names of the TARGET OWNERS and representing the number of fully paid and
non-assessable shares of common stock of TROPIC and TROPIC OPTIONS as set forth
opposite each TARGET OWNER'S name on the attached EXHIBIT A.
(b)Deliveries by TARGET OWNERS at the Closing. At the Closing, TARGET
OWNERS shall deliver to TROPIC stock certificates representing all (100%) of the
issued and outstanding interests of ownership of TARGET, free of liens or
encumbrances, accompanied by duly executed stock powers.
(c)Simultaneous Closing. All transactions at the Closing shall be
deemed to take place simultaneously and none shall be deemed to take place until
all shall have taken place. Except as otherwise provided herein, the parties
hereto shall have the right to waive any conditions of the Closing.
8. Survival of Representations and Warranties. Except as expressly stated
to the contrary in this Agreement, all statements, certifications,
indemnification's, representations and warranties, covenants and agreements made
by the parties to this Agreement and their respective obligations to be
performed pursuant to the terms hereof, shall survive the Closing,
notwithstanding any examination or investigation by or on behalf of any party
hereto, notwithstanding any notice of a breach or a failure to perform not
waived in writing, and notwithstanding the consummation of the transactions
hereby contemplated with the knowledge of such breach or failure.
9. Filings. Promptly after the Closing, the parties hereto shall make or
cause to be made all filings, and distribute and publish all notices and
releases required under the Federal securities laws and any other applicable
laws, rules or regulations and shall take all other steps necessary or proper to
effect the transactions hereunder.
10. Indemnification. The parties hereto shall, individually but not jointly,
indemnify and hold harmless each other, and each of their respective officers,
directors and affiliates, and each control person within the meaning of the
Exchange Act and the rules and regulations thereunder, for and against the full
amount of any loss, damage, liability, cost, obligation or expense, including
expenses and fees of counsel, judgments, fines, amounts paid in settlement and
related expenses (all of which are hereinafter collectively referred to as
"Deficiencies") incurred by such entities and/or persons directly or indirectly,
as a result of a breach of any representation, warranty or covenant of an
indemnifying party contained in this Agreement including any Exhibit, Schedule,
certificate or document delivered pursuant to the provisions hereof, or a
failure by an indemnifying party to perform or comply with any covenant,
agreement or obligation required by this Agreement to be performed or complied
with by such indemnifying party. Nothing contained in this Section 9 shall limit
or otherwise qualify any rights or remedies of any indemnified party under this
Agreement or applicable law.
11. Notices. Any notice or communications given by any party hereto to the
other party or parties shall be in writing and personally delivered or mailed by
registered or certified mail, return receipt requested, postage prepaid, to the
addresses provided below. Mailed notices shall be deemed given when received and
shall be addressed as follows:
(a) If to TARGET to:
R.A. LOGISTICS, INC.
Attn: Scott G. Villanueva, Esq
7500 NW 25th Street, Suite 209
Miami, Florida 33122
Telephone: 305-591-1331
Fax: 305-591-1332
(b)If to TROPIC, to:
Tropic Communications, Inc.
Attn: Mr. John E. Rayl, President
3021 Bethel Road, Suite 208
Columbus, OH 43220
Telephone: 614-538-0660
Fax: 614-538-0670
(c)with a copy to transaction counsel:
Cloud Koenig & Owen
Attn: Charles A. Koenig, Esq.
5354 North High Street, Suite 3D
Columbus, Ohio 43214
Telephone: 614-221-3621
Fax: 614-221-2698
(c)If to any TARGET OWNER, to the address set forth opposite the TARGET
OWNER'S name below, with a copy to any person or entity designated by such
TARGET OWNER from time to time.
12. Miscellaneous.
(a)Entire Agreement. All prior and contemporaneous agreements,
contracts, promises, representations and statements, if any, between the parties
hereto, or their representatives, with respect to the subject matter of this
Agreement, are merged into this Agreement and this Agreement (including the
Schedules and Exhibits hereto) shall constitute the entire agreement between
them. This Agreement (including the Schedules and Exhibits hereto) constitutes
the entire understanding between the parties and no waiver, modification or
termination of the terms hereof shall be valid unless in writing signed by the
party to be charged and only to the extent therein set forth.
(b)Expenses. Upon the successful Closing of the transactions
contemplated by this Agreement, TROPIC shall be fully and solely responsible for
all costs and expenses in preparing and negotiating this Agreement and
consummating the transactions contemplated hereby.
(c)No Waiver. No failure to exercise, and no delay in exercising, any
right, power or privilege hereunder shall operate as a waiver thereof. No waiver
of any breach of any provision shall be deemed to be a waiver of any preceding
or succeeding breach of the same or any other provision. No extension of time of
performance of any obligations or other acts hereunder or under any other
agreement shall be deemed to be an extension of the time for performance of any
other obligations or any other acts. The rights and remedies of the parties
under this Agreement, any Exhibits, any Schedules and any certificate or
document delivered pursuant to the provisions hereof, are in addition to all
other rights and remedies, at law or equity, that they may have against the
other.
(d)Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
(e)Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
(f)Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretations of this
Agreement.
(g)Exhibits and Schedules. The Exhibits and Schedules to this Agreement
constitute a part hereof as though set forth in full above.
(h)Governing Law. This Agreement shall be construed in accordance with
and governed for all purposes by the laws and public policy of the State of Ohio
applicable to contracts executed and to be performed within such State.
(i) Further Assurances. Each of the parties hereto agrees that at any
time, and from time to time, it shall execute, acknowledge, deliver and perform,
or cause to be executed, acknowledged, delivered and performed, all such further
acts, deed, assignments, transfers, conveyances, powers of attorney and
assurances as may be necessary or proper to carry out the purposes and intent of
this Agreement.
(j)Interpretation. A provision of this Agreement which requires a party
to perform an action shall be construed as requiring the party to perform the
action or to cause such action to be performed. A provision of this Agreement
which requires a party to refrain from taking an action shall be construed as
requiring the party to refrain from taking the action and to refrain from
causing such action to be taken. Wherever the term "including" is used herein,
the same shall be deemed to read "including, but not limited to." The singular
shall be deemed to include the plural, and the plural shall be deemed to include
the singular, as the context may require. "Any" shall be deemed to read "any and
all" whenever applicable.
(k)Severability. The parties stipulate that the terms and provisions of
this Agreement are fair and reasonable as at the signing of this Agreement.
However, if notwithstanding that stipulation any one or more of the terms,
provisions, covenants or restrictions of this Agreement shall be determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
(1)Acknowledgment. Each party hereto acknowledges that he or she has
received, read, understands and is familiar with this Agreement and except as
set forth in the Agreement, no representations or warranties have been made to
any party hereto, or to his or her tax, financial or legal advisors, by any
party hereto or by any person acting on behalf of any party hereto with respect
to the economic, tax, or any other aspects or consequences of the transactions
contemplated in this Agreement.
(m)Legal Counsel. Each party to this Agreement has been represented by
legal and tax counsel, each of whom has been personally selected by such party,
as each such party has found necessary, to consult concerning the consummation
of the transactions contemplated in the Agreement, and such representation has
included an examination of this Agreement and an analysis of all tax, financial
and legal aspects. Each of the parties hereto together with his or her counsel
and his or her financial and tax advisors and such other persons with whom such
party has found it necessary to consult, represent to each of the other parties
to this Agreement that they have sufficient knowledge and experience in legal,
financial and tax matters to evaluate this Agreement, and the transactions
contemplated herein.
(n)Tax Aspects. With respect to the tax aspects of the transactions
contemplated in this Agreement, each party hereto is relying solely upon the
advice of his or her own tax advisors, and upon his or her knowledge with
respect thereto.
(o)Representation. Each TARGET OWNER represents and warrants that he or
she is either an officer or a director of a party to this Agreement or is an
"accredited investor" as that term is defined in Rule 501(a) of Securities and
Exchange Commission Regulation D and that he has received and reviewed all
information required to have been given to him or her pursuant to the Rules of
said regulation, and that such SHAREHOLDER has had an opportunity and has made
all inquiry of TROPIC deemed necessary by him or her as to the business and
financial condition of TROPIC.
(p)Execution in Counter-Part. This Agreement may be executed
in counter-part and each facsimile signature shall be accepted as an
original signature.
(Signature page follows)
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as
of the day and year first above written, whereupon it became a legally binding
agreement in accordance with its terms.
R.A. LOGISTICS, INC. TARGET OWNERS:
By:
Title Angel Munoz, an
individual
Ronald Vimo, an individual
Scott Villanueva, an individual
TROPIC COMMUNICATIONS, INC.
By:
Title
<PAGE>
INDEX OF EXHIBITS
A. TARGET OWNERS
B. EMPLOYMENT AGREEMENTS
C. ARTICLES OF INCORPORATION and BY-LAWS of TARGET
and TARGET SUBSIDIARIES
D. FINANCIAL STATEMENTS of TARGET and TARGET SUBSIDIARIES
E. DESCRIPTION of ADVERSE COMMITMENTS, TAXES, LITIGATION
or SECURITY INTERESTS of TARGET and TARGET SUBSIDIARIES
F. TROPIC COMMUNICATIONS, INC.
SEC FORM 10-K FOR THE FISCAL YEAR ENDING
APRIL 30, 1997
<PAGE>
EXHIBIT A
TARGET OWNERS
Tropic Shares
Angel Munoz 12,900,000
6351 Lake June Road
Address
Miami Fl 33014
City State Zip Code
305-557-8297
Telephone Number
###-##-####
Social Security Number
Ronald Vimo 12,900,000
5840 SW 87th Street
Address
Miami FL 33143
City State Zip Code
305-665-3377
Telephone Number
###-##-####
Social Security Number
Scott Villanueva 600,000
2560 Tigermil Ave. #14
Address
Miami FL 33133
City State Zip Code
305-285-0655
Telephone Number
###-##-####
Social Security Number
Total 26,400,000
<PAGE>
EXHIBIT B
EMPLOYMENT AGREEMENTS
<PAGE>
EXHIBIT C
ARTICLES OF INCORPORATION
AND
BY-LAWS OF R.A. LOGISTICS, INC. AND SUBSIDIARIES
<PAGE>
EXHIBIT D
FINANCIAL STATEMENTS
Exhibit 1 - Balance Sheet of R.A. Logistics, Inc. as of August 1, 1997
Exhibit 2 - Balance Sheet of B. Airways Air Cargo, Inc. as of
August 1, 1997
Exhibit 3 - Balance Sheet of B. Airways, Inc. as of August 1, 1997
<PAGE>
Exhibit 1
R.A. Logistics, Inc.
Balance Sheet
As of August 1, 1997
Assets:
Cash $ -0-
Subscriptions Receivable
from Shareholders 1,047
Investment in Subsidiaries 135,500
Total Assets $ 136,547
----------
Liabilities
Accounts Payable $ -0-
Subscriptions Payable to Subsidiary 500
Stockholder's Equity
Common Stock, 2,000 shares $.01 par value
authorized, 1,047 subscribed for 10
Additional Paid In Capital 136,037
Retained Earnings -0-
Total Liabilities and Stockholder's Equity $ 136,547
<PAGE>
Exhibit 2
B. Airways Air Cargo, Inc.
Balance Sheet
As of August 1, 1997
Assets:
Cash $ -0-
Subscriptions Receivable from Parent 500
Total Assets $ 500
----------
Liabilities
Accounts Payable $ -0-
Stockholder's Equity
Common Stock 2,000 shares $.01 par value
authorized authorized and issued
and outstanding 20
Additional Paid In Capital 480
Retained Earnings -0-
Total Liabilities and Stockholder's Equity $ 500
<PAGE>
Exhibit 3
B. Airways, Inc.
Balance Sheet
As of August 1, 1997
Assets:
Cash $ -0-
Deposits on aircraft 10,000
Total Assets $ 10,000
----------
Liabilities
Accounts payable $ -0-
Stockholder's Equity
Common Stock 10,000
Retained Earnings -0-
Total Liabilities and Stockholder's Equity $ 10,000
<PAGE>
EXHIBIT E
DESCRIPTION of ADVERSE COMMITMENTS, TAXES
LITIGATION or SECURITY INTERESTS of
TARGET and TARGET SUBSIDIARIES
None.
<PAGE>
EXHIBIT F
TROPIC COMMUNICATIONS, INC.
SEC FORM 10-K FOR THE YEAR ENDING APRIL 30, 1997
12
EXHIBIT 10.92
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") made as of September 2, 1997 by and
between Tropic Communications, Inc., a Delaware corporation (the "Company") and
Angel Munoz (the "Executive").
WITNESSETH:
WHEREAS, the parties hereto desire to provide for the employment of the
Executive by the Company as an executive officer of the Company upon the terms
set forth herein; and
WHEREAS, the Executive is prepared to accept such employment, upon the
terms and conditions hereinafter described.
NOW THEREFORE, in consideration of the premises and mutual promises and
agreements hereinafter set forth, it is agreed as follows:
1. Effectiveness of this Agreement. This Agreement shall become effective on the
date first written above.
2. Employment and Duties. (a) Executive shall serve as President of the Company
and shall serve as an executive officer of each of the Company's wholly-owned
subsidiaries and affiliates as such offices and duties may be delegated to him
from time to time by the Company's Board of Directors, for a term commencing on
the effective date of this Agreement and expiring on the date set forth in
paragraph 7 of this Agreement. The Executive agrees to serve the Company
faithfully and to the best of his ability and to perform such services and
duties of an executive nature in connection with the business, affairs and
operations of the Company and any subsidiary of the Company as may be reasonably
and in good faith assigned or delegated to him from time to time by or under the
authority of the Board of Directors of the Company and consistent with the
positions of President, and to use his best efforts in the promotion and
advancement of the Company and its subsidiaries and their welfare and business.
Executive shall perform his duties hereunder, to the extent as, is or may be
reasonably necessary in connection therewith, at the Company's corporate
headquarters; provided, however, that the Company acknowledges that Executive's
physical presence at the Company's headquarters on a daily basis throughout the
term of this Agreement is not necessarily required, having due regard to the
ability of Executive to adequately interact with the Company's other employees
by telephone, facsimile and computer. Executive's employment with the Company
shall be Executive's primary employment during the term of this Agreement. As
long as he is current in the performance of his duties, Executive may also
engage in other business activities unrelated to his positions with the Company,
provided that such other activities do not interfere with the satisfactory
performance of his obligations hereunder and the Company and Executive agree
that Executive shall devote such time to his duties as, in his sole discretion,
he deems necessary to adequately discharge such responsibilities under this
Agreement and do not violate the terms and conditions of Paragraph 8 hereof.
(b) During the term of employment, Executive shall be nominated by the
management of the Company for election as a director of the Company at each
meeting of shareholders at which his term of office as a director shall expire.
In addition, at his request, the Company shall have Executive elected to the
Board of Directors of each of its subsidiaries.
3. Compensation. (a) Base Salary. The Company shall pay to Executive during the
term of this Agreement a salary (the "Base Salary") of $175,000 per year, which
shall be payable in cash to Executive not less frequently than once monthly, in
advance, in accordance with the current payment policies of the Company. The
Base Salary shall be increased effective as of January 1, 1998, and annually as
of each January 1 thereafter by a minimum annual adjustment as set forth herein.
To determine the Minimum Adjustment, the Base Salary shall be multiplied by a
fraction, the numerator of which shall be the United States Department of Labor,
Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and
Clerical Workers, U.S. City Average, All Items (1967=100) (the "Index") for the
month of December of the immediately preceding year, and the denominator of
which shall be the Index for the month of December, of the next preceding year,
provided however, that the fraction multiplied to determine the Adjustment shall
not be less than five percent (5%) for any Adjustment. Notwithstanding the
foregoing, the Board of Directors, may in its discretion at any time, increase
the amount of the Base Salary payable hereunder. The Base Salary, once
increased, may not thereafter be reduced without the prior written consent of
Executive.
(b) Incentive Compensation. The Company shall pay to Executive during the term
of this Agreement incentive compensation ("Incentive Compensation") in addition
to any Base Salary, in an amount equal to fifty (50.00%) percent of an amount
equal to: (i) one (1.00%) percent of the Company's annual gross revenue ("Annual
Gross Revenue" as hereinafter defined) minus (ii) an amount equal to the total
of the Base Salary for the year paid to Executive plus the Base Salary for the
year paid to the Company's Vice-President Ronald Vimo plus the Incentive
Compensation paid to the Company's General Counsel Scott Villanueva. The
Incentive Compensation shall be paid to Executive no later than two and one-half
months after the end of the fiscal year for which it is payable, or three days
after the audited results for the Company for such year becomes available,
whichever is later. In the event the Board of Directors of the Company
determines at any time during such year that all or any part of the Incentive
Compensation with respect to such year has been earned, the Board of Directors
in its sole discretion may pay all or part of such Incentive Compensation prior
to the time the Incentive Compensation is due hereunder.
(c) Definition of Annual Gross Revenue. Annual Gross Revenue shall mean the
consolidated sales and revenues of the Company and each of its wholly-owned
subsidiaries as reported to the Securities and Exchange Commission in the
Company's annual audited financial statements determined using generally
accepted accounting principles consistently applied.
(d) Deferred Compensation. Notwithstanding the payment provisions of Paragraphs
3(a) and 3(b) of this Agreement, Executive may elect to defer to a later taxable
year designated by him the receipt of all or any portion of his compensation
payable hereunder. The terms of any such deferral or deferrals shall be mutually
agreed upon by Executive and the Company at the time of an election.
4. Insurance Benefits. (a) Medical Insurance. During the term of this Agreement,
the Company shall provide to Executive and his dependents (at no expense to
Executive) insurance coverage suitable to Executive for hospitalization and
major medical, medical reimbursement, dental, and with respect to Executive,
long-term disability insurance or the cash equivalent of such. To the extent
such coverage is not provided by the types of insurance previously specified,
Executive shall be eligible, upon the same terms and conditions as any other
employee of the Company to be covered by or otherwise participate in any other
insurance plans maintained by the Company for the benefit of its employees.
(b) Permanent Disability. In the event of termination of Executive's employment
due to Permanent Disability (as hereinafter defined), the Company shall
thereafter pay the Executive 75% of his then effective Base Salary for the
balance of the stated term of this Agreement. In addition, Executive shall be
entitled to (i) a pro rata portion of the Incentive Compensation payable
pursuant to Paragraph 3(b) of this Agreement for the fiscal year in which such
termination occurs on the basis of the elapsed time (in full months) during such
year that Executive was employed prior to the date of termination, (ii)
reimbursement of expenses properly incurred prior to the date of termination (as
contemplated by Paragraph 7 of this Agreement) and (iii) accrued vacation pay
and pension, if any. "Permanent Disability" for purposes hereof shall be deemed
to exist if, in the judgment of a physician licensed to practice in the state of
Executive's residence who is satisfactory to Executive, Executive will be
unable, due to mental or physical incapacity, disease or injury, to perform the
duties of his office for a period of not less than six months. In the event of a
termination due to Permanent Disability, the Company shall also continue to
include Executive and his family in its group hospitalization, major medical and
life insurance plans (if any) until the end of the stated term, with the expense
thereof to be borne by the Company. The Company's obligation hereunder shall be
reduced by the amount of disability income insurance proceeds paid to Executive
under any of the Company's employee benefit plans. The Company's obligation
hereunder shall be reduced by the amount of disability income insurance proceeds
paid to Executive under any of the Company's employee benefit plans.
(c) Life Insurance. (i) The Company shall provide Executive with life insurance
on the life of the Executive in the principal amount of $2,000,000 during the
term of this Agreement, and pay all premiums with respect to such insurance. The
Company shall pay additional compensation to the Executive to hold him harmless
from any income taxes he may owe as a result of the premiums paid by the Company
with respect to such insurance and as a result of such additional compensation.
(ii) Upon termination of his employment hereunder, the Company shall be required
to transfer and assign to Executive any policy of life and/or disability
insurance then owned by the Company in respect of Executive. (iii) In the event
the Board of Directors determines to acquire "key man" insurance on the life of
Executive, Executive shall cooperate with the Company in obtaining such
insurance.
5. Executive Benefits. (a) Vacation. During the term of this Agreement,
Executive shall be entitled to paid vacations of one month in each calendar year
during the term of employment. Vacation periods need not be consecutive and
shall carry over to the following calendar years to the extent unused. Vacation
periods remaining unused at the date of Termination shall be paid to Executive
in cash without reduction at the Base Salary rate in effect as of the date of
Termination.
(b) Sick Leave. Executive shall be entitled to sick leave rights in accordance
with the sick leave policy of the Company.
(c) Parking. The Company, upon receipt of adequate documentation, shall directly
pay or reimburse Executive for his parking expenses.
(d) Office. During the term of this Agreement, the Company shall provide
Executive with a suitable office and furnishings required in the performance of
his duties, a Company cellular telephone, a personal lap top computer configured
for maximum utility, and a service account with a data and e-mail service
provider.
(e) Business Expenses. During the term of this Agreement, the Company authorizes
Executive to incur such expenses as are appropriate for the reasonable and
proper conduct of the Company's business, and the Company shall reimburse him no
less frequently than monthly for such expenses upon submission of a reasonably
detailed accounting thereof, with appropriate substantiation and shall provide
to Executive customary corporate credit and charge cards to permit direct
payment thereof by the Company.
(f) Automobile. The Company shall provide Executive with an automobile allowance
of $1,000 per month during the term of this Agreement, and the Company shall
reimburse Executive for the insurance, repair, gas, maintenance and mobile
telephone expense associated with Executive's automobile. In lieu hereof, the
Company may elect to provide Executive for reimbursement of the business use of
his personal automobile at the maximum rate per mile as set forth in the
Internal Revenue Code of 1986 as amended and the rules and regulations
promulgated thereunder (the "Code").
(g) Other Benefit Plans. In addition to, but not in limitation of the foregoing
benefits, Executive shall be eligible upon the same terms and conditions as any
other common-law employee to participate in any employee welfare, pension,
stock, or other benefit plan maintained on or after the date of this Agreement
for the benefit of the Company's employee's. Benefits for Executive under such
plans shall be at least as great as those offered to any other employee of the
Company and its subsidiaries.
6. Issuance of Stock Options; Additional Stock Options; Loans for Exercise of
Options; Registration Rights. (a) Executive shall qualify for participation in
all of the Company's stock option plans and may receive grants of stock options
from time to time. The Company shall pay additional compensation to the
Executive to hold him harmless from any income or other taxes he may owe as a
result of the grant of any options pursuant to this Agreement.
(b) With respect to shares of Common Stock of the Company which may be acquired
by Executive at any time after January 1, 1998 pursuant to any options which may
be held by Executive, the Company agrees that, to the extent permitted by law,
the Company will lend or cause to be lent to Executive, at Executive's request,
funds sufficient to enable him to pay the exercise price of such options from
time to time up to the total number of shares covered by said options, so long
as Executive is an employee of the Company or any of its subsidiaries at the
time a request for any such loan is made. Such loan shall bear interest at the
minimum applicable federal rate such that imputed interest will not result, and
will be due 36 months after the loan is made, unless Executive is terminated for
Cause or voluntarily terminates his employment prior to the end of the term of
employment, in which case the loan will be due 12 months following the date of
termination. In addition, any such loan shall be secured by shares of Common
Stock owned by Executive the fair market value of which shall at any time be not
less than 100% of the outstanding principal amount of, and accrued but unpaid
interest on, such loan.
(c) Subject to any contract or agreement to which the Company may be a party
with an underwriter of the common stock of the Company pursuant to which the
Company is required to withhold or delay the filing of any registration
statement relating to shares of common stock issuable pursuant to any option
plan of the Company and upon the request of Executive, the Company shall file at
the sole expense of the Company and as promptly as practicable following the
date of Executive's request, a registration statement with the Securities and
Exchange Commission on Form S-8 (or other then applicable form), registering the
shares of the Company's common stock issuable to Executive upon exercise of the
Option and any other options granted to the Executive, together with (if
required to enable the Executive to resell any such shares publicly) a selling
shareholder prospectus in conformity with Form S-3 (or any then applicable
form). The Company covenants and agrees to file all necessary amendments to such
registration statement and to keep same current during the full option exercise
term, at its sole cost and expense.
7. Term and Termination. (a) Term and Renewals. The term of this Agreement shall
be until December 31, 2002, unless earlier terminated for cause as provided
herein. Executive's employment under this Agreement and this Agreement shall
continue thereafter for one five-year term without any further action by the
parties hereto unless terminated by written notice of either party given to the
other no less than sixty (60) days prior to the end of the then current term.
(b) Subject to the performance of the covenants and agreements made by the
Company herein, Executive will perform his duties during the term of this
Agreement in good faith and will observe faithfully the covenants and agreements
made by him herein. Executive shall not be discharged during the term of this
Agreement unless Executive's termination is for (i) Cause (defined to be either
(A) the conviction of Executive for, or Executive pleads nolo contendere to, any
crime or offense involving monies or property of the Company or (B) a violation
of the provisions of Paragraph 8 hereof, subject to the provisions of Paragraph
8(d) thereof), or Permanent Disability as provided in Paragraph 4(b) hereof. The
discharge of Executive for reasons other than those specified in the preceding
sentence shall be deemed to be a discharge without justifiable reason. No breach
or default by Executive shall be deemed to have occurred unless written notice
thereof shall have been given by the Company to Executive and Executive shall
have failed to cure the breach or default within thirty (30) days after he
receives the written notice. If the employment of Executive is terminated by the
Company for Cause, the Company shall have no obligation to Executive except any
Base Salary earned to the date of termination, a pro rata portion of the
Incentive Compensation payable pursuant to Paragraph 3 of this Agreement for the
fiscal year in which such termination occurs on the basis of the elapsed time
(in full months) during such year that Executive was employed prior to the date
of termination, reimbursement of expenses properly incurred prior to such date
and accrued vacation pay, other employee benefits and pension, if any. If the
employment of Executive is terminated as a result of a Permanent Disability, the
provisions of Paragraph 4(b) shall apply.
(c) Termination for Good Reason. Executive shall be entitled to terminate his
employment for good reason. Any termination by Executive of his employment under
the following circumstances shall be deemed to be for good reason and shall be
deemed to be a breach of this Agreement by the Company:
(i) Any material breach of this Agreement by the Company, including but not
limited to any attempt by the Company to terminate the employment of Executive
for any reason other than as set forth in Paragraph (b) of this paragraph or if,
without his express written consent, Executive is assigned duties inconsistent
with his positions, duties, responsibilities, or status with the Company and its
subsidiaries in effect as of the date of this Agreement, or if his reporting
responsibilities, title or offices as in effect immediately prior to the date of
this Agreement are changed, or if Executive is removed from or not re-elected to
any of such positions, except in connection with the termination of his
employment pursuant to Paragraph (b) of this paragraph, or as a result of his
death or substantial disability;
(ii)If the Base Salary, in effect as of the date of this Agreement and as
the same may be increased from time to time pursuant to this Agreement, is
reduced, or if the Company fails to increase the Base Salary in accordance this
Agreement;
(iii) If the Company reduces in amount or scope, or fails to continue to
provide to Executive or his beneficiaries any or all of the benefits described
in this Agreement;
(iv)If the Company's principal executive offices are moved to a location
outside the United States, or if the Company requires Executive without his
agreement to be based anywhere other than the Company's principal executive
offices except for required travel on business of the Company to an extent
substantially consistent with his business travel obligations in effect
immediately prior to the date of this Agreement; or
(v) If, without the prior written consent of Executive, at any time after
the date hereof, any of the following occurs:
(A) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), of 30% or more
of either the then outstanding shares of Common Stock of the Company (the
"Outstanding Company Common Stock") or the combined voting power of the then
outstanding voting securities of the Company having general voting power in
electing the Board of Directors of the Company (the "Outstanding Company voting
Securities"); or
(B) Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors, provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election, by the Company's stockholders was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the Company (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(C) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company, or of the sale or other disposition
of all or substantially all of the assets of the Company, or of a
reorganization, merger or consolidation with respect to which all or
substantially all of the individuals and entities who were the respective
beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation do not, immediately following such reorganization, merger or
consolidation, beneficially own, directly or indirectly, more than 30% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation resulting from such
reorganization, merger or consolidation, as the case may be; or
(D) Executive is not nominated for a directorship of the Company or, if
requested, of any subsidiary; or, if nominated, he is not elected by the
stockholders; or if there appears to either Executive or the Company to be a
clear and reasonable probability (judging, among other things, by proxy returns,
competitive proxy solicitations, or adverse vote campaigns), that Executive may
not be so elected.
(d) Executive's Remedies for Breach. If any of the events specified in Paragraph
(c) of this Paragraph 7 occur or if the Company shall fail to observe or perform
any covenant or agreement in this Agreement, Executive may, by written notice to
the Company, elect to treat such breach as a termination without Cause within
the meaning of this Agreement and terminate his employment as an officer and
director of the Company and all subsidiaries. In the event of a termination
without Cause, all obligations of Executive hereunder shall terminate, and
Executive shall be entitled to the following:
(i) Executive may elect, in his sole discretion, to receive either of the
following (A), (B) or (C) (the "Severance Compensation"):
(A) Continue to receive all compensation and benefits provided by this
Agreement as if he had continued to be employed hereunder for the full remaining
term of employment (without any duty to mitigate damages).
(B) Receive, in lieu of all such compensation and benefits, within ten
business days after the date of termination, an amount equal to the sum of (x)
and (y) below:
(x) all accrued but unpaid Base Salary, Incentive Compensation and
other compensation or other amounts due to Executive under this Agreement as of
the date of termination; plus
(y) the discounted present value of all remaining Base Salary and
Incentive Compensation to which Executive would be entitled under this Agreement
for all years remaining under the Agreement. "Base Salary" for purposes of this
subparagraph shall be deemed the annual Base Salary rate in effect at the time
of the discharge, increased by 10% on each successive January 1. "Incentive
Compensation" for purposes of this subparagraph shall mean, for each remaining
year under the Agreement, an amount equal to 50% of the Base Salary payable to
Executive for such year. The discounted present value for the remaining term of
the Agreement shall be determined using an interest rate equal to the most
recent federal rate published by the Internal Revenue Service for imputing
interest, and shall be applied to a period of time equal to the period between
the date of termination and the expiration date of the stated term of
employment.
(C) Receive in lieu of amounts payable under either (A) or (B), within
ten business days after the date of termination, an amount equal to ten times an
amount equal to the Executives Base Salary and Incentive Compensation in respect
of the last full year Executive was employed under this Agreement.
(ii)All indebtedness of Executive to the Company then outstanding, if any,
shall thereupon be forgiven.
(iii) The group major medical, hospitalization, disability income insurance
and life insurance coverage provided to Executive and his family at the time of
termination shall be provided for the remainder of the stated term of the
Agreement with the cost thereof to be borne by the Company.
(iv)All stock options, including but not limited to the Option granted
pursuant to Paragraph 6 of this Agreement, which were not exercisable at the
time of termination of employment shall thereupon become exercisable in full at
any time during the remaining term of the respective option.
(e) In the event of termination of employment due to death, such termination
shall not result in the loss of any rights which the Executive may have as an
employee of the Company or any subsidiary at time of his death pursuant to any
insurance or other death benefit plans or arrangements of the Company or any
subsidiary or pursuant to any employee benefit plans of the Company or
subsidiary or pursuant to any options or rights to acquire shares of Common
Stock of the Company (except to the extent that such loss of rights arises under
the terms of the instruments governing such plans or arrangements).
(f) In the event any portion of this Paragraph 7 is held to be contrary to law
or to subject Executive to liability in any way, that portion of the Agreement
shall become null and void and all other portions hereof shall remain in full
force and effect.
8. Restrictive Covenants. Executive covenants and agrees that:
(a) Executive will not, unless otherwise required by law, at any time during the
term of employment hereunder and for two years thereafter, divulge to any person
other than a person associated with the Company any secret and confidential
information concerning the Company, or any of its subsidiaries, and their
respective products, customers and plans which Executive acquired during the
course of Executive's employment.
(b) Executive will not, directly or indirectly, except for the benefit of the
Company, at any time during the term of employment hereunder, become an officer,
director, stockholder, partner, associate, employee, owner, agent, creditor,
independent contractor, co-venturer or otherwise, or be interested in or
associated with any other corporation, firm or business engaged in the same or
any similar business then competitive with that of the Company or any of its
subsidiaries.
(c) Executive will not, directly or indirectly, except for the benefit of the
Company, during the term of employment and for a period of one year thereafter:
(i) (A) solicit, cause or authorize, directly or indirectly, to be
solicited for or on behalf of Executive or third parties, from persons who were
customers of the Company at any time within one year prior to the cessation of
Executive's employment hereunder, any business similar to the business
transacted by the Company with such customer; or
(B) accept or cause or authorize, directly or indirectly, to be
accepted for or on behalf of the Executive or third parties, any such business
from any such customers of the Company as defined in the preceding subparagraph.
(ii)(A) solicit, entice, persuade or induce, directly or indirectly, any
employee of the Company or any of its subsidiaries or any other person who was,
at any time within one year prior to the cessation of Executive's employment
hereunder, then under contract with or rendering services to the Company or any
of its subsidiaries, to terminate his or her employment by, or contractual
relationship with, the Company or its subsidiaries or to refrain from extending
or renewing the same (upon the same or new terms) or to refrain from rendering
services to the Company or its subsidiaries or to become employed by or to enter
contractual relations with persons other than the Company or its subsidiaries;
or
(B) approach any such employee or other person for any of the foregoing
purposes; or
(C) authorize or knowingly approve or assist in the taking of any such
actions by any person other than the Company or any of its subsidiaries.
(iii) provided, however, that if the employment of Executive has been
terminated without Cause under this Agreement and the Company has failed to
deliver to Executive the Severance Compensation and other benefits due him
pursuant to this Agreement, Executive shall not be subject to this Paragraph
7(c) immediately upon such non-delivery.
(d) Notwithstanding any alleged breach of the provisions of this Paragraph 8 by
Executive, this Agreement shall continue in full force and effect, and the
Company shall be required to make all payments and furnish all benefits due to
Executive hereunder, until such time as there is a final judgment by a court of
competent jurisdiction finding that there has been a material breach of this
Paragraph 7 by Executive, which is no longer subject to appeal by Executive.
9. Binding Effect; Governing Law; Notice of Breach and Right to Cure. (a) The
rights and obligations under this Agreement shall inure to the benefit of and
shall be binding upon the Company and its successors and assigns, including any
corporation with which the Company shall merge or consolidate or to which it
shall sell all or substantially all of its assets. This Agreement is otherwise
nonassignable.
(b) The interpretation and construction of this Agreement shall be governed by
the laws of the State of Florida.
(c.) In the event of any material breach by either party to this Agreement, the
non-breaching party shall give the breaching party written notice thereof, and
unless otherwise provided for herein, the breaching party shall have twenty
business days from the receipt of such notice to cure such breach. If the breach
is cured within such twenty business day period, no breach will be deemed to
have occurred hereunder.
10. Indemnity. The Company shall indemnify Executive if Executive was or is
threatened to be made a party to any threatened pending, or completed action or
suit by or in the right of or in the name of the Executive or in the name of the
Corporation to procure a judgment in its favor by reason of the fact that
Executive is or was a director, officer, employee or agent of the Company or is
or was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorney's fees and expenses) actually
incurred by the Executive in connection with the defense or settlement of such
negotiation, action or suit. Expenses incurred by Executive in defending a civil
or criminal action, suit or proceeding shall be paid by the Company upon the
request by Executive, which request may be in advance and from time to time, of
the final disposition of such action, suit or proceeding. The indemnification
provided hereby shall not be deemed exclusive of all rights to which Executive
may be entitled under any Bylaw, agreement, vote of stockholders or
disinterested Directors or otherwise, both as to action in Executive's official
capacity and as to action in another capacity while holding such office, and
shall continue to Executive as a person who has ceased to be a Director, officer
or agent as to claims arising during or as a result of the service to the
Company and shall inure to the benefit of Executive's heirs, executors and
administrators. References to the Company shall include, in addition to the
resulting corporation, any constituent corporation or business enterprise
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued would have had power and
authority to indemnify its directors, officers, and employees or agents so that
if Executive is or was a director, officer, employee or agent of such
constituent corporation or enterprise, or is or was serving at the request of
such constituent corporation or enterprise as a director or officer, of another
corporation, or enterprise, shall stand in the same position with respect to the
resulting or surviving corporation or enterprise as Executive would have with
respect to such constituent corporation or enterprise as if its separate
existence had continued.
11. Miscellaneous. (a) Consent to Jurisdiction. Each party hereto consents to
and agrees to submit solely to the jurisdiction of any court of competent
jurisdiction of the State of Florida or any federal court of competent
jurisdiction sitting within such state, in connection with any action or
proceeding brought by a party hereto in order to enforce any right or remedy
under this Agreement, and each party hereto agrees that service of process
relating to any such proceeding by mail or delivery at its address for notices
as specified in this Agreement shall be legally sufficient for all purposes.
(b) Notice. Any notice or other communication to be given under this Agreement
shall be in writing and delivered personally or by first class mail, postage
prepaid, to the Company at 3021 Bethel Road, Suite 208, Columbus, Ohio 43220 and
to Executive to 6351 Lake June Road, Miami Lakes, FL 33014. Each party shall
notify the other party in writing of any change in address. The new address
shall be used for all subsequent notices or communications until again changed
by written notice.
(c.) Amendment and Termination. This Agreement may be amended or
terminated in whole or in part at any time and from time-to-time upon
mutual written consent of the Company and Executive.
(d) Prior Agreements. All prior Agreements between the Company and Executive
are, to the extent such agreements relate to the employment of Executive by the
Company, hereby deemed superseded by this Agreement.
(e) Entire Agreement. This Agreement constitutes the complete and exclusive
statement of the agreement between the parties and supersedes all proposals,
oral or written, and all other communications between the parties relating to
the subject matter of this Agreement. Neither party is justified in relying on
such proposals or communications.
(f) Survivability. This Agreement constitutes a separate instrument, enforceable
in accordance with its terms, and neither this Agreement nor the obligations of
either party hereunder shall, under any circumstances or in any legal
proceeding, be deemed to have merged into or with any other agreement.
(g) Severability. If any provision of this Agreement is held to be void or
unenforceable by any court of competent jurisdiction, only that objectionable
term or provision shall be deleted herefrom while the remainder of the terms,
provisions, and agreements shall remain enforceable.
(h) Survivor Bound. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, the legal representatives, successors in
interest, and assigns, respectively, of each such party.
(i) Captions. Paragraph titles or captions contained in this Agreement are
inserted only as a mater of convenience and as reference and in no way define,
limit, extend, or describe the scope of this Agreement or the intent of any
provision hereof.
(j) Execution in Counterparts. This Agreement may be executed in several
counterparts, and each counterpart shall be considered as an original.
IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be
signed and sealed by its undersigned officer, hereunto duly authorized, and
Executive has set his hand hereto, all as of the day and year first above
written.
ATTEST: TROPIC COMMUNICATIONS, INC.
By:
Title
Angel Munoz, an individual
EXHIBIT 10.93
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") made as of September 2, 1997 by and
between Tropic Communications, Inc., a Delaware corporation (the "Company") and
Ronald Vimo (the "Executive").
WITNESSETH:
WHEREAS, the parties hereto desire to provide for the employment of the
Executive by the Company as an executive officer of the Company upon the terms
set forth herein; and
WHEREAS, the Executive is prepared to accept such employment, upon the
terms and conditions hereinafter described.
NOW THEREFORE, in consideration of the premises and mutual promises and
agreements hereinafter set forth, it is agreed as follows:
1. Effectiveness of this Agreement. This Agreement shall become effective on the
date first written above.
2. Employment and Duties. (a) Executive shall serve as Vice-President of the
Company and shall serve as an executive officer of each of the Company's
wholly-owned subsidiaries and affiliates as such offices and duties may be
delegated to him from time to time by the Company's Board of Directors, for a
term commencing on the effective date of this Agreement and expiring on the date
set forth in paragraph 7 of this Agreement. The Executive agrees to serve the
Company faithfully and to the best of his ability and to perform such services
and duties of an executive nature in connection with the business, affairs and
operations of the Company and any subsidiary of the Company as may be reasonably
and in good faith assigned or delegated to him from time to time by or under the
authority of the Board of Directors of the Company and consistent with the
positions of Vice-President, and to use his best efforts in the promotion and
advancement of the Company and its subsidiaries and their welfare and business.
Executive shall perform his duties hereunder, to the extent as, is or may be
reasonably necessary in connection therewith, at the Company's corporate
headquarters; provided, however, that the Company acknowledges that Executive's
physical presence at the Company's headquarters on a daily basis throughout the
term of this Agreement is not necessarily required, having due regard to the
ability of Executive to adequately interact with the Company's other employees
by telephone, facsimile and computer. Executive's employment with the Company
shall be Executive's primary employment during the term of this Agreement. As
long as he is current in the performance of his duties, Executive may also
engage in other business activities unrelated to his positions with the Company,
provided that such other activities do not interfere with the satisfactory
performance of his obligations hereunder and the Company and Executive agree
that Executive shall devote such time to his duties as, in his sole discretion,
he deems necessary to adequately discharge such responsibilities under this
Agreement and do not violate the terms and conditions of Paragraph 8 hereof.
(b) During the term of employment, Executive shall be nominated by the
management of the Company for election as a director of the Company at each
meeting of shareholders at which his term of office as a director shall expire.
In addition, at his request, the Company shall have Executive elected to the
Board of Directors of each of its subsidiaries.
3. Compensation. (a) Base Salary. The Company shall pay to Executive during the
term of this Agreement a salary (the "Base Salary") of $175,000 per year, which
shall be payable in cash to Executive not less frequently than once monthly, in
advance, in accordance with the current payment policies of the Company. The
Base Salary shall be increased effective as of January 1, 1998, and annually as
of each January 1 thereafter by a minimum annual adjustment as set forth herein.
To determine the Minimum Adjustment, the Base Salary shall be multiplied by a
fraction, the numerator of which shall be the United States Department of Labor,
Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and
Clerical Workers, U.S. City Average, All Items (1967=100) (the "Index") for the
month of December of the immediately preceding year, and the denominator of
which shall be the Index for the month of December, of the next preceding year,
provided however, that the fraction multiplied to determine the Adjustment shall
not be less than five percent (5%) for any Adjustment. Notwithstanding the
foregoing, the Board of Directors, may in its discretion at any time, increase
the amount of the Base Salary payable hereunder. The Base Salary, once
increased, may not thereafter be reduced without the prior written consent of
Executive.
(b) Incentive Compensation. The Company shall pay to Executive during the term
of this Agreement incentive compensation ("Incentive Compensation") in addition
to any Base Salary, in an amount equal to fifty (50.00%) percent of an amount
equal to: (i) one (1.00%) percent of the Company's annual gross revenue ("Annual
Gross Revenue" as hereinafter defined) minus (ii) an amount equal to the total
of the Base Salary for the year paid to Executive plus the Base Salary for the
year paid to the Company's President plus the Incentive Compensation paid to the
Company's General Counsel. The Incentive Compensation shall be paid to Executive
no later than two and one-half months after the end of the fiscal year for which
it is payable, or three days after the audited results for the Company for such
year becomes available, whichever is later. In the event the Board of Directors
of the Company determines at any time during such year that all or any part of
the Incentive Compensation with respect to such year has been earned, the Board
of Directors in its sole discretion may pay all or part of such Incentive
Compensation prior to the time the Incentive Compensation is due hereunder.
(c) Definition of Annual Gross Revenue. Annual Gross Revenue shall mean the
consolidated sales and revenues of the Company and each of its wholly-owned
subsidiaries as reported to the Securities and Exchange Commission in the
Company's annual audited financial statements determined using generally
accepted accounting principles consistently applied.
(d) Deferred Compensation. Notwithstanding the payment provisions of Paragraphs
3(a) and 3(b) of this Agreement, Executive may elect to defer to a later taxable
year designated by him the receipt of all or any portion of his compensation
payable hereunder. The terms of any such deferral or deferrals shall be mutually
agreed upon by Executive and the Company at the time of an election.
4. Insurance Benefits. (a) Medical Insurance. During the term of this Agreement,
the Company shall provide to Executive and his dependents (at no expense to
Executive) insurance coverage suitable to Executive for hospitalization and
major medical, medical reimbursement, dental, and with respect to Executive,
long-term disability insurance or the cash equivalent of such. To the extent
such coverage is not provided by the types of insurance previously specified,
Executive shall be eligible, upon the same terms and conditions as any other
employee of the Company to be covered by or otherwise participate in any other
insurance plans maintained by the Company for the benefit of its employees.
(b) Permanent Disability. In the event of termination of Executive's employment
due to Permanent Disability (as hereinafter defined), the Company shall
thereafter pay the Executive 75% of his then effective Base Salary for the
balance of the stated term of this Agreement. In addition, Executive shall be
entitled to (i) a pro rata portion of the Incentive Compensation payable
pursuant to Paragraph 3(b) of this Agreement for the fiscal year in which such
termination occurs on the basis of the elapsed time (in full months) during such
year that Executive was employed prior to the date of termination, (ii)
reimbursement of expenses properly incurred prior to the date of termination (as
contemplated by Paragraph 7 of this Agreement) and (iii) accrued vacation pay
and pension, if any. "Permanent Disability" for purposes hereof shall be deemed
to exist if, in the judgment of a physician licensed to practice in the state of
Executive's residence who is satisfactory to Executive, Executive will be
unable, due to mental or physical incapacity, disease or injury, to perform the
duties of his office for a period of not less than six months. In the event of a
termination due to Permanent Disability, the Company shall also continue to
include Executive and his family in its group hospitalization, major medical and
life insurance plans (if any) until the end of the stated term, with the expense
thereof to be borne by the Company. The Company's obligation hereunder shall be
reduced by the amount of disability income insurance proceeds paid to Executive
under any of the Company's employee benefit plans. The Company's obligation
hereunder shall be reduced by the amount of disability income insurance proceeds
paid to Executive under any of the Company's employee benefit plans.
(c) Life Insurance. (i) The Company shall provide Executive with life insurance
on the life of the Executive in the principal amount of $2,000,000 during the
term of this Agreement, and pay all premiums with respect to such insurance. The
Company shall pay additional compensation to the Executive to hold him harmless
from any income taxes he may owe as a result of the premiums paid by the Company
with respect to such insurance and as a result of such additional compensation.
(ii) Upon termination of his employment hereunder, the Company shall be required
to transfer and assign to Executive any policy of life and/or disability
insurance then owned by the Company in respect of Executive. (iii) In the event
the Board of Directors determines to acquire "key man" insurance on the life of
Executive, Executive shall cooperate with the Company in obtaining such
insurance.
5. Executive Benefits. (a) Vacation. During the term of this Agreement,
Executive shall be entitled to paid vacations of one month in each calendar year
during the term of employment. Vacation periods need not be consecutive and
shall carry over to the following calendar years to the extent unused. Vacation
periods remaining unused at the date of Termination shall be paid to Executive
in cash without reduction at the Base Salary rate in effect as of the date of
Termination.
(b) Sick Leave. Executive shall be entitled to sick leave rights in accordance
with the sick leave policy of the Company.
(c) Parking. The Company, upon receipt of adequate documentation, shall directly
pay or reimburse Executive for his parking expenses.
(d) Office. During the term of this Agreement, the Company shall provide
Executive with a suitable office and furnishings required in the performance of
his duties, a Company cellular telephone, a personal lap top computer configured
for maximum utility, and a service account with a data and e-mail service
provider.
(e) Business Expenses. During the term of this Agreement, the Company authorizes
Executive to incur such expenses as are appropriate for the reasonable and
proper conduct of the Company's business, and the Company shall reimburse him no
less frequently than monthly for such expenses upon submission of a reasonably
detailed accounting thereof, with appropriate substantiation and shall provide
to Executive customary corporate credit and charge cards to permit direct
payment thereof by the Company.
(f) Automobile. The Company shall provide Executive with an automobile allowance
of $1,000 per month during the term of this Agreement, and the Company shall
reimburse Executive for the insurance, repair, gas, maintenance and mobile
telephone expense associated with Executive's automobile. In lieu hereof, the
Company may elect to provide Executive for reimbursement of the business use of
his personal automobile at the maximum rate per mile as set forth in the
Internal Revenue Code of 1986 as amended and the rules and regulations
promulgated thereunder (the "Code").
(g) Other Benefit Plans. In addition to, but not in limitation of the foregoing
benefits, Executive shall be eligible upon the same terms and conditions as any
other common-law employee to participate in any employee welfare, pension,
stock, or other benefit plan maintained on or after the date of this Agreement
for the benefit of the Company's employee's. Benefits for Executive under such
plans shall be at least as great as those offered to any other employee of the
Company and its subsidiaries.
6. Issuance of Stock Options; Additional Stock Options; Loans for Exercise of
Options; Registration Rights. (a) Executive shall qualify for participation in
all of the Company's stock option plans and may receive grants of stock options
from time to time. The Company shall pay additional compensation to the
Executive to hold him harmless from any income or other taxes he may owe as a
result of the grant of any options pursuant to this Agreement.
(b) With respect to shares of Common Stock of the Company which may be acquired
by Executive at any time after January 1, 1998 pursuant to any options which may
be held by Executive, the Company agrees that, to the extent permitted by law,
the Company will lend or cause to be lent to Executive, at Executive's request,
funds sufficient to enable him to pay the exercise price of such options from
time to time up to the total number of shares covered by said options, so long
as Executive is an employee of the Company or any of its subsidiaries at the
time a request for any such loan is made. Such loan shall bear interest at the
minimum applicable federal rate such that imputed interest will not result, and
will be due 36 months after the loan is made, unless Executive is terminated for
Cause or voluntarily terminates his employment prior to the end of the term of
employment, in which case the loan will be due 12 months following the date of
termination. In addition, any such loan shall be secured by shares of Common
Stock owned by Executive the fair market value of which shall at any time be not
less than 100% of the outstanding principal amount of, and accrued but unpaid
interest on, such loan.
(c) Subject to any contract or agreement to which the Company may be a party
with an underwriter of the common stock of the Company pursuant to which the
Company is required to withhold or delay the filing of any registration
statement relating to shares of common stock issuable pursuant to any option
plan of the Company and upon the request of Executive, the Company shall file at
the sole expense of the Company and as promptly as practicable following the
date of Executive's request, a registration statement with the Securities and
Exchange Commission on Form S-8 (or other then applicable form), registering the
shares of the Company's common stock issuable to Executive upon exercise of the
Option and any other options granted to the Executive, together with (if
required to enable the Executive to resell any such shares publicly) a selling
shareholder prospectus in conformity with Form S-3 (or any then applicable
form). The Company covenants and agrees to file all necessary amendments to such
registration statement and to keep same current during the full option exercise
term, at its sole cost and expense.
7. Term and Termination. (a) Term and Renewals. The term of this Agreement shall
be until December 31, 2002, unless earlier terminated for cause as provided
herein. Executive's employment under this Agreement and this Agreement shall
continue thereafter for one five-year term without any further action by the
parties hereto unless terminated by written notice of either party given to the
other no less than sixty (60) days prior to the end of the then current term.
(b) Subject to the performance of the covenants and agreements made by the
Company herein, Executive will perform his duties during the term of this
Agreement in good faith and will observe faithfully the covenants and agreements
made by him herein. Executive shall not be discharged during the term of this
Agreement unless Executive's termination is for (i) Cause (defined to be either
(A) the conviction of Executive for, or Executive pleads nolo contendere to, any
crime or offense involving monies or property of the Company or (B) a violation
of the provisions of Paragraph 8 hereof, subject to the provisions of Paragraph
8(d) thereof), or Permanent Disability as provided in Paragraph 4(b) hereof. The
discharge of Executive for reasons other than those specified in the preceding
sentence shall be deemed to be a discharge without justifiable reason. No breach
or default by Executive shall be deemed to have occurred unless written notice
thereof shall have been given by the Company to Executive and Executive shall
have failed to cure the breach or default within thirty (30) days after he
receives the written notice. If the employment of Executive is terminated by the
Company for Cause, the Company shall have no obligation to Executive except any
Base Salary earned to the date of termination, a pro rata portion of the
Incentive Compensation payable pursuant to Paragraph 3 of this Agreement for the
fiscal year in which such termination occurs on the basis of the elapsed time
(in full months) during such year that Executive was employed prior to the date
of termination, reimbursement of expenses properly incurred prior to such date
and accrued vacation pay, other employee benefits and pension, if any. If the
employment of Executive is terminated as a result of a Permanent Disability, the
provisions of Paragraph 4(b) shall apply.
(c) Termination for Good Reason. Executive shall be entitled to terminate his
employment for good reason. Any termination by Executive of his employment under
the following circumstances shall be deemed to be for good reason and shall be
deemed to be a breach of this Agreement by the Company:
(i) Any material breach of this Agreement by the Company, including but not
limited to any attempt by the Company to terminate the employment of Executive
for any reason other than as set forth in Paragraph (b) of this paragraph or if,
without his express written consent, Executive is assigned duties inconsistent
with his positions, duties, responsibilities, or status with the Company and its
subsidiaries in effect as of the date of this Agreement, or if his reporting
responsibilities, title or offices as in effect immediately prior to the date of
this Agreement are changed, or if Executive is removed from or not re-elected to
any of such positions, except in connection with the termination of his
employment pursuant to Paragraph (b) of this paragraph, or as a result of his
death or substantial disability;
(ii)If the Base Salary, in effect as of the date of this Agreement and as
the same may be increased from time to time pursuant to this Agreement, is
reduced, or if the Company fails to increase the Base Salary in accordance this
Agreement;
(iii) If the Company reduces in amount or scope, or fails to continue to
provide to Executive or his beneficiaries any or all of the benefits described
in this Agreement;
(iv)If the Company's principal executive offices are moved to a location
outside the United States, or if the Company requires Executive without his
agreement to be based anywhere other than the Company's principal executive
offices except for required travel on business of the Company to an extent
substantially consistent with his business travel obligations in effect
immediately prior to the date of this Agreement; or
(v) If, without the prior written consent of Executive, at any time after
the date hereof, any of the following occurs:
(A) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), of 30% or more
of either the then outstanding shares of Common Stock of the Company (the
"Outstanding Company Common Stock") or the combined voting power of the then
outstanding voting securities of the Company having general voting power in
electing the Board of Directors of the Company (the "Outstanding Company voting
Securities"); or
(B) Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors, provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election, by the Company's stockholders was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the Company (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(C) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company, or of the sale or other disposition
of all or substantially all of the assets of the Company, or of a
reorganization, merger or consolidation with respect to which all or
substantially all of the individuals and entities who were the respective
beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation do not, immediately following such reorganization, merger or
consolidation, beneficially own, directly or indirectly, more than 30% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation resulting from such
reorganization, merger or consolidation, as the case may be; or
(D) Executive is not nominated for a directorship of the Company or, if
requested, of any subsidiary; or, if nominated, he is not elected by the
stockholders; or if there appears to either Executive or the Company to be a
clear and reasonable probability (judging, among other things, by proxy returns,
competitive proxy solicitations, or adverse vote campaigns), that Executive may
not be so elected.
(d) Executive's Remedies for Breach. If any of the events specified in Paragraph
(c) of this Paragraph 7 occur or if the Company shall fail to observe or perform
any covenant or agreement in this Agreement, Executive may, by written notice to
the Company, elect to treat such breach as a termination without Cause within
the meaning of this Agreement and terminate his employment as an officer and
director of the Company and all subsidiaries. In the event of a termination
without Cause, all obligations of Executive hereunder shall terminate, and
Executive shall be entitled to the following:
(i) Executive may elect, in his sole discretion, to receive either of the
following (A), (B) or (C) (the "Severance Compensation"):
(A) Continue to receive all compensation and benefits provided by this
Agreement as if he had continued to be employed hereunder for the full remaining
term of employment (without any duty to mitigate damages).
(B) Receive, in lieu of all such compensation and benefits, within ten
business days after the date of termination, an amount equal to the sum of (x)
and (y) below:
(x) all accrued but unpaid Base Salary, Incentive Compensation and
other compensation or other amounts due to Executive under this Agreement as of
the date of termination; plus
(y) the discounted present value of all remaining Base Salary and
Incentive Compensation to which Executive would be entitled under this Agreement
for all years remaining under the Agreement. "Base Salary" for purposes of this
subparagraph shall be deemed the annual Base Salary rate in effect at the time
of the discharge, increased by 10% on each successive January 1. "Incentive
Compensation" for purposes of this subparagraph shall mean, for each remaining
year under the Agreement, an amount equal to 50% of the Base Salary payable to
Executive for such year. The discounted present value for the remaining term of
the Agreement shall be determined using an interest rate equal to the most
recent federal rate published by the Internal Revenue Service for imputing
interest, and shall be applied to a period of time equal to the period between
the date of termination and the expiration date of the stated term of
employment.
(C) Receive in lieu of amounts payable under either (A) or (B), within
ten business days after the date of termination, an amount equal to ten times an
amount equal to the Executives Base Salary and Incentive Compensation in respect
of the last full year Executive was employed under this Agreement.
(ii)All indebtedness of Executive to the Company then outstanding, if any,
shall thereupon be forgiven.
(iii) The group major medical, hospitalization, disability income insurance
and life insurance coverage provided to Executive and his family at the time of
termination shall be provided for the remainder of the stated term of the
Agreement with the cost thereof to be borne by the Company.
(iv)All stock options, including but not limited to the Option granted
pursuant to Paragraph 6 of this Agreement, which were not exercisable at the
time of termination of employment shall thereupon become exercisable in full at
any time during the remaining term of the respective option.
(e) In the event of termination of employment due to death, such termination
shall not result in the loss of any rights which the Executive may have as an
employee of the Company or any subsidiary at time of his death pursuant to any
insurance or other death benefit plans or arrangements of the Company or any
subsidiary or pursuant to any employee benefit plans of the Company or
subsidiary or pursuant to any options or rights to acquire shares of Common
Stock of the Company (except to the extent that such loss of rights arises under
the terms of the instruments governing such plans or arrangements).
(f) In the event any portion of this Paragraph 7 is held to be contrary to law
or to subject Executive to liability in any way, that portion of the Agreement
shall become null and void and all other portions hereof shall remain in full
force and effect.
8. Restrictive Covenants. Executive covenants and agrees that:
(a) Executive will not, unless otherwise required by law, at any time during the
term of employment hereunder and for two years thereafter, divulge to any person
other than a person associated with the Company any secret and confidential
information concerning the Company, or any of its subsidiaries, and their
respective products, customers and plans which Executive acquired during the
course of Executive's employment.
(b) Executive will not, directly or indirectly, except for the benefit of the
Company, at any time during the term of employment hereunder, become an officer,
director, stockholder, partner, associate, employee, owner, agent, creditor,
independent contractor, co-venturer or otherwise, or be interested in or
associated with any other corporation, firm or business engaged in the same or
any similar business then competitive with that of the Company or any of its
subsidiaries.
(c) Executive will not, directly or indirectly, except for the benefit of the
Company, during the term of employment and for a period of one year thereafter:
(i) (A) solicit, cause or authorize, directly or indirectly, to be
solicited for or on behalf of Executive or third parties, from persons who were
customers of the Company at any time within one year prior to the cessation of
Executive's employment hereunder, any business similar to the business
transacted by the Company with such customer; or
(B) accept or cause or authorize, directly or indirectly, to be
accepted for or on behalf of the Executive or third parties, any such business
from any such customers of the Company as defined in the preceding subparagraph.
(ii)(A) solicit, entice, persuade or induce, directly or indirectly, any
employee of the Company or any of its subsidiaries or any other person who was,
at any time within one year prior to the cessation of Executive's employment
hereunder, then under contract with or rendering services to the Company or any
of its subsidiaries, to terminate his or her employment by, or contractual
relationship with, the Company or its subsidiaries or to refrain from extending
or renewing the same (upon the same or new terms) or to refrain from rendering
services to the Company or its subsidiaries or to become employed by or to enter
contractual relations with persons other than the Company or its subsidiaries;
or
(B) approach any such employee or other person for any of the foregoing
purposes; or
(C) authorize or knowingly approve or assist in the taking of any such
actions by any person other than the Company or any of its subsidiaries.
(iii) provided, however, that if the employment of Executive has been
terminated without Cause under this Agreement and the Company has failed to
deliver to Executive the Severance Compensation and other benefits due him
pursuant to this Agreement, Executive shall not be subject to this Paragraph
7(c) immediately upon such non-delivery.
(d) Notwithstanding any alleged breach of the provisions of this Paragraph 8 by
Executive, this Agreement shall continue in full force and effect, and the
Company shall be required to make all payments and furnish all benefits due to
Executive hereunder, until such time as there is a final judgment by a court of
competent jurisdiction finding that there has been a material breach of this
Paragraph 7 by Executive, which is no longer subject to appeal by Executive.
9. Binding Effect; Governing Law; Notice of Breach and Right to Cure. (a) The
rights and obligations under this Agreement shall inure to the benefit of and
shall be binding upon the Company and its successors and assigns, including any
corporation with which the Company shall merge or consolidate or to which it
shall sell all or substantially all of its assets. This Agreement is otherwise
nonassignable.
(b) The interpretation and construction of this Agreement shall be governed by
the laws of the State of Florida.
(c.) In the event of any material breach by either party to this Agreement, the
non-breaching party shall give the breaching party written notice thereof, and
unless otherwise provided for herein, the breaching party shall have twenty
business days from the receipt of such notice to cure such breach. If the breach
is cured within such twenty business day period, no breach will be deemed to
have occurred hereunder.
10. Indemnity. The Company shall forever protect, hold harmless, and indemnify
Executive against any and all claims, demands, losses, costs (including
attorneys' fees), damages, suits, judgments, penalties, fines, expenses, and
liability of any kind and nature whatsoever arising directly or indirectly out
of or in connection with the performance by Executive of the duties described in
this Agreement. The Company shall further indemnify Executive if Executive was
or is threatened to be made a party to any threatened pending, or completed
action or suit by or in the right of or in the name of the Executive or in the
name of the Corporation to procure a judgment against Executive by reason of the
fact that Executive is or was a director, officer, employee or agent of the
Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorney's fees and
expenses) actually incurred by the Executive in connection with the defense or
settlement of such negotiation, action or suit. Expenses incurred by Executive
in defending a civil or criminal action, suit or proceeding shall be paid by the
Company upon the request by Executive, which request may be in advance and from
time to time, of the final disposition of such action, suit or proceeding. The
indemnification provided hereby shall not be deemed exclusive of all rights to
which Executive may be entitled under any Bylaw, agreement, vote of stockholders
or disinterested Directors or otherwise, both as to action in Executive's
official capacity and as to action in another capacity while holding such
office, and shall continue to Executive as a person who has ceased to be a
Director, officer or agent as to claims arising during or as a result of the
service to the Company and shall inure to the benefit of Executive's heirs,
executors and administrators. References to the Company shall include, in
addition to the resulting corporation, any constituent corporation or business
enterprise (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued would
have had power and authority to indemnify its directors, officers, and employees
or agents so that if Executive is or was a director, officer, employee or agent
of such constituent corporation or enterprise, or is or was serving at the
request of such constituent corporation or enterprise as a director or officer,
of another corporation, or enterprise, shall stand in the same position with
respect to the resulting or surviving corporation or enterprise as Executive
would have with respect to such constituent corporation or enterprise as if its
separate existence had continued. References to "fines" shall include any excise
taxes and penalties assessed to Executive with respect to any function; and
references to "serving at the request of the Company" shall include any service
as a director or officer of the Company which imposes duties on, or involves
services by Executive. This right of indemnity shall extend to Executive whether
or not the Company would have the power to indemnify Executive against such
liability under Delaware Corporation law and may not be altered, amended, or
rescinded except by Court order or the advance written consent of Executive. The
Company agrees to purchase, as soon as practicable after the date of this
Agreement, and keep in full force and effect during the term of this Agreement
directors and officers liability insurance in an amount not less than $10
million.
11. Miscellaneous. (a) Consent to Jurisdiction. Each party hereto consents to
and agrees to submit solely to the jurisdiction of any court of competent
jurisdiction of the State of Florida or any federal court of competent
jurisdiction sitting within such state, in connection with any action or
proceeding brought by a party hereto in order to enforce any right or remedy
under this Agreement, and each party hereto agrees that service of process
relating to any such proceeding by mail or delivery at its address for notices
as specified in this Agreement shall be legally sufficient for all purposes.
(b) Notice. Any notice or other communication to be given under this Agreement
shall be in writing and delivered personally or by first class mail, postage
prepaid, to the Company at 3021 Bethel Road, Suite 208, Columbus, Ohio 43220 and
to Executive to 5840 SW 87th Street, Miami, FL 33143. Each party shall notify
the other party in writing of any change in address. The new address shall be
used for all subsequent notices or communications until again changed by written
notice.
(c.) Amendment and Termination. This Agreement may be amended or
terminated in whole or in part at any time and from time-to-time upon
mutual written consent of the Company and Executive.
(d) Prior Agreements. All prior Agreements between the Company and Executive
are, to the extent such agreements relate to the employment of Executive by the
Company, hereby deemed superseded by this Agreement.
(e) Entire Agreement. This Agreement constitutes the complete and exclusive
statement of the agreement between the parties and supersedes all proposals,
oral or written, and all other communications between the parties relating to
the subject matter of this Agreement. Neither party is justified in relying on
such proposals or communications.
(f) Survivability. This Agreement constitutes a separate instrument, enforceable
in accordance with its terms, and neither this Agreement nor the obligations of
either party hereunder shall, under any circumstances or in any legal
proceeding, be deemed to have merged into or with any other agreement.
(g) Severability. If any provision of this Agreement is held to be void or
unenforceable by any court of competent jurisdiction, only that objectionable
term or provision shall be deleted herefrom while the remainder of the terms,
provisions, and agreements shall remain enforceable.
(h) Survivor Bound. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, the legal representatives, successors in
interest, and assigns, respectively, of each such party.
(i) Captions. Paragraph titles or captions contained in this Agreement are
inserted only as a mater of convenience and as reference and in no way define,
limit, extend, or describe the scope of this Agreement or the intent of any
provision hereof.
(j) Execution in Counterparts. This Agreement may be executed in several
counterparts, and each counterpart shall be considered as an original.
IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be
signed and sealed by its undersigned officer, hereunto duly authorized, and
Executive has set his hand hereto, all as of the day and year first above
written.
ATTEST: TROPIC COMMUNICATIONS, INC.
By:
Title
Ronald Vimo, an individual
12
EXHIBIT 10.94
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") made as of September 2, 1997 by and
between Tropic Communications, Inc., a Delaware corporation (the "Company") and
Scott Villanueva (the "Executive").
WITNESSETH:
WHEREAS, the parties hereto desire to provide for the employment of the
Executive by the Company as an executive officer of the Company upon the terms
set forth herein; and
WHEREAS, the Executive is prepared to accept such employment, upon the
terms and conditions hereinafter described.
NOW THEREFORE, in consideration of the premises and mutual promises and
agreements hereinafter set forth, it is agreed as follows:
1. Effectiveness of this Agreement. This Agreement shall become effective on the
date first written above.
2. Employment and Duties. (a) Executive shall serve as Executive Vice-President
and General Counsel of the Company and shall serve as an executive officer of
each of the Company's wholly-owned subsidiaries and affiliates as such offices
and duties may be delegated to him from time to time by the Company's Board of
Directors, for a term commencing on the effective date of this Agreement and
expiring on the date set forth in paragraph 7 of this Agreement. The Executive
agrees to serve the Company faithfully and to the best of his ability and to
perform such services and duties of an executive nature in connection with the
business, affairs and operations of the Company and any subsidiary of the
Company as may be reasonably and in good faith assigned or delegated to him from
time to time by or under the authority of the Board of Directors of the Company
and consistent with the positions of Executive Vice-President and General
Counsel, and to use his best efforts in the promotion and advancement of the
Company and its subsidiaries and their welfare and business. Executive shall
perform his duties hereunder, to the extent as, is or may be reasonably
necessary in connection therewith, at the Company's corporate headquarters;
provided, however, that the Company acknowledges that Executive's physical
presence at the Company's headquarters on a daily basis throughout the term of
this Agreement is not necessarily required, having due regard to the ability of
Executive to adequately interact with the Company's other employees by
telephone, facsimile and computer. Executive's employment with the Company shall
be Executive's primary employment during the term of this Agreement. As long as
he is current in the performance of his duties, Executive may also engage in
other business activities unrelated to his positions with the Company, provided
that such other activities do not interfere with the satisfactory performance of
his obligations hereunder and the Company and Executive agree that Executive
shall devote such time to his duties as, in his sole discretion, he deems
necessary to adequately discharge such responsibilities under this Agreement and
do not violate the terms and conditions of Paragraph 8 hereof.
(b) During the term of employment, Executive shall be nominated by the
management of the Company for election as a director of the Company at each
meeting of shareholders at which his term of office as a director shall expire.
In addition, at his request, the Company shall have Executive elected to the
Board of Directors of each of its subsidiaries.
3. Compensation. (a) Base Salary. The Company shall pay to Executive during the
term of this Agreement a salary (the "Base Salary") of $85,000 per year, which
shall be payable in cash to Executive not less frequently than once monthly, in
advance, in accordance with the current payment policies of the Company. The
Base Salary shall be increased effective as of January 1, 1998, and annually as
of each January 1 thereafter by a minimum annual adjustment as set forth herein.
To determine the Minimum Adjustment, the Base Salary shall be multiplied by a
fraction, the numerator of which shall be the United States Department of Labor,
Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and
Clerical Workers, U.S. City Average, All Items (1967=100) (the "Index") for the
month of December of the immediately preceding year, and the denominator of
which shall be the Index for the month of December, of the next preceding year,
provided however, that the fraction multiplied to determine the Adjustment shall
not be less than ten percent (10%) for any Adjustment. Notwithstanding the
foregoing, the Board of Directors, may in its discretion at any time, increase
the amount of the Base Salary payable hereunder. The Base Salary, once
increased, may not thereafter be reduced without the prior written consent of
Executive.
(b) Incentive Compensation. The Company shall pay to Executive during the term
of this Agreement incentive compensation ("Incentive Compensation") in an amount
equal to the excess of an amount equal to ten (10.00%) percent of one (1.00%)
percent of the Company's annual gross revenue ("Annual Gross Revenue" as
hereinafter defined) minus an amount equal to the total Base Salary for the year
paid to the Company's President and to the Company's Vice-President. The
Incentive Compensation shall be paid to Executive no later than two and one-half
months after the end of the fiscal year for which it is payable, or three days
after the audited results for the Company for such year becomes available,
whichever is later. In the event the Board of Directors of the Company
determines at any time during such year that all or any part of the Incentive
Compensation with respect to such year has been earned, the Board of Directors
in its sole discretion may pay all or part of such Incentive Compensation prior
to the time the Incentive Compensation is due hereunder.
(c) Definition of Annual Gross Revenue. Annual Gross Revenue shall mean the
consolidated sales and revenues of the Company and each of its wholly-owned
subsidiaries as reported to the Securities and Exchange Commission in the
Company's annual audited financial statements determined using generally
accepted accounting principles consistently applied.
(d) Deferred Compensation. Notwithstanding the payment provisions of Paragraphs
3(a) and 3(b) of this Agreement, Executive may elect to defer to a later taxable
year designated by him the receipt of all or any portion of his compensation
payable hereunder. The terms of any such deferral or deferrals shall be mutually
agreed upon by Executive and the Company at the time of an election.
4. Insurance Benefits. (a) Medical Insurance. During the term of this Agreement,
the Company shall provide to Executive and his dependents (at no expense to
Executive) insurance coverage suitable to Executive for hospitalization and
major medical, medical reimbursement, dental, and with respect to Executive,
long-term disability insurance or the cash equivalent of such. To the extent
such coverage is not provided by the types of insurance previously specified,
Executive shall be eligible, upon the same terms and conditions as any other
employee of the Company to be covered by or otherwise participate in any other
insurance plans maintained by the Company for the benefit of its employees.
(b) Permanent Disability. In the event of termination of Executive's employment
due to Permanent Disability (as hereinafter defined), the Company shall
thereafter pay the Executive 75% of his then effective Base Salary for the
balance of the stated term of this Agreement. In addition, Executive shall be
entitled to (i) a pro rata portion of the Incentive Compensation payable
pursuant to Paragraph 3(b) of this Agreement for the fiscal year in which such
termination occurs on the basis of the elapsed time (in full months) during such
year that Executive was employed prior to the date of termination, (ii)
reimbursement of expenses properly incurred prior to the date of termination (as
contemplated by Paragraph 7 of this Agreement) and (iii) accrued vacation pay
and pension, if any. "Permanent Disability" for purposes hereof shall be deemed
to exist if, in the judgment of a physician licensed to practice in the state of
Executive's residence who is satisfactory to Executive, Executive will be
unable, due to mental or physical incapacity, disease or injury, to perform the
duties of his office for a period of not less than six months. In the event of a
termination due to Permanent Disability, the Company shall also continue to
include Executive and his family in its group hospitalization, major medical and
life insurance plans (if any) until the end of the stated term, with the expense
thereof to be borne by the Company. The Company's obligation hereunder shall be
reduced by the amount of disability income insurance proceeds paid to Executive
under any of the Company's employee benefit plans. The Company's obligation
hereunder shall be reduced by the amount of disability income insurance proceeds
paid to Executive under any of the Company's employee benefit plans.
(c) Life Insurance. (i) The Company shall provide Executive with life insurance
on the life of the Executive in the principal amount of $500,000 during the term
of this Agreement, and pay all premiums with respect to such insurance. The
Company shall pay additional compensation to the Executive to hold him harmless
from any income taxes he may owe as a result of the premiums paid by the Company
with respect to such insurance and as a result of such additional compensation.
(ii) Upon termination of his employment hereunder, the Company shall be required
to transfer and assign to Executive any policy of life and/or disability
insurance then owned by the Company in respect of Executive. (iii) In the event
the Board of Directors determines to acquire "key man" insurance on the life of
Executive, Executive shall cooperate with the Company in obtaining such
insurance.
5. Executive Benefits. (a) Vacation. During the term of this Agreement,
Executive shall be entitled to paid vacations of one month in each calendar year
during the term of employment. Vacation periods need not be consecutive and
shall carry over to the following calendar years to the extent unused. Vacation
periods remaining unused at the date of Termination shall be paid to Executive
in cash without reduction at the Base Salary rate in effect as of the date of
Termination.
(b) Sick Leave. Executive shall be entitled to sick leave rights in accordance
with the sick leave policy of the Company.
(c) Parking. The Company, upon receipt of adequate documentation, shall directly
pay or reimburse Executive for his parking expenses.
(d) Office. During the term of this Agreement, the Company shall provide
Executive with a suitable office and furnishings required in the performance of
his duties, a Company cellular telephone, a personal lap top computer configured
for maximum utility, and a service account with a data and e-mail service
provider.
(e) Business Expenses. During the term of this Agreement, the Company authorizes
Executive to incur such expenses as are appropriate for the reasonable and
proper conduct of the Company's business, and the Company shall reimburse him no
less frequently than monthly for such expenses upon submission of a reasonably
detailed accounting thereof, with appropriate substantiation and shall provide
to Executive customary corporate credit and charge cards to permit direct
payment thereof by the Company.
(f) Automobile. The Company shall provide Executive with an automobile allowance
of $300 per month during the term of this Agreement, and the Company shall
reimburse Executive for the insurance, repair, gas, maintenance and mobile
telephone expense associated with Executive's automobile. In lieu hereof, the
Company may elect to provide Executive for reimbursement of the business use of
his personal automobile at the maximum rate per mile as set forth in the
Internal Revenue Code of 1986 as amended and the rules and regulations
promulgated thereunder (the "Code").
(g) Other Benefit Plans. In addition to, but not in limitation of the foregoing
benefits, Executive shall be eligible upon the same terms and conditions as any
other common-law employee to participate in any employee welfare, pension,
stock, or other benefit plan maintained on or after the date of this Agreement
for the benefit of the Company's employee's. Benefits for Executive under such
plans shall be at least as great as those offered to any other employee of the
Company and its subsidiaries.
6. Issuance of Stock Options; Additional Stock Options; Loans for Exercise of
Options; Registration Rights. (a) Executive shall qualify for participation in
all of the Company's stock option plans and may receive grants of stock options
from time to time. The Company shall pay additional compensation to the
Executive to hold him harmless from any income or other taxes he may owe as a
result of the grant of any options pursuant to this Agreement.
(b) With respect to shares of Common Stock of the Company which may be acquired
by Executive at any time after January 1, 1998 pursuant to any options which may
be held by Executive, the Company agrees that, to the extent permitted by law,
the Company will lend or cause to be lent to Executive, at Executive's request,
funds sufficient to enable him to pay the exercise price of such options from
time to time up to the total number of shares covered by said options, so long
as Executive is an employee of the Company or any of its subsidiaries at the
time a request for any such loan is made. Such loan shall bear interest at the
minimum applicable federal rate such that imputed interest will not result, and
will be due 36 months after the loan is made, unless Executive is terminated for
Cause or voluntarily terminates his employment prior to the end of the term of
employment, in which case the loan will be due 12 months following the date of
termination. In addition, any such loan shall be secured by shares of Common
Stock owned by Executive the fair market value of which shall at any time be not
less than 100% of the outstanding principal amount of, and accrued but unpaid
interest on, such loan.
(c) Subject to any contract or agreement to which the Company may be a party
with an underwriter of the common stock of the Company pursuant to which the
Company is required to withhold or delay the filing of any registration
statement relating to shares of common stock issuable pursuant to any option
plan of the Company and upon the request of Executive, the Company shall file at
the sole expense of the Company and as promptly as practicable following the
date of Executive's request, a registration statement with the Securities and
Exchange Commission on Form S-8 (or other then applicable form), registering the
shares of the Company's common stock issuable to Executive upon exercise of the
Option and any other options granted to the Executive, together with (if
required to enable the Executive to resell any such shares publicly) a selling
shareholder prospectus in conformity with Form S-3 (or any then applicable
form). The Company covenants and agrees to file all necessary amendments to such
registration statement and to keep same current during the full option exercise
term, at its sole cost and expense.
7. Term and Termination. (a) Term and Renewals. The term of this Agreement shall
be until December 31, 2002, unless earlier terminated for cause as provided
herein. Executive's employment under this Agreement and this Agreement shall
continue thereafter for one five-year term without any further action by the
parties hereto unless terminated by written notice of either party given to the
other no less than sixty (60) days prior to the end of the then current term.
(b) Subject to the performance of the covenants and agreements made by the
Company herein, Executive will perform his duties during the term of this
Agreement in good faith and will observe faithfully the covenants and agreements
made by him herein. Executive shall not be discharged during the term of this
Agreement unless Executive's termination is for (i) Cause (defined to be either
(A) the conviction of Executive for, or Executive pleads nolo contendere to, any
crime or offense involving monies or property of the Company or (B) a violation
of the provisions of Paragraph 8 hereof, subject to the provisions of Paragraph
8(d) thereof), or Permanent Disability as provided in Paragraph 4(b) hereof. The
discharge of Executive for reasons other than those specified in the preceding
sentence shall be deemed to be a discharge without justifiable reason. No breach
or default by Executive shall be deemed to have occurred unless written notice
thereof shall have been given by the Company to Executive and Executive shall
have failed to cure the breach or default within thirty (30) days after he
receives the written notice. If the employment of Executive is terminated by the
Company for Cause, the Company shall have no obligation to Executive except any
Base Salary earned to the date of termination, a pro rata portion of the
Incentive Compensation payable pursuant to Paragraph 3 of this Agreement for the
fiscal year in which such termination occurs on the basis of the elapsed time
(in full months) during such year that Executive was employed prior to the date
of termination, reimbursement of expenses properly incurred prior to such date
and accrued vacation pay, other employee benefits and pension, if any. If the
employment of Executive is terminated as a result of a Permanent Disability, the
provisions of Paragraph 4(b) shall apply.
(c) Termination for Good Reason. Executive shall be entitled to terminate his
employment for good reason. Any termination by Executive of his employment under
the following circumstances shall be deemed to be for good reason and shall be
deemed to be a breach of this Agreement by the Company:
(i) Any material breach of this Agreement by the Company, including but not
limited to any attempt by the Company to terminate the employment of Executive
for any reason other than as set forth in Paragraph (b) of this paragraph or if,
without his express written consent, Executive is assigned duties inconsistent
with his positions, duties, responsibilities, or status with the Company and its
subsidiaries in effect as of the date of this Agreement, or if his reporting
responsibilities, title or offices as in effect immediately prior to the date of
this Agreement are changed, or if Executive is removed from or not re-elected to
any of such positions, except in connection with the termination of his
employment pursuant to Paragraph (b) of this paragraph, or as a result of his
death or substantial disability;
(ii)If the Base Salary, in effect as of the date of this Agreement and as
the same may be increased from time to time pursuant to this Agreement, is
reduced, or if the Company fails to increase the Base Salary in accordance this
Agreement;
(iii) If the Company reduces in amount or scope, or fails to continue to
provide to Executive or his beneficiaries any or all of the benefits described
in this Agreement;
(iv)If the Company's principal executive offices are moved to a location
outside the United States, or if the Company requires Executive without his
agreement to be based anywhere other than the Company's principal executive
offices except for required travel on business of the Company to an extent
substantially consistent with his business travel obligations in effect
immediately prior to the date of this Agreement; or
(v) If, without the prior written consent of Executive, at any time after
the date hereof, any of the following occurs:
(A) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), of 30% or more
of either the then outstanding shares of Common Stock of the Company (the
"Outstanding Company Common Stock") or the combined voting power of the then
outstanding voting securities of the Company having general voting power in
electing the Board of Directors of the Company (the "Outstanding Company voting
Securities"); or
(B) Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors, provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election, by the Company's stockholders was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the Company (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(C) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company, or of the sale or other disposition
of all or substantially all of the assets of the Company, or of a
reorganization, merger or consolidation with respect to which all or
substantially all of the individuals and entities who were the respective
beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation do not, immediately following such reorganization, merger or
consolidation, beneficially own, directly or indirectly, more than 30% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation resulting from such
reorganization, merger or consolidation, as the case may be; or
(D) Executive is not nominated for a directorship of the Company or, if
requested, of any subsidiary; or, if nominated, he is not elected by the
stockholders; or if there appears to either Executive or the Company to be a
clear and reasonable probability (judging, among other things, by proxy returns,
competitive proxy solicitations, or adverse vote campaigns), that Executive may
not be so elected.
(d) Executive's Remedies for Breach. If any of the events specified in Paragraph
(c) of this Paragraph 7 occur or if the Company shall fail to observe or perform
any covenant or agreement in this Agreement, Executive may, by written notice to
the Company, elect to treat such breach as a termination without Cause within
the meaning of this Agreement and terminate his employment as an officer and
director of the Company and all subsidiaries. In the event of a termination
without Cause, all obligations of Executive hereunder shall terminate, and
Executive shall be entitled to the following:
(i) Executive may elect, in his sole discretion, to receive either of the
following (A), (B) or (C) (the "Severance Compensation"):
(A) Continue to receive all compensation and benefits provided by this
Agreement as if he had continued to be employed hereunder for the full remaining
term of employment (without any duty to mitigate damages).
(B) Receive, in lieu of all such compensation and benefits, within ten
business days after the date of termination, an amount equal to the sum of (x)
and (y) below:
(x) all accrued but unpaid Base Salary, Incentive Compensation and
other compensation or other amounts due to Executive under this Agreement as of
the date of termination; plus
(y) the discounted present value of all remaining Base Salary and
Incentive Compensation to which Executive would be entitled under this Agreement
for all years remaining under the Agreement. "Base Salary" for purposes of this
subparagraph shall be deemed the annual Base Salary rate in effect at the time
of the discharge, increased by 10% on each successive January 1. "Incentive
Compensation" for purposes of this subparagraph shall mean, for each remaining
year under the Agreement, an amount equal to 50% of the Base Salary payable to
Executive for such year. The discounted present value for the remaining term of
the Agreement shall be determined using an interest rate equal to the most
recent federal rate published by the Internal Revenue Service for imputing
interest, and shall be applied to a period of time equal to the period between
the date of termination and the expiration date of the stated term of
employment.
(C) Receive in lieu of amounts payable under either (A) or (B), within
ten business days after the date of termination, an amount equal to ten times an
amount equal to the Executives Base Salary and Incentive Compensation in respect
of the last full year Executive was employed under this Agreement.
(ii)All indebtedness of Executive to the Company then outstanding, if any,
shall thereupon be forgiven.
(iii) The group major medical, hospitalization, disability income insurance
and life insurance coverage provided to Executive and his family at the time of
termination shall be provided for the remainder of the stated term of the
Agreement with the cost thereof to be borne by the Company.
(iv)All stock options, including but not limited to the Option granted
pursuant to Paragraph 6 of this Agreement, which were not exercisable at the
time of termination of employment shall thereupon become exercisable in full at
any time during the remaining term of the respective option.
(e) In the event of termination of employment due to death, such termination
shall not result in the loss of any rights which the Executive may have as an
employee of the Company or any subsidiary at time of his death pursuant to any
insurance or other death benefit plans or arrangements of the Company or any
subsidiary or pursuant to any employee benefit plans of the Company or
subsidiary or pursuant to any options or rights to acquire shares of Common
Stock of the Company (except to the extent that such loss of rights arises under
the terms of the instruments governing such plans or arrangements).
(f) In the event any portion of this Paragraph 7 is held to be contrary to law
or to subject Executive to liability in any way, that portion of the Agreement
shall become null and void and all other portions hereof shall remain in full
force and effect.
8. Restrictive Covenants. Executive covenants and agrees that:
(a) Executive will not, unless otherwise required by law, at any time during the
term of employment hereunder and for two years thereafter, divulge to any person
other than a person associated with the Company any secret and confidential
information concerning the Company, or any of its subsidiaries, and their
respective products, customers and plans which Executive acquired during the
course of Executive's employment.
(b) Executive will not, directly or indirectly, except for the benefit of the
Company, at any time during the term of employment hereunder, become an officer,
director, stockholder, partner, associate, employee, owner, agent, creditor,
independent contractor, co-venturer or otherwise, or be interested in or
associated with any other corporation, firm or business engaged in the same or
any similar business then competitive with that of the Company or any of its
subsidiaries.
(c) Executive will not, directly or indirectly, except for the benefit of the
Company, during the term of employment and for a period of one year thereafter:
(i) (A) solicit, cause or authorize, directly or indirectly, to be
solicited for or on behalf of Executive or third parties, from persons who were
customers of the Company at any time within one year prior to the cessation of
Executive's employment hereunder, any business similar to the business
transacted by the Company with such customer; or
(B) accept or cause or authorize, directly or indirectly, to be
accepted for or on behalf of the Executive or third parties, any such business
from any such customers of the Company as defined in the preceding subparagraph.
(ii)(A) solicit, entice, persuade or induce, directly or indirectly, any
employee of the Company or any of its subsidiaries or any other person who was,
at any time within one year prior to the cessation of Executive's employment
hereunder, then under contract with or rendering services to the Company or any
of its subsidiaries, to terminate his or her employment by, or contractual
relationship with, the Company or its subsidiaries or to refrain from extending
or renewing the same (upon the same or new terms) or to refrain from rendering
services to the Company or its subsidiaries or to become employed by or to enter
contractual relations with persons other than the Company or its subsidiaries;
or
(B) approach any such employee or other person for any of the foregoing
purposes; or
(C) authorize or knowingly approve or assist in the taking of any such
actions by any person other than the Company or any of its subsidiaries.
(iii) provided, however, that if the employment of Executive has been
terminated without Cause under this Agreement and the Company has failed to
deliver to Executive the Severance Compensation and other benefits due him
pursuant to this Agreement, Executive shall not be subject to this Paragraph
7(c) immediately upon such non-delivery.
(d) Notwithstanding any alleged breach of the provisions of this Paragraph 8 by
Executive, this Agreement shall continue in full force and effect, and the
Company shall be required to make all payments and furnish all benefits due to
Executive hereunder, until such time as there is a final judgment by a court of
competent jurisdiction finding that there has been a material breach of this
Paragraph 7 by Executive, which is no longer subject to appeal by Executive.
9. Binding Effect; Governing Law; Notice of Breach and Right to Cure. (a) The
rights and obligations under this Agreement shall inure to the benefit of and
shall be binding upon the Company and its successors and assigns, including any
corporation with which the Company shall merge or consolidate or to which it
shall sell all or substantially all of its assets. This Agreement is otherwise
nonassignable.
(b) The interpretation and construction of this Agreement shall be governed by
the laws of the State of Florida.
(c.) In the event of any material breach by either party to this Agreement, the
non-breaching party shall give the breaching party written notice thereof, and
unless otherwise provided for herein, the breaching party shall have twenty
business days from the receipt of such notice to cure such breach. If the breach
is cured within such twenty business day period, no breach will be deemed to
have occurred hereunder.
10. Indemnity. The Company shall forever protect, hold harmless, and indemnify
Executive against any and all claims, demands, losses, costs (including
attorneys' fees), damages, suits, judgments, penalties, fines, expenses, and
liability of any kind and nature whatsoever arising directly or indirectly out
of or in connection with the performance by Executive of the duties described in
this Agreement. The Company shall further indemnify Executive if Executive was
or is threatened to be made a party to any threatened pending, or completed
action or suit by or in the right of or in the name of the Executive or in the
name of the Corporation to procure a judgment against Executive by reason of the
fact that Executive is or was a director, officer, employee or agent of the
Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorney's fees and
expenses) actually incurred by the Executive in connection with the defense or
settlement of such negotiation, action or suit. Expenses incurred by Executive
in defending a civil or criminal action, suit or proceeding shall be paid by the
Company upon the request by Executive, which request may be in advance and from
time to time, of the final disposition of such action, suit or proceeding. The
indemnification provided hereby shall not be deemed exclusive of all rights to
which Executive may be entitled under any Bylaw, agreement, vote of stockholders
or disinterested Directors or otherwise, both as to action in Executive's
official capacity and as to action in another capacity while holding such
office, and shall continue to Executive as a person who has ceased to be a
Director, officer or agent as to claims arising during or as a result of the
service to the Company and shall inure to the benefit of Executive's heirs,
executors and administrators. References to the Company shall include, in
addition to the resulting corporation, any constituent corporation or business
enterprise (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued would
have had power and authority to indemnify its directors, officers, and employees
or agents so that if Executive is or was a director, officer, employee or agent
of such constituent corporation or enterprise, or is or was serving at the
request of such constituent corporation or enterprise as a director or officer,
of another corporation, or enterprise, shall stand in the same position with
respect to the resulting or surviving corporation or enterprise as Executive
would have with respect to such constituent corporation or enterprise as if its
separate existence had continued. References to "fines" shall include any excise
taxes and penalties assessed to Executive with respect to any function; and
references to "serving at the request of the Company" shall include any service
as a director or officer of the Company which imposes duties on, or involves
services by Executive. This right of indemnity shall extend to Executive whether
or not the Company would have the power to indemnify Executive against such
liability under Delaware Corporation law and may not be altered, amended, or
rescinded except by Court order or the advance written consent of Executive. The
Company agrees to purchase, as soon as practicable after the date of this
Agreement, and keep in full force and effect during the term of this Agreement
directors and officers liability insurance in an amount not less than $10
million.
11. Miscellaneous. (a) Consent to Jurisdiction. Each party hereto consents to
and agrees to submit solely to the jurisdiction of any court of competent
jurisdiction of the State of Florida or any federal court of competent
jurisdiction sitting within such state, in connection with any action or
proceeding brought by a party hereto in order to enforce any right or remedy
under this Agreement, and each party hereto agrees that service of process
relating to any such proceeding by mail or delivery at its address for notices
as specified in this Agreement shall be legally sufficient for all purposes.
(b) Notice. Any notice or other communication to be given under this Agreement
shall be in writing and delivered personally or by first class mail, postage
prepaid, to the Company at 3021 Bethel Road, Suite 208, Columbus, Ohio 43220 and
to Executive to 2560 Tigermil Ave. #14, Miami, FL 33133. Each party shall notify
the other party in writing of any change in address. The new address shall be
used for all subsequent notices or communications until again changed by written
notice.
(c.) Amendment and Termination. This Agreement may be amended or
terminated in whole or in part at any time and from time-to-time upon
mutual written consent of the Company and Executive.
(d) Prior Agreements. All prior Agreements between the Company and Executive
are, to the extent such agreements relate to the employment of Executive by the
Company, hereby deemed superseded by this Agreement.
(e) Entire Agreement. This Agreement constitutes the complete and exclusive
statement of the agreement between the parties and supersedes all proposals,
oral or written, and all other communications between the parties relating to
the subject matter of this Agreement. Neither party is justified in relying on
such proposals or communications.
(f) Survivability. This Agreement constitutes a separate instrument, enforceable
in accordance with its terms, and neither this Agreement nor the obligations of
either party hereunder shall, under any circumstances or in any legal
proceeding, be deemed to have merged into or with any other agreement.
(g) Severability. If any provision of this Agreement is held to be void or
unenforceable by any court of competent jurisdiction, only that objectionable
term or provision shall be deleted herefrom while the remainder of the terms,
provisions, and agreements shall remain enforceable.
(h) Survivor Bound. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, the legal representatives, successors in
interest, and assigns, respectively, of each such party.
(i) Captions. Paragraph titles or captions contained in this Agreement are
inserted only as a mater of convenience and as reference and in no way define,
limit, extend, or describe the scope of this Agreement or the intent of any
provision hereof.
(j) Execution in Counterparts. This Agreement may be executed in several
counterparts, and each counterpart shall be considered as an original.
IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be
signed and sealed by its undersigned officer, hereunto duly authorized, and
Executive has set his hand hereto, all as of the day and year first above
written.
ATTEST: TROPIC COMMUNICATIONS, INC.
By:
Title
Scott Villanueva, an individual
