1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Employment Agreement") is entered into as
of the 10th day of September, 1996 between ▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Employee") and
TRANSCRYPT INTERNATIONAL, INC., a Delaware corporation (the "Company").
The Company wishes to employ the Employee as Chairman and Chief Executive
Officer of the Company on the terms set forth in this Employment Agreement, and
the Employee wishes to accept such employment on such terms.
THEREFORE, in consideration of the mutual promises set forth herein, it is
mutually agreed between the parties as follows:
Section 1. EMPLOYMENT AND TERM. The Company hereby employs the Employee
and the Employee hereby accepts employment as Chairman and Chief Executive
Officer of the Company on the terms of this Employment Agreement, commencing as
of July 18, 1996 and continuing until the second anniversary of such date unless
terminated earlier in accordance with the provisions of Section 5 hereof.
Section 2. DUTIES AND AUTHORITY. The Employee's duties shall be as
determined by the Board of Directors.
Section 3. COMPENSATION.
(a) Base Salary. The Employee will receive a base salary during the
term of this Employment Agreement of $180,000 per year ("Base Salary"),
which shall be payable in approximately equal bi-weekly installments. Base
salary will be subject to annual review each January and can be increased
with concurrence of the Board of Directors.
(b) Bonus. The Employee shall receive an annual bonus in an amount
to be determined by the Company's Board of Directors if the Company meets
or exceeds the projections of the Company's performance set forth in the
Business Plan.
(c) Additional Benefits. The Employee will also receive such
additional employee benefits as the Company may from time to time make
available to its executive officers, including paid vacations, pension
benefits, qualified profit-sharing plans, employee group insurance and
disability insurance. Benefits will be at least equal to those received as
of the date of this Employment Agreement.
(d) Withholdings. All payments made to the Employee pursuant to this
Employment Agreement shall be reduced by all required federal, state and
local withholdings for taxes and similar charges and by all contributions
or payments required
2
to be made by the Employee in connection with any employee benefit plan
maintained by the Company.
(e) Special Payment. As specified in the original offering documents
for Transcrypt International Limited Partnership (the "Partnership"), when
the Partnership's founding partners have received the return of their
initial investment or a purchase agreement has been entered into for the
sale of a majority in interest of the Company to another entity or
individual or the Board of Directors of the Company has approved the sale
of equity interests to the public in an amount that would value the
founding partner interests at an amount greater than their initial
investment then the Employee shall be entitled to a special payment of
$210,000. If the Company is sold or taken public said payment shall be due
and payable at least 15 days prior to the projected date of consummation
of such transaction. Payment will be made as cash flow allows.
Section 4. REIMBURSEMENT FOR EXPENSES. The Employee is expected to incur
certain expenses on behalf of the Company for travel, promotion, telephone,
entertainment and similar items. The Company will reimburse the Employee for all
ordinary, necessary and reasonable amounts of such expenses incurred by the
Employee, which amounts shall be payable promptly upon receipt of reasonable
written documentation signed by the Employee itemizing such expenses.
Section 5. EARLY TERMINATION OF TERM; SEVERANCE PAYMENT. This Employment
Agreement shall terminate prior to the date of termination set forth in Section
1 above upon the first to occur of:
(a) the determination by the Board of Directors that the Employee
has become disabled and shall not be able to continue his service to the
Company; or
(b) the Employee's death; or
(c) Employment Agreement is terminated by the Company by reason of
the Employee's continuing willful neglect of his duties under this
Employment Agreement, the theft or misappropriation of the Company's
assets by the Employee or fraud of the Employee under the Company.
Section 6. RESTRICTIVE COVENANT. The Employee shall execute, concurrently
with this Employment Agreement, a Noncompete Agreement in the form attached
hereto as Exhibit A.
Section 7. COMPANY OPTION PLAN. The Chairman is currently participating in
the Option Program dated December 1995 and due to his level of existing
ownership in the Company has chosen not to participate in any new options so
that employees can be motivated by broader investment in the program. The Board
will review other incentive programs for the Chairman instead of options
including vacation, etc.
2
3
Section 8. AMENDMENTS. No change, modification, waiver, discharge,
amendment or addition to this Employment Agreement shall be binding unless it is
in writing and signed by the Company and the Employee.
Section 9. ENTIRE AGREEMENT. This Employment Agreement contains the entire
understanding and agreement between the Company and the Employee and supersedes
any prior agreements between them pertaining to the Employee's employment with
the Company. There are no representations, warranties, promises, covenants or
understandings between the Company and the Employee with respect to such
employment other than those expressly set forth in this Employment Agreement.
This Employment Agreement takes precedence over other conflicting agreements
with Employee.
Section 10. GOVERNING LAW. This Employment Agreement shall be governed by
the substantive laws of the State of Nebraska.
Section 11. NONASSIGNABILITY; SUCCESSORS. The obligations of the Employee
under this Employment Agreement are not assignable by him. Except as provided in
the immediately preceding sentence, this Employment Agreement shall be binding
upon and inure to the benefit of the parties hereto and their successors.
Section 12. NOTICES. Any notice required to be given in writing by any
party to this Employment Agreement may be personally delivered or mailed by
registered or certified mail to the last known address of the party to be
notified. Any such notice personally delivered shall be effective upon delivery
and any such notice mailed shall be effective four business days after the date
of mailing, by registered or certified mail with postage prepaid to the last
known address of the party to be notified.
Section 13. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Employment Agreement shall not affect the other
provisions of this Employment Agreement, and this Employment Agreement shall be
construed in all respects as if such invalid or unenforceable provision were
omitted.
Section 14. HEADINGS. The section and other headings contained in this
Employment Agreement are for reference purposes only and shall not affect the
interpretation of this Employment Agreement.
Section 15. CONSTRUCTION. Whenever required by the context, references to
the singular shall include the plural, and the masculine gender shall include
the feminine gender.
IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be
executed on its behalf and the Employee has signed his name hereto, effective as
of the date first written above.
3
4
TRANSCRYPT INTERNATIONAL, INC.,
a Delaware corporation
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Printed Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Its President
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Employee
4
5
EXHIBIT A
NONCOMPETE AGREEMENT
TRANSCRYPT INTERNATIONAL, INC., a Delaware corporation (the "Company")
(for the purposes of this Noncompete Agreement, the term "Company" shall include
affiliates of Transcrypt International, Inc.) and ▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Employee")
agree as follows:
1. In consideration of the Company employing Employee as set forth in that
certain Employment Agreement (the "Agreement") of even date hereto executed by
and among the Company and Employee, Employee hereby agrees to adhere to the
following terms and conditions:
Employee expressly covenants and agrees that at no time during the
effective time of the Agreement will it for itself or on behalf of any
other person, partnership, firm, association or corporation other than
Transcrypt International, Inc. in any territory in which the Employee is
acting pursuant to the Agreement (1) open or operate a business which
would be a competitor of the Company, (2) act as an employee, agent,
advisor or consultant of any then existing competitor of the Company, (3)
solicit or accept business from any of the Company's competitors, unless
authorized by the Company, (4) divert any business from the Company by
influencing or attempting to influence any present customers or the
Company or (5) attempt to attract any supplier away from the Company or
use its information regarding the Company's suppliers in any way which
would detrimentally affect the Company. Employee further covenants and
agrees that for two years following the termination of the Agreement,
whether such termination is voluntary or involuntary, he will not for
himself or on behalf of any other person, partnership, firm, association
or corporation in any territory in which the Company has done business
during the 12 months immediately prior to the Agreement's termination (1)
directly or indirectly solicit or accept business from any of the
Company's present customers or customers it serviced in said territory
within the last 12 months of the effective term of the Agreement, (2)
divert any business from the Company by influencing or attempting to
influence any present customers of the Company or (3) attempt to attract
any supplier away from the Company or use its information regarding the
Company's suppliers in any way which would detrimentally affect the
Company.
2. By signing this agreement, Employee expressly acknowledges that the
territorial limitations, duration and scope of this agreement are fair and
reasonable. This Noncompete Agreement shall survive the termination of the
Agreement.
3. Employee further agrees that the Company shall be entitled to maintain
proceedings in any court of competent jurisdiction, either at law or in equity,
for any breach of this agreement by Employee to enforce the specific performance
of this agreement and/or to obtain damages for
5
6
any breach thereof, and without regard to any or all remedies sought by the
Company, the Company shall be entitled to recover reasonable attorneys' fees
incurred in enforcing this agreement.
4. This agreement supersedes any prior agreement between the Employee and
the Company pertaining to the subject hereof. In the event that any portion of
this agreement is declared invalid or illegal by final judgment of any court of
competent jurisdiction, the remainder of this agreement shall remain in full
force and effect, notwithstanding the invalidity or illegality of the other
portion.
5. This agreement shall be governed by the laws of the State of Nebraska.
6. This agreement may be executed in duplicate counterparts, each of which
shall be deemed to be an original, and all of which shall constitute one in the
same agreement.
IN WITNESS WHEREOF, the parties have caused this agreement to be executed
as of the 10th day of September, 1996.
TRANSCRYPT INTERNATIONAL, INC.,
a Nebraska corporation
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Printed Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Its President
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
6