This Executive Employment Agreement involves
Title: EXECUTIVE EMPLOYMENT AGREEMENT
Governing Law: New Jersey Date: 7/7/2016
Industry: Electronic Instr. and Controls Sector: Technology
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”) is made as of June 30, 2016 (the “ Effective Date ”), by and between Wireless Telecom Group, Inc. (together with its successors and assigns, the “ Company ”), and Timothy Whelan (“ Executive ”).
R E C I T A L S
WHEREAS, the Company desires to employ Executive and Executive desires to be employed by the Company as the Company’s Chief Executive Officer.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and conditions herein, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereby agree as follows:
A G R E E M E N T
1. Employment and Term . The Company hereby agrees to employ Executive and Executive hereby accepts employment by the Company on the terms and conditions hereinafter set forth. Executive’s term of employment by the Company under this Agreement (the “ Term ”) shall continue from the Effective Date through June 30, 2017; provided , however , that the Term shall thereafter be automatically extended for unlimited additional one-year periods unless, at least three months prior to the then-scheduled date of expiration of the Term, either (a) the Company gives notice to Executive that it is electing not to so extend the Term or (b) Executive gives notice to the Company that he is electing not to so extend the Term. Notwithstanding the foregoing, the Term may be earlier terminated in strict accordance with the provisions of Section 5 below, in which event Executive’s employment with the Company shall expire in accordance therewith.
2. Position, Duties and Responsibilities; Location .
2.1 Position and Duties . Executive shall be employed as Chief Executive Officer of the Company. Executive shall have, subject to the general direction of the Board of Directors of the Company (the “ Board ”), general overall authority and responsibility for the day-to-day management of the Company. Executive shall also have such other duties, powers and authority as are commensurate with his position as Chief Executive Officer of a wireless telecommunications company focused on researching, developing and commercializing radio frequency based products for the wireless and advanced communications industries, including such other duties and responsibilities as are reasonably delegated to him from time to time by the Board. Executive shall report to the Board.
2.2 Exclusive Services and Efforts . Executive agrees to devote his efforts, energies and skill to the discharge of the duties and responsibilities attributable to his position and, except as set forth in this subsection 2.2 with respect to service on a single external board of directors, agrees to devote substantially all of his professional time and attention exclusively to the business and affairs of the Company. It is expressly understood and agreed that, during the Term, Executive will not be employed by, render services to, or represent, any other person, firm or company engaged in a business of a similar nature or in competition with the Company without the prior written consent of the Company (as used throughout this Agreement, a consent of the Company must be in writing and approved by a majority of the independent members of the Board). Executive also agrees that he shall not take personal advantage of any business opportunities which arise during his employment and which may benefit the Company and are within the scope of the Company’s then business or natural extension thereof without the consent of the Company, provided , that the foregoing does not apply to future employment opportunities. Notwithstanding the foregoing, Executive shall be entitled to (a) engage in service on the board of directors of not-for-profit organizations, provided that he has received the prior written approval of the Board, (b) engage in other charitable activities and community affairs, and (c) manage his personal and family investments and affairs, in each case to the extent such activities do not, either individually or in the aggregate, materially interfere with the performance of his duties and responsibilities to the Company. In addition, Executive shall be entitled to continue to serve as a director of Edgewater Technology, Inc., provided that such corporation does not enter the same or similar business as the Company or the Company enters the same or similar business of Edgewater Technology, Inc., in which event Executive agrees to promptly resign from the board of directors of Edgewater Technology, Inc. If Executive is no longer serving as a director of Edgewater Technology, Inc., at the request of Executive, the Board shall evaluate Executive’s participation in one other board of directors relating to a for-profit organization. If the Board in its sole discretion (it being understood that Executive shall, at the request of the Board, recuse himself from such Board discussions) determines that Executive’s participation on such other board of directors will not create a conflict of interest or interfere with Executive’s completion of his duties hereunder, Executive shall be allowed to serve on such other board of directors. Notwithstanding the foregoing, in the event the Board in its sole discretion determines that Executive’s service on an external board of directors is a conflict of interest or is interfering with the provision of his duties hereunder and so notifies Executive, Executive agrees to promptly resign from such board of directors.
2.3 Compliance with Company Policies . To the extent not inconsistent with the terms and conditions of this Agreement, Executive shall be subject to the known and established bylaws, policies, practices, procedures and rules of the Company, including those policies and procedures specified in the Company’s Employee Handbook.
2.4 Location . Executive’s principal office, and principal place of employment, shall be at the Company’s offices in Parsippany, New Jersey.
3. Compensation .
3.1 Base Salary . Commencing on the Effective Date and continuing through the duration of the Term, the Company hereby agrees to pay to Executive an annualized base salary of Two Hundred Seventy Five Thousand Dollars ($275,000) (the “ Salary ”) payable in equal installments on the Company’s regularly-scheduled paydays as it is earned, subject to all applicable federal, state and local income and employment taxes and other required or elected withholdings and deductions. Executive’s Salary will be reviewed annually by the compensation committee (the “ Compensation Committee ”) of the Board, or the full Board, commencing in January 2017, taking into account the performance of Executive, the performance of the Company and other information deemed appropriate by the Compensation Committee, and may be adjusted by the Compensation Committee or the Board in their sole discretion (in which case such new amount shall be the “Salary” hereunder).
3.2 Annual Cash Bonus . For the calendar year ending December 31, 2016, Executive shall be entitled to receive a cash incentive award (the “ 2016 Annual Cash Bonus ”) of 50% of Salary for meeting the performance targets determined by the Compensation Committee. The 2016 Annual Cash Bonus shall be pro-rated to reflect the period of Executive’s employment during the year ending December 31, 2016. Within ninety (90) days after the end of the 2016 calendar year, the Board shall consult with Executive and shall determine and approve Executive’s 2016 Annual Cash Bonus taking into account the performance targets established for Executive, it being understood that the Compensation Committee (or the independent members of the Board) shall be entitled to award the 2016 Annual Cash Bonus in an amount greater than 50% of Salary for performance at greater than target levels. Subject to any valid deferral election by Executive, the 2016 Annual Cash Bonus shall be paid in a cash lump sum as soon as reasonably practicable following the Board’s approval thereof, provided that Executive remains employed through such date, but in no event later than April 15, 2017. Thereafter, for each calendar year that ends during the Term, Executive shall be eligible to receive an annual cash incentive award at the good faith discretion of the Compensation Committee, based upon the Compensation Committee’s evaluation of the Company’s performance and his performance, in accordance with the terms and conditions of the Company’s Officer Incentive Compensation Plan (“OICP”) and any other applicable bonus plan in effect upon the Effective Date and during the remainder of the Term; provided, however, in the event any term of the OICP or any other applicable bonus plan contradicts any term or right in this Agreement, this Agreement shall govern.
3.3 Equity Compensation . In connection with Executive’s employment as Chief Executive Officer of the Company as contemplated hereby, Executive shall receive: (i) a 10-year option, dated the date hereof, to acquire four hundred thousand (400,000) shares of common stock of the Company at an exercise price equal to the closing price of the common stock as of the date hereof, which shall vest in equal quarterly installments over a period of four years; and (ii) Eight Thousand Three Hundred Thirty Three (8,333) shares of restricted common stock, which shall vest in equal quarterly installments over a period of four years. Executive will be eligible for future grants of long-term incentive and equity compensation awards at the good faith discretion of the Compensation Committee, based upon the Compensation Committee’s evaluation of his performance, the Company’s performance, and peer company compensation practices, in accordance with the terms and conditions of any applicable policy of the Company in effect during the Term. The parties acknowledge and agree that Executive shall no longer be an independent member of the Board as a result of his appointment as Chief Executive Officer of the Company and that the stock option and restricted stock that were granted to Executive following his election to the Board at the 2016 Annual Meeting of Shareholders terminated, unvested, upon his appointment as Chief Executive Officer. The parties also acknowledge and agree that the stock option granted to Executive on November 19, 2015 in connection with his service on the Strategic Planning and Operating Committee shall remain in effect.
4. Employee Benefits .
4.1 Participation in Benefit Plans . During the Term, Executive shall be entitled to participate in such health, group insurance, welfare, pension, and other employee benefit plans, programs and arrangements as are made generally available from time to time to senior executives of the Company (which shall include health, life insurance and disability plans), such participation in each case to be on terms and conditions no less favorable to Executive than to other senior executives of the Company generally.
4.2 Vacations; Other . During the Term, Executive shall be entitled to participate in other benefits made available generally to other senior executives of the Company, such participation to be at levels, and on terms and conditions, that are commensurate with his position and responsibilities at the Company and that are no less favorable than those applying generally to other senior executives at similar levels of the Company. Notwithstanding the foregoing, Executive shall be entitled to annual vacation leave at not less than four weeks and such other time-off in accordance with the Company’s policies.
4.3 Reimbursement of Expenses . The Company shall reimburse Executive for all reasonable business and travel expenses, incurred in the performance of his job duties and the promotion of the Company’s business, promptly upon presentation of appropriate supporting documentation and otherwise in accordance with the expense reimbursement policy of the Company.
5. Termination .
5.1 General . The Company may terminate Executive’s employment for any reason or no reason, and Executive may terminate his employment for any reason or no reason, in either case subject only to the terms of this Agreement. For purposes of this Agreement, the following terms have the following meanings:
(a) “ Accrued Obligations ” shall mean: (i) Executive’s earned but unpaid Salary through the Termination Date (as hereinafter defined); (ii) payment of any annual, long-term, or other incentive award with respect to which all required performance periods have been completed and all required performance and service conditions have been satisfied on or before the Termination Date; (iii) payment in respect of accrued but unused vacation days in accordance with the Company’s vacation policies; and (iv) any unpaid expense or other reimbursement due pursuant to Sections 4.2 or 4.3 hereof or otherwise.
(b) “ Cause ” shall mean (i) the deliberate and continued failure by Executive to devote substantially all of his business time and reasonable efforts to the performance of Executive’s duties after a demand for substantial performance is delivered to Executive by the Board which specifically identifies the manner in which Executive has not substantially performed such duties; (ii) the engaging by Executive in gross misconduct which is injurious to the Company, monetarily or otherwise, including but not limited to, fraud or embezzlement by Executive; (iii) Executive’s conviction (or entering into a plea bargain admitting guilt) of any felony; or (iv) Executive’s refusal to follow a lawful directive of the Board.
(c) “ Company Arrangement ” shall mean any plan, program, agreement, corporate governance document or arrangement of the Company.
(d) “ Disability ” shall mean total and permanent disability as defined in the Company’s long-term disability plan.
(e) “ Good Reason ” shall mean the occurrence of any one of the following events without either (x) Executive’s express prior written consent or (y) full cure within 30 days after Executive gives written notice to the Company: (i) a reduction, other than a temporary one, in Executive’s authority, duties, responsibilities, or reporting lines; (ii) a reduction by the Company in Executive’s Salary, except for (A) across-the-board salary reductions similarly affecting all salaried employees of the Company or (B) across-the-board salary reductions similarly affecting all senior executive officers of the Company; (iii) the relocation of Executive’s principal office, or principal place of employment, to a location more than fifty (50) miles from Parsippany, New Jersey; (iv) the Company’s failure to extend the Term of this Agreement in accordance with Section 1 hereof without Cause; or (v) any other action or inaction constituting the Company’s material breach of this Agreement, including but not limited to the Company’s failure to make any of the monetary payments contained herein,
provided, however, that no event shall constitute grounds for a Good Reason termination unless Executive terminates his employment within 90-days after such event occurs.
(f) “ Person ” shall mean any individual, corporation, partnership, limited liability company, joint venture, trust, estate, board, committee, agency, body, employee benefit plan, or other person or entity.
(g) “ Pro Rata Annual Cash Bonus ” shall mean the amount, in the good faith determination of the Compensation Committee (or the independent members of the Board), Executive has earned as of the date of termination, taking into account Executive’s annual cash incentive award opportunity for the applicable year, in accordance with the terms and conditions of the Company’s Officer Incentive Compensation Plan and any other applicable bonus plan in effect upon the termination date.
(h) “ Termination Date ” shall mean the date on which Executive’s employment hereunder terminates in accordance with this Agreement (which, in the case of a notice of non-renewal of the Term in accordance with Section 1 hereof, shall mean the date on which the Term expires).
(i) “ Options ” shall mean all outstanding vested stock options held by Executive on the Termination Date.
5.2 Termination by the Company without Cause or upon Change of Control or by Executive for Good Reason . In the event that Executive’s employment is terminated (i) by the Company without Cause, (ii) by the Company upon, or within one year following, a Change of Control (except with respect to termination for Cause, in which case Section 5.4 shall govern), or (iii) by Executive for Good Reason, the Term shall expire on the Termination Date and Executive shall be entitled to:
(a) a cash amount, payable in equal installments (over a period of one-year) in accordance with the Company’s regular payroll policies following his Termination Date, in an amount equal to the sum of (i) severance in the amount of one year of his Salary as in effect immediately prior to the Termination Date and (ii) a Pro-Rata Annual Cash Bonus;
(b) the post-termination exercise period for all Options shall be extended to the earlier of (i) the first anniversary of the Termination Date, and (ii) the date of expiration of the respective option, during which post-termination period such Options shall continue to vest in accordance with their respective terms (to the extent not already fully vested). Except as specifically provided for in this Agreement, all other terms of the Options shall remain unchanged; and
(c) the Accrued Obligations.
5.3 Death and Disability . Executive’s employment shall terminate in the event of his death, and either Executive or the Company may terminate Executive’s employment in the event of his Disability (provided that no termination of Executive’s employment hereunder for Disability shall be effective unless the party terminating Executive’s employment first gives at least 15 days’ written notice of such termination to the other party). In the event that Executive’s employment hereunder is terminated due to his death or Disability, the Term shall expire on the Termination Date and he and/or his estate or beneficiaries (as the case may be) shall be entitled to (a) a single sum cash amount, payable on the 60 th day following the Termination Date, in an amount equal to a Pro-Rata Annual Cash Bonus, (b) the benefits described in Section 5.2(b) and (c) the Accrued Obligations.
5.4 Termination by the Company for Cause or by Executive without Good Reason . In the event that Executive’s employment hereunder is terminated by Executive without Good Reason or by the Company for Cause, the Term shall expire as of the Termination Date and Executive shall only be entitled to the Accrued Obligations.
5.5 Expiration of the Term . Executive or the Company may elect not to renew or extend the Term in accordance with Section 1 above, in which case the Termination Date shall be the date the Term expires. In the event of such a termination, Executive shall only be entitled to the Accrued Obligations.
5.6 Change in Control . For purposes of Section 5.2 hereof, “ Change in Control ” shall mean the first to occur of any of the following, provided that for any distribution that is subject to Section 409A (as defined in Section 6.2 below), a Change in Control under this Agreement shall be deemed to occur only if such event also satisfies the requirements under Treas. Regs. Section 1.409A-(i)(5):
(i) the determination by a vote of a majority of the members of the Board (which may be made effective as of a particular date), that a Change in Control has occurred, or is about to occur;
(ii) any person becomes the beneficial owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities (a “Majority of the Securities”);
(iii) (A) the stockholders of the Company approve a plan of complete liquidation of the Company; (B) the sale or disposition of all or substantially all of the Company’s assets; or (C) a merger, consolidation or reorganization of the Company with or involving any other entity, other than (i) a merger, consolidation or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least a Majority of the Securities of the Company (or such
surviving entity) outstanding immediately after such merger, consolidation or reorganization owned in approximately the same proportion of such ownership by each of the prior shareholders as prior to the transaction; or (ii) a merger, consolidation or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least a Majority of the Securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation or reorganization owned in approximately the same proportion of such ownership by each of the prior shareholders as prior to the transaction except for the fact that one of the shareholders owning more than 5% of the Company’s outstanding common stock as of the effective date of this Agreement increases its percentage of ownership by no more than 20% and to no greater than 49.99% immediately after the merger, consolidation or reorganization and the percentage ownership of the other shareholders are reduced proportionally; or
(iv) the date a majority of the members of the Board are replaced during any 12-month period by directors whose appointment or election are not endorsed by a majority of the members of the Board before the date of the appointment or election.
Notwithstanding the foregoing, in no event shall a restructuring, reorganization, merger or other change in capitalization in which the persons who own an interest in the Company on the date hereof (the “Current Owners”) (or any individual or entity which receives from a Current Owner an interest in the Company through will or the