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EXHIBIT
10.1
EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT, dated as of March 17, 2005, by and
between TELULAR CORPORATION, a Delaware corporation (the
“Company”), and JOHN E. BERNDT, a resident of
Plano, Texas (the “Executive”);
WITNESSETH:
WHEREAS,
the Company wishes to employ the Executive as its President and
Chief Executive Officer on an interim basis until the Company is
able to complete its selection process for a new President and
Chief Executive Officer; and
WHEREAS,
the Executive has agreed to serve in these capacities for the
Company, on the terms and conditions set forth below;
NOW,
THEREFORE, in consideration of the mutual obligations set forth
herein, the parties hereto hereby agree as follows:
1.
Engagement . The Company hereby agrees to employ
the Executive as its President and Chief Executive Officer and the
Executive hereby accepts such employment, on the terms and
conditions hereinafter set forth. The Executive’s
principal place of business shall be at the headquarters of the
Company.
2.
Term of Employment . The Executive’s
employment by the Company under this Agreement shall commence on
February 21, 2005 (the “Effective Date”). Employment
shall be on an “at-will” basis and shall continue in
effect until the earlier of (a) the effective date of the
Company’s election of a
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new permanent President
and Chief Executive Officer or (b) the employment is terminated by
either party upon at least 30 days’ prior written notice;
provided that the 30-day notice requirment shall not apply in the
case of a termination under Sections 10 (“Termination for
Cause”) or 11 (“Death or Disability of the
Executive”). The period of employment of the Executive by the
Company is referred to herein as the “Term.”
3.
Duties . During the Term, Executive shall serve
as the Company’s President and Chief Executive Officer and
shall have such duties and responsibilities as are set forth in the
Company’s Bylaws and such other executive responsibilities
and performances as may be assigned to him from time to time by the
Board of Directors of the Company (the “Board”). The
Executive shall use his best efforts and shall act in good faith in
performing all duties reasonably required to be performed under
this Agreement.
4.
Availability . The Executive shall devote his
entire working time, attention and energies to the Company’s
business and, during the term of this Agreement, shall not be
engaged in any other business activity without the express written
approval of the Board; provided, however , that the
Executive may continue to serve as Director and/or Chairman of the
Board of MetaSolv, Inc., and Thunderbird, The Garvin School of
International Management and as a Director of Calence Inc., so long
as such service does not materially interfere with the performance
by him of his duties to the Company.
5.
Expenses . The Company shall reimburse the
Executive, promptly upon presentation of itemized vouchers, for all
ordinary and necessary business expenses incurred by the Executive
in the performance of his duties hereunder. In recognition of
the Executive’s willingness to serve the Company
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on an interim basis, the
Company shall also reimburse the Executive’s reasonable
out-of-pocket expenses of travel to and from the Company’s
offices and the Executive’s regular residences, and of the
Executive’s hotel or other short-term residential expenses
while in the Vernon Hills area. To the extent that, in the
good faith determination of the Company, such expense
reimbursements constitute income that is taxable by Federal or
state income tax authorities, the Company shall, within 60 days
after the end of any tax year in which such reimbursements are
paid, pay to the Executive (or withhold and pay to taxing
authorities in accordance with Section 14) an additional
“gross-up” amount sufficient to reimburse the Executive
for the Federal and state income tax payable (based on the highest
Federal and state income tax rates, as applicable) by the Executive
on (a) such reimbursements and (b) such gross-up
payments.
6.
Compensation . As compensation for the services
to be rendered hereunder, the Company agrees as follows:
(a) The
Company shall pay to the Executive a base salary (the “Base
Salary”) which shall be at the annual rate of $100,000.
The Base Salary shall be paid in accordance with the
Company’s normal payroll practice.
(b) The
Company shall permit the Executive to participate in such pension,
401(k), and other employee benefit plans as are made available to
employees of the Company generally, subject to the terms of such
plans; provided that the Company retains the right to amend or
terminate such plans at any time. The Executive shall be
entitled to one week of paid vacation per calendar quarter (accrued
at the beginning of such quarter).
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7.
Stock Options .
(a) Under
a Stock Option Agreement of even date herewith, the Company is
granting to the Executive certain stock options under the
Company’s Stock Incentive Plan.
(b) Under
a separate Supplemental Stock Option Agreement of even date
herewith, the Company is granting to the Executive certain
additional stock options under the Company’s Stock Incentive
Plan, incorporating vesting provisions keyed to the
Executive’s achievement of performance targets specified by
the Compensation Committee. The number of stock options to be
granted under the Supplemental Stock Option Agreement is calculated
to deliver to the Executive stock options to vest each calendar
quarter in which specified performance targest are met, with a
target value (as of the date of grant), determined by the Company
in accordance with Black-Scholes methodology, equal to the
Executive’s base salary payable by the Company to the
Executive during such calendar quarter.
8.
Ownership of Proprietary Information . All right,
title and interest of every kind and nature whatsoever in and to
discoveries, inventions, improvements, patents (and applications
therefor), copyrights, ideas, know-how, laboratory notebooks,
creations, properties and all other proprietary rights arising
from, or in any way related to, the Executive’s employment
hereunder shall become and remain the exclusive property of the
Company, and the Executive shall have no interest
therein.
9.
Trade Secrets . The Executive shall not, during
the Term or thereafter, disclose to anyone (except to the extent
reasonably necessary for the Executive to perform his duties
hereunder or as may be required by law) any confidential
information concerning the business or affairs of the
Company
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(or of any affiliate or
subsidiary of the Company), including but not limited to lists of
customers, business plans, joint ventures, financial or cost
information, and confidential scientific and technological
information (whether of the Company or entrusted to the Company by
a third party under a confidentiality agreement or understanding)
which the Executive shall have acquired in the course of, or
incident to, the performance of his duties pursuant to the terms of
this Agreement or pursuant to any prior dealings with the Company
or any affiliate or subsidiary of the Company. In the event
of a breach or threatened breach by the Executive of the provisions
of this Section 9, the Company shall be entitled to an injunction
restraining the Executive from disclosing, in whole or in part,
such information or from rendering any services to any person,
firm,
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