Contract
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated the 7th day of January 2013, is by and between
Data Call Technologies Corp., a Nevada corporation, having its principal place
of business at 000 Xxxxxxx, Xxxxx X-00, Xxxxxxx, XX 00000 (the "Company"), and
Xxx Xxxxx (the "Executive").
WHEREAS, the Company has benefited from the services of Executive for many
years, serving as chief executive officer, chief operating officer and director
and desires to formalize the terms of the employment of Executive pursuant to
this agreement ("Employment Agreement") and Executive desires to continue to be
employed by the Company, as its chief executive officer and chief operating
officer pursuant to this Employment Agreement.
NOW, THEREFORE, in consideration of the premises and covenants herein contained,
the parties hereto agree as follows:
1. Term of Agreement. Subject to the terms and conditions hereof, the term of
employment of the Executive under this Employment Agreement shall be for the
period commencing on the date first set forth (the "Commencement Date") and
terminating on January 30, 2018, subject to the provisions of this Employment
Agreement. Such term of employment is herein called the "Employment Term.")
2. Employment. As of the Commencement Date, the Company hereby agrees to employ
the Executive as chief executive officer and chief operating officer, and the
Executive hereby accepts such employment and agrees to perform his duties and
responsibilities hereunder in accordance with the terms and conditions
hereinafter set forth.
3. Duties and Responsibilities. Executive shall serve as chief executive officer
and chief operating officer during the Employment Term. Executive shall report
to and be subject to the direction of the board of directors of the Company, of
which the Executive shall perform duties which are consistent with his current
title and position as chief executive officer and chief operating officer of the
Company and such other duties as may be assigned to him from time to time by the
board of directors which are consistent with his position of management and
leadership. During the Employment Term, Executive shall devote his full time,
skill, energy and attention to the business of the Company and shall perform his
duties in a diligent, trustworthy, loyal and businesslike manner.
4. Compensation and Benefits During the Employment Term:
(a) The Executive's base compensation shall be at the rate of $________ per
month, for the term of this Agreement, payable in regular semi-monthly
installments. At the election of the Executive, his compensation may be payable
in shares of the Company's common stock, registered on Form S-8 under the
Securities Act of 1933 or such other form as may be appropriate, or at the
election of the Executive pursuant to an exemption from registration under the
Act. Cash compensation shall be less applicable withholding for income and
employment taxes as required by law and other deductions as to which the
Executive shall agree. Such base compensation shall be subject to increases as
and when determined by the Company's board of directors at its sole discretion.
Any unpaid balance during the year shall be adjusted and paid on or before each
fiscal year end.
(b) In addition to the Executive's base compensation, Executive will be entitled
to a bonus as determined by the Company's board of directors from time to time.
Further, the Executive shall be entitled to a special bonus in the event that
lenders or investment bankers working with the Company require the personal
guarantee of the Executive. In the event of a change in control of the Company,
resulting in Executive ceasing to serve as the Company's chief executive officer
and chief operating officer, Executive shall be entitled to receive and the
Company shall pay to Executive within ninety (90) days of the change in control
a sum equal to three (3) years of the base salary then payable to Executive
under this Employment Agreement, and issue to Executive the shares underlying
the common stock purchase warrants provided in 4(d) below, based upon and
adjusted exercise price equal to par value of the shares at the date of the
change in control.
(c) The Executive shall be entitled to reimbursement of all reasonable, ordinary
and necessary business related expenses incurred by him in the course of his
duties and upon compliance with the Company's procedures.
(d) The Executive shall be granted common stock purchase warrants, exercisable
on a cashless basis, for 500,000 shares per annum commencing on February 1, 2012
and on each consecutive February 1st for a period of five (5) years, based upon
an exercise price equal to the lower of: (i) the par value of the shares of
common stock; or (ii) $.03 per share. The warrants will provide for an
expiration date two (2) years following each annual grant, as set forth in the
warrant agreement that will be attached to this employment agreement.
(e) In addition to the Executive's base compensation, and as an inducement for
Executive agreeing to entering into this Employment Agreement for a term of five
(5) years on a full-time basis, the Executive shall be issued an aggregate of
5,500,000 restricted shares of the Company's common stock ("Executive Shares"),
subject to the following: (i) Executive shall have voting rights with respect to
the Executive Shares from the date of issuance throughout the Employment Term,
except that for the purposes of Executive's right (the "Right") to sell,
transfer or assign the Executive Shares, such Right shall vest at the rate of
1,000,000 Executive Shares per year during the Employment Term; (ii) Executive's
right to sell, transfer or assign Executive Shares shall be subject to the
restrictions of Rule 144 promulgated by the Securities and Exchange Commission
("SEC") under the Securities Act of 1933, as amended (the "Act"); (iii) in the
event that Executive shall elect, for any reason, to terminate his employment
with the Company during the Employment Term, all rights of Executive to the
Executive Shares shall immediately cease, including voting rights, rights to
sell, transfer or assign the Executive Shares; and (iv) Executive consents
pursuant to this Employment Agreement to the cancelation by the Company's
transfer agent of any remaining Employment Shares without any further action or
approval of Executive.
5. Termination. The Company may terminate this Employment Agreement: (i) for
death or disability under Section 5(a) or 5(b); (ii) with "cause" as set forth
under Section 5(c); or by the Executive for good reason as defined under Section
5(d). All other terminations which may occur shall constitute a breach of this
Employment Agreement.
(a) The Company shall have the right to terminate the employment of the
Executive under this Employment Agreement for disability in the event Executive
suffers an injury, illness or incapacity of such character as to substantially
disable him from performing his duties without reasonable accommodation by the
Company hereunder for a period of more than one hundred and twenty (120)
consecutive days upon the Company giving at least thirty (30) days written
notice of termination; provided, however, that if the Executive is eligible to
receive disability payments pursuant to a disability policy paid for by the
Company, the Executive shall assign such benefits to the Company for all periods
as to which he is receiving full payment under this Employment Agreement.
(b) This Employment Agreement shall terminate upon the death of Executive.
(c) The Company may terminate this Employment Agreement at any time because of
(i) Executive's material breach of any term of this Employment Agreement; (ii)
the willful engaging by the Executive in misconduct which is materially
injurious to the Company, monetarily or otherwise; provided, in each case,
however, that the Company shall not terminate this Employment Agreement pursuant
to this Section 5(c) unless the Company shall first have delivered to the
Executive a written notice which specifically identifies such breach or
misconduct and the Executive shall not have cured the same within thirty (30)
days after receipt of such notice; (iii) Executive's gross negligence in the
performance of his duties or (iv) the failure of Executive to perform his
essential duties or comply with reasonable directions of the board of directors.
(d) The Executive may terminate his employment for "Good Reason" if:
(i) he is assigned, without his express written consent, any duties inconsistent
with his positions, duties, responsibilities, authority and status with the
Company as of the date hereof, or a change in his reporting responsibilities or
titles as in effect as of the date hereof;
(ii) his compensation is reduced, other than by reason of the limited cash flow
of the Company and such reduction is also applied to other executive officers of
the Company;
(iii) the Company shall file a petition for bankruptcy or re-organization under
the federal bankruptcy statues or an involuntary petition is filed against the
Company and not removed or withdrawn within thirty (30) days or the Company does
not pay any material amount of compensation due hereunder and then fails either
to pay such amount within the ten (10) day notice period required for
termination hereunder or to contest in good faith said notice. Further, if such
contest is not resolved within thirty (30) days the Company shall submit such
dispute to arbitration, under Section 7.
6. Arbitration. If a dispute should arise regarding this Employment Agreement,
all claims, disputes, controversies, differences or other matters in question
arising out of this relationship shall be settled finally, completely and
conclusively by arbitration of a single arbitrator in Xxxxxx County, Texas, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "Rules"). Arbitration shall be initiated by written demand.
This Employment Agreement to arbitrate shall be specifically enforceable only in
the District Court of Xxxxxx County, Texas. A decision of the arbitrator shall
be final, conclusive and binding on the Company and the Executive, and judgement
may be entered in the District Court of Xxxxxx County, Texas, for enforcement
and other benefits. On appointment, the arbitrator shall then proceed to decide
the arbitration subjects in accordance with the Rules. Any arbitration held in
accordance with this paragraph shall be private and confidential and no person
shall be entitled to attend the hearings except the arbitrator, Executive,
Executive's attorneys, and an designated representatives of the Company and
their respective attorneys. The matters submitted for arbitration, the hearings
and proceedings and the arbitration award shall be kept and maintained in
strictest confidence by Executive and the Company and shall not be discussed,
disclosed or communicated to any persons. On request of any party, the record of
the proceeding shall be sealed and may not be disclosed except insofar, and only
insofar, as may be necessary to enforce the award of the arbitrator and any
judgement enforcing an award. The prevailing party shall be entitled to recover
reasonable and necessary attorneys' fees and costs from the non-prevailing
party.
7. Opportunities. During his employment with the Company, and for one year
thereafter, Executive shall not take any action which might divert from the
Company any opportunity learned about by him during his employment with the
Company (including without limitation during the Employment Term) which would be
within the scope of any of the businesses then engaged in or planned to be
engaged in by the Company.
8. Survival. In the event that this Employment Agreement shall be terminated,
then notwithstanding such termination, the obligations of Executive pursuant to
Sections 7 of this Employment Agreement shall survive such termination.
9. Indemnification.
(a) The Company agrees to indemnify and hold harmless Executive against any and
all losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements (incurred in any and all actions,
suits, proceedings and investigations in respect thereof and any and all legal
and other costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise), including without limitation,
the costs, expenses and disbursements, as and when incurred, of investigating,
preparing or defending any such action, suit, proceeding or investigation that
is in any way related to the Executive's employment with the Company (whether or
not in connection with any action in which the Executive is a party). Such
indemnification does not apply to acts performed by Executive, which are
criminal in nature or a violation of law. The Company also agrees that Executive
shall not have any liability (whether direct or indirect, in contract or tort,
or otherwise) to the Company, for, or in connection with, the engagement of the
Executive under the Agreement, except to the extent that any such liability
resulted primarily and directly from Executive's gross negligence and willful
misconduct.
(b) These indemnification provisions shall be in addition to any liability which
the Company may otherwise have to Executive or the persons indemnified below in
this sentence and shall extend to the following: the Executive, his affiliated
entities, partners, employees, legal counsel, agents, and controlling persons
(within the meaning of the federal securities laws), and the officers,
directors, employees, legal counsel, agents, and controlling persons of any of
them (collectively, the "the Executive Parties").
(c) If any action, suit, proceeding or investigation is commenced, as to which
any of the Executive parties propose indemnification under the Agreement, they
shall notify the Company with reasonable promptness; provided however, that any
failure to so notify the Company shall not relieve the Company from its
obligations hereunder. The Executive Parties shall have the right to retain
counsel of their own choice (which shall be reasonably acceptable by the
Company) to represent them, and the Company shall pay fees, expenses and
disbursements of such counsel; and such counsel shall, to the extent consistent
with its professional responsibilities, cooperate with the Company and any
counsel designated by the Company. The Company shall be liable for any
settlement of any claim against the Executive Parties made with the Company's
written consent, which consent shall not be unreasonably withheld. The Company
shall not, without the prior written consent of the party seeking
indemnification, which shall not be reasonably withheld, settle or compromise
any claim, or permit a default or consent to the entry of any judgment in
respect thereof, unless such settlement, compromise or consent includes, as an
unconditional term thereof, the giving by the claimant to the party seeking
indemnification of an unconditional release from all liability in respect of
such claim.
(d) The indemnification provided by this Section 9 shall not be deemed exclusive
of, or to preclude, any other rights to which those seeking indemnification may
at any time be entitled under the Company's Articles of Incorporation, Bylaws,
any law, agreement or vote of shareholders or otherwise, or under any policy or
policies of insurance purchased and maintained by the Company on behalf of
Executive, both as to action in his Employment and as to action in any other
capacity.
(f) Neither Termination nor completion of the Employment shall effect these
indemnification provisions which shall then remain operative and in full force
and effect.
10. Contents of Employment Agreement, Parties in Interest, Assignment. This
Employment Agreement sets forth the entire understanding of the parties hereto
with respect to the subject matter hereof. All of the terms and provisions of
this Employment Agreement shall be binding upon and inure to the benefit of and
be enforceable by the respective heirs, representatives, successors and assigns
of the parties hereto, except that the duties and responsibilities of Executive
hereunder which are of a personal nature shall neither be assigned nor
transferred in whole or in part by Executive. This Employment Agreement shall
not be amended except by a written instrument duly executed by the parties.
11. Severability. If any term or provision of this Employment Agreement shall be
held to be invalid or unenforceable for any reason, such term or provision shall
be ineffective to the extent of such invalidity or unenforceability without
invalidating the remaining terms and provisions hereof, and this Employment
Agreement shall be construed as if such invalid or unenforceable term or
provision had not been contained herein.
12. Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other party shall be in writing and shall be
deemed to have been duly given when delivered personally or five (5) days after
dispatch by registered or certified mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made:
If to the Company, addressed to:
Data Call Technologies Corp.
000 Xxxxxxx, Xxxxx X-00
Xxxxxxx, Xxxxx 00000
If to Executive, addressed to:
Xxx Xxxxx
_________________
_________, Texas ______
or to such other address as the one party shall specify to the other party in
writing.
13. Counterparts and Headings. This Employment Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all which
together shall constitute one and the same instrument. All headings are inserted
for convenience of reference only and shall not affect the meaning or
interpretation of this Employment Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to
be duly executed and delivered as of the day and year first above written.
Data Call Technologies Corp.
By:_______________________________
Xxxx Xxxxx, Chief Financial Officer and Secretary
Executive
By:________________________________
Xxx Xxxxx
