EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of October
1, 1999 between CYBERTEL COMMUNICATIONS CORP., a Nevada corporation (the
"Company"), and XXXXXXX XXXXXXX (the "Executive").
RECITALS
WHEREAS, The Company is engaged in the business of developing and marketing
long distance voice and data telecommunications services and related products
and services ("the Company's Business"); and
WHEREAS, Executive possesses substantial knowledge and experience with respect
to the Company's Business; and
WHEREAS, the Company desires to employ the Executive to have the benefits of
his expertise and knowledge. The Executive, in turn, desires employment with
the Company. The parties, therefore, enter into this Agreement to establish
the terms and conditions of the Executive's employment with the Company.
In consideration of the mutual covenants and representations contained in this
Agreement, the Company and the Executive agree as follows:
1. Employment of Executive; Duties. The Company agrees to employ the Executive
and the Executive agrees to be employed by the Company as Chief Financial
Officer for the period specified in Section 3 (the "Employment Period"),
subject to the terms and conditions of this Agreement. During the Employment
Period, the Executive shall have such duties and responsibilities generally
consistent with his position and such other duties not inconsistent with his
title and position and as may be assigned to him by the Company, which may
include providing similar services for any of the Company's subsidiaries,
parents or affiliates. In connection therewith, Executive shall devote his
best efforts, experience and judgement to fully discharge his duties and
responsibilities under this Employment Agreement and as reasonably
contemplated hereby, and shall act in conformity with the written and oral
policies of the Company and within the limits, budgets, business plans and
instructions as set by its Board of Directors ("the Board"). Executive shall
be subject to the authority of the Board and the Company's duly appointed
officers.
2. Place of Employment and Travel. Executive acknowledges that the Company's
offices and headquarters are currently located in the City of San Diego,
County of San Diego, State of California that shall be the initial site of
Executive's employment.
3. Employment Period. The Employment Period shall begin on the date first
written above ("the Effective Date") and shall continue for three (3) years.
Upon the expiration of one (1) year from the Effective Date and upon each
anniversary thereafter, the Employment Period shall be extended an additional
year without further action by either party, unless the Company gives written
notice to the Executive within thirty (30) days of the anniversary and as
provided in Paragraph 9 herein, in which case the Employment Period shall
expire two (2) years from the next anniversary of the Effective Date.
4. Base Salary. Commencing October 1, 1999 and continuing to January 31, 2000,
the Company shall pay to the Executive a monthly salary of Five Thousand U. S.
Dollars (US$5,000.00), and commencing February 1, 2000 the Company shall pay
to the Executive a minimum annual base salary of One Hundred Thousand U.S.
Dollars (US$100,000.00) ("the base salary"). The base salary shall be payable
in equal periodic installments which are not less frequent than the periodic
installments in effect for salaries of other executives of the Company. The
base salary shall be subject to review annually by the Board (or a committee
appointed by the Board) for upward adjustments based on the policies of the
Company and the Executive's contributions to the business of the Company. The
base salary shall not be adjusted downward without the written consent of the
Executive.
5. Benefits. In addition to and except for the matters governed by this
Agreement, the Executive shall be entitled to: (i) employee benefits and
perquisites, including but not limited to pension plans, deferred compensation
plans, stock options, annual bonus plans, long term incentive plans, group
life insurance, disability, sickness and accident insurance and health
benefits under such plans and programs as provided to other executives of the
Company from time to time; (ii) paid vacation as well as holidays, leave of
absence and leave for illness and temporary disability in accordance with the
policies of the Company; and, (iii) the specific benefits as are set forth in
Exhibit 2 attached hereto and incorporated in full by this reference.
6. Non-Disclosure; Non-Competition. As a condition to the employment
arrangement, Executive agrees to execute and comply with the terms and
conditions of the "Employee Non-Disclosure, Non-Competition and Assignment of
Inventions Agreement" attached hereto as Exhibit 1.
7. Termination.
7.1 Termination by the Company.
(a) The Company may not terminate the Executive's employment under this
Agreement without Cause.
(b) The Company, by action of its Board, may terminate the Executive's
employment under this Agreement for Cause at any time by notifying the
Executive of such termination. For all purposes of this Agreement, the
Employment Period shall end as of the date of such termination of employment.
"Cause" means the Executive's: (i) persistent and repeated refusal, failure or
neglect to perform the material duties of his employment under this Agreement
(other than by reason of the Executive's physical or mental illness or
impairment), provided that such Cause shall be deemed to occur only after the
Company gave written notice thereof to the Executive specifying in reasonable
detail the conduct constituting Cause, the Executive failed to cure and
correct his conduct within thirty (30) days after receipt of such notice, and
the Executive had the opportunity to be heard at a meeting of the Board; (ii)
committing any act of fraud or embezzlement, provided that such Cause shall
be deemed to occur only after the Company gave notice thereof to the Executive
specifying in reasonable detail the instances of such conduct, and the
Executive had the opportunity to be heard at a meeting of the Board; (iii)
breach of the Employee Non-Disclosure, Non-Competition and Assignment of
Inventions Agreement or of such other subsequent agreements entered into
during the Employment Period that results in a detriment to the Company,
provided the Company gave notice thereof to the Executive specifying in
reasonable detail each such alleged breach, and the Executive had the
opportunity to be heard at a meeting of the Board; (iv) conviction of a felony
(including pleading guilty to a felony); or (v) habitual abuse of alcohol or
drugs.
7.2 Termination by the Executive. The Executive may terminate this Agreement
at any time, for any reason or for no reason at all, by giving notice thereof
to the Company at least sixty (60) days before the effective date of such
termination. The Employment Period shall terminate as of the date of such
termination of employment.
7.3 Severance Benefits.
(a) If the Executive's employment under this Agreement is terminated by the
Executive before the end of the Employment Period and without Good Reason (as
defined in herein below), the Company shall continue to pay to the Executive
his unpaid Base Salary through the time of termination and for a period
extending ninety (90) days thereafter. Additionally, the Executive shall be
entitled to his share of the accrued stock and accrued stock options through
the date of termination which shall be paid to him at such time as the next
payment is made to the other participants of all applicable stock or stock
option plan or long term incentive plan.
(b) If the Executive's employment under this Agreement is terminated by the
Company for Cause, or if the Executive dies or becomes totally disabled (as
defined herein below), the Company shall only pay the Executive a lump sum
cash payment within thirty (30) days of the date of such termination, equal to
the sum of: (i) Executive's unpaid Base Salary earned to the termination date;
(ii) his share of the accrued stock and accrued stock options through the date
of termination which shall be paid to him or his estate at such time as the
next payment is made to the other participants of all applicable stock or
stock option plans or long term incentive plans.
(c) If the Executive's employment under this Agreement is terminated by the
Executive for Good Reason or by the Company without Cause, the Company shall
continue to pay to the Executive his unpaid base salary for the entire time
remaining in the Employment Period. Additionally, the Executive shall be
entitled to all stock and stock options set forth in Exhibit 2, including but
not limited to his share of all accrued stock, accrued stock options, and all
other stock and stock options through the date of the termination of the
Employment Period which shall be paid to him at such time as such payments are
made to the other participants of all applicable stock option plans or long
term incentive plans.
(d) "Good Reason" means: any material failure by the Company to pay or provide
the compensation and benefits under this Agreement; provided that, in each
such event, the Executive shall give the Company notice thereof which shall
specify in reasonable detail the circumstances constituting Good Reason, and
there shall be no Good Reason with respect to any such circumstances cured by
the Company within thirty (30) days after such notice.
(e) If the Executive is terminated by the Company for Cause and the Executive
is entitled to receive payments or other benefits under this Agreement upon
the termination of his employment with the Company, the Executive hereby
irrevocably waives the right to receive any payments or other benefits under
any other severance or similar plan maintained by the Company ("Other
Severance Plan").
7.4 Termination by Death or Disability. This Agreement shall terminate
automatically upon the Executive's death. If the Company determines in good
faith that the Executive has a "total disability" (within the meaning of such
term or of a similar term as defined in the Company's long-term disability
plan as in effect from time to time), the Company may terminate his employment
under this Agreement by notifying the Executive thereof at least thirty (30)
days before the effective date of such termination.
8. Representation by Executive. Executive represents and warrants to the
Company that his employment hereunder will not conflict with or result in a
violation or breach of, or constitute a default under any contract, agreement
or understanding to which he is or was a party.
9. Notices. Any notices, requests, demands and other communications provided
for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with the Company or, in the case of the Company, to the Company's
principal executive offices.
10. Withholding Taxes. The Company shall have the right, but not the duty, to
the extent permitted by law, to withhold from any payment of any kind due to
the Executive under this Agreement to satisfy the tax withholding obligations
of the Company under applicable law.
11. Validity; Complete Agreement. The validity and enforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision hereof. This Agreement sets forth the entire understanding and
embodies the entire Agreement of the parties with respect to the subject
matter covered hereby and supersedes all prior or contemporaneous oral or
written agreements, understandings, arrangements, negotiations or
communications, among the parties hereto.
12. Amendment. This Agreement shall not be modified or amended except by
written agreement of the parties hereto.
13. Choice of Law; Jurisdiction and Venue. This Agreement shall be governed by
and construed in accordance with the law of the State of California. The
Parties consent to the exclusive jurisdiction of the California courts. Venue
for any action brought hereunder shall be exclusively in the State of
California, County of San Diego.
14. Counterpart. This Agreement may be executed in any number of counterparts,
all of which shall be considered one and the same agreement.
15. Delay; Partial Exercise. No failure or delay by any party in exercising
any right, power or privilege under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
16. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the Company and its successors and assigns. The Company shall
have the right to assign this Agreement to any of its respective subsidiaries,
parents or affiliates. The rights and obligations of Executive under this
Agreement are personal to him and no such right or obligation shall be subject
to voluntary or involuntary alienation, assignment, or transfer.
17. Mandatory Arbitration. DISPUTES REGARDING THE EXECUTIVE'S EMPLOYMENT BY
THE COMPANY, INCLUDING, WITHOUT LIMITATION, ANY DISPUTE UNDER THIS AGREEMENT
WHICH CANNOT BE RESOLVED BY NEGOTIATIONS BETWEEN THE COMPANY AND THE EXECUTIVE
SHALL BE SUBMITTED TO, AND SOLELY DETERMINED BY, FINAL AND BINDING ARBITRATION
CONDUCTED UNDER THE RULES OF ARBITRATION OF THE STATE OF CALIFORNIA APPLICABLE
TO EMPLOYMENT DISPUTES, AND THE PARTIES AGREE TO BE BOUND BY THE FINAL AWARD
OF THE ARBITRATOR IN ANY SUCH PROCEEDING. THE ARBITRATOR SHALL APPLY THE LAWS
OF THE STATE OF CALIFORNIA WITH RESPECT TO THE INTERPRETATION OR ENFORCEMENT
OF ANY MATTER RELATING TO THIS AGREEMENT. ARBITRATION MAY BE HELD IN SAN
DIEGO, CALIFORNIA, OR SUCH OTHER PLACE AS THE PARTIES HERETO MAY MUTUALLY
AGREE, AND SHALL BE CONDUCTED BY A QUALIFIED ARITRATOR APPOINTED UNDER THE
LAWS OF THE STATE OF CALIFORNIA. JUDGMENT UPON THE AWARD BY THE ARBITRATOR MAY
BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first written above.
Witness
/s/ Xxxxxxx Xxxxxxx
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XXXXXXX XXXXXXX
Witness
CYBERTEL COMMUNICATIONS CORP.
By /s/ Xxxxxxx Xxxxxxxxxxx
----------------------------------- ----------------------------------
XXXXXXX XXXXXXXXXXX
President, Director
Exhibit 1
EMPLOYEE NON-DISCLOSURE, NON-COMPETITION
AND ASSIGNMENT OF INVENTIONS AGREEMENT
The Undersigned, XXXXXXX XXXXXXX ("the Employee" or "Employee") in
consideration of his employment with CYBERTEL COMMUNICATIONS CORP.
("CYBERTEL"), plus other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, intending to be legally bound by
the terms and conditions of this Employee Non-Disclosure, Non-Competition and
Assignment of Inventions Agreement ("this Agreement"), hereby agrees as
follows:
1. Respective Persons or Entities Covered.Employee acknowledges that, as
an employee of CYBERTEL, he will possibly also be working with subsidiaries,
parents and affiliated entities of CYBERTEL that shall hereinafter be referred
to herein as the "Companies."
2. Inventions. Employee agrees as follows:
A. Disclosure. He will promptly disclose to the Companies and each of
them, any invention, discovery, know-how, improvement, design, device,
apparatus, composition, process, plans, programs, or use made, conceived
or discovered by Employee, either solely or in collaboration with others,
during the term of this Agreement which (i) relates in any way to the
products, services processes or systems relating to any of the Companies'
respective businesses (ii) results from or is suggested by any work
performed by Employee for any of the Companies (all the foregoing
hereinafter referred collectively as "Inventions");
B. Ownership of Inventions. Each Invention shall be and remain the sole
and exclusive property of the Companies, whether patented or not, and any
Invention conceived within six months after termination of this Agreement
shall be presumed to be the property of the Companies subject to proof of
the Companies' satisfaction that such Invention was first conceived after
the termination of this Agreement. In furtherance of the foregoing,
Employee agrees to execute, acknowledge and deliver any and all documents
and instruments as may be requested by the Companies (but without any
additional compensation from the Companies) for the purpose of vesting
title to any Invention in the Companies.
C. Prior Inventions. Employee attaches as Schedule A hereto, concurrently
with the execution hereof, a list and brief description of all unpatented
Inventions or proprietary information, if any, made or conceived by him
prior to the date of this Agreement and which are to be excluded from the
provisions of this Agreement. If no such list is attached at the time of
the execution of this Agreement, it shall be conclusively presumed that
Employee has waived any right he may have to any such Invention that
relates to any of the Companies businesses.
D. Representation. Employee represents and warrants to the Companies that
except as set forth on Schedule B, attached hereto, neither he nor his
Associates or Affiliates have any agreements with or obligations to any
person or entity in conflict with any of the provisions of this
Agreement.
3. Confidentiality. Employee covenants and agrees that he will not, at
any time either during the term of this Agreement of thereafter, for a period
of one year after the receipt by Employee of the last disclosure of
proprietary information, reveal (or permit to be revealed where such is
within its control) to a third party or use for his own benefit, without prior
written consent of the Companies, any information pertaining to the
Inventions, or any of the Companies' respective businesses including but not
limited to information relating to research results, formulations, computer
code, suppliers, employees, customers financial condition, procedures, tests,
know-how, production, distribution, work and organizational methods,
experimental results or trade secrets.
4. Non-competition. During the term of this Agreement and for a period of
one year thereafter, Employee agrees that, except as contemplated by this
Agreement, he shall not, without the prior written consent of the Companies,
either individually or with others, directly or indirectly, as an employee,
representative, partner, principal, agent, independent contractor, consultant,
stockholder, or in any other capacity, participate in, engage in or have a
financial interest in any activity, business or entity relating to or involved
in the development, testing or marketing of products, services, systems or
processes related to the Companies' respective businesses, except as provided
in Schedule B.
Employee acknowledges that the claim for or the payment of any damages for
breach of the provisions contained in this paragraph 4 shall not preclude the
Companies from seeking injunctive or such other forms of relief as may be
obtained in a court of law or equity. Employee acknowledges that he will be
fully able to earn an adequate livelihood for himself and his dependents if
the provisions of this paragraph 4 shall be specifically enforced against him.
In the event that any court of competent jurisdiction shall determine that any
term, covenant, or condition of this paragraph 4 is void or unenforceable,
such court shall have the powers and authority to modify this paragraph 4 in
accordance with the original intent of the parties so as to make such term,
covenant or condition and the remainder of this Agreement valid and binding
upon the parties hereto.
5. Non-solicitation. During the term of this Agreement and for a period
of one year thereafter, Employee agrees that he shall not, without the prior
written consent of the Companies, either individually or with others, directly
or indirectly solicit or hire any of the Companies' employees or key employees
of the Companies' customers for employment with a person or entity involved in
marketing products or services competitive with any of the Companies'
respective businesses. Key employees include supervisory personnel,
executives, personnel in charge of any department, section or subdivision, and
project managers (or directors) and senior personnel on any individual
project or projects. Employee further agrees that all customers of the
Companies, and all prospective customers from whom Employee may have solicited
business while engaged as an employee by the Companies hereunder, shall be
solely the customers of the Companies. Employee therefore agrees that he will
not, for a period of one year immediately following the termination of this
Agreement, either directly or indirectly, solicit business, as to products or
services competitive with those of the Companies respective businesses, from
any of the Companies'' customers with whom Employee has had contact within one
year prior the termination of this Agreement.
6. Definition of Terms. The term "Employee" shall, for purposes of
paragraphs 1 through 5 includes Employee along with any of Employee's
Affiliates, Associates, or entities of which he is a Beneficial Owner. The
term "Affiliate" shall means a person controlling, controlled by or under
common control with Employee and the term "control" (including the terms
"controlling," "controlled by," and "under common control with") means the
power to direct or cause the direction of the management and policies of a
person or entity, whether through the ownership of voting securities, by
contract or otherwise. The term "Associate," shall mean a relationship with:
i) any corporation, or organization (other than the Companies) of which
Employee or any of his Affiliates or Associates is a director, officer or
partner, ii) any corporation, or organization (other than the Companies) of
which Employee or any of Employee's Affiliates or Associates, directly or
indirectly, are the beneficial owner of five percent (5%) or more of any class
of equity securities; iii) any trust or other estate in which Employee or any
of his Affiliates or Associates have a substantial beneficial interest or with
respect to which Employee or any of his Affiliates or Associates serve as a
trustee or in any other fiduciary capacity; or iv) Employee's spouse, or any
blood relative of Employee, or any blood relative of Employee's spouse, who
resides in the same home as Employee, or who is an officer or director, or
partner of any Affiliate or Associate of Employee. The term "beneficial
ownership" shall mean interests which Employee or his or Affiliates or
Associates may possess which are substantially equivalent to those of
ownership and are enjoyed by reason of any contract, understanding,
relationship, agreement or other arrangement, whether or not such are set
forth in a legally binding contract or document. The term "term of this
Agreement" shall mean the period of time during which the Employment Agreement
executed by Employee and CYBERTEL concurrently with this Agreement remains in
force.
7. Restriction on Enforceability of Agreement. Full compliance by
CYBERTEL and the Companies with the terms of the Employment Agreement executed
by CYBERTEL and Employee concurrently with this Agreement is a material
condition in Employee's decision to execute this Agreement. Therefore, the
provisions of Paragraphs 3 through 5 of this Agreement restricting Employee
for a period of one (1) year following the termination of this Agreement shall
not apply to Employee if his employment is terminated by the Companies without
Cause or by Employee with Good Reason as defined in the Employment Agreement.
IN WITNESS WHEREOF, the Undersigned, intending to be legally bound, hereby
executes and delivers this Agreement this 1st day of October, 1999.
/s/Xxxxxxx Xxxxxxx
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XXXXXXX XXXXXXX
Witness
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Schedule A
EXEMPT INVENTIONS AND PROPRIETARY INFORMATION
Schedule B
EXEMPT AGREEMENTS AND OBLIGATIONS
Exhibit 2
In addition to the benefits set forth in the Employment Agreement, the
Employee shall be entitled to receive the following:
One Hundred Thousand (100,000) shares of Common Stock in the Company,
which shares shall accrue to the benefit of the Employee and shall be issued
in thirty-six (36) equal monthly installments commencing November 1, 1999.
The following additional terms and conditions shall apply to all shares
of Common Stock subject to this Exhibit 2:
1. All shares transferred and paid to Employee shall be restricted
within the meaning of Rule144 of the Securities Act of 1933, as
amended, and shall bear the appropriate legend on each certificate
as well as a legend describing the limitation on transferability
contained herein;
2. In the event the Company approves and implements a stock split or
other revaluation of the shares of Common Stock subject to this
Exhibit 2, the number of remaining shares of Common Stock to be
issued to the Employee shall be recalculated so that the Employee
shall receive the number of shares exactly equivalent to the value
of the shares set forth above; and,
3. In the event the Company is merged into or acquired by another
entity, or a majority interest in the Common Stock is sold or
otherwise transferred to another entity, or the Company authorizes
any other reorganization that in any way affects the marketability
of the shares of Common Stock subject to this Exhibit 2, all shares
of Common Stock remaining to be issued to the Employee shall
immediately vest in the Employee, and the Employee shall have the
right to sell or otherwise dispose of all or any portion of such
shares at his sole discretion and free of any restrictions.
