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Exhibit 10.44
EMPLOYMENT AND NON-DISCLOSURE AGREEMENT
THIS EMPLOYMENT AND NON-DISCLOSURE AGREEMENT ("Agreement") is made,
entered into and effective as of this 1st day of September, 1996, by and
between UStel, Inc., ("Employer"), and Xxx Xxxxxxx, an individual ("Employee"),
with reference to the following facts:
R E C I T A L S
WHEREAS Employee previously was engaged by Employer as an independent
contractor from January 1, 1994 through December 31, 1995 (the "Independent
Agent Relationship");
WHEREAS, pursuant to the Independent Agent Relationship, Employee was to
receive, through December 31, 1995, commissions as his primary compensation from
Company for the independent contractor services he had been providing;
WHEREAS, the parties have agreed to terminate the Independent Agent
Relationship, (and any and all agreements for payment of commissions) effective
as of December 31, 1995 and to employ Employee as of January 1, 1996;
WHEREAS the parties hereto wish to formalize the employment
relationship as more fully set forth herein;
WHEREAS, as a result of both Employee's employment with Employer, and
the Independent Agent Relationship, Employee has acquired knowledge of
Employer's trade secrets, including confidential information concerning product
and service marketing plans and strategy, pricing policies, customer needs and
peculiarities, and customer lists and detailed information regarding Employer's
technology incorporated in Employer's products and services (the "Trade
Secrets");
WHEREAS, Employer desires that Employee be employed as set forth
herein, such employment to become effective on the date first set forth above;
and
WHEREAS, Employee is willing to be employed by Employer as described
under the terms and conditions herein stated.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, it is hereby agreed by
and between the parties hereto as follows:
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1. Employment, Services, and Duties
1.1 Employer hereby employs Employee and Employee hereby agrees to
perform the services of Director of International Business Development, with
the duties consistent therewith. Employee agrees to devote all of his efforts,
and shall devote a minimum of forty hours (40) per week (during regular
business hours) to rendering the services for which Employee has been hired.
Employee shall not engage in any other activity which conflicts with or
otherwise might be deemed a business opportunity of Employer during the term of
this Agreement. Employee shall not engage in any other activity which conflicts
with or otherwise might be deemed a business opportunity of Employer during the
term of this Agreement. Employee shall render his services to Employer by and
subject to the instructions and directions of Employer's Chief Executive
Officer to whom Employee shall directly report.
2. Term and Termination
2.1 Unless sooner terminated pursuant to Paragraph 2.2 hereof,
Employee's employment shall commence on the date first set forth above and
shall continue through December 31, 1997 unless extended by the mutual written
agreement of Employer and Employee (the "Term").
2.2 Employee's employment shall terminate prior to the expiration
of the Term upon the happening of any of the following events:
(a) Upon the death of Employee;
(b) For cause by the Employer, that is to say only:
(i) if Employee is convicted of (or pleads nolo
contendere to) or at any time prior to employment by Employer, has been
convicted of (or pled nolo contendere to) a crime of dishonesty or breach of
trust or crime leading to incarceration of more than ninety (90) days
(including, without limitation, embezzlement or theft from Employer) or the
payment of a penalty or fine of $10,000 or more;
(ii) upon a determination by Employer that Employee
has engaged in willful misconduct in the performance of his duties under this
Agreement or has refused to perform the services which he has been hired to
perform, or has committed an act of fraud, theft or dishonesty against Employer;
(iii) if Employee engages or participates, in any
manner, in any business which competes with or would otherwise be deemed a
business opportunity of Employer;
(iv) if Employee has materially breached any of the
terms of this Agreement or any other material legal obligation to Employer
including, without limitation, a breach of trust or fiduciary duty involving
Employer or a material violation of policies or procedures of Employer and has
not cured any such breach within thirty (30) days after having
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been given written notice thereof by Employer; or
(v) any determination of "cause" as used in this
Section 2.2(b) shall be made only in good faith by an affirmative majority vote
of the Board of Directors of the Employer;
(d) By mutual agreement between Employer and Employee;
2.3 Except for the remaining obligations set forth in Sections 7,
8, 9 and 10 herein, in the event that Employee's employment is terminated
pursuant to Sections 2.2(a), (b), (c) or (d) herein, neither Employer or
Employee shall have any remaining duties or obligations hereunder, except that
Employer shall pay to Employee, or his representatives, on the date of
termination of employment ("Termination Date"),
(a) such compensation as is due pursuant to Section 3.1(a)
herein, prorated through the Termination Date; and
(b) expense reimbursements due and owing to Employee as of
the Termination Date.
2.4 There is no Section 2.4.
2.5 There is no Section 2.5.
2.6 There is no Section 2.6.
2.7 This Agreement shall not be terminated by any:
(a) Merger, whether the Employer is or is not the surviving
corporation; or
(b) Transfer of all or substantially all of the assets or
capital stock of the Employer.
2.8 In the event of any merger, transfer of assets or capital
stock, dissolution, liquidation, or consolidation, the surviving corporation or
transferee, as the case may be, shall be bound by and shall have the benefits
of this Agreement, and the Employer shall take all action to ensure that such
corporation or transferee is bound by the provisions of this Agreement.
3. Compensation
3.1 As the total consideration for the services which Employee
agrees to render hereunder, Employee is entitled to the following:
(a) A monthly salary ("Salary") of Eight Thousand Dollars
($8,000)
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payable on a monthly basis in arrears not later than five (5) days after the
end of each month subsequent to the first month of this Agreement;
(b) Employee shall be entitled to standard vacations
based on number of years of employment with Employer. Employee's vacations
shall be under Employer's usual policies applicable to all employees.
(c) Such other benefits as the Board of Directors of
Employer, in its sole discretion, may from time to time provide.
3.2 Employer shall have the right to deduct from the
compensation due to Employee hereunder any and all sums required for social
security and withholding taxes and for any other federal, state, or local tax
or charge which may be in effect or hereafter enacted or required as a charge
on the compensation of Employee. At Employee's option, all compensation and
expense advances shall be sent by wire transfer to Employee's bank account in
Israel.
3.3 The commission agreement previously entered into between
the parties shall be deemed terminated as of December 31, 1995.
3.4 The parties agree that as of August 31, 1996, Employee was
owed, in total, the sum of $23,250.00 for services rendered both under the
Independent Agent Relationship and as an employee, which amount remains due and
owing (the "Past Due Compensation"), together with compensation pursuant to
this Agreement for September and October 1996, in three (3) equal monthly
installments of $13,083.00 each, on September 20, 1996, October 20, 1996 and
November 20, 1996.
4. Options
4.1 Employee shall be entitled to participate in either
Employer's 1993 Stock Option Plan or a separate plan consistent herewith (in
which case this Section 4 shall constitute such separate plan), pursuant to
which Employee shall receive the following incentive stock options in year one
of the Agreement:
(a) An option to purchase up to 100,000 shares of
Employer's common stock, at an exercise price of Five Dollars ($5.00) per
share, which shall be deemed to have vested on October 1, 1996. Such option
shall have a five year term notwithstanding any earlier termination;
(b) All shares derived from the exercise of options
granted pursuant to this Section 4.1 will be restricted and subject to Rule
144. The options granted hereunder shall be non-transferable except by will or
descent to the estate of Employee.
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(c) The aggregate number of shares subject to the options
granted pursuant to this Section 4.1 shall be proportionately adjusted for any
increase or decrease in the number of outstanding shares of Stock of Employer
resulting from a subdivision or consolidation of shares or any other capital
adjustment or the payment of a stock dividend or any other increase or decrease
in the number of such shares effected without the Employer's receipt of
consideration therefor in money, services or property.
5. Expenses
5.1 Subject to the limitations set forth in Paragraph 5.2 above,
Employer shall reimburse Employee for all travel, lodging, office,
entertainment and other miscellaneous out-of-pocket expenses reasonably
incurred by him in connection with the performance of the services to be
rendered hereunder. Employee shall be required to obtain Employer's prior
written consent for any expense or aggregate expenses exceeding $500.00 in any
given month. Such reimbursement shall be promptly made upon presentation to
Employer, provided that:
(a) Each such expenditure is of a nature qualifying it as a
proper deduction of the Federal and State Income Tax Return of Employer; and
(b) Employee furnishes to Employer adequate records and other
documentary evidence required by Federal and State statutes and regulations
issued by the appropriate taxing authorities for the substantiation of each
such expenditure as an income tax deduction.
5.2 Employer shall provide Employee with office and related support
in an amount not to proceed $2,500.00 per month.
6. Section 6 Intentionally Omitted.
7. Non-Competition
(a) During the term of this Agreement, Employee shall not, directly
or indirectly, engage or participate in, prepare or set up, assist or have any
interest in any person, partnership, corporation, firm, association, or other
business organization, entity or enterprise (whether as an employee, officer,
director, agent, security holder, creditor, consultant or otherwise) that
engages in any activity, which is the same as, similar to, or competitive with
any activity now engaged in by Employer or in any way relating to the business
currently conducted by Employer in those geographic areas where Employer
conducts its business.
(b) Nothing contained in this Agreement shall be deemed to preclude
Employee from purchasing or owning, directly or beneficially, as a passive
investment, one percent (1%)
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or less of any class of a publicly traded security of any entity, if he does not
actively participate in or control, directly or indirectly, any investment or
other decisions with respect to such entity.
8. Confidentiality
Employee shall keep all Trade Secrets confidential; use Trade Secrets only
in the course of his duties hereunder; maintain in trust, as Employer's
property, all documents concerning Employer's business, including his own work
papers of any kind including telephone directories and notes, and any and all
copies thereof in his possession or under his control; and transfer to Employer
all documents that belong to Employer and any and all copies that are in his
possession or under his control when his Employment terminates, or at any other
time upon request by Employer.
9. Injunctive Relief
Employee hereby acknowledges and agrees that it would be difficult to fully
compensate Employer for damages resulting from the breach or threatened breach
of Sections 5 and 7 herein and, accordingly, that Employer shall be entitled to
temporary and injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions to enforce such Sections
without the necessity of proving actual damages therewith. This provision with
respect to injunctive relief shall not, however, diminish Employer's right to
claim and recover damages or enforce any other of its legal and/or equitable
rights or defenses.
10. Severable Provisions
The provisions of this Agreement are severable and if any one or more
provisions may be determined to be illegal or otherwise unenforceable, in whole
or in part, the remaining provisions, and any partially unenforceable provisions
to the extent enforceable, shall nevertheless be binding and enforceable.
11. Binding Agreement
This Agreement shall inure to the benefit of and shall be binding upon
Employer, its successors and assigns.
12. Captions
The Section captions are inserted only as a matter or convenience and
reference and in no way define, limit or describe the scope of this Agreement or
the intent of any provisions hereof.
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13. Entire Agreement
This Agreement contains the entire agreement of the parties
relating to the subject matter hereof, and the parties hereto have made no
agreements, representations or warranties relating to the subject matter of
this Agreement that are not set forth otherwise herein. This Agreement
supersedes any and all prior agreements, written or oral, between Employee and
Employer and its affiliates. No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto and unless such writing
is made by an executive officer of Employer. The parties hereto agree that in
no event shall an oral modification of this Agreement be enforceable or valid.
14. Governing Law
This Agreement shall be governed and construed in accordance with
the laws of the State of California. Any action arising hereunder shall be
brought in the appropriate court with venue in Los Angeles, California.
15. Notices
All notices and other communications under this Agreement shall be
in writing (including, without limitation, telegraphic, telex, telecopy or
cable communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered by hand or by a nationally recognized courier service guaranteeing
overnight delivery to a party at the following address (or to such other
address as such party may have specified by notice given to the other party
pursuant to this provision):
If to the Employer to:
Xxxxxx X.X. Xxxxxx, President
UStel, Inc.
0000 Xxxxx Xxxxxxx Xxxx., Xxx 000
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Employee, to:
Xxx Xxxxxxx
00 Xxxx Xxxxxx, Xxxx 0
Xxx Xxxx, Xxxxxx
Telephone: 000-000-0-000-0000
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All such notices and communications shall, when mailed, telegraphed, telexed,
telecopied, cabled or delivered, be effective three days after deposit in the
mails, delivered to the telegraph company, confirmed by telex answerback,
telecopied with confirmation of receipt, delivered to the cable company,
delivered by hand to the addressee or one day after delivery to the courier
service.
16. Attorney's Fees
In the event that any party shall bring an action or proceeding
in connection with the performance, breach and interpretation hereof, then the
prevailing party in such action as determined by the court or other body having
jurisdiction shall be entitled to recover from the losing party in such
action, as determined by the court or other body having jurisdiction, all
reasonable costs and expense of litigation or arbitration, including reasonable
attorney's fees, court costs, costs of investigation and other costs reasonably
related to such proceeding.
IN WITNESS WHEREOF, this Employment Agreement is executed as of the day
and year first above written.
"EMPLOYER"
USTEL, INC.
By: ______________________________
Xxxxxx X.X. Xxxxxx
ITS: President/CEO
"EMPLOYEE"
__________________________________
Xxxxx Xxxxxxx
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