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Exhibit 6.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is dated as of June 1, 1999, between
DebitFone International, Inc., a Florida corporation ("DFI"), Satellite Control
Technology, Inc., a public Nevada corporation ("SATX"), the Parent Company,
both hereinafter referred to as the "Company", and Xxxxx Xxxxxxxx
("Employee").
WHEREAS, the Companies are presently in the business of selling and
reselling domestic and international telecommunications services; and
WHEREAS, Employee desires to become employed by the Company as Vice
President of Operations for the Company and the Company desire to employ
Employee in such capacity pursuant to the terms hereof, and
WHEREAS, in such capacity, Employee has agreed to be responsible for
planning and managing the operational aspects of the Company as more fully
provided herein, all subject to the direction of the Chief Operating Officer of
the Company.
NOW, THEREFORE, in consideration of the mutual promises and
conditions contained herein, and other good and valuable consideration, the
adequacy of which the parties hereby acknowledge, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Employment of Employee. The Company hereby employs Employee,
and Employee hereby accepts employment, as Vice President of Operations of the
Company upon the terms and conditions of this Agreement.
2. Term of Agreement. This Agreement shall remain in force and
effect for a three (3) year period commencing on June 1, 1999 (the "Employment
Date") and ending at the close of business on May 31, 2002, unless sooner
terminated pursuant to paragraph 9 below (the "Initial Term"). At the end of
the Initial Term, the Company may, in their sole discretion, extend the term of
this Agreement for up to three additional successive one-year periods (each
such one-year period referred to herein as a "Renewal Term") by providing
written notice to the Employee at least ninety (90) days prior to the
expiration of the Initial Term or of any Renewal Term, as applicable. (The
Initial Term together with any Renewal Term(s) granted by the Company is
sometimes collectively referred to herein as the "Term").
3. Employee's Duties. During the Term of this Agreement,
Employee shall serve as Vice President of Operations for the Company, and be
responsible for managing the day-to-day activities of the Company. All
activities including but not limited to the foregoing activities shall be
conducted by Employee under the direction of and subject to the control of the
Chief Operating Officer of DebitFone International, Inc. and Satellite Control
Technology, Inc.
Initials:
/s/ LB By: /s/ MJ
-------- --------
Employee Company
LB FINAL EMPLOYMENT AGREE 7-99.DOC
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4. Loyalty to the Company. Employee shall devote his full time,
attention and efforts to the business and affairs of the Company and to the
performance of his duties and responsibilities during the Term hereof. Employee
shall owe his full loyalty to the Company and shall not engage in any activity
or enter into any transaction that would or might constitute a conflict of
interest, or the appearance thereof, with the duties and loyalties owed by him
to the Company. Without limiting the foregoing, Employee agrees that during the
Term of this Agreement, Employee will not engage in any business activity other
than those duties described in this Agreement, whether or not such business is
pursued for gain or profit, or other pecuniary advantage. However, it is
understood by the Parties that Employee is currently assisting existing prepaid
cellular participants in creating technology and business solutions which
benefit those clients and will likely benefit the Company in some measurable
manner in the near future. Such assistance is acceptable within the terms of
this Agreement as long as it is performed on a non-interference basis with
Company business and does not negatively impact the Company's position, and
ability to compete, in the prepaid cellular marketplace. In addition, Employee
may invest his assets in such form or manner as will not require his services
in the operation of the affairs of the companies in which such investments are
made, provided that such investments are not wholly or in part based upon
confidential information obtained in his employment with the Company. If any
such investment is contemplated to be made with a competitor of the Company,
the specific nature and amount of the investment shall be disclosed to the
Company in writing prior to such investment and such investment may not be made
without the prior approval in writing of the Board of Directors of the Parent
Company.
5. Salary.
(a) Base Salary. In consideration of the performance by
the Employee of the duties and obligations contained in this Agreement, the
Company shall pay Employee an initial gross salary of $88,000 per year, payable
in accordance with the normal payroll practices of the Company. Any amounts
shall be prorated for periods less than a month. Salary payments shall be
subject to withholding and other applicable taxes and deductions. The
aforementioned initial salary will be subject to review by the Company, which
may decide, in their sole discretion to raise such salary. Such review shall
occur at least annually, on or about each Employment Date anniversary.
6. Bonus Eligibility
(a) Signing Bonus. Employee shall receive 50,000 shares
of the common stock of SATX upon the signing of this employment contract.
(b) Stock Options. In addition to the base salary
described in paragraph 5 above, Employee shall be eligible to receive an option
to purchase up to 50,000 shares of common stock of the common stock of SATX
annually commencing on the first anniversary date of this Agreement. The
exercise price of the options shall be ($0.50) per share in year one.
Thereafter, the exercise price of the options shall be as follows:
Year 2. Sixty percent (60%) of the trading price as of the
date of the grant.
Year 3. Seventy percent (70%) of the trading price as of
the date of the grant.
Year 4. Eighty percent (80%) of the trading price as of the
date of the grant.
Year 5. Ninety percent (90%) of the trading price as of the
date of the grant.
Initials:
/s/ LB By: /s/ MJ
-------- --------
Employee Company
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The actual number of shares awarded to Employee each year shall be dependent
upon the pre-tax profit of SATX. For example, should SATX meet its projected
pre-tax profit (as approved by the Board of Directors) for the year, Employee
shall be entitled to an option grant of 50,000 shares. However, if SATX's
pre-tax profit is only 50% of projections, then Employee shall be entitled to a
grant of 25,000 shares. Employee shall not be entitled to more than 50,000
shares if SATX exceeds the projection. The option shall fully vest upon the
date of the grant and shall expire if not exercised within five (5) years of
the date of the grant.
(c) Additional Bonus. The Employee may be eligible for
an additional quarterly Performance bonus equal to a range of twenty to forty
percent (20% - 40%) of Employee's annual base salary to be paid out, if earned,
on a quarterly basis after completion of each of the Company's fiscal quarters.
The calculation of earned bonus is based upon the Company's financial
performance against certain performance criteria described in Exhibit A to this
document (Company Projections). The threshold for enacting the bonus pool for a
specific quarter shall be Company attainment of eighty percent (80%) or more
performance against the applicable goals in Exhibit A. Exhibit A will be
officially revised for bonus calculation purposes, as required by changes in
business events and forecasts, only as approved by the Board of Directors of
SATX.
Each quarter's earned bonus will be calculated from the following sliding
scale:
Level of Company goal performance 80% 100% 120%
Payout % of Employee's annual salary 20% 30% 40%
If goals are achieved, and a bonus is earned for a quarter, Employee shall have
the option of receiving the bonus in cash or in common stock in the Parent
Company (SATX). If stock is chosen, the number of shares to be issued will be
calculated using eighty percent (80%) of the average market price of the shares
of the Company over the most recent thirty (30) days prior to issue date.
In order to compensate for variations in quarterly performance, and to
recognize the ability to make up for previous lesser performance, the quarterly
bonus calculation will be made from year-to-date Company data. Thus, within any
given performance year, a previous quarter's shortcoming can be offset by
subsequent performance improvement. The instant quarter's bonus payout is
therefore calculated as the year-to-date earned bonus less the cumulative bonus
paid previously during the applicable year.
As additional management responsibilities are assumed by Employee due to
acquisitions by SATX, projections for those acquired entities will be added to
the performance criteria in Exhibit A, and the size of the applicable bonus
pool for Employee will be increased accordingly, as approved by the SATX Board
of Directors.
7. Benefits. Employee shall be entitled to receive benefits made
available to other Executive officers within the Company consistent with the
policies and practices of the Company effected from time to time. As of the
Employment Date, these benefits include insurance benefits.
Initials:
/s/ LB By: /s/ MJ
-------- --------
Employee Company
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8. Business Expenses. Employee may incur expenses in connection
with the performance of his duties as Vice President of Operations for the
Company, including expenses for business travel, meals, lodging and similar
items. The Company will reimburse Employee for all such customary, reasonable
and necessary expenses upon Employee's periodic presentation of an itemized and
documented account of such expenditures and in accordance with the Company's
expense reimbursement policies, which are in effect all the time the expense is
incurred.
9. Termination.
(a) Termination by the Company.
i. For Cause. The Company may terminate the
Employee's employment with the Company at any time for "cause," which
termination shall be effective immediately upon written notice to Employee.
The Company shall pay base salary through the date of termination and have no
further obligations to Employee as of the date of termination. For purposes of
this Agreement, "cause" is defined to mean such act, omission or course of
conduct which the Companies determine is (1) a willful violation of any of the
provisions of this Agreement; (2) willful misconduct which is demonstrably
injurious to the Company, monetarily or otherwise; (3) the commission of a
felony involving the Company and/or its business and suggesting moral turpitude
on the part of the Employee, whether or not the Employee ultimately is
indicted, arraigned or convicted; (4) improper or unethical business activity,
including, but not limited to, the Employee's fraud, misappropriation,
embezzlement, dishonesty, unlawful harassment, or gross negligence; (5) lack of
sufficient effort or willful neglect in the performance of his duties; or (6)
inability to perform the essential functions of the job, even with reasonable
accommodation by the Company, due to disability of thirty days or more.
ii. Without Cause. The Company may terminate
the Employee's employment with the Company without cause, effective upon
thirty (30) days written notice to Employee. Employee shall be entitled to (a)
continuation of compensation as provided in Paragraph 5 & 6 through the
original term of employment agreement, and (b) COBRA benefits. In such event,
Employee, if requested by the Company, shall continue to render his services
and shall be paid his regular salary and receive his normal benefits up to the
effective date of termination. All stock options in employment agreement shall
be considered vested at the time of termination.
(b) Termination by Employee. Employee may terminate his
employment under this Agreement at any time upon thirty (30) days notice to the
Company. In such event, Employee, if requested by the Company, shall continue
to render his services and shall be paid his regular salary and receive his
normal benefits only up to the effective date of termination. The Company's
salary obligations to the Employee shall cease as of the effective date of
termination.
(c) Termination Upon Death. This Agreement shall
terminate automatically upon the death of Employee during the Term hereof, and
all salary payments shall immediately cease upon death.
Initials:
/s/ LB By: /s/ MJ
-------- --------
Employee Company
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10. Restrictive Covenants.
(a) Covenant Not To Compete. Employee acknowledges that
as Vice President of Operations, Employee shall be engaged, without limitation,
in, and performing the other duties set forth in Paragraph 3 herein. Employee
also acknowledges that the Companies are currently engaged in selling and
reselling domestic and international telecommunication service (the
"Services"). Employee agrees that, during the term of his employment and for a
period of one year after the expiration or termination of his employment with
the Company, whether such termination is voluntary or involuntary, with or
without cause, he shall not, either directly or indirectly, for himself or
through, on behalf of, or in conjunction with any other person or legal entity,
perform the same services for any other business engaged in providing directly
competitive Services.
(b) Non-Interference with Employees. During the term of
Employee's employment and for a period of one year after the expiration or
termination of his employment with the Company, whether such termination is
voluntary or involuntary, with or without cause, Employee will not, directly or
indirectly, on his own behalf or on behalf of or in conjunction with any person
or legal entity other than the Company, recruit, solicit, or induce or attempt
to recruit, solicit or induce any employee of the Company to become employed by
or to be engaged in a business engaged in providing the Services.
(c) Non-Solicitation Covenant. Employee agrees that
during the term of his employment and for a period of one year after the
expiration or termination of his employment by the Company, whether such
termination is voluntary or involuntary, with or without cause, Employee will
not, directly or indirectly, on his own behalf or on behalf of or in
conjunction with any person or entity other than the Company, actively solicit
the business or patronage of any of the clients, customers or accounts of the
Company served by Employee during the term of this Agreement.
(d) Non-Disclosure Covenants. Employee acknowledges that
as an integral part of the Company's business, the Company has developed, and
will develop, at a considerable investment of time and expense, plans,
procedures, methods of operation, methods of production, financial data, lists
of actual and potential customers, suppliers, marketing strategies, plans for
development and expansion, customer and supplier data, and other confidential
and sensitive information, and Employee acknowledges that the Company has
legitimate business interest in protecting the confidentiality of such
information. Employee acknowledges that as Vice President of Operations for the
Company, he will be entrusted with such information. Employee, therefore,
acknowledges a continuing responsibility with respect to the protection of the
information and agrees:
i. "Trade Secrets" shall be defined as
information, without regard to form, belonging to the Company or licensed by it
including, but not limited to, technical or nontechnical data, formulae,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product plans, or lists of actual
or potential customers of suppliers which is not commonly known by or available
to the public and which information: (a) derive economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons or entities who can obtain
economic value from their disclosure or use; and (b) are the subject of efforts
that are reasonable under the circumstances to maintain their secrecy.
Initials:
/s/ LB By: /s/ MJ
-------- --------
Employee Company
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ii. "Confidential Information" shall be
defined, as any information belonging to the Company or licensed by it other
than Trade Secrets with is material to the Company and not generally known by
the public.
iii. Employee will treat as confidential and
will not, without the prior written approval of the Company, use (other than in
the performance of his duties of employment with the Company), publish,
disclose copyright or authorize anyone else to use, publish, disclose or
copyright, either during the term of Employee's employment or at any time
subsequent thereto, any information which constitutes Trade Secrets of the
Company whether or not the Trade Secrets are in written or tangible form.
iv. Employee will treat as confidential and
will not, without the prior written approval of the Company, use (other than in
the performance of his duties of employment with the Company), publish
disclose, copyright or authorize anyone else to use, publish, disclose or
copyright, any Confidential Information either during the term of his
employment or for two (1) year after termination of employment, whether
voluntary or involuntary, with or without cause, and whether or not the
Confidential Information is in written or other tangible form.
v. All records, notes, files, drawings,
documents, plans and like items, and all copies thereof, relating to or
containing or disclosing Confidential Information or Trade Secrets of the
Companies which be made or kept by Employee or which are disclosed to or come
into the possession of Employee, shall be and remain the sole and exclusive
property of the Company. Upon termination of employment, Employee agrees to
deliver to the Company or its designee, the originals and all copies of any of
the foregoing.
11. Proprietary Rights In Developments. In the course of
rendering his services to the Company, Employee may conceive, create or develop
or invent ideas, concepts, methods of operation, processes, programs or other
matter or material, whether or not constituting an advance to, or an
improvement of, or pertaining to existing Company proprietary matter (all of
which are hereinafter referred to as "Developments"). All Developments shall
constitute Confidential Information (and may constitute Trade Secrets) and
shall be subject to all of the restrictions imposed on Employee pursuant to
this Agreement. In addition, all Developments and all rights therein throughout
the world constitute works made for hire and in all circumstances shall be and
remain the sole and exclusive property of the Company whether or not
protectible under any laws now known or hereafter applicable, including by not
limited to patent, copyright, trademark or trade secret laws.
(a) Assignment by Employee of All Rights in
Developments. Employee hereby assigns to the Company all rights throughout the
world, however, denominated (whether under patent, copyright, trademark, trade
secret or like or different laws), in all media now known or hereafter
recognized, in and to each such Development. This assignment is not intended to
derogate any rights the Company has as an author of a work made for hire. In
order to fully effectuate these provisions, Employee hereby represents and
warrants, that, with respect to each such Development: (i) to the extent of
Employee's contribution, all such matter is original and does not and will not
infringe or violate the rights of any other person or entity, and (ii) that
neither Employee nor anyone on his behalf have granted or will grant or purport
to grant to any other person or entity any rights, in whole or in part, in and
to such Developments.
Initials:
/s/ LB By: /s/ MJ
-------- --------
Employee Company
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(b) Cooperation. Employee shall, during and after
termination of Employee's employment, cooperate with the Company in the
prosecution or defense of any claims, litigation, or other proceedings
involving the Developments and provide such information and execute such
documents as the Company may reasonably request to confirm, implement or
enforce its rights in such Developments. The Company shall be responsible for
the expenses associated with the filing of any patent, copyright, trademark
or like applications.
12. Remedies for Breach. In the event of Employee's actual or
threatened breach of the provisions of Paragraphs 10 or 11, the Company, in
addition to all other rights, shall be entitled to an injunction-restraining
Employee therefrom. Nothing herein shall be construed as prohibiting the Company
form pursuing any other available remedy for such breach or threatened breach,
including the recovery of damages from Employee. This provision shall remain in
full force and effect in the event Employee should claim that the Company
violated any of the terms of this Agreement. In such event, Employee agrees to
pursue such claim against the Company independently of his covenants set forth
in such Paragraphs.
13. Governing Law. This Agreement shall be construed under,
governed by and enforced in accordance with the laws of the State of Florida,
not including its conflicts of law principles.
14. Right of Offset. In the event Employee violates any of the
terms or conditions of this Agreement, the Company shall have the right, in
addition to and not in lieu of all other rights at law or in equity, to offset
the amount of any damages caused by such breach or violation against any sums
due or to become due to Employee under the terms of this Agreement.
15. Notice. Any notice required or desired to be given under this
Agreement shall be deemed given in writing and hand-delivered or sent by
Certified mail to his address shown herein below in the case of Employee, or to
its principal office in the case of the Company.
16. No Waiver by Company. The waiver by the Company of a breach
of any provision of this Agreement by Employee shall not operate or be
construed as a waiver of any subsequent breach by Employee. No waiver shall be
valid unless in writing and signed by an authorized officer of the Company.
17. Assignment. Employee acknowledges that the services to be
rendered by him are unique and personal. Accordingly, Employee may not assign
any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of the Company under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
the Company.
18. Severability. Should any part of this Agreement for any
reason, be declared invalid by an arbitrator or a court of competent
jurisdiction, such decision or determination shall not affect the validity of
any remaining portion, and such remaining portion shall remain in force and
effect as if this Agreement had been executed with the invalid portion
eliminated; provided, that in the event of declaration of invalidity, the
provision declared invalid shall not be invalidated in its entirety, but shall
be observed and performed by the parties to the extent such provision is valid
and enforceable.
Initials:
/s/ LB By: /s/ MJ
-------- --------
Employee Company
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19. Complete Agreement. This Agreement shall constitute the
entire agreement between the parties hereto and shall supersede all previous
negotiations, commitments and writings with respect to Employee's employment.
Any subsequent alteration or modification to this Agreement must be made in
writing and signed by both parties.
EMPLOYEE ACKNOWLEDGES THAT HE HAS HAD THE OPPORTUNITY TO CONSULT WITH
AN ATTORNEY OR ANY OTHER INDIVIDUAL FROM WHOM HE WISHED TO OBTAIN ADVICE
CONCERNING THIS AGREEMENT. EMPLOYMENT STATES THAT HE HAS CAREFULLY READ THE
WITHIN AND FOREGOING "EMPLOYMENT AGREEMENT" AND KNOWS AND UNDERSTANDS THE
CONTENTS THEREOF AND THAT HE IS EXECUTING THE SAME AS HIS OWN FREE ACT AND
DEED.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
COMPANY: EMPLOYEE:
DEBITFONE INTERNATIONAL, INC. XXXXX XXXXXXXX
a Florida corporation
By: /s/ Xxxxxxx Xxxxxx /s/ Xxxxx Xxxxxxxx
----------------------------------- --------------------------------------
Xxxxxxx Xxxxxx
Its: President/CEO
SATELLITE CONTROL TECHNOLOGY, INC.,
a Nevada corporation
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Xxxxxxx Xxxxxx
Its: President/CEO
Initials:
/s/ LB By: /s/ MJ
-------- --------
Employee Company
LB FINAL EMPLOYMENT AGREE 7-99.DOC
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