EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 11th day of February 2000 between
U.S. Wireless Data, Inc., a Colorado corporation (the "Company"), and Xxxxxxx X.
Xxxxx, an individual who presently resides at 00 Xxxx Xxxxx, Xxxxxxxxx Xxxxxx,
Xxx Xxxx 00000 (the "Executive").
WHEREAS, the parties hereto wish to enter into an employment agreement to
document the employment of the Executive as Chief Financial Officer and Chief
Operating Officer of the Company, and to set forth certain additional agreements
between the Executive and the Company.
NOW, THEREFORE, in consideration of the mutual covenants, agreements and
representations contained herein, the parties hereto agree as follows:
1. TERM. The Company will employ the Executive, and the Executive will
serve the Company, under the terms of this Agreement for a term of two (2)
years, commencing on the date hereof, which term shall be subject to automatic
renewal for successive one-year terms unless either party notifies the other
party of its or his intent not to renew this Agreement (which non-renewal may be
for any or no reason by either party) at least ninety (90) days prior to the end
of the applicable term or renewal term. Notwithstanding the foregoing, the
Executives employment hereunder may be earlier terminated, as provided in
Section 4 hereof. The term of this Agreement, as in effect from time to time in
accordance with the foregoing, shall be referred to herein as the Term. The
period of time between the commencement and the termination of the Executives
employment hereunder shall be referred to herein as the Employment Period.
2. EMPLOYMENT.
a. EnhancedEnhancedPosition. The Company hereby employs the Executive
for the Employment Period as its Chief Financial Officer and Chief Operating
Officer on the terms and conditions set forth in this Agreement.
b. Authority and Duties. The Executive shall perform all duties and
functions and discharge all responsibilities as are customarily performed by the
Chief Financial Officer of a publicly-held company and, in addition, all duties,
functions and responsibilities specified by the Chief Executive Officer of the
Company to the extent such specifications are consistent with the Executives
position as Chief Financial Officer. The Executive shall report directly and be
responsible to the Chief Executive Officer of the Company. During the Employment
Period, the Executive shall devote his full business time, skill and efforts to
the business of the Company and use his best efforts in performing services for
the Company. The Executive shall work out of the Companys offices located in the
New York City metropolitan area; provided, however, the Executive shall be
required to travel in performing services under this Agreement and to provide
services to the Company from time to time at other locations to the extent
required by the Companys Board of Directors or Chief Executive Officer.
Executive will not be required to relocate his residence outside of the New York
City Metropolitan area.
3. COMPENSATION AND BENEFITS.
a. Salary. During the Employment Period, the Company shall pay to the
Executive, as compensation for the performance of his duties and obligations
under this Agreement, a base salary at the rate of $175,000 per annum, payable
in arrears in accordance with the normal payroll practices of the Company in
effect from time to time. The present normal payroll practices of the Company
provide for base salary payments not less frequently than twice each month. Such
base salary shall be subject to annual review after each year worked with the
first such review to take place during the first calendar quarter of 2001 with
respect to services performed from the date of this Agreement through February
10, 2001. Each party agrees that there has been no promise or inducement to
Executive that his base salary will be increased.
b. Annual Bonus. During the Employment Period, the Executive shall
have the opportunity to earn an annual bonus. The Company, through its Chief
Executive Officer, acting on behalf of the Company, and the Executive, shall
endeavor to mutually establish from time to time certain corporate and/or
individual performance goals for Executive, it being understood and agreed by
both parties to this Agreement that the Company and its officers shall not have
any liability to the Executive for or in respect of a bonus or the failure to
pay a bonus if the parties fail to agree on said goals. Without in any way
limiting the discretion of the Chief Executive Officer of the Company to
determine whether to pay or not pay bonuses and to determine the amount of any
such bonuses, the Company has set a target bonus of $75,000 for Executive for
each full year (February 11 of any year through February 10 of the immediately
succeeding year) worked for the Company. Such bonuses, if and to the extent
payable, will be paid after the expiration of each calendar year by the end of
the first calendar quarter of the next year with the first such bonus payable
after February 11, 2001.
c. Equity Participation. The Companys Board of Directors has granted
the Executive an option to purchase shares of common stock of the Company, which
options will be subject to option agreements between the Company and the
Executive to be entered into and, if applicable, the Companys qualified stock
option plan.
d. Other Benefits. During the Employment Period, the Executive shall
be entitled to participate in all of the employee benefit plans, programs and
arrangements of the Company in effect during the Employment Period which are
generally available to senior executives of the Company, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans, programs and arrangements, as amended from time to time. In addition,
during the Employment Period, the Executive shall be entitled to fringe benefits
and perquisites comparable to those generally available to all other senior
executives of the Company, as amended from time to time.
e. Business Expenses. During the Employment Period, the Company shall
reimburse the Executive for all documented reasonable business expenses incurred
by the Executive in the performance of his duties under this Agreement, in
accordance with the Companys policies as in effect from time to time.
f. Indemnification. During the Employment Period, the Company shall
indemnify Executive for losses suffered by Executive arising out of third party
lawsuits relating directly to his employment by the Company to the extent such
indemnification is permitted by applicable Colorado law and consistent with and
in accordance with the Companys articles or certificate of incorporation and
by-laws; provided, however, Executive shall promptly notify Company of any such
lawsuit and cooperate with Company in connection therewith.
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4. TERMINATION OF EMPLOYMENT.
a. Termination for Cause. The Company may at any time terminate the
Executives employment hereunder for cause. For purposes of this Agreement and
subject to the Executives opportunity to cure to the extent provided in Section
4.c. hereof, the Company shall have cause to terminate the Executives employment
hereunder if such termination shall be the result of:
(1) Fraud in connection with the Executive's performance
hereunder;
(2) Dishonesty in connection with the Executive's performance
hereunder except to the extent the Executive proves such dishonesty
was both unintentional and covered only a matter which was de minimis;
(3) The failure by the Executive to perform his duties hereunder
or any other breach by Executive of this Agreement;
(4) The failure by the Executive to follow the lawful directions
of or policies established by the Board of Directors or the Chief
Executive Officer of the Company unless the tasks are of the type
which could not reasonably be required of Executive pursuant to this
Agreement;
(5) The conviction for, or plea of nolo contendere to, a charge
of commission of a felony or crime involving moral turpitude;
(6) The Executive's performance of any services under this
Agreement while under the influence of drugs, alcohol or any
controlled substance except, with respect to controlled substances
only, to the extent Executive proves (a) taking any controlled
substance was prescribed by a medical doctor to treat a medical
problem, (b) such controlled substance was used only in accordance
with said doctor's instructions, and (c) taking such controlled
substance does not and did not adversely affect Executive's job
performance during more than a de minimis period of time; or
(7) The Executive acting in a manner which damages or could
reasonably be expected to damage the business or reputation of the
Company.
The parties agree that each of the foregoing breaches, events, crimes,
behaviors, acts, inactions or occurrences constitutes independent grounds for
"cause" and the failure of any breach, event, crime, behavior, act, inaction or
occurrence to constitute "cause" under any paragraph of this Section 4.a. shall
not prevent that same breach, event, crime, behavior, act, inaction or
occurrence from constituting "cause" under a different paragraph of this Section
4.a.
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b. Termination for Good Reason. The Executive shall have the right at
any time to terminate his employment with the Company and for any reason upon
twenty (20) days prior written notice. For purposes of this Agreement and
subject to the Companys opportunity to cure as provided in Section 4.c. hereof,
the Executive shall have good reason to terminate his employment hereunder only
if such termination shall be the result of:
(1) A breach by the Company of the compensation and benefits
provisions set forth in Section 3 hereof; or
(2) A material breach by the Company of any other material term of
this Agreement.
c. Notice and Opportunity to Cure. It shall be a condition precedent
to the Companys right to terminate the Executives employment for cause and the
Executives right to terminate his employment for good reason that (1) the party
seeking the termination shall first have given the other party written notice
stating with reasonable specificity the reason for the termination (breach) and
(2) if such breach is susceptible of cure or remedy, a period of ten (10) days
from and after the giving of such notice shall have elapsed without the
breaching party having effectively cured or remedied such breach during such
10-day period, unless such breach cannot be cured or remedied within ten (10)
days, in which case the period for remedy or cure shall be extended for a
reasonable time (not to exceed an additional ten (10) days) provided the
breaching party has made and continues to make a diligent effort to effect such
remedy or cure. Notwithstanding anything contained in this Agreement, the
parties agree that any breach, event, crime, behavior, action, inaction or
occurrence constituting cause (or which would constitute cause after the giving
of notice) under Section 4.a.(1), (2), (5), (6) or (7) shall not under any
circumstances be susceptible or capable of cure or remedy under this Section
4.c.
d. Termination Upon Death or Permanent and Total Disability. The
Employment Period shall automatically without further action be terminated by
the death of the Executive. The Employment Period may be terminated by the
Company at any time if the Executive shall be rendered incapable of performing
his duties to the Company at the same level by reason of any medically
determined physical or mental impairment that (i) can reasonably be expected to
result in death or (ii) can reasonably be expected to last or has lasted for a
period of three (3) or more consecutive months or for a period of four (4) or
more months during any twelve (12) month period from the first date of the
Executives impairment or absence or projected absence due to the disability
(Disability). If the Employment Period is terminated by reason of a Disability
of the Executive, the Company shall give thirty (30) days advance written notice
to that effect to the Executive.
5. CONSEQUENCES OF TERMINATION.
a. Termination Without Cause or for Good Reason. In the event of
termination of the Executives employment hereunder by the Company without cause
(other than upon death or Disability or non-renewal) or by the Executive for
good reason (each as defined in Section 4 hereof), subject to Section 8 the
Executive shall be entitled to only the following pay and benefits:
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(1) Severance Pay. Executive shall receive severance payments for a
150-day period after the termination date (the "Severance Period") in
regular payroll increment payments with each such payment to be equal to
the base salary payments which would have been received under this
Agreement on each such date if Executive's employment had not been
terminated. Executive shall also receive, at the time bonuses are otherwise
payable under this Agreement, for services performed during the year of
termination, a prorated portion of the targeted annual bonus of $75,000,
with the prorated bonus being equal to (a) $75,000 multiplied by the number
of days worked during the year the Executive was terminated, divided by (b)
the actual number of days in the year. The parties agree that for purposes
of this Section 5.a.(1), any year shall commence on February 11 of the
applicable year and terminate on February 10 of the immediately succeeding
year; and
(2) Benefits Continuation. Continuation for the Severance Period of
coverage under the group medical care, disability and life insurance
benefit plans or arrangements in which the Executive is participating at
the time of termination; provided, however, that the Company's obligation
to provide such coverages shall be terminated if the Executive obtains
comparable substitute coverage from another employer at any time during the
Severance Period. The Executive shall be entitled, at the expiration of the
Severance Period, to elect continued medical coverage in accordance with
Section 4980B of the Internal Revenue Code of 1986, as amended (or any
successor provision thereto).
b. Other Terminations. In the event of termination of the Executives
employment hereunder for any reason other than (a) without cause or (b) for good
reason (i.e., termination for death, Disability, with cause or without good
reason), or if Executive makes the election provided for in Section 8, or if the
Term is not renewed, the Executive shall be paid base salary only through the
date of termination or non-renewal, and Executive shall not be entitled to any
severance, bonus or other pay, or any benefits continuation rights, except for
benefits continuation rights as may otherwise be provided (e.g., Cobra benefits)
under the applicable benefit plans relating to the Executive; provided, however,
that upon termination for death or Disability, the Company in its sole and
absolute discretion, may consider granting to Executive or his estate a pro
rated bonus of up to the amount provided in connection with a termination
without cause (but Company shall have no obligation to grant any such bonus).
6. CONFIDENTIALITY. The Executive agrees that he shall not at any time
during the Term hereof or at any time thereafter for any reason, in any fashion,
form or manner, either directly or indirectly, divulge, disclose or communicate
to any person, firm, corporation or other business entity, in any manner
whatsoever, any confidential information or trade secrets concerning the
business of the Company, including, without limiting the generality of the
foregoing, the techniques, methods or systems of its operation or management,
any information regarding its financial matters, or any other information
concerning the business of the Company, its manner of operation, its plans or
other data. The provisions of this Section 6 shall not apply to (i) information
that is public knowledge other than as a result of disclosure by the Executive
in breach of this Section 6; or (ii) information disclosed by Executive under a
requirement of law or as directed by applicable legal authority having
jurisdiction over the Executive.
7. INVENTIONS. The Executive is hereby retained in a capacity such that the
Executives responsibilities include the making of technical and managerial
contributions of value to the Company. The Executive hereby assigns to Company
all right, title and interest in such contributions and inventions made or
conceived by the Executive alone or jointly with others during the Employment
Period which relate to the business of the Company. This assignment shall
include, without limitation, (a) the right to file and prosecute patent
applications on such inventions in any and all countries, (b) the patent
applications filed and patents issuing thereon, and (c) the right to obtain
copyright, trademark or trade name protection for any such work product. The
Executive shall promptly and fully disclose all such contributions and
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inventions to the Company and assist the Company in obtaining and protecting the
rights therein (including patents thereon), in any and all countries; provided,
however, that said contributions and inventions will be the property of Company,
whether or not patented or registered for copyright, trademark or trade name
protection, as the case may be.
8. NON-COMPETITION. The Executive agrees that he shall not during the
Employment Period and, if applicable, the Severance Period, without the approval
of the Board of Directors of the Company, directly or indirectly, alone or as
partner, joint venturer, officer, director, employee, consultant, agent,
independent contractor, stockholder or otherwise (other than as provided below),
engage in any "Competitive Business" within the United States. For purposes of
the foregoing, the term "Competitive Business" shall mean any business involved
in development, marketing, sale or support of products or services (a) which can
reasonably be expected to cause customers not to use the Company's or any of its
subsidiaries' or affiliates' products or services or (b) which are similar to or
competitive with products or services provided or supplied by the Company or any
of its subsidiaries or affiliates. Notwithstanding the foregoing, the Executive
shall not be prohibited during the non-competition period applicable above from
acting as a passive investor by owning not more than one percent (1%) of the
issued and outstanding capital stock of any publicly-held company. The
Executive, at his option, may elect to eliminate the above restrictions in this
Section 8 only during the Severance Period but any such election shall, without
further action, be deemed an automatic and irrevocable relinquishment by
Executive and termination of all of his rights to pay and benefits under Section
5.a. During the Employment Period and the Severance Period, if applicable, and
for a period of one (1) year after the later of expiration of the Employment
Period and the Severance Period, the Executive shall not, without the prior
written consent of the Board of Directors of the Company, directly, or
indirectly, alone or as partner, joint venturer, officer, director, employee,
consultant, agent, independent contractor, stockholder or otherwise, (a) solicit
or induce any employee, independent contractor or consultant of the Company or
any current or future subsidiary or affiliate thereof to terminate or reduce his
or her employment or engagement with the Company or any current or future
subsidiary or affiliate thereof or (b) solicit the business of or any business
from any current or future customer or supplier to the Company or any current or
future subsidiary or affiliate thereof or induce any such customer or supplier
not to do business with or reduce its business transactions with the Company or
any subsidiary or affiliate thereof.
9. BREACH OF RESTRICTIVE COVENANTS; SEVERABILITY. The parties hereto intend
all provisions of this Agreement to be enforced to the fullest extent permitted
by law. The parties agree that Sections 6, 7 and 8 are reasonable and necessary
to protect the Companys interests and properties and that a breach or violation
of Sections 6, 7 or 8 hereof will result in immediate and irreparable injury and
harm to the innocent party, who shall have, in addition to any and all remedies
of law and other consequences under this Agreement, the right to an injunction,
specific performance or other equitable relief to prevent the violation of the
covenant or agreement hereunder. The parties agree that each of such covenants
and agreements is separate, distinct and severable not only from the other of
such covenants and agreements but also from the other and remaining provisions
of this Agreement; that the unenforceability of any such covenant or agreement
shall not affect the validity or enforceability of any other such covenants or
agreements or any other provision or provisions of this Agreement. Should a
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court of competent jurisdiction determine that the scope of any provision of
this Agreement is too broad to be enforced as written, the parties intend that
the court should reform the provision to such narrower scope as it determines to
be enforceable. If, however, any provision of this Agreement is held to be
illegal or unenforceable or by its severance, invalid or unenforceable under
present or future law, such provision shall be fully severable from this
Agreement, this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision were never a part hereof and the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance.
10. NOTICE. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given within one business day of dispatch if
sent by hand delivery or reputable overnight courier, addressed as follows:
a. If to the Company, to:
U.S. Wireless Data, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
b. If to the Executive, to:
Xxxxxxx X. Xxxxx
00 Xxxx Xxxxx
Xxxxxxxxx Xxxxxx, XX 00000
or to such other respective addresses as the parties hereto shall designate to
the other by like notice, provided that notice of a change of address shall be
effective only upon receipt thereof.
11. JURISDICTION; VENUE; LEGAL FEES; ETC.
a. Executive hereby irrevocably consents to the exclusive jurisdiction of any
State or federal court located within the SOUTHERN DISTRICT of New York OR NEW
YORK COUNTY in connection with any dispute or legal proceeding arising under
this Agreement. Executive hereby waives any objection that it may have to the
conduct of any action or proceeding in any such court based on improper venue or
forum non conveniens, waives personal service of any and all process upon it,
and consents that all service of process may be made by mail or courier service
directed to it at the address designated for it set forth in this Agreement and
that service so made shall be deemed to be completed upon the earlier of actual
receipt or ten (10) days after the same shall have been posted. Each of the
parties hereby waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any litigation directly or
indirectly arising out of, under or in connection with this Agreement. Each of
the parties certifies that no representative, agent or attorney of either party
has represented, expressly or otherwise, that the other would not, in the event
of litigation, seek to enforce the foregoing waivers.
b. The prevailing party in any proceeding brought under this Agreement shall be
reimbursed by the other party for all costs, fees and expenses, including
without limitation, attorneys fees and expenses, incurred by such prevailing
party in preparation for, in the investigation of, and/or otherwise directly or
indirectly in connection with any such proceeding.
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12. WAIVER OF BREACH. Any waiver of any breach of the Agreement shall not
be construed to be a continuing waiver or consent to any subsequent breach on
the part either of the Executive or of the Company.
13. NON-ASSIGNMENT; SUCCESSORS. Executive may not assign or in any way
transfer his rights or delegate or in any way transfer his duties or obligations
under this Agreement. This Agreement shall inure to the benefit of the
successors and assigns of the Company and this Agreement shall inure to the
benefit of and be binding upon the heirs, representatives, estate and successors
of the Executive.
14. WITHHOLDING OF TAXES. All payments required to be made by the Company
to the Executive under this Agreement shall be subject to the withholding of
such amounts, if any, relating to tax, and other payroll deductions as the
Company may reasonably determine it should withhold pursuant to any applicable
law or regulation or as agreed to by Executive and Company.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
16. GOVERNING LAW. Except as set forth in Section 3.f., this Agreement
shall be construed, interpreted and enforced in accordance with the laws of the
State of New York, without giving effect to the conflict of law principles
thereof. The parties have selected a New York choice of law for this Agreement
because the Company is relocating its offices to New York.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement by
the Company and the Executive with respect to the subject matter hereof (except
with respect to the stock options referred to in Section 3.c. which shall not be
governed by this Agreement) and supersedes any and all prior agreements or
understandings between the Executive and the Company with respect to the subject
matter hereof, whether written or oral. This Agreement may be amended or
modified only by a written instrument executed by the Executive and the Company.
18. CAPTIONS. Paragraph captions contained in this Agreement are inserted
only as a matter of convenience and for reference and in no way define, limit or
extend or describe the scope of this Agreement or the intent of any provision
hereof.
19. LEGAL COUNSEL. Each party hereto has retained counsel in connection
with the drafting and negotiation of this Agreement . Each party hereby waives
any right, claim or defense he may have that any provision of this Agreement or
that any provision thereof is unenforceable, illegal, invalid or unconscionable
arising out of or relating to his failure to retain counsel in connection with
this transaction.
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20. AGREEMENT NOT TO BE CONSTRUED AGAINST DRAFTSPERSON. This Agreement
shall be construed without giving effect or regard to any principle that a
contract should be construed against its draftsperson.
IN WITNESS WHEREOF, the parties have executed this Agreement as of February
11, 2000.
U.S. WIRELESS DATA, INC.
By:
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Name: Xxxx Xxxxxxx
Title: President
--------------------------------
Xxxxxxx X. Xxxxx
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