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EXHIBIT 10.1(c)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of March,
1996 (the "Effective Date"), by and between STARTRONIX USA, INC., a Delaware
corporation (the "Company"), and XXXXXX XXXXXXXX XXXXX, a resident of the State
of Arizona ("Executive"). In consideration of the employment by the Company and
of the compensation and other remuneration paid, and to be paid, by the Company
and received by Executive for such employment, and for other good and valuable
consideration, the receipt and sufficiency of which is here acknowledged by
Executive, it is agreed by and between the parties hereto as follows:
1. Employment. The Company agrees to employ Executive as its President
and Chief Operating Officer and Executive agrees that he will devote his
productive time, skill, energy, knowledge and best efforts during the period of
his employment to such duties as the President and Chief Executive Officer and
the Board of Directors of the Company may reasonably assign to him, and he will
faithfully and diligently endeavor to the best of his ability to further the
best interest of the Company during the period of employment. Certain of such
duties are summarized in Schedule A. However, Executive is not prohibited from
(a) making personal investments in any other businesses, as long as those
investments do not require Executive to participate in the operation of the
companies in which he invests and such other businesses are not in competition
with the Company or any of its subsidiaries or (b) from participating as a Board
member of a not for profit entity or of a non-competing business enterprise,
provided such activities do not impinge on the time available to provide his
services to Company.
2. Terms. Executive's employment will begin on the date hereof and will
end on February 28, 2001, a term of five (5) years, unless earlier terminated in
accordance with the terms hereof or extended upon the mutual consent of both
parties.
3. Compensation. On the terms and subject to the conditions of this
Agreement, (i) the Company will pay Executive a salary and a bonus determined in
accordance with Schedule B, and (ii) the Company will provide Executive with
three weeks of vacation per year and other employee benefits consistent with
those provided by the Company to similarly situated executives. Such additional
benefits shall include medical (including hospital) and dental insurance for
Executive and his dependents. However, the parties acknowledge that at present
the Company does not have medical insurance for its key employees. Accordingly,
until such time as the Company obtains and makes available to Executive medical
insurance for Executive and his dependents comparable to that afforded to
Executive by his prior employer, the Company shall pay Executive $500 per month
to allow him to pay for such insurance. Executive will be entitled to
reimbursement of all expenses incurred by him in the performance of his duties,
in accordance with the Company's normal policy, subject to presenting of
appropriate vouchers.
4. Termination. (a) Notwithstanding anything to the contrary contained
in this Agreement, the Company may terminate Executive's employment (i) upon
thirty (30) days'
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written notice to Executive, without cause or reason or (ii) without notice,
with "cause" (as hereinafter defined). In addition, this Agreement will
terminate automatically upon the death of the Executive. "Cause" means any act
or omission by Executive which, in the reasonable judgment of the Company, is
inimical to the Company's best interests. In the event of any dispute between
the Company and Executive as to whether the Company's basis for such termination
constituted "cause," Executive will have the burden of proving that the
Company's determination was unreasonable.
(b) If the Company terminates Executive's employment without cause
(including a resignation by Executive upon or following breach or constructive
termination by the Company under applicable law), the Company shall thereupon
pay Executive in a lump sum (in addition to base salary and any bonus, as
provided in Schedule B, during the thirty (30) day notice period) severance pay
in an amount equal to:
(i) one month's base salary, if termination occurs
prior to September 1, 1996;
(ii) five months' base salary, if termination
occurs on or after September 1, 1996 but before February 29, 1997; or
(iii) six months' base salary, if termination occurs
on or after February 28, 1997 but before February 28, 2001.
(c) If termination of Executive's employment shall occur by reason of
the death or resignation of Executive (except for a resignation upon or
following breach or constructive termination by the Company under applicable
law), or because the Company terminates Executive's employment for "cause" (as
hereinafter defined), no severance pay or benefits will be payable beyond the
date of such termination.
(d) If the Executive's employment hereunder terminates for any reason,
Executive will be entitled to a bonus, pro rated to the date of termination,
determined in accordance with Schedule B.
5. Disclosure of Information.
(a) Definitions. For purposes of this Paragraph 5, the following terms
have the meanings specified below:
"Business" means the development, marketing and distribution of
products or services of the type offered by the Company or any of its
subsidiaries, including: (i) the development, marketing and distribution of (1)
screen phones, touch screens and other receiving hardware to provide home
shopping, xxxx paying, banking, utility meter reading, swipe-card services,
access to video and audio programming (whether from low-orbiting satellites or
other sources),
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wireless communications, emergency response, Services for "On-Line" home-based
businesses accessing the Internet, and related hardware or software, and (2)
wireless communications and/or pagers, including without limitation hardware and
services related to a telecom./pager wrist watch with access to information,
including winning lottery numbers, weather conditions, sports scores and stock
market and financial data, and related hardware and software; and (ii) the
provision of international long distance, domestic long distance or local
telephone time or services in the United States, including (1) the prepayment of
telephone charges, (2) telephone debit cards, (3) international or domestic long
distance local telephone sales or resales, (4) international calling from
non-U.S. locations to the United States, (5) "1 plus 1" residential telephone
service, (6) business telephone service.
"Confidential Information" means information relating to the operations,
customers, or finances of the Company, or the Business, that derives value from
not being generally known to other Persons, including, but not limited to,
technical or nontechnical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, and lists of
or identifying information about actual or potential customers or suppliers,
whether or not reduced to writing, certain unpatented information relating to
the research and development, manufacture or serving of the Company's products,
information concerning proposed new products, market feasibility studies and
proposed or existing marketing techniques or plans. Confidential Information
also includes the same types of confidential information relating to the
operations, customers, finances or Business of any affiliate of the Company, if
such information is learned by Executive during the term of this Agreement or in
connection with Executive's performance of Services. Confidential Information
also includes information disclosed to the Company by third parties that the
Company is obligated to maintain as confidential. Notwithstanding the
foregoing, Confidential Information does not include information which (i) is
already known to Executive at the time it is disclosed to Executive, (ii) has
become generally known to the public through no wrongful act of Executive or
(iii) has been rightfully received by Executive from a third party without
restriction on disclosure and without, to Executive's knowledge, a breach of an
obligation of confidentiality running directly or indirectly to the Company or
any affiliate thereof. Confidential Information that is not also a trade secret
will constitute Confidential Information only for three (3) years after the
Termination Date.
"Customer" means any customer of the Company in the United States that
Executive, during the one (1) year period prior to the Termination Date, (i)
provided goods or services to or solicited on behalf of the Company; or (ii)
about whom Executive possesses Confidential Information.
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"Person" means any individual, corporation, partnership, limited
liability company, association, municipality, government agency, government,
unincorporated organization or other entity.
"Services" means the duties and functions that Executive provides in the
United States as an employee of the Company, including the duties and functions
expressly set forth on Schedule A attached hereto. Executive acknowledges that
Executive has been informed of and discussed with the Company the specific
activities that Executive will perform as Services and that Executive
understands the scope of the activities that constitute Services under this
Agreement.
"Termination Date" means the last day Executive is employed by the
Company, whether the termination is voluntary or involuntary and whether with or
without cause.
b. Confidential Information. Executive shall protect Confidential
Information. Except as required in connection with work for the Company,
Executive shall not use, disclose or give to others, during or after Executive's
employment, any Confidential Information.
c. Return of Materials. On the Termination Date or for any reason or at
any time at the Company's request, Executive shall deliver promptly to the
Company all materials, documents, plans, records, notes, manuals, subcontracts,
procedures and other papers and any copies thereof in Executive's possession,
custody or control relating to the Company or the Business, all of which at all
times will be the property of the Company.
d. Solicitation of Customers. During employment and, if Executive is
employed by the Company for at least six (6) months, for at least three (3)
months after the Termination Date, Executive shall not solicit Customers within
the United States for the purpose of providing products or services comparable
to those provided by the Business, except on behalf of the Company.
e. Solicitation of Company Employees. During employment and, if
Executive is employed by the Company for at least six (6) months, for at least
three (3) months after the Termination Date, Executive shall not solicit for
employment with another Person anyone who is an employee of the Company.
f. Disparagement. Executive shall not at any time make false, misleading
or disparaging statements about the Company, including the Business, management,
employees and Customers. The Company shall not make false, misleading or
disparaging statements about Executive.
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g. Future Employment Opportunities. If Executive is employed by Company
for at least three (3) months, for a period commencing on the Termination Date
and ending three (3) months thereafter, Executive shall (a) provide any
prospective employer with a copy of this Section 5, and (b) upon accepting any
position, provide the Company with the employer's name and a description of
the services, if any, Executive will provide for such employer.
h. Work for Hire Acknowledgment; Assignment. All writings, drawings,
photographs, tapes, recordings, computer programs and other works in any
tangible medium of expression, regardless of the form of medium, which are
prepared by Executive, or to which Executive contributes, in connection with
Executive's employment by the Company (collectively the "Works") and all
copyrights and other rights in and to the Works, belong solely, irrevocably and
exclusively throughout the world to the Company as works made for hire. However,
to the extent any court or agency should conclude that the Works (or any of
them) do not constitute or qualify as a "work made for hire," Executive hereby
assigns, grants and delivers, Solely, irrevocably, exclusively and throughout
the world to the Company all copyrights and other rights to the Works. Executive
also agrees to cooperate with the Company and to execute such other further
grants and assignments of all rights as the Company from time to time reasonably
may request for the purpose of evidencing, enforcing, registering or defending
its ownership of the Works and the copyrights in them, and Executive hereby
irrevocably constitutes and appoints the Company as Executive's agent and
attorney-in-fact, with full power of substitution, in Executive's name, place
and stead, to execute and deliver any and all such assignments or other
instruments which Executive shall fail or refuse promptly to execute and
deliver, this power and agency being coupled with an interest and being
irrevocable. Without limiting the preceding provisions of this Paragraph 5(h),
Executive agrees that the Company may edit and otherwise modify, and use,
publish and otherwise exploit, the Works in all media and in such manner as the
Company, in its discretion, may determine.
i. Inventions, Ideas and Patents. Executive shall disclose promptly to
the Company (which shall receive it in confidence), and only to the Company, any
invention or idea of Executive (developed alone or with others) conceived or
made during and related to Executive's employment by the Company. Executive
assigns to the Company any such invention or idea in any way connected with
Executive's employment or related to the Business, research or development of
the Company, or demonstrably anticipated research or development of the
Company, and will cooperate with the Company and sign all papers deemed
necessary by the Company to enable it to obtain, maintain, protect and defend
patents covering such inventions and ideas and conform the exclusive ownership
of the Company of all rights in such inventions, ideas and patents, and
irrevocably appoints the Company as its agent to execute and deliver any
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assignments or documents Executive fails or refuses to execute and
deliver promptly, this power and agency being coupled with an interest
and being irrevocable. This constitutes written notification to Executive
that this assignment does not apply to an invention for which no
equipment, supplies, facility or trade secret information of the Company
or any Customer was used and which was developed entirely on Executive's
own time, unless (a) the invention relates (i) directly to the Business
or (ii) to the actual or demonstrably anticipated research or development
of the Company, or (b) the invention results from any work performed by
Executive for the Company.
j. Independence of Covenants. The covenants contained herein are
to be construed as agreements independent of each other and of any other
provision of this or any other contract between the parties hereto, and
the existence of any claim or cause of action by Executive against the
Company, whether predicated upon this or any other contract, will not
constitute a defense to the enforcement by the Company of said covenants.
6. Right to Injunctive Relief. (a) Executive recognizes and agrees that
the injury the Company will suffer in the event of the Executive's breach of any
covenant or agreement contained herein cannot be compensated by monetary damages
alone, and Executive therefore agrees that the Company, in addition and without
limiting any other remedies or rights that the Company may have, either under
this Agreement or otherwise, the Company will have the right to obtain an
injunction against Executive from any court of competent jurisdiction enjoining
any such breach.
(b) The Company recognizes and agrees that the injury Executive
will suffer in the event of the Company's breach of any covenant or agreement
contained herein cannot be compensated by monetary damages alone, and the
Company therefore agrees that Executive, in addition and without limiting any
other remedies or rights that Executive may have, either under this Agreement or
otherwise, Executive will have the right to obtain an injunction against the
Company from any court of competent jurisdiction enjoining any such breach.
7. Indemnification. The Company shall indemnify, hold harmless and
defend Executive with respect to any claims which may be asserted against him by
reason of his title, position or acts or omissions in regard to his employment,
to the maximum extent permitted by applicable law, except to the extent such
acts or omissions constitute gross negligence, willful misconduct or a breach
of his obligations hereunder.
8. Relocation; Location of Performance. (a) The parties acknowledge that
Executive and his family reside in Phoenix, Arizona. Executive intends to spend
his weekends at home, arriving in Orange County before noon on Monday's and
leaving for Arizona after the lunch hour on Friday. At such time as he decides
to move his family's residence to California, the parties will reach an
agreement with respect to reimbursement of the relocation expenses as is
customary
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for Southern California as applied to an incoming President and Chief Operating
Officer of a company similar to the Company.
(b) Executive's services will be performed primarily in the area
of Irvine, California. Executive's performance hereunder will be within such
area or its environs. The Company will not be required to reimburse Executive
for any expenses he incurs for commuting between Phoenix and Irvine. The parties
acknowledge, however, that Executive may be required to travel in connection
with the performance of his duties hereunder. Such travel will be on a Business
Class basis.
9. Miscellaneous. (a) This Agreement may be assigned by the Company to
any successor in interest to its business, which successor in interest will be
bound hereby to the same extent as the Company. Executive agrees to perform his
duties for such successor in interest to the same extent as he would for the
Company.
(b) This is a personal agreement on the part of Executive and
neither this Agreement nor any right or duty hereunder may be sold, assigned,
transferred, delegated or conveyed by Executive.
(c) The waiver by either party of a breach of any provision of
this Agreement by the other party will not operate or be construed as a waiver
of any subsequent breach by the other party.
(d) This Agreement is to be governed by and construed in
accordance with the laws of the State of California.
(e) This Agreement states the entire agreement and understanding
between the parties and supersedes all prior understandings and agreements.
(f) No change or modification to this Agreement will be valid
unless in writing and signed by both parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
STARTRONIX USA, INC.
By: /s/ Xxxx Xxxxxxx
__________________________________________
Name: Xxxx Xxxxxxx
____________________________________
Title: Executive Chairman & CEO
___________________________________
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/s/ Xxxxxx X. Xxxxx
_____________________________________________
NAME: Xxxxxx X. Xxxxx
_______________________________________
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SCHEDULE A - DUTIES AND FUNCTIONS
PRESIDENT AND CHIEF OPERATING OFFICER
As the President and Chief Operating Officer of the Company, the Executive shall
direct, administer, and coordinate the activities of the organization in support
of policies, goals, and objectives established by the Chief Executive Officer
and in accordance with the lawful directives of the Company's Board of Directors
by performing various duties and responsibilities which shall include but not be
limited to the following:
Guide and direct management in the development, production, promotion, and sale
of the organization's products and services.
Direct the preparation of short term and long range plans and budgets based on
broad corporate goals and growth objectives.
Maintain a sound plan of corporate organization establishing policies to insure
adequate management development and to provide for capable management
succession.
Develop and install procedures and controls to promote communication and
adequate information flow.
Establish operations consistent with the Chief Executive Officer's broad
policies and objectives and ensure their execution.
Evaluate the results of overall operations regularly and systematically and
report these results to the Chief Executive Officer.
Ensure that the responsibilities, authorities, and accountability of all direct
subordinates are defined and understood.
Ensure that all organization activities and operations are carried out in
compliance with local, state, and federal regulations and laws governing
business operations.
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SCHEDULE B - SALARY AND BONUS
BASE SALARY. $12,000 monthly, subject to increase.
SALARY ADJUSTMENT. Quarterly. Executive's salary for each month in a
fiscal quarter "will be increased, effective as of the first day of such fiscal
quarter, if the Company attained a higher level of estimated Quarterly Net
Income (as defined below) for the previous full fiscal quarter of the Company,
according to the table below:
QUARTERLY NET INCOME LEVELS MONTHLY SALARY
--------------------------- --------------
less than $1.5 million $12,000
greater than $1.5 million but less than or equal to $3 $15,000
million
greater than $3 million $20,000
For all purposes of this Schedule B "Quarterly Net Income" means the
Company's quarterly net income before income taxes. The Company will deduct from
payments of monthly salary to Executive all federal, state and local income tax,
FICA, FUTA and other withholdings as required by law. For purposes of this
Agreement, the Company's net income and gross sales shall be determined in
accordance with generally accepted accounting principles in the United States,
applied on a basis consistent with prior periods ("GAAP").
For all purposes of this Schedule B where the consolidated net income
of the Company is to be determined, inter-company transactions and relations
shall be charged on a reasonable arm's-length basis and GAAP shall apply, to the
extent reasonable and practicable. Further, although consolidated net income can
be estimated from quarter to quarter, it is determined with more dependability
upon completion and audit of the Company's annual financial statements.
Accordingly, within ten (10) days after the delivery to the Board of Directors
of StarTronix International, Inc. of the annual report of the Company's
independent certified public accountants, the Company and the Executive shall
settle their accounts to pay or reimburse, as the case may be, any base salary
and bonus payments made to the Executive which were less than or more than that
which should have been paid with respect to the just audited fiscal year.
BONUS; STOCK PURCHASE RIGHTS. As soon as is reasonably practicable
following the end of each fiscal quarter and, in any event as of the date on
which the Company files a 10Q (or, in the case of the fourth fiscal quarter, a
10K) for such quarter, the Company shall pay Executive a cash bonus equal to two
percent (2%) of the Quarterly Net Income for such fiscal quarter, subject to pro
ration if the Executive's employment terminated during such fiscal quarter for
any reason, on the basis of the actual number of days having elapsed in such
quarter until termination.
The Executive will have the right to purchase, from the last day of the
first fiscal quarter of each fiscal year until the last day of the second fiscal
quarter of such fiscal year, restricted common stock of StarTronix
International, Inc. in an aggregate amount (the "Annual Amount") equal to (i)
the aggregate amount of bonuses paid to such Executive in the previous fiscal
year pursuant to this Schedule B divided by (ii) 75% of the average closing
price of such common stock during the last thirty days of the previous fiscal
year (the "Stock Price"). Executive will be entitled to purchase such restricted
common stock at a price equal to 75% of the aggregate Stock Price therefor.
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STARTRONIX INTERNATIONAL, INC.
0000 XXXXXXXXX XXXXX
XXXXX 000
XXXXXX, XXXXXXXXXX 00000
March 6, 1996
Xx. Xxxxxx Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Dear Xx. Xxxxx:
This letter confirms that, so long as you are employed by StarTronix
USA, Inc. and you reside in Phoenix, Arizona, StarTronix International, Inc. or
StarTronix USA, Inc. will allow you to use its company-owned apartment and
automobile when you are working in southern California.
Very truly yours,
STARTRONIX INTERNATIONAL, INC.
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, President
GG/jbl
