Employment Agreement
EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is dated as of May 23, 2000, between ORA
Electronics, Inc., a Delaware public corporation ("Company") and Xxxx X. Xxxxxx
("Employee").
WHEREAS, the Company is presently in the business of selling and reselling
domestic and international telecommunications services and products; and
WHEREAS, Employee desires to become employed by the Company as Chief
Financial Officer 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
day-to-day financial operations of the Company as more fully provided herein,
reporting to the President and CEO 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 Chief Financial Officer of the Company
upon the terms and conditions of this Agreement. Employee shall be based at the
principal executive offices of the Company in Chatsworth, California.
2. Term of Agreement. This Agreement shall remain in force and effect for a
three-(3) year period commencing on May 23, 2000 (the "Employment Date") and
ending at the close of business on April 30, 2003, unless sooner terminated
pursuant to paragraph 9 below (the "Initial Term"). At the end of the Initial
Term the agreement may be extended by mutual agreement of Company and Employee,
for up to three additional successive one-year periods (each such one-year
period referred to herein as a "Renewal Term") on such terms as may be agreed.
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 Chief Financial Officer for the Company, and be responsible for all the
day-to-day financial affairs of the company. All activities including but not
limited to the foregoing activities shall be conducted by Employee reporting to
the President and CEO of the Company.
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, 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 $150,000 per year, payable weekly in
accordance with the normal payroll practices of the Company. Any amounts shall
be prorated for periods less than a week. Salary payments shall be subject to
withholding and other applicable taxes. The aforementioned initial salary shall
be increased by $25,000 per year on or about each Employment Date anniversary.
In addition to the base salary previously described, Employee shall receive an
automobile allowance of $500.00 per month.
6. Bonus Eligibility.
(a) Signing Bonus. Employee shall receive 200,000 shares of the common
stock of ORA upon the signing of this employment contract.
(b) Stock Options. In addition to the base salary described in paragraph 5
above, Employee shall be granted an option to purchase 100,000 shares of common
stock of "ORA" annually commencing on the first anniversary date of this
Agreement. The exercise price of the options shall be ($.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.
(c) Additional Bonus. The employee may be eligible for an additional
performance bonus with an equivalent value of ten percent - thirty percent
(10%-30%) of the Employee's base salary on a quarterly basis. The companies
shall determine Employee's eligibility for such additional bonus based upon
certain performance criteria described in Exhibit A, (ORA projections). The
performance criteria shall be evaluated by the Company achieving (80% - 120%) of
the projected pre-tax profits in such exhibit on a quarterly basis. If the
Company determines that such performance goals have been achieved, the Employee
shall have the option to receive the bonus in cash or common stock in the
Company: ORA at 90% of the average market price of the shares of (ORA) over the
last thirty (30) days prior to issue. If at the end of the year volumes are made
up to cover any quarters that volumes were not met and the bonus was not paid,
the Company will offer the bonus for that quarter. The sliding scale used in the
calculation of bonus is:
Level of Company Performance 80% 100% 120%
Payout % of Employee annual salary 10% 20% 30%
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 medical, dental and vision insurance benefits and four
weeks annual paid vacation.
8. Business Expenses. Employee may incur expenses in connection with the
performance of his duties as Chief Financial Officer 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 al 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 Company 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) 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 5a & 6b 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. During the first year of this agreement,
Employee may immediately terminate his employment with Company only if Company
enters into an involuntary bankruptcy, or SATX, Inc. fails to infuse sufficient
capital to Company to maintain the on-going operations of Company within a sixty
(60) day period of SATX, Inc., becoming a majority shareholder of Company. After
this first year, Employee may terminate his employment under this Agreement at
any time upon thirty (30) day's notice to the Company. In such event, during the
second and subsequent years of this agreement, 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.
10. Restrictive Covenants
(a) Covenant Not To Compete. Employee acknowledges that as Chief Financial
Officer, Employee shall be engaged, without limitation, in, and performing the
other duties set forth in Paragraph 3 herein. Employee also acknowledges that
the Company is 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 services for any
other business engaged in providing the 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 Chief Financial Officer 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.
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.
4
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 one (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 Company 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 their 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.
(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 Companies, in addition to
all other rights, shall be entitled to an injunction-restraining Employee
therefrom. Nothing herein shall e 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 California, 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.
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 AND COMPANY EACH ACKNOWLEDGE THAT THEY HAVE HAD THE OPPORTUNITY TO
CONSULT WITH AN ATTORNEY OR ANY OTHER INDIVIDUAL TO OBTAIN ADVICE CONCERNING
THIS AGREEMENT. EMPLOYEE AND COMPANY EACH STATE THAT THEY HAVE CAREFULLY READ
THE WITHIN AND FOREGOING "EMPLOYMENT AGREEMENT" AND KNOWS AND UNDERSTANDS THE
CONTENTS THEREOF AND THAT THEY ARE EACH EXECUTING THE SAME AS THEIR OWN FREE ACT
AND DEED AND WITH ALL NECESSARY AUTHORIZATIONS AND RIGHTS TO DO SO.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
COMPANY: EMPLOYEE:
ORA ELECTRONICS, INC.
a Delaware Corporation
By: /s/ XXXXXXX X. XXXXXX /s/ XXXX X. XXXXXX
------------------------- ---------------
Xxxxxxx X. Xxxxxx Xxxx X. Xxxxxx
An Authorized Signatory
Its: President
