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EXHIBIT 10.35
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("AGREEMENT") is entered into by and among,
TeleHub Technologies Corporation, a Nevada corporation, with offices at 0000
Xxx-Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (the "EMPLOYER"), TeleHub
Communications Corporation, a Nevada corporation (the "PARENT"), and Xxxx X.
Xxxxxx III, an individual residing at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxxxxxx,
Xxxxxx 00000 ("EXECUTIVE"). This Agreement is executed on the date last
written at the signature blocks below and supercedes and terminates the
Independent Contractor Agreement entered into by the parties dated as of June
29, 1998. The effective date of this Agreement is October 1, 1998 ("EFFECTIVE
DATE").
R E C I T A L S
WHEREAS, Employer desires to hire and employ Executive as its President of
TeleHub Technologies Corporation; and
WHEREAS, Executive desires to become an employee of Employer;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. EMPLOYMENT. Employer, its subsidiaries and Affiliates (collectively, the
"COMPANY") agree to employ Executive, and Executive hereby agrees to be employed
by the Company on a full-time basis. For the purpose of this Agreement, the
term "AFFILIATE" means a person, firm or corporation that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with Employer. Executive represents and warrants that
the execution of this Agreement and his performance under this Agreement do not
breach any other agreement to which Executive is a party and does not require
the consent of any other person.
2. DUTIES. Executive shall serve as president of the Employer, shall perform
such senior executive duties as are assigned by the Company from time to time
and shall serve the Company faithfully and to the best of Executive's ability.
The Executive will hold, without additional compensation, such other senior
executive positions for the Company to which Executive may be appointed or
elected from time to time. Subject to Subsection 8.4 hereof, in its sole
discretion the Company may, from time to time, change Executive's title or
responsibility. Executive's conduct must promote the host interests of the
Company and must not discredit the Company, its products or services.
Executive's primary work location will be Employer's headquarters, currently
located in Gurnee, Illinois. Executive agrees to spend as much time in the
Employer's headquarters or in any other location as may be deemed necessary by
the Company's chief executive officer ("CEO"). The Employer agrees to establish
a satellite office in the vicinity of Kansas City, Missouri from which Executive
may work from time to time on the condition that Executive meets his obligations
under the preceding sentence.
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3. EXCLUSIVITY. Executive shall devote substantially his full business time,
efforts, attention, skill and energy to the Company's business. Executive shall
disclose all other business activities to the Company shall not engage in any
other business activity that requires significant personal services by
Executive. After notifying the Company, Executive may take reasonable personal
time for:
3.1 personal investments that do not require significant services by
Executive;
3.2 participation in volunteer or charitable activities;
3.3 participation in industry-related organizations;
3.4 with prior Board approval, serving as a Director for other companies;
and
3.5 activities approved in advance by the Board;
except that Executive shall cease any such outside activity if the Company
determines that such activity will interfere or conflict with the Company's
interests.
4. CONFLICTS OF INTEREST. Executive shall not engage in any activity that, in
the Company's judgment, may interfere or conflict with the proper performance of
Executive's duties or the Company's interest. If Executive has any interest in
a proposed transaction involving the Company, other than as a director, officer,
employee or shareholder of the Company, Executive must fully disclose such
interest to the Company. If Executive is considering obtaining or anticipates
obtaining any interest in a transaction involving the Company other than as a
director, officer, employee or shareholder of the Company, Executive must obtain
the Company's written approval of Executive's involvement (which Company may
withhold in its sole discretion) prior to Executive obtaining such an interest.
Executive represents that, to the best of his knowledge, there is no other
contract or duty on his part now in existence inconsistent with this Agreement
or that in any way would prohibit Executive from performing any of his duties
hereunder. Executive further agrees not to disclose to Company, bring onto
Company's premises or use any confidential information that belongs to anyone
other than Company or Executive. Executive has provided to Employer a copy of
Executive's Employee Agreement Regarding Property Rights and Business Practices
dated January 1, 1991, and signed September 23, 1991 ("SPRINT EMPLOYEE
AGREEMENT") with Sprint Corporation, which restricts the use or disclosure of
certain information by Executive. The parties hereto agree that the Sprint
Employee Agreement is not inconsistent with this Agreement.
5. INVENTIONS AND CONFIDENTIALITY. Executive acknowledges that the Company is
in a unique , world-wide business and has expended significant amounts to
develop its proprietary products and services and, by reason of Executive's
position with the Company, Executive will have access to Confidential
Information, proprietary information and other intellectual property of the
Company. As a condition to the Executive's employment with the Company, the
Executive agrees to and has executed and delivered to the Company, the Invention
Assignment and Confidentiality Covenant ("COVENANT"), the terms of which are
hereby incorporated into and made part of this Agreement. Executive agrees that
the restrictions contained in the Covenant are fair, reasonable and necessary.
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6. COMPENSATION AND BENEFITS. In consideration of the services to be rendered
pursuant to this Agreement, Executive shall receive the following compensation
and benefits during the term of is employment:
6.1. SALARY. The Company shall pay Executive an annual base salary,
payable semi-monthly in arrears. The annual base salary during the term hereof
shall be $160,000 ("SALARY").
6.2. BONUS.
6.2.1. The Company will pay Executive an incentive bonus up to
fifty percent (50%) of Executive's base Salary for each fiscal
year of the Company during which Executive is employed hereunder
("BONUS"), based upon Executive's accomplishments of objectives
that are mutually defined and agreed upon between, and documented
by, Executive and the Company. If the Company and Executive are
unable to reasonably agree on the performance criteria, targets
or other components of the Bonus to be paid to Executive for any
fiscal year of the Company, executive shall receive an automatic
Bonus for that fiscal year equal to thirty four percent (34%) of
Executive's base Salary for such fiscal year. For fiscal year
1998, Executive's Bonus shall be prorated back to July 1, 1998.
The Company shall pay Executive's Bonus ninety (90) calendar days
after the close of the Company's fiscal year.
6.2.2. Notwithstanding the foregoing, if, in any fiscal year,
the Company, (i) defers or does not pay a bonus generally to
similar Company executives, or (ii) lowers the amount of the
bonus or the percentage of salary upon which the bonus is based
generally for similar Company executives, then the Company may,
in its sole discretion, (i) defer or not pay the Bonus to, or
(ii) lower the amount of the Bonus or the percentage of Salary
upon which the Bonus is based for, Executive provided that any
such deferral, nonpayment or reduction is for the same length of
time and/or the same percentage deferral, nonpayment, or
reduction as applied generally to similar Company executives.
6.2.3. The Company's Board of Directors, with the advice of
Executive's supervisor, shall annually review the amounts of
Executive's base Salary and Bonus, and may increase, but may not
decrease, Executive's base Salary and Bonus as set forth herein,
except that if the Company (i) lowers the salary or defers some
portion of the salary generally for similar Company executives,
or (ii) lowers the bonus or the percentage of salary upon which
the bonus is based generally for similar Company executives, then
Company may, in its sole discretion, (i) lower Executive's Salary
or defer some portion of the Salary, or (ii) lower Executive's
Bonus or the percentage of Salary upon which the Bonus is based
provided that such deferral or reduction is for the same length
of time and or the same percentage deferral or reduction as
applied generally to similar Company executives. However, if,
pursuant to this subsection, the Company lowers Executive's
Salary by more than fifty percent (50%), then the Executive shall
have the right to terminate his employment with the Company
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pursuant to Section R.4 or renegotiate this Agreement.
6.3. BENEFITS. The Company may provide Executive with such insurance
plans, hospitalization plans, retirement plans and other executive benefits that
are generally provided to executive employees of the Company and for which
Executive is eligible under the terms and conditions thereof. If Executive
wishes to purchase a disability insurance policy for himself, then following
Executive's delivery to Company of a receipt and proof of payment for the
premium on such a policy. Company will reimburse Executive up to $4,000 per
year toward the cost of the premium.
6.4. STOCK OPTIONS. The Company has created a stock option plan for
directors, officers and employees.
6.4.1 Parent hereby grants to Executive as of the Effective Date an
option ("OPTION") to purchase 350,000 common shares, $0.001
par value, of Parent ("SHARES") at an exercise price of
$14.58 per Share, pursuant to the terms and conditions of
Parent's 1997 Stock Option Plan ("PLAN"). Promptly after the
execution and delivery of this Agreement, Parent shall
deliver to Executive a Stock Option Certificate enumerating
the specific terms and conditions of the Option as set forth
herein in accordance with Section 6.1 of the Plan. The
Company represents and warrants to Executive that the Option
has been approved by the Committee (as defined in the Plan)
in accordance with the terms of the Plan.
6.4.2 The Option shall become exercisable with respect to 25% of
the Shares subject to the Option on the Effective Date, with
respect to an additional 25% of the Shares subject to the
Option on January 1, 1999, with respect to an additional 25%
of Shares subject to the Option on January 1, 2000 and with
respect to the remaining 25% of the Shares subject to the
Option on January 1, 2001. Such rights to exercise shall be
cumulative. The Option shall expire on October 1, 2008,
subject to earlier termination as provided in the Plan.
6.5. ANNUAL LEAVE. Executive shall be entitled to vacations, sick
leaves, personal days and other time off in accordance with the Company's
policies in effect for officers and executive employees of the Company which
shall include no less than three weeks paid vacation per year.
6.6. CAR ALLOWANCE. The Company shall pay Executive a car allowance of
$450.00 per month, in addition to Executive's other compensation.
6.7. TEMPORARY LIVING EXPENSE. The Company shall reimburse the Executive
up to $2,000.00 per month for reasonable housing expenses incurred while
Executive is assigned to the Gurnee, Illinois work site or to any other work
site more than 100 miles outside the Kansas City, Missouri metropolitan area.
6.8. REIMBURSEMENT OF EXPENSES. Upon receipt of an itemized accounting
of such expenses with acceptable supporting documentation, the Company shall
promptly reimburse Executive for all reasonable and necessary out-of-pocket
expenses incurred by Executive in connection with the business of the Company
and in performance of Executive's duties under this Agreement in accordance with
Company policy.
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7. DURATION. Executive's employment shall commence on the Effective Date and
continue until terminated in accordance with Section 8. The initial term of
Executive's employment shall be four (4) years ("INITIAL TERM"), and shall be
automatically renewed for additional terms of one (1) year unless earlier
terminated pursuant to the terms of this Agreement. After termination of
Executive's employment, the applicable provisions of this Agreement shall
remain in full force and effect.
8. TERMINATION. Executive's employment may be terminated as follows:
8.1. Expiration of Term. Upon written notice by either party delivered at
least thirty (30) calender days before the expiration of the Initial Term or
renewal term (collectively, "TERM"), Executive's employment will terminate at
the expiration of the then current Term.
8.2. Death. If Executive dies during the Term of his employment, the
Company shall pay his estate the compensation that would otherwise be payable
to him for the month in which his death occurs, and his employment shall be
deemed terminated on the last day of such month.
8.3. Cause. The Company may immediately terminate Executive's employment at
any time for:
8.3.1. non-performance or gross negligent performance by Executive of
any material duties which continues after fifteen (15)
calendar days' written notice specifying in detail such
non-performance or gross negligent performance; or
8.3.2. the commission of any theft, fraud, embezzlement or similar
crime involving the commission of any felony; for acts of
dishonesty or moral turpitude; for material violation of any
material Company policy; for material violation of applicable
local, state or federal laws or regulations related to
Executive's performance of his duties hereunder or to the
Company, including anti-discrimination laws or securities laws;
or for violation of other laws which causes material economic
damage to the Company or material damage to the business
reputation of the Company; or a material breach by Executive of
this Agreement and a failure by Executive to terminate or cure
such breach within fifteen (15) calander days' after written
notice from the Company specifying in detail such breach.
8.4. Demotion or Lower Salary. The Executive may terminate Executive's
employment with the Company upon thirty (30) calendar days' written notice if
the Company assigns the Executive to a position of lower responsibility and
Executive rejects such assignment or if the Company lowers Executive's Salary
by more than fifty percent (50%) pursuant to Section 6.2.3. above.
8.5. Discretion. Either party, in its sole discretion, may terminate
Executive's employment at any time upon thirty (30) calendar days' prior
written notice.
8.6. Change of Control. Either party may terminate Executive's employment
upon at least thirty (30) calendar days' written notice upon the occurrence of
any of the following events:
8.6.1. sale by the Company of substantially all of its assets to a
single purchaser or associated group of purchasers who are not
Affiliates of the Company.
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8.6.2. sale, exchange or other disposition in one transaction of
35% or more of the outstanding voting stock of the Company
to persons, firms or corporations who are not Affiliates of
the Company;
8.6.3. merger or consolidation of the Company in a transaction not
involving an Affiliate of the Company in which the
shareholders of the Company receive less than 50% of the
outstanding voting stock of the new continuing corporation
or successor entity;
8.6.4. a bona find decision by the Company to terminate its
business and liquidate its assets (but only if such
liquidation is not part of a plan to carry on the Company's
business through its shareholders).
8.7. SEVERANCE. If Executive's employment is terminated pursuant to
Subsection 8.4 or 8.6 hereof, or the Company terminates Executive's employment
pursuant to Subsection 8.5 hereof, the Company shall pay Executive a Termination
Fee equal to one hundred percent (100%) of Executive's then annual Salary, plus
an amount equal to the Company's annual contribution for Executive's medical,
dental and life insurance policy benefits plus ten percent (10%) of that annual
contribution, plus the Bonus specified in Section 6.2 hereof; if Executive's
employment is terminated before July 1, 1999, the Bonus will be fifty percent
(50%) of Executive's annual Salary pro-rated for the portion of the year served;
otherwise the Bonus will be the amount of the previous year's Bonus pro rated
for the portion of the year served. Payments to be made pursuant to this
paragraph shall only be made upon Executive's execution of a standard release
waiving all claims against the Company ("RELEASE"). The Termination Fee shall
be paid as soon as practical after Executive's termination and execution and
delivery in the Company of the Release except that the Bonus portion of the
Termination Fee shall be paid within ninety (90) calendar days of Executive's
termination and execution and delivery to the Company of the Release. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment.
8.8. NOTICE OF TERMINATION. Any termination of Executive's employment by
the Company or by the Executive under this Section 8, other than pursuant
Subsection 8.2, shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 12. For purposes of this
Agreement, a "NOTICE OF TERMINATION" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon and (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated. The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which contributes to
a showing of Demotion of Cause shall not waive any right of the Executive or the
Company hereunder or preclude the Executive or the Company from asserting such
fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.
9. SECURITIES MATTERS. Since the Executive will have access to Confidential
Information, Executive's ability to engage in securities transactions (including
securities issued by the Company and by others) will be limited. Executive
agrees to:
9.1 not engage in any transactions that intentionally or knowingly
violate federal and
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state securities laws;
9.2 file all reports required by securities regulatory authorities to be
filed by Executive;
9.3 provide information about securities transactions when requested by
the Company;
9.4 follow written Company policies concerning securities transactions;
9.5 execute any "lock-up" agreements or other restrictions on
transactions when reasonably requested by the Company; and
9.6 comply with securities law requirements for all transactions.
While Executive may request the Company's permission to engage in proposed
securities transactions, Executive is still responsible for compliance with
applicable legal requirements.
10. INJUNCTIVE RELIEF. Upon a material breach or threatened material breach
by Executive of any of the provisions of Section 3, 4, 5 and 9 of this
Agreement, or any term of the Covenant, the Company shall be entitled to
institute and prosecute proceedings in any court of competent jurisdiction
either in law or in equity to obtain the specific performance thereof by
Executive or to enjoin Executive from violating the provisions hereof. Pending
the outcome of any such litigation, Company shall be entitled to obtain
injunctive or other relief, without bond.
11. SEVERABILITY. It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any provision of this Agreement shall be
adjudicated to be invalid or unenforceable, then the remaining provisions will
continue in full force and effect.
12. NOTICES. All communications, requests, consents and other notices under
this Agreement shall be given in writing and delivered by courier, registered or
certified mail (postage prepaid), return receipt requested, and shall be
effective upon delivery. Notices to the Company shall be delivered to the
attention of the Chief Executive Officer at the Employer's Gurnee, Illinois
address written above, and Notices to Executive shall be delivered to the
Executive's address written above, or to such other address as the party to
receive notice shall have furnished to the other in writing in accordance
herewith.
13. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by Illinois
law, irrespective of choices of law principles. The parties agree that any
action brought pursuant to the terms of this Agreement shall be brought in, and
the parties hereby submit exclusively to, the personal jurisdiction and venue of
the state and federal courts in or presiding over Chicago, Illinois.
14. ASSIGNMENT. The Company may assign its rights and obligations under this
Agreement to any successor, corporation or to any acquirer of substantially all
of the business of the Company, and all covenants and agreements hereunder shall
inure to the benefit of and be enforceable by or against any such assignee.
Neither this Agreement nor any rights or duties hereunder may be assigned or
delegated by Executive.
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15. NO WAIVER. A waiver by any party of any breach of this Agreement shall
not be a waiver for any preceding or succeeding breach. A waiver by any party
of any right under this Agreement shall not be construed as a waiver of any
other right.
16. AMENDMENTS. No provision of this Agreement shall be altered, amended,
revoked or waived, except by an instrument in writing, signed by the Parent,
Employer and Executive.
17. BINDING EFFECT. Except as otherwise provided herein, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective legal representatives, heirs, successors and assigns.
18. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. ENTIRE AGREMENT. This Agreement together with the Invention Assignment
and Confidentiality Covenant set forth the entire agreement and understanding of
the parties related to the subject matter of this Agreement and supersede all
prior and contemporaneous understandings, agreements or representations by or
between the parties, whether written or oral.
20. DISPUTES. Other than an action brought under Section 10, which may be
brought directly in any court of competent jurisdiction, any dispute or
controversy arising under, out of, in connection with or in relation in this
Agreement or the employment of Executive, and the Company or the termination of
employment of Executive, with the Company, including any claims under Title VII
of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans With Disabilities Act, the Family and Medical Leave Act, and any other
federal, state or local law, statute, regulation or ordinance pertaining to
employment, shall be finally determined and settled by arbitration. Arbitration
shall be initiated by one party making written demand upon the other party and
simultaneously filing the demand together with required fees in the office of
the American Arbitration Association in Chicago, Illinois. The arbitration
proceeding shall be conducted in Chicago, Illinois by a single arbitrator in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration
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Association, except as otherwise provided herein. Discovery shall be permitted
to the extent ordered by the arbitrator in compliance with and pursuant to the
Employment Dispute Resolution Rules of the American Arbitration Association.
The arbitration award shall be a final and binding determination of the dispute
and shall be fully enforceable as an arbitration award in any court having
jurisdiction and venue over such parties.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the Effective Date as stated above.
EMPLOYER: TeleHub Technologies Corporation, EXECUTIVE: Xxxx X. Xxxxxx, III
a Nevada corporation
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx, III
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Xxxxxx X. Xxxxxx, President & CEO Xxxx X. Xxxxxx, III
10/1/98 10/1/98
Date: ----------------------------------- Date: -----------------------------------
PARENT: TeleHub Communications Corporation,
A Nevada corporation
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, President & CEO
10/1/98
Date: -----------------------------------
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