Exhibit 10.43
EMPLOYMENT AGREEMENT
I. This agreement is executed this 20th day of December, 2002 and made
effective as of August 1, 2002 ("Effective Date"), between Schimatic
Cash Transactions Xxxxxxx.xxx, Inc., a Florida corporation ("Employer"
or "Company"), and Xxxxx X. Xxxxx ("Xxxxx" or "Employee") and
(collectively the "Parties").
II. RECITALS
A. Employer is a Florida corporation, the principal business of
which is computer software solutions with particular expertise
in Smart Card Loyalty programs.
B. Employer's current headquarters office ("Corporate Office")
has been relocated to 000 X. Xxxx Xxxxxxx Xx., Xxxxx X00, Xxx
Xxxxx, XX 00000, and its back office operations ("Operations
Center") are currently located at 000 Xxxx 0000 Xxxxx xx Xxxx
Xxxx Xxxx, Xxxx.
C. Company recognizes that Simon has played a key role, and will
continue to play a key role, in the establishment of a Product
technology base upon which the Company has been, and will be,
able to move forward in an evolving industry, and that,
without the continued contribution of Simon, the Company's
chances of success would be diminished.
D. Company desires to ensure the continued involvement of Simon,
and is therefore entering this Employment Agreement for Simon
to serve as Chief Product Architect reporting to the Board of
Directors.
The Parties wish to enter into a written agreement to memorialize the
terms of Employee's employment by the Employer.
III. AGREEMENT.
In consideration of the employment of Simon by the Employer and other
good and valuable consideration, the parties hereto agree as follows:
A. Employment. The Employer agrees to employ Simon as Chief
Product Architect on the terms set forth herein. Simon accepts
such employment and agrees to work full time and use his best
efforts in performing services for the Employer.
B. Inventions. Employee shall promptly disclose to the company
any and all inventions, discoveries, developments,
improvements, machines, appliances, processes, software,
firmware, products, or the like whether patentable or not,
which are related to the Company's business (all of which are
referred to herein as "inventions") which Employee may invent,
conceive, produce, or reduce to practice, either solely or
jointly with others, at any time (whether or not during
working hours) during the period of employment. All such
inventions which in any way relate to the goods, materials, or
services developed, produced, used or sold by the Company or
any of it's subsidiaries shall at all times and for all
purposes be regarded as acquired and held by Employee in a
fiduciary capacity for, and solely for the benefit of the
Company. No termination of employment or of this agreement
shall release Employee or the Employee's heirs or legal
representatives from the foregoing obligations as to such
inventions.
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Xxxxx Employment Agreement (Cont.)
C. Terms & Salary. Employee's current salary will be twelve
thousand five hundred dollars ($12,500) per month, subject to
partial deferment as described below. Employee will be given
regular reviews and, subject to employee's continued
performance of duties, employee will be given raises, bonuses,
and additional compensation, in addition to any other
compensation already due, at least equal to those of other
executives of the company already employed or new executives
after being employed if indeed warranted based on employee's
performance. Employee does understand that any bonuses,
options, stocks and other compensation, etc., etc., given to
new executives as an incentive or enticement to join and
remain with the company will not apply to the above paragraph.
Except as provided herein, the term of this Agreement shall be
for a period of one (1) year commencing on the Effective Date,
and will automatically renew for one (1) year upon
notification in writing by the employer within sixty (60) days
prior to the employee contract expiration date. Employer
recognizes that Simon, as Chief Product Architect, has been,
and will continue to be, instrumental in establishing vision
and direction for the Company in an evolving industry, and is
therefore entitled to compensation above that which may be
common in the marketplace.
D. Partial Salary Deferment. Until such time as the Company has
received sufficient funding, or begins to receive revenues,
adequate to support its on-going operation, Employee agrees to
accept his salary as follows: sixty percent (60%) payable in
cash (less appropriate withholding) and forty percent (40%)
payable in stock options. The number of stock options will be
calculated at the pre-reverse 5 cents ($.05) per share,
divided into the amount due. The strike price of the stock
options will be the pre-reverse 5 cents ($.05) per share. At
the option of Employee, any portion or all of the forty
percent (40%) payable in stock options, or any portion of the
sixty percent (60%) payable in cash remaining unpaid after
thirty (30) days from when it became due, may be converted to
stock options as described above..
E. Place of Work. At the present time, the Company intends to
maintain its Product Development and back office operations in
its Operations Center at 740 East 3900 South in Salt Lake
City. Employee's principal place of business is the Operations
Center in Salt Lake City, UT and his home office. Should the
Company decide to relocate the Operations Center outside of
Salt Lake City, then his principal office shall be his home
office, for which Company agrees to provide all equipment and
supplies deemed necessary by the Employee for the fulfillment
of his duties. Notwithstanding the foregoing, Employee agrees
to travel, as he deems necessary, to the Company's Operations
Center and any other locations necessary for the fulfillment
of his duties. The expenses associated with such travel shall
be reimbursed by the Company. The Company agrees:
1. To reimburse Employee for travel, lodging and
associated expenses during the term of this
Agreement;
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Xxxxx Employment Agreement (Cont.)
2. In the event the company and employee elect to have
the Employee relocate to a new location upon
relocation of the Operations Center, Company agrees
to provide Employee a moving allowance not to exceed
$20,000; and
3. To reimburse Employee for any real estate commissions
and fees incurred by Employee on the sale of his
principal personal residence or the purchase of a new
residence associated with the above described
relocation, whichever is greater, as well as any
income or other taxes associated with such
reimbursement. Such reimbursements as noted in this
paragraph will be made to the Employee at such time
as the Company is operating with a run rate that is
cash flow positive.
F. Benefits.
1. Fringe Benefits. Simon shall be entitled to and shall
receive all benefits of employment generally
available to other executives of the Employer,
including, without limitation, participation in the
following:
a. Group Health, Dental and Life Insurance.
Simon will be eligible to participate in
such group health, dental and life insurance
plans, which the Employer may keep in effect
during the Term, subject to the terms of any
such plans. At any time that the Employer
does not have available Group Health and
Dental Insurance plans, during the Term and
for 12 months thereafter, Employer shall pay
any premiums associated with the enrollment
of the plan(s) of Employee's choice.
b. Long Term Disability. Simon will be eligible
to participate in such long term disability
plans which the Employer may keep in effect
during the Term, and for 12 months
thereafter, subject to the terms of any such
plan.
c. Commuting and Relocation Expenses. Employer
shall reimburse Simon for all reasonable
business expenses including: travel and
lodging for commuting to the Company's
Corporate Office in Nevada and Operations
Center located at 740 East 3900 South in
Salt Lake City, or anywhere to which either
may be relocated. The Company also agrees to
pay the moving allowance to the Corporate
Office or new Operations Center Location (s)
as described in Section (E) above.
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Xxxxx Employment Agreement (Cont.)
d. Business Expenses. The Employer shall pay
the actual and normal expenses incurred by
Simon for the benefit of the Employer in
performing his duties as Chief Product
Architect of the Employer in accordance with
the Employer's expense reimbursement policy,
as adopted from time to time. At the option
of Employee, any portion of any expenses due
to Employee remaining unpaid after one
hundred eighty (180) days from when it was
incurred, may be converted to stock options
as described below, credited, or converted
to any deferred compensation package or
investment offering that the company may be
offering at that time. If converted to stock
options, the number of stock options will be
calculated at the pre-reverse 5 cents ($.05)
per share, divided into the amount due. The
strike price of the stock options will be at
the pre-reverse 5 cents ($.05) per share.
e. Vacation. Simon shall be entitled to
vacation benefits in accordance with the
employer's vacation policy, as currently
stated or as increased in the future, at the
maximum level of accrued and unused vacation
benefits which Employer's executives or
employees are permitted to accrue in
accordance with the Employer's personnel
policies.
f. Sick Leave/Personal Leave. Simon shall be
entitled to sick leave and personal leave
benefits in accordance with the Employer's
personnel policies, as adopted from time to
time.
g. Accrual Year. Any of the benefits provided
under this Agreement or under Employer's
personnel policies generally which are
accrued on a "per year" basis, are deemed to
accrue during each of Employer's fiscal
years in accordance with Employer's
personnel policies applicable to its
employees generally. Any benefits accruing
from the Effective Date of hire through the
end of the current fiscal year will be
prorated for such year.
2. Indemnity. Employer shall indemnify Simon to the
maximum extent permissible under law as an agent,
Director, and Officer for acts taken by him during
the Term on behalf of Employer provided such acts are
taken in good faith and in what is in the best
interest of Employer.
3. Directors' and Officers' Insurance. Employer agrees
to obtain and maintain a policy of directors and
officers insurance covering Employee's acts as a
Director or Officer, as the case may be and as may be
limited by the terms of any such insurance policy, in
a face amount of no less than ONE MILLION DOLLARS
($1,000,000.00).
4. Stock, Stock Options and Bonuses. Employer agrees to
cause to be issued to Simon, at the same rate,
quantity, and terms, any stock, stock options or
bonuses issued other executives of the company
already employed or new executives after being
employed if indeed warranted based on employee's
performance , in addition to any stock, stock options
or bonuses to which employee may already be entitled.
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Xxxxx Employment Agreement (Cont.)
Employee does understand that any bonuses, stocks,
options and other compensation, etc., etc., given to
new executives as an incentive or enticement to join
and remain with the company will not apply to the
above paragraph. Further, as a condition to the
issuance of any such shares, bonuses or options,
Simon agrees to execute and deliver to Employer all
such forms as it may reasonably request in order to
comply with applicable securities laws. Upon the
signing ,by Simon and the Company Representative and
approval of the sctn board of directors, of this one
(1) year employment contract with a one year renewal
company (employer) option to extend his employment;
and on the effective date of the contract as listed
above, Simon will immediately be issued stock options
for twelve (12) million shares of the company's stock
at the pre-reverse split price of five (.05) cents
per share as a signing bonus to remain with the
company providing his expertise, knowledge and
experience in his capacity as Chief Product Architect
to allow the company to become a successful entity.
The company will also allow Employee the opportunity
to exercise these options immediately by execution of
a Nonrecourse Note, payable to the Company. The note
payable is due no later than December 31, 2009,
however, Employee is under no obligation to repay the
Note other than from proceeds from the sale of the
common stock purchased through the exercise. In other
words, the Note has no recourse to Employee's
separate funds, assets, or money due to Employee from
the Company, other than the common stock purchased
with the note. The attached Note, certificate through
which employee may exercise the stock options, and
Stock Power of Attorney to deal with managing the
stock during the period of the loan, will all be
executed simultaneously with this Employment
Agreement.
5. Registration of Securities. The Company agrees to
forthwith register the securities underlying the
Stock Options described in Section 4 above and any
stock appreciation rights or plan interests (the
"SAR"s), which may be deemed by the Securities and
Exchange Commission (the "SEC") to require
registration, in order for employee to be able to
freely assign or trade the SAR's or the underlying
securities.
6. Termination.
a. Termination as a result of a change of
control or for good cause. This Agreement is
terminable prior to the expiration of the
Term, in the manner and to the extent set
forth in this section 6.
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b. Death, Disability or Resignation During
Term. This Agreement shall automatically
terminate upon the death of Simon or
Employee's voluntary resignation during the
Term. The Employer or Xxxxx xxx terminate
this Agreement upon reasonable determination
of Employee's total disability. As used
herein, total disability means Employee's
inability to perform his normal and usual
duties as Chief Product Architect of the
Employer due to physical disability or
physical or mental illness for a period of
ninety (90) consecutive calendar days.
c. Termination for Cause. The Employer may
terminate this Agreement immediately, and
except as otherwise set forth below, without
prior notice, for "Cause" which shall mean:
i. Employee's excessive use of alcohol
or illegal drug abuse;
ii. Any material dishonest act by Simon
relating to the Employer's
business;
iii. Any intentional act by Simon that
would be materially detrimental to
the business or reputation of the
Employer;
iv. Employee's rendering any services
to a firm or entity which does
business in a field competitive
with the business of Employer
except as may be expressly
authorized in writing pursuant by
the Board, or
v. Employee's substantial failure to
perform the material services
contemplated by this Agreement, it
being understood and agreed that
the Employer must give Simon notice
of such failure by the Employer and
not less than sixty (60) days with
in which to cure such failure
before invoking the provisions of
this subparagraph v. in terminating
Employee.
d. Without Cause or from Change of Control. The
Employer may terminate this Agreement during
the Term without Cause upon giving sixty
(60) days prior written notice of such
termination. Such notice is deemed to be
given in the event of change of control as
described in section 11 below.
7. Severance Pay. If Employee's employment terminates due to his
death, disability or by Employer notice without cause as
described in Section 6 above at any time prior to the Term,
Employer will pay to Simon or his legal designee(s), an amount
equal to his annual Base Salary ("Severance Pay") and will
immediately pay all outstanding expenses and loans due to
Simon from the Company if there are sufficient funds to pay
these items; otherwise, these expenses and loans will be paid
out over a twelve (12) month period and will earn a fifteen
(15%) rate of interest until fully paid. Any vesting rights in
any Stock Option Plan agreed to pursuant to Section 4 hereof
shall continue to accrue for a 36 month period following such
termination.
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Xxxxx Employment Agreement (Cont.)
8. No Severance Pay upon Resignation. It is expressly understood
and agreed that Simon (or his personal representative, as the
case may be) shall not be entitled to any Severance Pay if he
resigns during the Term, but will immediately be paid all
outstanding expenses and loans due from the Company if
sufficient funds are available to pay these items; otherwise,
these outstanding expenses and loans will be paid out over a
twelve (12) month period and will earn a fifteen (15%) percent
rate of interest until fully paid. At the option of Employee,
all or any portion of these expense or loans may be converted
to stock options as described below. If converted to stock
options, the number of stock options will be calculated at the
at the pre-reverse 5 cents ($.05) per share, divided into the
amount due. The strike price of the stock options will be at
the pre-reverse 5 cents ($.05) per share.
9. Manner of Payment of Severance Pay. Any Severance Pay
hereunder will be paid at such intervals and in the manner
dictated by the Employer's normal pay practices but not to
exceed 90 days after severance.
10. Notice of Termination. The Employer shall give Simon notice of
the termination of this Agreement pursuant to sub-section b-d
of this Section 6 and, except as otherwise provided herein,
the termination of this Agreement shall be effective upon the
giving of such notice. Company will immediately pay all
outstanding expenses and loans due to Simon from the Company.
11. Change of Control. As used in this section, the term "change
of control" means and refers to:
a. Any merger, consolidation, or sale of the Company
such that any individual, entity or group (within the
meaning of section 13 (d) (3) or 14 (d) (2) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act") acquires beneficial ownership, within
the meaning of Rule 13d-3 of the Exchange Act, of 20
percent or more of the voting common stock of the
Company or its subsidiary
b. Any transaction in which the Company sells all or
substantially all of its assets; A dissolution of
liquidation of the Company; or
d. The Company becomes a non-publicly held company.
e. A "change of control" as used in this section does
not include a direct capital investment in the
company.
At the option of Employee, this agreement will continue in
full effect with, and be binding upon, any successor
organization following a Change of Control.
IV. Integration. This Agreement contains the entire agreement between the
parties and supersedes all prior oral and written agreements,
understandings, commitments and practices between the parties,
including, without limitation, all prior employment agreements, whether
or not fully performed before the date of this Agreement. No amendments
to this Agreement may be made except by a writing signed by both
parties.
V. Arbitration. Any controversy or claim arising out of or relating to
this agreement, or breach of this agreement, shall be settled by
binding arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association and judgment on the award
rendered by the arbitrators may be entered in any court having
jurisdiction. Within five (5) business days after a demand has been
made to arbitrate a dispute, the parties will meet and attempt to agree
on a single arbitrator. If the parties are unable to agree on a single
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arbitrator, then each party shall, before the expiration of such five
(5) day period, designate an arbitrator. Within (30) additional
business days thereafter the two arbitrators shall select a third
arbitrator. If for any reason they cannot agree on a third arbitrator,
they may apply to the Utah Superior Court for the name of a neutral
party. The three arbitrators shall hear all the evidence, and a
majority vote shall set the award of the arbitrators. Each party shall
pay the fees of the arbitrator he or it selects and of his or its own
attorneys, and the expenses of his or its witnesses and all other
expenses connected with presenting his or its case. Other costs of the
arbitration, including the cost of any record or transcripts of the
arbitration, administrative fees, the fee of the third arbitrator, and
all other fees and costs, shall be borne equally by the parties.
Notwithstanding the foregoing, the arbitrators may award reasonable
attorneys' fees and costs to the prevailing party in their award.
VI. Litigation. In the event legal action or arbitration is brought to
enforce any of the provisions of this Agreement or for any breach
thereof, reasonable attorneys' fees and costs shall be awarded to the
prevailing party or parties in said action. All legal action is to take
place in Salt Lake City, Utah or such other city where the Employee
maintains residence.
VII. Notices. Any notice given pursuant to this Agreement must be sent by
United States Certified Mail (postage prepaid) and shall be deemed
given on dates on which the envelope or envelopes containing such
notices are deposited in the United States Mail. The Addresses of the
parties to be used for the giving of notices shall be as set forth on
the signature page of the Agreement. The parties hereto may change the
addresses to which notices to them may be sent by giving written notice
thereof in accordance with this paragraph.
VIII. Severability of Provision. If any provision of this Agreement is
invalid or illegal, the other provision shall nevertheless remain in
full force and affect.
IX. Controlling Law. This Agreement is entered into in the State of Utah
and shall be interpreted and controlled by the laws of the State of
Utah or such other state where Employee maintains residence, at the
option of Employee.
X Successors. The Agreement shall be binding on and shall inure to the benefit
of the parties to it and their respective successors and assigns. This
employment contract supercedes any other out-standing Sctn Employment Contract
between the two parties that may have been signed prior to this date for this
same time period.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on December, 20th, 2002.
Employer: SCTN Employee: Xxxxx X. Xxxxx
000 X. Xxxx Xxxxxxx Xx., Xxxxx X00, 0000 X. Xxxxxxx Xxxx.
Xxx Xxxxx, XX 00000, Xxxxx, XX 00000
By: /s/ Xxxxxxx XxXxxx By: /s/ Xxxxx X. Xxxxx
-------------------------------- -----------------------------
Xxxxxxx XxXxxx Xxxxx X. Xxxxx
Director, Treasurer and CEO
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