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EXHIBIT 10.1(f)
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into on this 1st day of September,
1995 (the "Effective Date"), by and between StarTronix Inc., a Delaware
corporation (the "Company"), and Xxxxxxxxxxx X. Xxxx, a resident of the State of
Arizona ("Employee").
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 Employee for such employment, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
Employee, it is agreed by and between the parties hereto as follows:
1. EMPLOYMENT: The Company agrees to employ Employee and Employee
agrees that he will devote his full productive time, skill, energy, knowledge
and best efforts during the period of his employment to such duties as 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 his employment. However, Employee is not
prohibited from making personal investments in any other businesses, as long as
those investments do not require Employee 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.
2. TERMS OF EMPLOYMENT: Employee's employment will begin on the 5th
day of September, 1996, and will end on the 5th day of September, 2001, a term
of five (5) years, unless earlier terminated in accordance with Sections 7 or
9 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 Employee a salary and a bonus determined in
accordance with Schedule A, (ii) Employee will be entitled to participate in the
Company's Employee Stock Option Plan as in effect from time to time, and (iii)
the Company will provide Employee with employee benefits consistent with those
provided by the Company to similarly situated executives. The Company's Employee
Stock Option Plan is summarized in Schedule B. The employee benefits provided by
the Company as of the date hereof are summarized in Schedule C.
4. TITLE AND DUTIES: The Company hires Employee as Senior Vice
President, General Counsel and Canadian General Manager, reporting to the
President. Employee shall perform such duties and functions for the Company as
shall be specified from time to time by the President or Board of Directors of
the Company, including, but not limited to the duties and functions expressly
set forth on Schedule D, and which are consistent with Employee's duties set
forth on Schedule D.
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5. ILLNESS OR INCAPACITY: Employee is entitled to absences because of
illness or incapacity of no more than a total of ninety (90) days in each
calendar year. If Employee cannot perform his duties because of illness or
incapacity for more than a total of ninety (90) days in any year, the Company
may terminate this Agreement upon thirty (30) days' written notice to Employee.
Employee is not entitled to receive, and the Company shall not be required to
pay, Employee's compensation hereunder for absences because of illness or
incapacity other than the total of ninety (90) days in each year granted to
Employee under this Section 5. If Employee returns to work and is able to
discharge his duties in full, Employee shall be deemed reinstated and
thereafter shall be entitled to full compensation hereunder.
6. TERMINATION OF AGREEMENT UPON SALE OR TERMINATION OF COMPANY'S
BUSINESS:
a. Notwithstanding anything to the contrary contained in this
Agreement, the Company may terminate Employee's employment upon thirty (30)
days' written notice to Employee upon the occurrence of any of the following
events:
(1) The acquisition, directly or indirectly, of any "person"
(excluding any "person" who on the date hereof owns or controls ten
percent (10%) or more of the voting power of the Company's common
stock), as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended, within any twelve (12)
month period of securities of the Company representing an aggregate of
fifty percent (50%) or more of the combined voting power of the
Company's then outstanding securities; provided, that for purposes of
this Paragraph (a), "acquisition" shall not include shares which are
received by a person through gift, inheritance, under a will or
otherwise through the laws of descent and distribution;
(2) During any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors
of the Company (the "Board"), cease for any reason to constitute at
least a majority thereof, unless the election of each new director was
approved in advance by a vote of at least a majority of the directors
then still in office who were directors at the beginning of such
period; or
(3) The occurrence of any other event or circumstance which
is not covered by (1) or (2) above which the Board reasonably
determines affects control of the Company and, in order to implement
the purposes of this Agreement, adopts a resolution that such event or
circumstance constitutes an "event" under this Paragraph 6.
b. If the Company terminates Employee pursuant to Paragraph
6(a), Company will, for the Applicable Period (as defined in Paragraph 8(c)),
pay Employee his then current salary (subject to decrease pursuant to Schedule
A, but without any increase pursuant to Schedule A) and provide Employee with
Group Health Insurance, but Company shall not be required to pay any other
compensation or provide any other benefits.
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7. DISCLOSURE OF INFORMATION; NONSOLICITATION; NON-COMPETITION.
a. DEFINITIONS. For purposes of this Paragraph 8, the following
terms shall have the meanings specified below:
"BUSINESS" - the development, marketing and distribution of
products or services of the type offered by the Company or any of its
subsidiaries utilizing a multi-level marketing structure, including (i)
the development, marketing and distribution of (1) screen phones, touch
screens and other receiving hardware to provide home shopping, xxxx
paying, banking, swipe-card services, access to video and audio
programming (whether from low-orbiting satellites or other sources),
and (2) the provision of international long distance, domestic long
distance or local telephone time or services in the United States and
Canada;
"CONFIDENTIAL INFORMATION" - 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 non-technical 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 non-patented
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 information relating to the operations, customers, finances,
or Business of any affiliate of the Company, if such information is
learned by Employee during the term of this Agreement or in connection
with Employee'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. Confidential
Information may include information that is not a trade secret, but
Confidential Information that is not also a trade secret shall
constitute Confidential Information only for three (3) years after the
Termination Date;
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"CUSTOMER" - any customer of the Company in the United
States that Employee, during the one year period prior to the
Termination Date, (i) provided goods or services to or solicited on
behalf of the Company; or (ii) about whom Employee possesses
Confidential Information;
"PERSON" - any individual, corporation, partnership, limited
liability company, association, municipality, government agency,
government, unincorporated organization or other entity;
"SERVICES" - the duties and functions that Employee shall
provide in the United States as an employee of the Company and that
Employee shall be prohibited from providing in the United States in
competition with the Company in accordance with the terms of this
Agreement, including the duties and functions expressly set forth on
Schedule B attached hereto. Employee acknowledges that Employee has
been informed of and discussed with the Company the specific activities
that Employee will perform as Services and that Employee understands
the scope of the activities that constitute Services under this
Agreement;
"TERMINATION DATE" - the last day Employee is employed by the
Company, whether the termination is voluntary or involuntary and
whether with or without cause; and
b. CONFIDENTIAL INFORMATION. Employee shall protect Confidential
Information. Except as required in connection with work for the Company,
Employee will not use, disclose or give to others, during or after Employee'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, Employee will deliver promptly
to the Company all materials, documents, plans, records, notes, manuals,
subcontracts, procedures and other papers and any copies thereof in Employee's
possession, custody or control relating to the Company or the Business, all of
which at all times shall be the property of the Company.
d. SOLICITATION OF CUSTOMERS. During employment and for two (2)
years after the Termination Date, Employee will 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 for
two (2) years after the Termination Date, Employee will not solicit for
employment with another Person anyone who is or was, at any time during the one
year period prior to the Termination Date, an employee of the Company.
f. SERVICES PROVIDED TO COMPETITORS. During employment and for
two (2) years after the Termination Date, Employee will not provide Services
within the United States to any Person that offers or provides products or
services through multi-level marketing involving screen phones as its main
product line.
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g. DISPARAGEMENT. Employee shall not at any time make false,
misleading or disparaging statements about the Company, including the Business,
management, employees and Customers.
h. PRIOR AGREEMENTS. Employee represents and warrants that
Employee is not under any obligation, contractual or otherwise, limiting,
impairing or affecting Employee's performance of Services. Upon execution of
this Agreement, Employee shall give the Company any agreement with a prior
employer or other Person purporting to limit or affect, in any way, Employee's
ability to work for the Company, to solicit customers or potential customers or
employees or to use any type of information.
i. FUTURE EMPLOYMENT OPPORTUNITIES. Prior to and for two (2)
years after the Termination Date, Employee shall (a) provide any prospective
employer with a copy of this Agreement, and (b) upon accepting any position,
provide the Company with the employer's name and a description of the services,
if any, Employee will provide for such employer.
j. 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 have
been or are prepared by Employee, or to which Employee contributes, in
connection with Employee'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,"
Employee hereby assigns, grants and delivers, solely, irrevocably, exclusively
and throughout the world to the Company all copyrights and other rights to the
Works. Employee 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 Employee hereby irrevocably constitutes and appoints the Company as
Employee's agent and attorney-in-fact, with full power of substitution, in
Employee's name, place and stead, to execute and deliver any and all such
assignments or other instruments which Employee 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
8(j), Employee 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.
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k. INVENTIONS, IDEAS AND PATENTS. Employee shall disclose
promptly to the Company (which shall receive it in confidence), and only to the
Company, any invention or idea of Employee (developed alone or with others)
conceived or made during Employee's employment by the Company. Employee assigns
to the Company any such invention or idea in any way connected with Employee'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 to confirm 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 assignments or documents
Employee 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 Employee 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 Employee'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 Employee for
the Company.
l. INDEPENDENCE OF COVENANTS. The covenants contained herein
shall 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 Employee against the Company,
whether predicated upon this or any other contract, shall not constitute a
defense to the enforcement by the Company of said covenants.
m. RIGHT TO INJUNCTIVE RELIEF. Employee recognizes and agrees
that the injury the Company will suffer in the event of the Employee's breach of
any covenant or agreement contained herein cannot be compensated by monetary
damages alone, and Employee therefore agrees that the Company, in addition and
without limiting any other remedies or rights that it may have, either under his
Agreement or otherwise, shall have the night to obtain an injunction against
Employee from any court of competent jurisdiction enjoining any such breach.
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8. TERMINATION.
a. This Agreement and the employment of Employee may be
terminated as follows:
(1) By the Company (i) pursuant to Paragraph 5 or 6, (ii)
upon the conviction of the Employee of any felony or material
misdemeanor under federal, state or local laws or ordinances, except
traffic violations or (iii) upon the failure of Employee to diligently
or competently discharge the duties assigned to him pursuant to this
Agreement. Company may terminate pursuant to this paragraph only upon
providing Employee written notice of request to cure such failure to
diligently or competently discharge the duties assigned and the failure
of employee cure such failure to diligently or competently discharge
the duties assigned within thirty (30) days of notice; or
(2) (i) By Employee upon thirty (30) days' written notice to
the Company or (ii) by the Company upon thirty (30) days' written
notice to Employee, or
(3) By the Company upon material violation by Employee of
any of the terms and conditions of this Agreement or the breach by
Employee of any representation or warranty made to the Company herein
or in any other agreement, document or instrument executed by Employee
and delivered to the Company, or should any representation or warranty
made by Employee hereunder or thereunder prove to have been false or
misleading in any material respect when made or furnished. Company may
terminate pursuant to this paragraph only upon providing Employee
written notice of request to cure such material violation, breach or
misrepresentation and the failure of employee cure such material
violation, breach or misrepresentation within thirty (30) days of
notice; or
(4) By the Company upon the death of Employee.
b. In the event Employee is terminated by the Company for any
reason (including, without limitation, in accordance with Paragraph
8(a)(2)(ii)) other than pursuant to Paragraph 8(a)(1) or 8(a)(3), the Company
shall (i) pay Employee his then current salary (subject to decrease pursuant to
Schedule A, but without any increase thereafter pursuant to Schedule A) and
provide Employee with Group Health Insurance, but no other compensation or
benefits, for the Applicable Period beginning with the date of termination and
(ii) subject to the Employee's strict adherence to and performance of the
covenants set forth in Paragraph 7, not later than twenty-four (24) months
after the date of such termination, an amount equal to [the lesser of (x)
$250,000 and (y) two percent (2%) of the average Net Income Amount (as defined
in Schedule A) of the Company for the two full twelve (12) month periods
following the date of such termination), however, in no event less than One
Hundred Thousand dollars ($100,000.00). If Employee is terminated pursuant to
Paragraph 8(a)(1) or 8(a)(3) or Employee terminates his employment pursuant to
Paragraph 8(a)(2)(i), Employee shall be entitled only to compensation accrued
through the date of termination and all benefits accrued as of such date, and
shall not be entitled to any portion of the payment set forth in clause (ii) of
this Paragraph (b).
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c. For purposes of this Agreement, the term "Applicable Period"
means: (i) one hundred eighty (180) days, in the case of a notice given to
Employee prior to the six (6) month anniversary of the date on which Employee
commenced his employment with the Company or its affiliate (the "Employment
Date"); (ii) two hundred seventy (270) days, in the case of a notice given to
Employee on or after the six (6) month anniversary and prior to the second
anniversary of his Employment Date, and (iii) one (1) year, in the case of a
notice given to Employee on or after the second anniversary of his Employment
Date.
9. MISCELLANEOUS.
a. This Agreement may be assigned by the Company to any
successor in interest to its business, which successor in interest shall be
bound herein to the same extent as the Company. Employee 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 Employee and may
not be sold, assigned, transferred or conveyed by Employee.
c. The waiver by either party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any subsequent breach by the other party.
d. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
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 shall 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 INC.
By: /s/ XXXXXX XXXXX
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Xxxxxx Xxxxx
President
EMPLOYEE
/s/ XXXXXXXXXXX X. XXXX
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Xxxxxxxxxxx X. Xxxx
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SCHEDULE A - SALARY AND BONUS
SALARY. Commencing on the first day of employment the Company shall pay
Employee for each of the next twelve months, a Monthly Salary (as defined
below) based upon the Net Income Amount (as defined below) for the current
fiscal year, according to the following table:
CORRESPONDING MONTHLY
NET INCOME AMOUNT SALARY
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less than or equal to $1.2 million $ 8,500
greater than $1.2 million but less than or equal to $6 million $10,500
greater than $6 million but less than or equal to $12 million $12,500
greater than $12 million $15,000
For purposes of this Agreement, "Net Income Amount" means the
Company's annual net income before income taxes and "Monthly Salary"
means Employee's monthly salary, before deductions. The Company will
deduct from payments of Monthly Salary to Employee 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 as a basis
consistent with prior periods.
BONUS. On the last day of each of the second, third and fourth
fiscal quarters following the end of the previous full fiscal year of the
Company, the Company shall pay Employee a cash bonus equal to one-third of the
Net Income Amount for such full fiscal year multiplied by the Applicable
Percentage; provided that no cash bonus shall be payable to Employee on any date
unless Employee is employed by the Company on that date.
ANNUAL NET INCOME AMOUNT APPLICABLE PERCENTAGE
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less than or equal to $1.2 million 0%
greater than $1.2 million but less than or equal to $6 million 0.5%
greater than $6 million but less than or equal to $12 million 1%
greater than $12 million 1.5%
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SCHEDULE B - SUMMARY OF EMPLOYEE STOCK OPTION PLAN
As of the date hereof, the Company's Employee Stock Option Plan (the
"Option Plan") provides for the Employee to earn, as of the last day of the
first fiscal quarter of each fiscal year (the "Issuance Date") options for
restricted common stock of StarTronix International, Inc., in an aggregate
amount (the "Annual Amount") equal to (i) one percent (1%) of the Net Income
Amount divided by the average closing price of such common stock during the last
thirty days of the previous fiscal year (the "Stock Price"), on the following
terms and conditions and the other terms and conditions as now are, and may in
the future be, set forth as the Option Plan: The exercise price for the options
issued shall equal seventy-five percent (75%) of the Stock Price. The options
shall vest over a five year period, exercisable in an amount equal to up to
twenty percent (20%) of the Annual Amount on each of the first five
anniversaries of the Issuance Date.
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SCHEDULE C -- SUMMARY OF EMPLOYEE BENEFITS
1. Senior management level medical and dental benefits for Employee and
Employee's spouse and dependents and other employee benefits phased in over
the term of this Agreement. Included in the benefit package will be a 401K
plan, the terms of which are not determined at the time of signing this
Agreement. Company shall pay for Employee's yearly membership fees in the
Law Society of Upper Canada. Employee shall be entitled to three (3) weeks
vacation per anniversary year.
2. Company shall provide Employee with the use of an automobile with a base
price equal to or less than $25,500. Such automobile shall be replaced no
later than every three years commencing on the Employment Date or sooner if
needed due to serious mechanical malfunction. At the end of the lease term,
Employee shall have the right to purchase the vehicle at its residual value
pursuant to terms of the lease agreement. Company shall provide all
maintenance and repair of the vehicle and automobile insurance in an amount
equal to or greater than the requirements of the lease agreement.
3. Company shall pay Employee $2,000 per month for travel and lodging expense
payable on the fifteenth (15th) day of each month commencing September 15,
1996 and continuing thereafter on a monthly basis for the term of this
Agreement and as extended upon mutual consent of the parties.
4. Company shall provide office equipment to Employee for his Scottsdale
office including, computer, printer, optical scanner, fax modem, business
and fax phone lines, long distance telephone service and mobile phone
service.
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SCHEDULE D - DUTIES AND FUNCTIONS
Position Summary:
Directs the legal affairs of the organization. Provides legal counsel and
guidance in the ordinary and special activities of the organization to insure
maximum protection of its legal rights utilizing broad familiarity with most
major legal disciplines. Participates in senior management policy deliberations.
Directs the defense of the organization against suits or claims and prepares
the prosecution of the organization's claims against others. Supervises the
legal aspects of organization transactions and the preparation of reports and
statements of a legal nature.
Position Responsibilities:
Directs the legal department, including internal lawyers and staff and outside
counsel.
Organizes and directs the organization's legal activities to protect the
organization's interests from a legal standpoint.
Initiates legal action on behalf of and defends the organization in any legal
action initiated against it.
Counsels and advises all organization executives on the legal aspects of
activities within their assigned areas such as human resources, taxes,
insurance, patents and the acquisition, protection and disposal of real and
personal property.
Counsels in the conduct of all relations with municipal, state and federal
bureaus, departments and agencies.
Reviews legal implications on the purchase of other organizations or on the
assessment of the assets of other organizations.
Provides counsel to executives of the organization and to all other personnel
on organization matters involving legal problems.
Reviews legal aspects of sales pricing and promotion programs.
Retains and supervises outside counsel, as required, to obtain legal opinions
or handle claims and litigation.
Supervises the registration, renewal and protection of trademarks and
copyrights.
Assists, as required, in connection with meetings of shareholders, the Board of
Directors or the Executive Committee.
Supervises preparation or review of proposed contracts, leases, and other legal
instruments to safeguard the organization's interests.
Prepares departmental budget and operates within approved budget.
Performs other related duties as assigned by management.
