EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of June 14, 2005
between CYBERTEL CAPITAL CORP., a Nevada corporation (the "Company"), and
XXXXXXX XXXXXXXXXXX (the "Executive").
RECITALS
WHEREAS, The Company is engaged in the business of developing and marketing long
distance voice and data telecommunications services and related products and
services. The Company is intending to acquire a management company for medical
offices (the "Company's Business"); and
WHEREAS, Executive possesses substantial knowledge and experience with respect
to the Company's Business; and
WHEREAS, the Company desires to employ the Executive to have the benefits of his
expertise and knowledge. The Executive, in turn, desires employment with the
Company. The parties, therefore, enter into this Agreement to establish the
terms and conditions of the Executive's employment with the Company.
In consideration of the mutual covenants and representations contained in this
Agreement, the Company and the Executive agree as follows:
1. Employment of Executive; Duties. The Company agrees to employ the Executive
and the Executive agrees to be employed by the Company as Chief Operating
Officer for the period specified in Section 3 (the "Employment Period"), subject
to the terms and conditions of this Agreement. During the Employment Period, the
Executive shall have such duties and responsibilities generally consistent with
his position and such other duties not inconsistent with his title and position
and as may be assigned to him by the Company, which may include providing
similar services for any of the Company's subsidiaries, parents or affiliates.
In connection therewith, Executive shall devote his best efforts, experience,
and judgment to fully discharge his duties and responsibilities under this
Employment Agreement and as reasonably contemplated hereby, and shall act in
conformity with the written and oral policies of the Company and within the
limits, budgets, business plans, and instructions as set by its Board of
Directors (the "Board"). Executive shall be subject to the authority of the
Board and the Company's duly appointed President and Chief Executive Officer.
2. Place of Employment and Travel. Executive acknowledges that the Company's
offices and headquarters are currently located in Northern California. The
Company will maintain a satellite office in San Diego, California that shall be
the site of Executive's employment.
3. Employment Period. The Employment Period shall begin on the date first
written above (the "Effective Date") and shall continue for two (2) years. Upon
the expiration of one (1) year from the Effective Date and upon each anniversary
thereafter, the Employment Period shall be extended an additional year without
further action by either party, unless the Company gives written notice to the
Executive within thirty (30) days of the anniversary and as provided in
Paragraph 9 herein, in which case the Employment Period shall expire one (1)
years from the next anniversary of the Effective Date.
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4. Base Salary. The Company shall pay to the Executive a minimum annual base
salary of One Hundred Thousand U.S. Dollars (US$100,000.00) (the "base salary").
The base salary shall be payable in equal periodic installments which are not
less frequent than the periodic installments in effect for salaries of other
executives of the Company. The base salary shall be subject to review annually
by the Board (or a committee appointed by the Board) for upward adjustments
based on the policies of the Company and the Executive's contributions to the
business of the Company. The base salary shall not be adjusted downward without
the written consent of the Executive.
1. Commencing after the Company closes on the acquisition of Strategic
Healthcare Systems, Inc., a Nevada corporation, for each ten percent
(10%) rise in share price of the Company's common stock
(proportionately adjusted for stock splits, stock dividends, reverse
stock splits, and the like), calculated quarterly, executive shall
receive a $10,000 raise in annual compensation.
2. Executive shall receive an annual bonus of five percent (5%) of
increased annual net revenues attributable to acquisition or roll
ups of additional facilities.
5. Benefits. In addition to and except for the matters governed by this
Agreement, the Executive shall be entitled to the following: (i) employee
benefits and perquisites, including but not limited to pension plans, deferred
compensation plans, stock options, annual bonus plans, long term incentive
plans, group life insurance, disability, sickness and accident insurance and
health benefits under such plans and programs as provided to other executives of
the Company from time to time; (ii) paid vacation as well as holidays, leave of
absence and leave for illness and temporary disability in accordance with the
policies of the Company; and (iii) the specific benefits as are set forth in
Exhibit 2 attached hereto and incorporated in full by this reference.
6. Non-Disclosure. As a condition to the employment arrangement, Executive
agrees to execute and comply with the terms and conditions of the "Employee
Non-Disclosure Agreement" attached hereto as Exhibit 1.
7. Termination.
7.1 Termination by the Company.
(a) The Company may not terminate the Executive's employment under this
Agreement without Cause.
(b) The Company, by action of its Board, may terminate the Executive's
employment under this Agreement for Cause at any time by notifying the Executive
of such termination. For all purposes of this Agreement, the Employment Period
shall end as of the date of such termination of employment. "Cause" means the
Executive's: (i) persistent and repeated refusal, failure or neglect to perform
the material duties of his employment under this Agreement (other than by reason
of the Executive's physical or mental illness or impairment), provided that such
Cause shall be deemed to occur only after the Company gave written notice
thereof to the Executive specifying in reasonable detail the conduct
constituting Cause, the Executive failed to cure and correct his conduct within
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thirty (30) days after receipt of such notice, and the Executive had the
opportunity to be heard at a meeting of the Board; (ii) committing any act of
fraud or embezzlement, provided that such Cause shall be deemed to occur only
after the Company gave notice thereof to the Executive specifying in reasonable
detail the instances of such conduct, and the Executive had the opportunity to
be heard at a meeting of the Board; (iii) breach of the Employee Non-Disclosure,
Non-Competition and Assignment of Inventions Agreement or of such other
subsequent agreements entered into during the Employment Period that results in
a detriment to the Company, provided the Company gave notice thereof to the
Executive specifying in reasonable detail each such alleged breach, and the
Executive had the opportunity to be heard at a meeting of the Board; (iv)
conviction of a felony (including pleading guilty to a felony); or (v) habitual
abuse of alcohol or drugs.
7.2 Termination by the Executive. The Executive may terminate this Agreement at
any time, for any reason or for no reason at all, by giving notice thereof to
the Company at least sixty (60) days before the effective date of such
termination. The Employment Period shall terminate as of the date of such
termination of employment.
7.3 Severance Benefits.
(a) If the Executive's employment under this Agreement is terminated by
the Executive before the end of the Employment Period and without Good
Reason (as defined in herein below), the Company shall continue to pay to
the Executive his unpaid Base Salary through the time of termination and
for a period extending ninety (90) days thereafter. Additionally, the
Executive shall be entitled to his share of the accrued stock and accrued
stock options through the date of termination which shall be paid to him
at such time as the next payment is made to the other participants of all
applicable stock or stock option plan or long term incentive plan.
(b) If the Executive's employment under this Agreement is terminated by
the Company for Cause, or if the Executive dies or becomes totally
disabled (as defined herein below), the Company shall only pay the
Executive a lump sum cash payment within thirty (30) days of the date of
such termination, equal to the sum of: (i) Executive's unpaid Base Salary
earned to the termination date; (ii) his share of the accrued stock and
accrued stock options through the date of termination which shall be paid
to him or his estate at such time as the next payment is made to the other
participants of all applicable stock or stock option plans or long term
incentive plans.
(c) If the Executive's employment under this Agreement is terminated by
the Executive for Good Reason or by the Company without Cause, the Company
shall continue to pay to the Executive his unpaid base salary for the
entire time remaining in the Employment Period. Additionally, the
Executive shall be entitled to all stock and stock options set forth in
Exhibit 2, including but not limited to his share of all accrued stock,
accrued stock options, and all other stock and stock options through the
date of the termination of the Employment Period which shall be paid to
him at such time as such payments are made to the other participants of
all applicable stock option plans or long term incentive plans.
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(d) "Good Reason" means: any material failure by the Company to pay or
provide the compensation and benefits under this Agreement; provided that,
in each such event, the Executive shall give the Company notice thereof
which shall specify in reasonable detail the circumstances constituting
Good Reason, and there shall be no Good Reason with respect to any such
circumstances cured by the Company within thirty (30) days after such
notice.
(e) If the Executive is terminated by the Company for Cause and the
Executive is entitled to receive payments or other benefits under this
Agreement upon the termination of his employment with the Company, the
Executive hereby irrevocably waives the right to receive any payments or
other benefits under any other severance or similar plan maintained by the
Company ("Other Severance Plan").
7.4 Termination by Death or Disability. This Agreement shall terminate
automatically upon the Executive's death. If the Company determines in good
faith that the Executive has a "total disability" (within the meaning of such
term or of a similar term as defined in the Company's long-term disability plan
as in effect from time to time), the Company may terminate his employment under
this Agreement by notifying the Executive thereof at least thirty (30) days
before the effective date of such termination.
8. Representation by Executive. Executive represents and warrants to the Company
that his employment hereunder will not conflict with or result in a violation or
breach of, or constitute a default under any contract, agreement or
understanding to which he is or was a party.
9. Notices. Any notices, requests, demands and other communications provided for
by this Agreement shall be sufficient if in writing and if sent by registered or
certified mail to the Executive at the last address he has filed in writing with
the Company or, in the case of the Company, to the Company's principal executive
offices.
10. Withholding Taxes. The Company shall have the right, but not the duty, to
the extent permitted by law, to withhold from any payment of any kind due to the
Executive under this Agreement to satisfy the tax withholding obligations of the
Company under applicable law.
11. Validity; Complete Agreement. The validity and enforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision hereof. This Agreement sets forth the entire understanding and
embodies the entire Agreement of the parties with respect to the subject matter
covered hereby and supersedes all prior or contemporaneous oral or written
agreements, understandings, arrangements, negotiations or communications, among
the parties hereto.
12. Amendment. This Agreement shall not be modified or amended except by written
agreement of the parties hereto.
13. Choice of Law; Jurisdiction and Venue. This Agreement shall be governed by
and construed in accordance with the law of the State of California. The Parties
consent to the exclusive jurisdiction of the California courts. Venue for any
action brought hereunder shall be exclusively in the State of California, County
of San Diego.
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14. Counterpart. This Agreement may be executed in any number of counterparts,
all of which shall be considered one and the same agreement.
15. Delay; Partial Exercise. No failure or delay by any party in exercising any
right, power or privilege under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
16. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Company shall have
the right to assign this Agreement to any of its respective subsidiaries,
parents or affiliates. The rights and obligations of Executive under this
Agreement are personal to him and no such right or obligation shall be subject
to voluntary or involuntary alienation, assignment, or transfer.
17. Mandatory Arbitration. DISPUTES REGARDING THE EXECUTIVE'S EMPLOYMENT BY THE
COMPANY, INCLUDING, WITHOUT LIMITATION, ANY DISPUTE UNDER THIS AGREEMENT WHICH
CANNOT BE RESOLVED BY NEGOTIATIONS BETWEEN THE COMPANY AND THE EXECUTIVE SHALL
BE SUBMITTED TO, AND SOLELY DETERMINED BY, FINAL AND BINDING ARBITRATION
CONDUCTED UNDER THE RULES OF ARBITRATION OF THE STATE OF CALIFORNIA APPLICABLE
TO EMPLOYMENT DISPUTES, AND THE PARTIES AGREE TO BE BOUND BY THE FINAL AWARD OF
THE ARBITRATOR IN ANY SUCH PROCEEDING. THE ARBITRATOR SHALL APPLY THE LAWS OF
THE STATE OF CALIFORNIA WITH RESPECT TO THE INTERPRETATION OR ENFORCEMENT OF ANY
MATTER RELATING TO THIS AGREEMENT. ARBITRATION MAY BE HELD IN SAN DIEGO,
CALIFORNIA, OR SUCH OTHER PLACE AS THE PARTIES HERETO MAY MUTUALLY AGREE, AND
SHALL BE CONDUCTED BY A QUALIFIED ARITRATOR APPOINTED UNDER THE LAWS OF THE
STATE OF CALIFORNIA. JUDGMENT UPON THE AWARD BY THE ARBITRATOR MAY BE ENTERED IN
ANY COURT HAVING JURISDICTION THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
Witness
/s/ Xxxxxxx Xxxxxxxxxxx /s/ Xxxxxx X. Xxxxxx
-------------------------------- --------------------------------
XXXXXXX XXXXXXXXXXX
CYBERTEL CAPITAL CORP. Witness
By /s/ Xxxxxx X. Xxxxx, M.D. /s/ Xxxxxx X. Xxxxxx
-------------------------------- --------------------------------
Xxxxxx X. Xxxxx, M.D.
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Exhibit 1
EMPLOYEE NON-DISCLOSURE
AGREEMENT
The Undersigned, XXXXXXX XXXXXXXXXXX (the "Employee" or "Employee") in
consideration of his employment with CYBERTEL COMMUNICATIONS CORP. ("CYBERTEL"),
plus other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, intending to be legally bound by the terms and
conditions of this Employee Non-Disclosure Agreement (this "Agreement"), hereby
agrees as follows:
1. Respective Persons or Entities Covered. Employee acknowledges that, as
an employee of CYBERTEL, he will possibly also be working with subsidiaries,
parents and affiliated entities of CYBERTEL that shall hereinafter be referred
to herein as the "Companies."
1. Confidentiality. Employee covenants and agrees that he will not, at any
time either during the term of this Agreement of thereafter, for a period of one
year after the receipt by Employee of the last disclosure of proprietary
information, reveal (or permit to be revealed where such is within its control)
to a third party or use for his own benefit, without prior written consent of
the Companies, any information pertaining to the Inventions, or any of the
Companies' respective businesses including but not limited to information
relating to research results, formulations, computer code, suppliers, employees,
customers financial condition, procedures, tests, know-how, production,
distribution, work and organizational methods, experimental results or trade
secrets.
2. Definition of Terms. The term "Employee" shall, for purposes of
paragraphs 1 through 2 includes Employee along with any of Employee's
Affiliates, Associates, or entities of which he is a Beneficial Owner. The term
"Affiliate" shall means a person controlling, controlled by or under common
control with Employee and the term "control" (including the terms "controlling,"
"controlled by," and "under common control with") means the power to direct or
cause the direction of the management and policies of a person or entity,
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whether through the ownership of voting securities, by contract or otherwise.
The term "Associate," shall mean a relationship with: i) any corporation, or
organization (other than the Companies) of which Employee or any of his
Affiliates or Associates is a director, officer or partner, ii) any corporation,
or organization (other than the Companies) of which Employee or any of
Employee's Affiliates or Associates, directly or indirectly, are the beneficial
owner of five percent (5%) or more of any class of equity securities; iii) any
trust or other estate in which Employee or any of his Affiliates or Associates
have a substantial beneficial interest or with respect to which Employee or any
of his Affiliates or Associates serve as a trustee or in any other fiduciary
capacity; or iv) Employee's spouse, or any blood relative of Employee, or any
blood relative of Employee's spouse, who resides in the same home as Employee,
or who is an officer or director, or partner of any Affiliate or Associate of
Employee. The term "beneficial ownership" shall mean interests which Employee or
his or Affiliates or Associates may possess which are substantially equivalent
to those of ownership and are enjoyed by reason of any contract, understanding,
relationship, agreement or other arrangement, whether or not such are set forth
in a legally binding contract or document. The term "term of this Agreement"
shall mean the period of time during which the Employment Agreement executed by
Employee and CYBERTEL concurrently with this Agreement remains in force.
3. Restriction on Enforceability of Agreement. Full compliance by CYBERTEL
and the Companies with the terms of the Employment Agreement executed by
CYBERTEL and Employee concurrently with this Agreement is a material condition
in Employee's decision to execute this Agreement.
IN WITNESS WHEREOF, the Undersigned, intending to be legally bound, hereby
executes and delivers this Agreement this 14th day of June, 2005.
/s/ Xxxxxxx Xxxxxxxxxxx
--------------------------------
XXXXXXX XXXXXXXXXXX
Witness
/s/ Xxxxxx X. Xxxxxx
--------------------------------
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Exhibit 2
In addition to the benefits set forth in the Employment Agreement, the
Employee or his assigns shall receive the following:
An option to purchase shares of the Company's common stock such that the
number of shares of common stock issuable upon exercise of the option shall
equal seven and one-half percent (7.5%) of the issued and outstanding common
stock as of the date of exercise. The exercise price of the option will be $500
for all shares issuable upon exercise of the option. This option fully vests
upon the execution of this agreement and the termination of the executive's
employment for any reason will not have an effect on the ability of the
Executive to exercise this option. This option shall terminate on June 14, 2010.
An option to purchase shares of the Company's preferred stock such that
the number of shares of preferred stock issuable upon exercise of the option
shall equal seven and one-half percent (7.5%) of the issued and outstanding
preferred stock as of the date of exercise. The exercise price of the option
will be $500 for all shares issuable upon exercise of the option. This option
fully vests upon the execution of this agreement and the termination of the
executive's employment for any reason will not have an effect on the ability of
the Executive to exercise this option. This option shall terminate on June 14,
2010.
The following additional terms and conditions shall apply to all shares of
Common Stock subject to this Exhibit 2:
1. All shares transferred and paid to Employee shall be restricted
within the meaning of Rule144 of the Securities Act of 1933, as
amended, and shall bear the appropriate legend on each certificate
as well as a legend describing the limitation on transferability
contained herein;
2. In the event the Company approves and implements a stock split or
other revaluation of the shares of Common Stock subject to this
Exhibit 2, the number of remaining shares of Common Stock to be
issued to the Employee shall be recalculated so that the Employee
shall receive the number of shares exactly equivalent to the value
of the shares set forth above; and,
3. In the event the Company is merged into or acquired by another
entity, or a majority interest in the Common Stock is sold or
otherwise transferred to another entity, or the Company authorizes
any other reorganization that in any way affects the marketability
of the shares of Common Stock subject to this Exhibit 2, all shares
of Common Stock remaining to be issued to the Employee shall
immediately vest in the Employee, and the Employee shall have the
right to sell or otherwise dispose of all or any portion of such
shares at his sole discretion and free of any restrictions other
than restrictions under federal or state securities laws.
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