EMPLOYMENT AGREEMENT
Exhibit
10.4
This
EMPLOYMENT AGREEMENT (this
“Agreement”) is made as of the 31st day of March 2006, by and between Advanced
Tel, Inc., a California corporation (the “Company”), and Xxxxx Xxxxxx, an
individual (“Employee”), and is made with respect to the following facts:
R
E C I T A L S
A.
The Company and the Employee wish
to ensure that the Company will receive the benefit of Employee’s loyalty and
service.
B.
In order to help ensure that the
Company receives the benefit of Employee’s loyalty and service, the parties
desire to enter into this formal Employment Agreement to provide Employee with
appropriate compensation arrangements and to assure Employee of employment
stability.
C.
The parties have entered into
this Agreement for the purpose of setting forth the terms of employment of
the
Employee by the Company.
NOW,
THEREFORE, in
consideration of the premises and mutual covenants herein contained, THE
PARTIES HERETO AGREE AS FOLLOWS:
1.
Employment
of Employee
and Duties. The Company hereby hires Employee and Employee hereby
accepts employment upon the terms and conditions described in this Agreement.
The Employee will initially serve as the President of Advanced Tel, Inc., a
wholly owned subsidiary of InterMetro Communications, Inc., a California
corporation (“InterMetro”), with all of the duties, privileges and authorities
usually attendant upon such office, including but not limited to responsibility
for the day-to-day supervision and management of the operation of the Company.
Subject only to Employee’s right to perform his duties for Company from Orange
County, the Chief Executive Officer may, at his/her sole discretion, modify
Employee’s title, duties, privileges and authorities at any time after execution
of this Agreement. Subject to (a) the general supervision of the Board of
Directors and the Chief Executive Officer of the Company, and (b) the
Employee’s duty to report to the Board of Directors and the Chief Executive
Officer periodically, as specified by the Chief Executive Officer from
time-to-time, Employee will have all of the authority to perform his employment
duties for the Company. A change in Employee’s title with the Company or to his
duties, privileges, or authorities shall not be a breach of any provision of
this Agreement.
2.
Time
and
Effort. Employee agrees to devote his full working time and
attention to the management of the Company’s business affairs, the
implementation of its strategic plan, as determined by the Chief Executive
Officer, and the fulfillment of his duties and responsibilities as the President
of Advanced Tel, Inc. Expenditure of a reasonable amount of time for personal
matters and charitable activities will not be deemed to be a breach of this
Agreement, provided that those activities do not materially interfere with
the
services required to be rendered to the Company under this Agreement.
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3.
The
Company’s
Authority. Employee agrees to comply with the Company’s rules and
regulations as adopted by the Company’s Board of Directors regarding performance
of his duties, and to carry out and perform those orders, directions and
policies established by the Company with respect to his engagement. Employee
must promptly notify the Company’s Chief Executive Officer of any objection he
has to the Board’s directives and the reasons for such objection.
4.
Noncompetition
by
Employee. In addition to any other noncompetition covenants of
Employee to the Company pursuant to that certain Stock Purchase Agreement,
dated
March 30, 2006, by and between the Company, Employee, and InterMetro (the
“Stock Purchase Agreement”), Employee agrees that during the term of this
Agreement and during any period that Employee is receiving any payments or
benefits from the Company, Employee will not directly or indirectly, whether
(a) as employee, agent, consultant, employer, principal, partner, officer
or director; (b) holder of five percent or more of any class of equity
securities or five percent or more of the aggregate principal amount of any
class of debt, notes or bonds of a company with publicly traded equity
securities; or (c) in any other individual or representative capacity
whatsoever, in each case for his own account or the account of any other person
or entity, engage in any business or trade competing with any of the businesses
or trades of the Company, its parent, subsidiaries, or affiliates, which they
conduct as of the closing date of the Stock Purchase Agreement, during the
term
of this Employment Agreement, or as of the termination of this Employment
Agreement, anywhere in the world in which the Company, its parent, subsidiaries,
or affiliates are carrying on such trade or business.
5.
Nondisclosure
Covenant
and Proprietary Information, Confidentiality, Loyalty, and
Nonsolicitation.
5.1
Proprietary
Information, Confidentiality, Loyalty, and Nonsolicitation.
Employee agrees to execute the Employee Proprietary Information,
Confidentiality, Loyalty, and Nonsolicitation Agreement (the “PCLN Agreement”)
attached to this Agreement as Exhibit A. This Agreement and the PCLN Agreement
shall be interpreted in tandem to confer upon the Company the maximum
protection.
5.2
Nondisclosure
Covenant. Employee hereby covenants and agrees to maintain in
strictest confidence all Confidential Information, as that term is defined
in
Exhibit A to this Agreement, in trust for the Company, its successors and
assigns. During the period of Employee’s employment with the Company and at any
and all times following Employee’s termination of employment for any reason,
including without limitation Employee’s voluntary resignation or involuntary
termination with or without cause, Employee agrees not to misappropriate, or
disclose or make available to anyone outside Company’s organization, any
Confidential Information, as that term is defined in Exhibit A to this
Agreement, or anything relating thereto without the prior written consent of
the
Company, which consent may be withheld by the Company for any reason or no
reason at all.
6.
Noninterference
and
Nonsolicitation Covenants. In further reflection of the Company’s
important interests in its proprietary information on trade and customer and
employee relationships, Employee agrees that, (a) during the thirty
(30) month period following the termination of Employee’s employment with
the Company “for cause” or as a result of his voluntary resignation before the
end of the term of this Agreement under circumstances where the Company is
not in breach of this
Agreement, Employee will not directly or indirectly, for or on behalf of any
person, firm, corporation or other entity, interfere with any contractual or
other business relationships that the Company has with any of its customers,
clients, service providers or materials suppliers as of the date of Employee’s
termination of employment, and (b) during the thirty (30) month period
following the termination of Employee’s employment with the Company “for cause”
or as a result of his voluntary resignation before the end of the term of this
Agreement under circumstances where the Company is not in breach of this
Agreement, Employee will not directly or indirectly solicit or induce any
employee or consultant of the Company to terminate his/her employment or
consulting relationship with Company.
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7.
Term
of
Agreement. This Agreement will commence to be effective on the date
first above written (the “Commencement Date”), and will continue until a date
three years from the Commencement Date, unless terminated sooner as provided
in
Section 13 hereof.
8.
Compensation. During the term of this Agreement, the
Company will pay the following compensation to Employee:
8.1
Annual
Salary. Employee will be paid a fixed salary of $185,000 per year,
payable in two installments per month on or about the 5th and the 20th
day of each month, commencing on April 20, 2006 for
the first period after the Commencement Date of this Agreement.
8.2
Annual
Job
Performance Bonus. Employee’s job performance will be reviewed by
the Board of Directors of the Company on an annual basis and if recommended
by
the Compensation Committee of the Company’s Board of Directors and if approved
by the Company’s full Board of Directors, Employee may receive an annual bonus
of up to 50% of Employee’s salary paid in the form of cash, stock, stock options
or any combination thereof, based on the Board’s evaluation of the Employee’s
definable efforts, accomplishments and similar contributions. Employee’s job
performance review shall be made without consideration for any other
compensation Employee is receiving pursuant to the Stock Purchase Agreement
between Employee and InterMetro.
9.
Reimbursement
of
Expenses. The Company will reimburse Employee for all reasonable
verifiable business expenses incurred at the direction of the Company in
connection with the performance of Employee’s duties hereunder, including
expense reimbursement for the monthly service fees and all toll charges incurred
on behalf of the Company for one cellular telephone. All requests for expense
reimbursement must be submitted, with appropriate receipts, to the Company
no
later than thirty (30) days after the expense has been incurred. All
compensation provided in Section 8 and 9 of this Agreement will be subject
to customary withholding tax and other employment taxes, to the extent required
by law.
10.
Vacation. Employee will be entitled to three weeks of
paid vacation during the first year of this Agreement and four weeks of paid
vacation during each of the second and third years of this Agreement. The
Employee will be entitled to the holidays provided in the Company’s established
corporate policy for employees with comparable duties and responsibilities.
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11.
Automobile. Only if this Agreement is entered into by
March 31, 2006, notwithstanding anything else herein to the contrary, the
Company will pay to the Employee a fixed amount equal to (a) $500 per month
on the last day of each month during the term of this Agreement as reimbursement
to the Employee on a nonaccountable basis of all expenses incurred by the
Employee for the use of his automobile for Company business purposes, including
but not limited to depreciation, repairs and insurance. Employee will not be
entitled to any other reimbursement for the use of his automobile for business
purposes.
12.
Definition
of
“Cause”. For the purposes of this Agreement, “termination for
cause” means termination of Employee’s employment by Employer due to
(a) Employee’s conviction of, or the entry of a pleading of guilty or nolo
contendre by Employee to, a felony or crime involving moral turpitude, or
(b) Employee’s breach of this Agreement or failure to comply with any
provision of this Agreement, or (c) an act of fraud committed by Employee
against the Company, or (d) a willful act by Employee as a result of which
he receives a material improper personal benefit at the expense of the Company,
or (e) Employee’s demonstration of negligence or willful misconduct in the
execution of his assigned duties, or (f) a breach of Employee’s fiduciary
duty to the Company, to the Board of Directors, or to the Company’s
shareholders, or (g) Employee’s imparting Confidential Information relating
to the Company to a third party, other than in the course of carrying out the
Employee’s duties, which has resulted in material damage to the Company,
provided, that the circumstances described in subparagraphs (b) and
(e) above are not as a result of Employee’s death, disability or
retirement; and provided further, that the Employee has been given the written
notice specified in this Section and has failed to cure any defect in
performance as specified in such notice within the time period specified in
the
next sentence. The Company will give Employee written notice specifying the
conduct alleged to have constituted such cause and provide Employee the
opportunity to cure such conduct, if curable, within ten (10) days
following receipt of such notice.
13.
Termination. This Agreement may be terminated in the
following manner and not otherwise:
13.1
Mutual
Agreement. This Agreement may be terminated by the mutual written
agreement of the Company and Employee to terminate.
13.2
Termination
by
Employee for Breach. Employee may at his option and in his sole
discretion terminate this Agreement for the material breach by the Company
of
this Agreement (other than where Employee has first materially breached this
Agreement causing material damage to the Company), and failure by the Company
to
cure such breach within ten (10) days of receipt of written notice by the
Company’s Board of Directors from Employee of the alleged material breach of
this Agreement by the Company. In the event of such termination, Employee must
give the Company thirty (30) day’s prior written notice.
13.3
Termination
by the
Company for Cause. The Company may at its option terminate this
Agreement for cause as defined in and only in accordance with Section 12 of
this Agreement. In the event of termination by the Company for cause as defined
in Section 12, the Company will pay the Employee any remaining base salary,
at the rate then in effect under Section 8.1, through the effective date of
such termination, plus any benefits under other plans or programs in which
the
Employee is vested at the time of his termination.
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13.4
Termination
Upon
Death. This Agreement will terminate upon the death of the
Employee.
13.5
Termination
Upon the
Disability of the Employee. This Agreement will terminate upon the
disability of the Employee. As used in the previous sentence, the term
“disability” means the complete physical and/or mental disability to discharge
Employee’s duties and responsibilities for a continuous period of not less than
six months during any consecutive twelve (12) month period. Any physical or
mental disability which does not prevent Employee from discharging his duties
and responsibilities in accordance with usual standards of conduct as determined
by the Company in its reasonable opinion will not constitute a disability under
this Agreement.
13.6
Survival
of
Covenants. Notwithstanding anything contained in this Agreement to
the contrary, the covenants of Employee contained in Section 4,
Section 5 and Section 6 of this Agreement will survive the term of
this Agreement (as specified in Section 7 hereof) or Employee’s termination
of his employment relationship with the Company, in each case as specified
further in such covenants.
14.
Arbitration. Any dispute under this Agreement will be
resolved by binding arbitration conducted in accordance with the rules and
procedures of the American Arbitration Association as they are then in effect
in
the County of Los Angeles, State of California. In order to select an
arbitrator, each party to the dispute will select an arbitrator of its choice,
and those selected arbitrators will then select by mutual agreement a single
arbitrator for the proceeding. The decision of the arbitrator shall be final
and
binding on the parties to this Agreement, and judgment thereon may be entered
in
the Superior Court for the County of Los Angeles or any other court having
jurisdiction. Each party to this Agreement will advance one-half of the
arbitrator’s fees; however, all costs of the arbitration proceeding to enforce
this Agreement, including attorneys’ fees and witness expenses, shall be paid by
the party against whom the arbitrator rules. It is expressly agreed that the
parties to any such arbitration may take discovery as contemplated and provided
for by California Code of Civil Procedure §1283.05. Notwithstanding anything
herein to the contrary, the parties hereto will not be required to submit a
claim to arbitration if the claim is for temporary or preliminary equitable
or
injunctive relief that could not practicably be heard in a timely fashion
through the arbitration process.
15.
Assignability
of
Benefits. Except to the extent that this provision may be contrary
to law, no assignment, pledge, collateralization or attachment of any of the
benefits under this Agreement will be valid or recognized by the Company.
Payment provided for by this Agreement will not be subject to seizure for
payment of any debts or judgments against the Employee, nor will the Employee
have any right to transfer, modify, anticipate or encumber any rights or
benefits hereunder; provided that any stock issued by the Company to the
Employee pursuant to this Agreement will not be subject to Section 15 of
this Agreement.
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16.
Notice.
Except as otherwise specifically provided, any notices to be given hereunder
will be deemed given upon personal delivery, air courier or mailing thereof,
if
mailed by certified mail, return receipt requested, to the following addresses
(or to such other address or addresses as will be specified in any notice
given):
In
case of the Company:
Advanced
Tel, Inc.
0000
Xxxx Xxxxxx Xxxxx
Xxxxxxxx
X
Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention:
Xxxxxxx Xxxx, Chief
Executive Officer
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
In
case of the Employee:
Xxxxx
Xxxxxx
The
address listed below
Xx. Xxxxxx’x
signature
to this Agreement.
17.
Recourse. Employee’s recourse for any liability, claims,
damages, losses, expenses, judgments or settlements will be limited to the
assets of the Company. Employee will have no recourse against any individual
officer, director, or employee of the Company, its parent or subsidiaries.
18.
Entire
Agreement. This Agreement embodies the entire understanding among
the parties and merges all prior discussions or communications among them,
and
no party will be bound by any definitions, conditions, warranties, or
representations other than as expressly stated in this Agreement or as
subsequently set forth in a writing signed by the duly authorized
representatives of all of the parties hereto.
19.
No
Oral Change;
Amendment. This Agreement may only be changed or modified and any
provision hereof may only be waived by a writing signed by the party against
whom enforcement of any waiver, change or modification is sought. This Agreement
may be amended only in writing by mutual consent of the parties.
20.
Severability. In the event that any provision of this
Agreement will be void or unenforceable for any reason whatsoever, then such
provision will be stricken and of no force and effect. The remaining provisions
of this Agreement will, however, continue in full force and effect, and to
the
extent required, will be modified to preserve their validity.
21.
Applicable
Law and
Venue. This Agreement will be construed as a whole and in
accordance with its fair meaning. This Agreement will be interpreted in
accordance with the laws of the State of California, and venue for any action
or
proceedings brought with respect to this Agreement will be in the County of
Los
Angeles in the State of California.
22.
Successors
and
Assigns. Each covenant and condition of this Agreement will inure
to the benefit of and be binding upon the parties hereto, their respective
heirs, personal representatives, assigns and successors in interest. Without
limiting the generality of the foregoing sentence,
this Agreement will be binding upon any successor to
the Company whether by merger, reorganization or otherwise.
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23.
Injunctive
Remedy. In the case of any breach or threatened breach by Employee
of any of his covenants or obligations under this Agreement, the parties hereto
agree that damages may not be an adequate remedy for the Company and that,
in
the event of any such breach or threatened breach, the Company may, either
with
or without pursuing any potential damage remedies, immediately obtain and
enforce an injunction prohibiting Employee from committing or continuing to
commit such breach or threatened breach.
24.
Counterparts. This Agreement may be executed in two
counterparts, each of which may be deemed an original, but both of which
together will constitute one and the same agreement.
25.
Tax
Advice. Employee hereby represents and warrants that he has sought
his own independent tax advice regarding the matters set forth in this Agreement
and Employee has not relied on any representation or statement made by the
Company or its representatives regarding the tax implications of such matters.
IN
WITNESS WHEREOF,
the parties hereto have executed this Agreement on the date first above written.
| COMPANY: |
ADVANCED
TEL,
INC.
a
California
corporation
|
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|
By:
|
/s/ Xxxxxxx Xxxx | |||||||
| Xxxxxxx Xxxx, Chief Executive Officer | ||||||||
|
Attest:
|
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| /s/ Xxxxx Arena | ||||||||
| ____________________________, Director | ||||||||
| EMPLOYEE: | /s/ Xxxxx Xxxxxx | |||||||
|
Xxxxx
Xxxxxx
|
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|
Street
Address
|
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|
City,
State and Zip
Code
|
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|
Telephone
Number
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Facsimile
Number
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EXHIBIT
A
EMPLOYEE
PROPRIETARY
INFORMATION,
CONFIDENTIALITY,
LOYALTY,
AND NONSOLICITATION
AGREEMENT
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