EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into effective as of
July 6, 1999 between Prepaid Telecom Corporation (PTC), a Texas corporation (the
"Company"), and Xxx Xxxxxxx (the "Employee").
RECITALS
WHEREAS, PTC, a Texas corporation, is engaged in the business of providing
prepaid wireless service, (the Company's Business); and
WHEREAS, Employee possess substantial knowledge and experience with respect
to the Company's Business; and
WHEREAS, the Company desires to employ the Employee to have the benefits of
his expertise and knowledge. The Employee, in turn, desires employment with the
Company. The parties, therefore, enter into this Agreement to establish the
terms and conditions of the Employee's employment with the Company.
In consideration of the mutual covenants and representations contained in
this Agreement, the Company and the Employee agree as follows:
1. EMPLOYMENT OF EMPLOYEE; DUTIES. The Company agrees to employ Employee and
Employee agrees to be employed by the Company, as Vice President - Treasurer,
for the period specified in Section 3 (the "Employment Period"), subject to the
terms and conditions of this Agreement. During the Employment Period, the
Employee 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 each of the Company's subsidiaries, parents or affiliates.
In connection therewith, Employee shall devote his best efforts, experience and
judgement 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. Employee shall be subject to the authority of the Company's Board of
Directors and duly appointed officers.
2. PLACE OF EMPLOYMENT AND TRAVEL. Employee acknowledges that the Company's
offices and headquarters are currently located in Houston, Texas, that shall be
the initial site of Employee's employment.
3. EMPLOYMENT PERIOD. The Employment Period shall begin on the date first
written above and shall continue for three (3) years.
4. BASE SALARY. During the Employment Period, the Company shall pay the Employee
a minimum annual base salary of U.S. Twelve thousand Dollars (US $12,000). 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
Employees of the Company. The base salary shall be subject to review annually by
the Board of Directors ("Board") (or a committee appointed by the Board) for
upward adjustments based on the policies of the Company and the Employee's
contributions to the business of the Company.
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5. BENEFITS. In addition to and except for the matters governed by this
Agreement, the Employee shall be entitled to: (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 employees of the Company from time
to time; and (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.
6. NON-DISCLOSURE; NON-COMPETITION. As a condition to the employment
arrangement, Employee agrees to execute and comply with the terms and conditions
of the "Employee Non-Disclosure, Non-Competition and Assignment of Inventions
Agreement" attached hereto as Exhibit 1.
7. TERMINATION.
7.1 TERMINATION BY THE COMPANY.
(a) The Company, by action of its Board, may terminate Employee's employment
under this Agreement without Cause (as defined in herein below) at any time by
giving notice thereof to Employees 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.
(b) The Company, by action of its Board, may terminate Employee's employment
under this Agreement for Cause at any time by notifying Employee 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 Employee'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
Employee's physical or mental illness or impairment), provided that such Cause
shall be deemed to occur only after the Company gave notice thereof to Employee
specifying in reasonable detail the conduct constituting Cause, and Employee
failed to cure and correct his conduct within thirty (30) days after such
notice; (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
Employee specifying in reasonable detail the instances of such conduct, and
Employee 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; (iv) conviction of
a felony (including pleading guilty to a felony); or (v) habitual abuse of
alcohol or drugs.
7.2 TERMINATION BY EMPLOYEE. Employee 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 ninety (90) days before the effective date of such termination. The
Employment Period shall terminate as of the date of such termination of
employment, unless the Company elects to waive such period of notice, in which
case, the Employment Period shall terminate upon acceptance by the Company of
the notice.
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7.3 SEVERANCE BENEFITS.
(a) If Employee's employment under this Agreement is terminated before the
end of the Employment Period by the Company without Cause or by Employee
for Good Reason (as defined in herein below), the Company shall continue to
pay to Employee his unpaid Base Salary through the time of termination and
for a period extending sixty days thereafter. Additionally, Employee shall
be entitled to his share of the vested 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 the any stock option plan or the long
term incentive plan.
(b) If Employee's employment under this Agreement is terminated by the
Company for Cause, by Employee without Good Reason or if Employee dies or
becomes totally disabled (as defined in herein below), the Company shall
only pay Employee a lump sum cash payment within thirty (30) days of the
date of such termination, equal to the sum of: (i)Employee's unpaid Base
Salary earned to the termination date; (ii) his share of the vested stock
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 the any
stock option plan. Not withstanding the foregoing, in the event that the
Company terminates Employee's employment for Cause upon the reason that
Employee has breached the terms of the Employee Non-Disclosure,
Non-Competition and Assignment of Inventions Agreement then, and in such
event, Employee shall forfeit all right to any shares vested or unvested in
any stock option or other bonus plan of the Company along with any rights
to any bonuses cash or otherwise.
(c) "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, Employee 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.
(d) If Employee is entitled to receive payments or other benefits under
this Agreement upon the termination of his employment with the Company,
Employee 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 Employee's death. If the Company determines in good faith
that Employee 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 Employee thereof at least thirty (30) days before the
effective date of such termination.
8. REPRESENTATION BY EMPLOYEE. Employee 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 Employee 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.
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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
Employee 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.
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 Employee 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 EMPLOYEE'S EMPLOYMENT BY THE
COMPANY, INCLUDING, WITHOUT LIMITATION, ANY DISPUTE UNDER THIS AGREEMENT WHICH
CANNOT BE RESOLVED BY NEGOTIATIONS BETWEEN THE COMPANY AND EMPLOYEE SHALL BE
SUBMITTED TO, AND SOLELY DETERMINED BY, FINAL AND BINDING ARBITRATION CONDUCTED
UNDER THE RULES OF ARBITRATION OF THE STATE OF TEXAS 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
TEXAS WITH RESPECT TO THE INTERPRETATION OR ENFORCEMENT OF ANY MATTER RELATING
TO THIS AGREEMENT. ARBITRATION MAY BE HELD IN TEXAS OR SUCH OTHER PLACE AS THE
PARTIES HERETO MAY MUTUALLY AGREE, AND SHALL BE CONDUCTED BY A QUALIFIED
ARBITRATOR APPOINTED UNDER THE LAWS OF THE STATE OF TEXAS. JUDGMENT UPON THE
AWARD BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the month, day, and year first written above.
PREPAID TELECOM CORPORATION EMPLOYEE
By //s// Xxxxxxx X. Xxxxxxxxxx By: //s// Xxxxxx X. Xxxxxxx
---------------------------------- ----------------------------
Xxxxxxx X. Xxxxxxxxxx Xxxxxx X. Xxxxxxx
President Vice President - Treasurer
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Exhibit 1
EMPLOYEE NON-DISCLOSURE, NON-COMPETITION
AND ASSIGNMENT OF INVENTIONS AGREEMENT
The Undersigned Xxx Xxxxxxx, for and in consideration of his employment with
Prepaid Telecom Corporation ("PTC"), plus other good and valuable consideration,
the receipt and sufficiently of which is hereby acknowledge, intending to be
legally bound by the terms and conditions of this Agreement, hereby agrees as
follows:
1. RESPECTIVE PERSONS OR ENTITIES COVERED. Undersigned acknowledges that,
as an employee of PTC, he will possibly also be working with subsidiaries,
parents and affiliated entities of PTC that shall hereinafter be referred to
herein as the "Companies."
2. INVENTIONS. Undersigned agrees as follows:
A. DISCLOSURE. He will promptly disclose to the Companies and each of them,
any invention, discovery, know-how, improvement, design, device, apparatus,
composition, process, plans, programs, or use made, conceived or discovered
by Employee, either solely or in collaboration with others, during the term
of this Agreement which (i) relates in any way to the products, services
processes or systems relating to any of the Companies respective businesses
(ii) results from or is suggested by any work performed by Employee for any
of the Companies (all the foregoing hereinafter referred collectively as
"Inventions");
B. OWNERSHIP OF INVENTIONS. Each Invention shall be and remain the sole and
exclusive property of the Companies, whether patented or not, and any
Invention conceived within six months after termination of this Agreement
shall be presumed to be the property of the Companies subject to proof of
the Companies' satisfaction that such Invention was first conceived after
the termination of this Agreement. In furtherance of the foregoing,
Employee agrees to execute, acknowledge and deliver any and all documents
and instruments as may be requested by the Companies (but without any
additional compensation from the Companies) for the purpose of vesting
title to any Invention in the Companies.
C. PRIOR INVENTIONS. Employee attaches as Schedule A hereto, concurrently
with the execution hereof, a list and brief description of all unpatented
Inventions or proprietary information, if any, made or conceived by him
prior to the date of this Agreement and which are to be excluded from the
provisions of this Section. If no such list is attached at the time of the
execution of this Agreement, it shall be conclusively presumed that
Employee has waived any right he may have to any such Invention which
relates to any of the Companies businesses.
D. REPRESENTATION. Employee represents and warrants to the Companies that
except as set forth on Schedule B, attached hereto, neither he nor his
Associates or Affiliates have any agreements with or obligations to any
person or entity in conflict with any of the provisions of this Agreement.
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3. 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.
4. NON-COMPETITION. During the term of this Agreement and for a period of
one year thereafter, Employee agrees that, except as contemplated by this
Agreement, he shall not, without the prior written consent of the Companies,
either individually or with others, directly or indirectly, as an employee,
representative, partner, principal, agent, independent contractor, consultant,
stockholder, or in any other capacity, participate in, engage in or have a
financial interest in any activity, business or entity relating to or involved
in the development, testing or marketing of products, services, systems or
processes related to the Companies' respective businesses, except as provided in
Schedule B.
Employee acknowledges that the claim for or the payment of any damages for
breach of the provisions contained in this paragraph 4 shall not preclude the
Companies from seeking injunctive or such other forms of relief as may be
obtained in a court of law or equity. Employee, acknowledges that he will be
fully able to earn an adequate livelihood for himself and his dependents if the
provisions of this paragraph 4 shall be specifically enforced against him. In
the event that any court of competent jurisdiction shall determine that any
term, covenant, or condition of this paragraph 4 is void or unenforceable, such
court shall have the powers and authority to modify this paragraph 4 in
accordance with the original intent of the parties so as to make such term,
covenant or condition and the remainder of this Agreement valid and binding upon
the parties hereto.
5. NON-SOLICITATION. During the term of this Agreement and for a period of
-
one year thereafter, Employee agrees that he shall not, without the prior
written consent of the Companies, either individually or with others, directly
or indirectly solicit or hire any of the Companies' employees or key employees
of the Companies' customers for employment with a person or entity involved in
marketing products or services competitive with any of the Companies' respective
businesses. Key employees include supervisory personnel, executives, personnel
in charge of any department, section or subdivision, and project managers (or
directors) and senior personnel on any individual project or projects. Employee
further agrees that all customers of the Companies, and all prospective
customers from whom Employee may have solicited business while engaged as an
employee by the Companies hereunder, shall be solely the customers of the
Companies. Employee therefore agrees that he will not, for a period of one year
immediately following the termination of this Agreement, either directly or
indirectly, solicit business, as to products or services competitive with those
of the Companies respective businesses, from any of the Companies'' customers
with whom Employee has had contact within one year prior the termination of this
Agreement.
The term "Employee" shall, for purposes of paragraphs 1 through 5 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, 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
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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.
IN WITNESS WHEREOF, the Undersigned Xxxxxx X. Xxxxxxx, intending to be
legally bound, hereby executes and delivers this Agreement this 6th day of July,
1999.
By: //s// Xxxxxx X. Xxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxx
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