EXHIBIT 10.24
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") dated October 31, 1997 is made
between GLOBALTEL RESOURCES, INC. (the "Company"), and XXXX X. ORSE
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("Executive"). By its terms, this agreement shall, on and after the IPO Date
supersede all prior employment agreements between the parties hereto. In
consideration of the mutual covenants and conditions set forth in this
Agreement, the parties agree as follows:
This Agreement shall become effective on the date the Company completes an
initial public offering of its common stock that yields, to the Company, net
proceeds in excess of Fifteen Million Dollars ($15,000,000) (the "IPO Date"). If
the IPO Date has not occurred by March 31, 1998, for any reason whatsoever
(including but not limited to a decision by the Company not to offer its common
stock for sale in a public offering), this Agreement shall be null and void,
without the need for further action by either party. If the IPO Date occurs
prior to March 31, 1998, the Company shall employ Executive on the following
terms and conditions.
1 - ENGAGEMENT
.1 Term
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The term of employment pursuant to this Agreement will extend from the IPO Date
for a period of one (1) year, unless earlier terminated as hereinafter provided.
.2 Title and Location
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Executive will serve as a DIRECTOR OF FINANCE of the company and shall perform
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all functions customarily assigned to such a position. Absent Executive's
concurrence, Executive's primary place of employment shall be Seattle,
Washington.
2 - COMPENSATION
.1 Salary
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Executive will receive an annual Base Salary of $120,000.00 per annum.
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.2 Bonus
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Executive will be entitled to receive during the term of this Agreement
incentive or bonus payments of up to one times annual salary pursuant to any
plans or agreements approved by the Company's Compensation Committee of the
Board and the Board of Directors, and payable by their express terms and
conditions to Executive.
.3 Benefits
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During the term of this Agreement, the Company shall provide Executive with
health, life, disability and other appropriate insurance, vacation, sick leave
and other benefits as are generally provided to other management-level employees
holding similar positions with the Company. Executive will have at least four
weeks of paid vacation per year.
.4 Stock Options
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On the IPO Date, the Company shall issue to Executive stock options, pursuant to
its 1996 Stock Option Plan (the "Plan"), exercisable at a price per share equal
to the per share price at which common stock is sold in the public offering
completed on the IPO Date. The number of shares for which options are issued
shall be equivalent to the number of shares that Executive would have held on
the IPO Date had he held 100,000 shares on the date of this Agreement, giving
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effect to all recapitalizations, stock splits and other adjustments to the
Company's capital structure that may occur between the date of this Agreement
and the IPO Date. The options shall, to the extent permitted by the Plan, be
Incentive Stock Option and shall otherwise be Non-Qualified Stock Options. Said
options shall be governed by the terms and conditions of the Plan and, in
addition, said options shall vest over three years based upon performance
criteria as established by the Compensation Committee of the Board of Directors
of the Company. The foregoing additional vesting requirements shall be deemed
fully satisfied if, prior to the third (3rd) calendar anniversary of the IPO
Date, there is a Change of Control Event. As used herein, a "Change of Control
Event" is at sale or merger of the Company to or with a non-affiliate or a
change in the identity of the majority of the Board of Directors other than
through normal transition. All options not exercised prior to the tenth (10th)
calendar anniversary of the IPO Date, whether or not vested, shall expire.
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3 - NEGATIVE COVENANTS
.1 Non-Competition
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Without the written consent of the Company, Executive will not, during the term
of employment under this Agreement and for six (6) months following the
termination of employment under this Agreement, work directly or indirectly (as
an employee, consultant, advisor or owner, except as a holder of less than 5% of
a public company) for any business or activity which is in a business
substantially similar to that of the Company, anywhere in the Company's
marketplace. For purposes of this covenant, a business activity is substantially
similar to the business of the Company if it involves a product or service that
the Company was developing, manufacturing, marketing or distributing, or
otherwise commercially exploiting during the Executive's employment with the
Company.
.2 Nondisclosure
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Executive acknowledges that in the course of carrying out his responsibilities
to the Company under this Agreement he will have access to and be entrusted with
confidential information relating to the patents, copyrights, trademarks, trade
secrets, technology, business and finances of the Company. All of this
information, except information that is in the public domain through no fault of
Executive, is collectively referred to as "Confidential Information." Executive
shall keep in confidence and trust all Confidential Information. Without the
Company's prior written consent, Executive shall not use or disclose any
Confidential Information, during or after his employment with the Company,
except as required in the ordinary course of his duties for the Company.
.3 Relief for Breach
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Executive agrees that damages for breach of the covenants contained in sections
3.1 and 3.2 would be difficult to determine and therefore agrees that these
provisions may be enforced by temporary or permanent injunction. The right to
such injunctive relief shall be in addition to and not in place of any further
remedies to which the Company may be entitled.
.4 Reasonableness
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Executive agrees that the provisions of sections 3.1, 3.2 and 3.3 are
reasonable. However, if any court of competent jurisdiction
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determines that any provision within these sections is unreasonable in any
respect, the parties intend that the provisions of these sections should be
enforced to the fullest extent allowed by such court.
.5 Survival of Covenants
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The provisions of this Article shall survive the termination of employment under
this Agreement.
4 - DUTIES
.1 Duties
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Executive agrees that during the term of this Agreement he/she will diligently
perform all duties assigned to him/her by the Company which are reasonably
commensurate with the positions held by Executive pursuant to 1.2 above, and
will devote all of his/her efforts to those duties on a full-time basis and to
the best of his/her skill and ability. It is understood that Executive may have
other investment activities and sit on, subject to the limitations in Section 3
above, boards of directors of other companies.
5 - TERMINATION
.1 Termination Prior to the End of Term
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(a) The Company may terminate this Agreement on written notice of not
less than six (6) months, except as otherwise provided in sections 5.1(b),
5.1(c) and 5.2. Executive may terminate employment under this Agreement on
written notice of not less than three (3) months.
(b) The Company may, at its option, terminate employment under this
Agreement at any time without notice in the event that Executive commits a
felony for which Executive is found guilty by a court of competent jurisdiction
or commits any intentional damage to or misappropriation of the property or
business of the Company. Any such termination shall be considered a termination
for cause. In the event of a termination for cause, Executive shall be paid all
compensation and benefits earned through the date of termination, but shall not
be entitled to receive any further compensation or benefits other than payments
already due as of that date.
(c) This Agreement shall terminate in the event that Executive dies, or is
unable to perform his/her duties as a
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result of a physical or mental disability at any time during the term of this
Agreement. In the event of a termination under this subsection, Executive or
his/her estate shall be paid all compensation and benefits earned through the
date of such termination, but shall not be entitled to receive any compensation
or benefits other than payments already due as of that date. For purposes of
this Agreement, Executive will be considered unable to perform his/her duties as
a result of a physical or mental disability if that disability exists, or
is reasonably expected to exist, for more than ninety (90) days in any twelve
(12) consecutive calender months.
.2 Severence Pay
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If the Company gives notice under section 5.1(a), then at the Company's option:
(a) The Company shall honor Executive's employment contract to the stated
end of the employment term and thereafter pay Executive severance pay equal to
Executive's then-current monthly Base Salary multiplied by six (6); or
(b) the Company may terminate Executive's employment prior to the end of
the notice period, in exchange for severance pay equal to Executive's
then-current monthly salary multiplied by (i) the number of months remaining in
the notice period plus (ii) six (6).
Executive agrees to accept this amount as full compensation for the
termination. Severance pay under this section will be paid in payments made
according to the Company's regular payroll practices over the remainder of the
notice period and the six-month severance period. Executives options and all
other benefits shall be accrue until the date of termination and in the case of
stock options shall be vested on a prorated basis up to and including the date
of termination.
.3 Payment on Resignation
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If Executive gives notice under Section 5.1(a), the Company may, at its option,
elect to terminate Executive's employment prior to the end of the notice period.
Regardless of whether the Company elects to have Executive continue to work
through the notice period provided in Section 5.1(a), or elects to terminate
Executive's employment prior to the end of that notice period, Executive shall
be paid all compensation and benefits earned through his/her last day of work,
but shall not be entitled to receive any further compensation or benefits other
than payments already due as of that date.
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