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EXHIBIT 10.62
EMPLOYMENT AND NON-DISCLOSURE AGREEMENT
THIS EMPLOYMENT AND NON-DISCLOSURE AGREEMENT is made effective as of
the 15th day of August, 1996, by and between UStel, Inc. ("Employer"), and
Xxxxx Xxxxxxxxx, an individual ("Employee"), with reference to the following
facts:
R E C I T A L S
WHEREAS Employee has been employed under an informal employment
agreement with Employer since the date first set forth above;
WHEREAS the parties hereto wish to formalize the employment
relationship as more fully set forth herein;
WHEREAS, as a result of Employee's employment with Employer, Employee
has acquired knowledge of Employer's trade secrets, including confidential
information concerning pricing, strategy, product and service marketing plans,
customer needs and peculiarities, and customer lists and confidential
information regarding Employer's business and services (the "Trade Secrets");
WHEREAS, Employer desires that Employee be employed as set forth
herein, such employment to become effective on the date first set forth above;
and
WHEREAS, Employee is willing to be employed by Employer as described
under the terms and conditions herein stated.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, and for other good and valuable
consideration, it is hereby agreed by and between the parties hereto as
follows:
1. Employment, Services, and Duties. Employer hereby employs
Employee and Employee hereby agrees to perform the services of Executive Vice
President Sales and director through December 31, 1996 and from December 31,
1996 through the Term of this Agreement, the services of President and Chief
Operating Officer, with the duties consistent therewith. Employee agrees to
devote substantially of all working hours to rendering the services for which
Employee has been hired, recognizing that until the merger between Employer and
C-2000, Inc., is completed, Employee will also devote a portion of his time in
the service of C-2000, Inc. Employee shall render his services to Employer by
and subject to the instructions and directions of Employer's Chief Executive
Officer to whom Employee shall directly report.
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2. Term and Termination
2.1 Unless sooner terminated pursuant to Paragraph 2.2
hereof, Employee's employment shall commence on the date first set forth above
and shall continue for a period of three (3) years, provided however that
either party may terminate this agreement by written notice to the other party,
in which case the term shall be for a period of two (2) years from the date
either party gives written notice of termination to the other, (the "Term").
2.2 Employee's employment shall terminate prior to the
expiration of the Term upon the happening of any of the following events:
(a) Upon the death of Employee;
(b) Upon dissolution and termination of the
Employer;
(c) For cause by the Employer, that is to say
only:
(i) if Employee is convicted of (or
pleads nolo contendere to) or at any time prior to employment by Employer has
been convicted of (or pled nolo contendere to) a crime of dishonesty or breach
of trust or crime leading to incarceration of more than ninety (90) days
(including, without limitation, embezzlement or theft from Employer) or the
payment of a penalty or fine of $10,000, or more;
(ii) upon a determination by Employer
that Employee has engaged in willful misconduct or neglect in the performance
of his duties under this Agreement or has refused or failed to effectively
perform the services which he has been hired to perform, or has committed an
act of fraud, theft or dishonesty against Employer;
(iii) if Employee has materially breached
any of the terms of this Agreement or any other material legal obligation to
Employer including, without limitation, a breach of trust or fiduciary duty
involving Employer or a material violation of policies or procedures of
Employer and has not cured any such breach within thirty (30) days after having
been given written notice thereof by Employer; or
(iv) Any determination of "cause" as used in this
Section 2.2(c) shall be made only in good faith by an affirmative majority vote
of the Board of Directors of the Employer;
(d) By mutual agreement between Employer and
Employee;
(e) By Employee if both of the following occur:
in the event of a change of control of Employer of the type as would be
required to be reported under Form 8-k of the Securities Exchange Act of 1934,
and a change in the services Employee is to perform, if such change in services
is unacceptable to Employee.
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2.3 Except for the remaining obligations set forth in
Sections 4, 5, 6 and 7 herein, in the event that Employee's employment is
terminated pursuant to Sections 2.2(a), (b), (c) or (d) herein, neither
Employer nor Employee shall have any remaining duties or obligations hereunder,
except that Employer shall pay to Employee, or his representatives, on the date
of termination of employment ("Termination Date"),
(i) such compensation as is due pursuant to Section
3.1(a) herein, prorated through the Termination Date; and
(ii) expense reimbursements due and owing to Employee
as of the Termination Date.
2.4 Except for the remaining obligations set forth in
Sections 4, 5, 6 and 7 herein, in the event that Employee's employment is
terminated pursuant to Section 2.2(e) (the date when such termination occurs
being herein referred to as the "Termination Date"), neither Employer nor
Employee shall have any remaining duties or obligations hereunder, except that
Employer shall pay to Employee, or his representatives, on the Termination
Date,
(i) all such compensation as would be due
pursuant to Section 3.1(a) for the period from the Termination Date to the date
which is two years from the Termination Date;
(ii) whatever non-discretionary bonus or
incentive compensation is provided by any plan for the year of termination,
prorated through the Termination Date; and
(iii) expense reimbursements, if any, due and
owing to Employee as of the Termination Date.
2.5 There is no Section 2.5.
2.6 There is no Section 2.6.
2.7 This Agreement shall not be terminated by any:
(a) Merger, whether the Employer is or is not the
surviving corporation; or
(b) Transfer of all or substantially all of the
assets or capital stock of the Employer.
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Except as set forth in Section 2.2(e), in the event
of any such merger, transfer of assets or capital stock, dissolution,
liquidation, or consolidation, the surviving corporation or transferee, as the
case may be, Employee shall be bound by and shall have the benefits of this
Agreement, and the Employer shall take all action to ensure that such
corporation or transferee is bound by the provisions of this Agreement.
3. Compensation
3.1 As the total consideration for the services which
Employee agrees to render hereunder, Employee is entitled to the following:
(a) A salary of One Hundred Eighty Thousand
Dollars ($180,000) per year ("Salary"), payable in equal installments monthly
on those days when Employer normally pays its employees, said Salary to be
subject to annual review;
(b) A Bonus to be determined at the discretion of the
Board of Directors of Employer;
(c) Employee shall be entitled to three (3) weeks
paid vacation per year;
(d) Employer shall be entitled to participate in
Employee incentive stock options, such options to be determined by the Board of
Directors in their discretion.
(e) Employer agrees to provide Employee with
insurance and health coverages and other benefits generally available to other
employees of similar rank of Employer;
(f) Reimbursement for out-of-pocket expenses
incurred by Employee on behalf of Employer; and
(g) Such other benefits as the Board of Directors
of Employer, in its sole discretion, may from time to time provide.
3.2 Employer shall have the right to deduct from the
compensation due to Employee hereunder any and all sums required for social
security and withholding taxes and for any other federal, state, or local tax
or charge which may be in effect or hereafter enacted or required as a charge
on the compensation of Employee.
4. Non-Competition
(a) During the term of this Agreement, Employee shall
not, directly or indirectly, engage or participate in, prepare or set up,
assist or have any interest in any person, partnership, corporation, firm,
association, or other business organization, entity or enterprise (whether as
an employee, officer, director, agent, security holder, creditor,
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consultant or otherwise) that engages in any activity, which is the same as,
similar to, or competitive with any activity now engaged in by Employer or in
any way relating to the business currently conducted by Employer in those
geographic areas where Employer conducts its business, with the exception of
C-2000, Inc.
(b) Nothing contained in this Agreement shall be deemed
to preclude Employee from purchasing or owning, directly or beneficially, as a
passive investment, one percent (1%) or less of any class of a publicly traded
security of any entity, if he does not actively participate in or control,
directly or indirectly, any investment or other decisions with respect to such
entity.
5. Confidentiality.
Employee shall keep all Trade Secrets confidential; use Trade
Secrets only in the course of his duties hereunder; maintain in trust, as
Employer's property, all documents concerning Employer's business, including
his own work papers of any kind including telephone directories and notes, and
any and all copies thereof in his possession or under his control; and transfer
to Employer all documents that belong to Employer and any and all copies that
are in his possession or under his control when his Employment terminates, or
at any other time upon request by Employer.
6. Injunctive Relief
Employee hereby acknowledges and agrees that it would be
difficult to fully compensate Employer for damages resulting from the breach or
threatened breach of Sections 4 and 5 herein and, accordingly, that Employer
shall be entitled to temporary and injunctive relief, including temporary
restraining orders, preliminary injunctions and permanent injunctions, to
enforce such Sections without the necessity of proving actual damages
therewith. This provision with respect to injunctive relief shall not,
however, diminish Employer's right to claim and recover damages or enforce any
other of its legal and/or equitable rights or defenses.
7. Severable Provisions
The provisions of this Agreement are severable and if any one
or more provisions may be determined to be illegal or otherwise unenforceable,
in whole or in part, the remaining provisions, and any partially unenforceable
provisions to the extent enforceable, shall nevertheless be binding and
enforceable.
8. Reference Provision
(a) Each controversy, dispute or claim between the parties
arising out of or relating to this Agreement, which controversy, dispute or
claim is not settled in writing within thirty (30) days after the "Claim Date"
(defined as the date on which a party subject to the Agreement gives written
notice to the other that a controversy, dispute or claim exists), will be
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settled by binding arbitration in Los Angeles, California in accordance with the
provisions of the American Arbitration Association, which shall constitute the
exclusive remedy for the settlement of any controversy, dispute or claim, and
the parties waive their rights to initiate any legal proceedings against each
other in any court or jurisdiction other than the Superior Court of Los Angeles
(the "Court"). Any decision rendered by the arbitrator and such arbitration
will be final, binding and conclusive and judgment shall be entered pursuant to
CCP Section 644 in any court in the State of California having jurisdiction.
(b) Except as expressly set forth in this Agreement, the
arbitrator shall determine the manner in which the proceeding is conducted,
including the time and place of all hearings, the order of presentation of
evidence, and all other questions that arise with respect to the course of the
proceeding. All proceedings and hearings conducted before the arbitrator,
except for trial, shall be conducted without a court reporter, except that when
any party so requests, a court reporter will be used at any hearing conducted
before the arbitrator. The party making such a request shall have the
obligation to arrange for any pay for the court reporter. The costs of the
court reporter shall be borne equally by the parties.
(c) The arbitrator shall be required to determine all
issues in accordance with existing case law and the statutory laws of the State
of California. The rules of evidence applicable to proceedings at law in the
State of California will be applicable to the reference proceeding. The
arbitrator shall be empowered to enter equitable as well as legal relief, to
provide all temporary and/or provisional remedies and to enter equitable orders
that will be binding upon the parties. The arbitrator shall issue a single
judgement at the close of the proceeding which shall dispose of all of the
claims of the parties that are the subject of the proceeding. The parties
hereto expressly reserve the right to contest or appeal from the final judgment
or any appealable order or appealable judgement entered by the arbitrator. The
parties hereto expressly reserve the right to findings of fact, conclusions of
law, a written statement of decision, and the right to move for a new trial or
a different judgment, which new trial, if granted, is also to be a proceeding
governed under this provision.
9. Binding Agreement
This Agreement shall inure to the benefit of and shall be
binding upon Employer, its successors and assigns.
10. Captions
The Section captions are inserted only as a matter of
convenience and reference and in no way define, limit or describe the scope of
this Agreement or the intent of any provisions hereof.
11. Entire Agreement
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This Agreement contains the entire agreement of the parties
relating to the subject matter hereof, and the parties hereto have made no
agreements, representations or warranties relating to the subject matter of
this Agreement that are not set forth otherwise herein. This Agreement
supersedes any and all prior agreements, written or oral, between Employee and
Employer and its affiliates. No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto and unless such writing
is made by an executive officer of Employer. The parties hereto agree that in
no event shall an oral modification of this Agreement be enforceable or valid.
12. Governing Law
This Agreement shall be governed and construed in accordance
with the laws of the State of California.
13. Notices. All notices and other communications under this
Agreement shall be in writing (including, without limitation, telegraphic,
telex, telecopy or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered by hand or by a nationally recognized courier
service guaranteeing overnight delivery to a party at the following address (or
to such other address as such party may have specified by notice given to the
other party pursuant to this provision):
If to the Employer, to:
Xxxxxx X.X. Xxxxxx, Chairman
UStel, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Employee, to:
Xxxxx Xxxxxxxxx
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Telephone: ( )
Facsimile: ( )
All such notices and communications shall, when mailed, telegraphed, telexed,
telecopied, cabled or delivered, be effective three days after deposit in the
mails, delivered to the telegraph company, confirmed by telex answerback,
telecopied with confirmation of receipt, delivered to the cable company,
delivered by hand to the addressee or one day after delivery to the courier
service.
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14. Attorney's Fees. In the event that any party shall bring an
action or proceeding in connection with the performance, breach or
interpretation hereof, then the prevailing party in such action as determined
by the court or other body having jurisdiction shall be entitled to recover
from the losing party in such action, as determined by the court or other body
having jurisdiction, all reasonable costs and expense of litigation or
arbitration, including reasonable attorney's fees, court costs, costs of
investigation and other costs reasonably related to such proceeding.
IN WITNESS WHEREOF, this Employment Agreement is executed as of the
day and year first above written.
"EMPLOYER"
USTEL, INC.
By:
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Name: Xxxxxx X.X. Xxxxxx
Title: Chairman and Chief Executive Officer
"EMPLOYEE"
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Xxxxx Xxxxxxxxx
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