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Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of July 14,
1995 between STAR VENDING, INC., a Nevada corporation ("Star"); and XXXX XXXXX
("Executive").
RECITALS
A. Executive has acted as Corporate Secretary and as an operations
manager of Star since January 1994;
B. Pursuant to the terms of this Agreement, Star desires to continue to
employ Executive for a fixed term;
C. Star has requested Executive to continue to perform the duties which
Executive has performed in order to continue to have the benefit of Executive's
special knowledge, experience, reputation and abilities for the benefit of Star
and its shareholders; and
D. Executive desires to continue to perform the duties that she has
performed for Star and to utilize her special knowledge, experience, reputation
and abilities for the benefit of Star and its shareholders for the term set
forth below.
AGREEMENT
In consideration of the foregoing recitals, and intending to be legally
bound, the parties agree as follows:
1. EMPLOYMENT. Star hereby continues the employment of Executive, and
Executive hereby accepts this continued employment and agrees to exercise and
perform faithfully, exclusively, and to the best of her ability the powers and
duties of her position on the terms and conditions set forth herein.
2. EXECUTIVE'S SERVICES AND DUTIES.
2.1 NATURE OF DUTIES. During the term hereof, Executive shall:
a. Assume and perform those duties customarily
performed by the Corporate Secretary and an operations manager of a start-up
telecommunications company, including general executive duties as may be
assigned from time to time by the President;
b. Devote her full business time, ability, attention
and loyalty to the business of Star during the term of the Agreement, and
neither directly nor indirectly render any services of a business, commercial,
or professional nature to any other person, firm, corporation, or organization
for compensation, without the prior written consent of the President of Star;
and
c. As a member of the Board of Directors elected by
the shareholders of Star, perform her duties as a director without additional
compensation.
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2.2 SERVICES DEFINED BY THE PRESIDENT. The precise services to
be performed by Executive may be extended or curtailed, from time to time, at
the discretion of the President of Star, provided such services shall at all
times be of the nature customarily performed by an operations manager and
Corporate Secretary of a start-up telecommunications company.
3. TERM. The term of Executive's employment by Star pursuant to this
Agreement shall be for a period commencing with the execution of this Agreement
and ending December 31, 1996. Such term may be extended by the parties on a
year-to-year basis as may be further mutually agreed to by the parties in
writing. The term of Executive's employment is subject to earlier termination as
hereinafter provided in Paragraph 7.
4. COMPENSATION AND BENEFITS. As compensation for the services to be
rendered by Executive hereunder commencing with the Effective Date, Star shall
pay and the Executive shall accept the following compensation:
4.1 SALARY. Star shall pay to Executive a salary at the rate
of $84,000 per year. Executive's salary shall be paid in accordance with Star's
usual payroll practice. Executive shall submit timesheets in a manner consistent
with that required of Star's other exempt executive employees. Executive's
salary may be increased from time to time in the sole discretion of the
President of Star.
4.2 CASH BONUSES. In addition to the salary set forth in
Section 4.1 above, Executive may be entitled to cash bonuses as may awarded by
the President and approved by the Board of Directors from time to time, as
determined in their sole discretion.
4.3 PURCHASE OF SHARES. Concurrent with the execution of this
Agreement by the parties, Executive is purchasing shares of Star common stock
(the "Shares"), subject to the terms, conditions and restrictions set forth in
that certain Restricted Stock Agreement of even date between Star and Executive.
4.4 AUTOMOBILE ALLOWANCE. Star shall provide Executive during
the term of this Agreement, at Executive's option, with either (i) an automobile
allowance of $500 per month, or (ii) the use of a comparable automobile at an
expense to Star not in excess of such amount.
4.5 PAID VACATION LEAVE. Executive shall be entitled to an
annual vacation of three (3) weeks duration, during which time her salary shall
be paid in full. Executive is required to take this time off each year, since
Star and Executive agree that: (1) extended work without any vacation may
jeopardize Executive's creativity or productivity and thus work to Star's
disadvantage; (2) while Star may use its existing staff and resources with
minimal disruption to cover short regular vacations each year, it does not have
the resources to absorb the substantial disruption accompanying a situation
where Executive may accumulate many months of vacation and then take such
vacation all at once; and (3) Star may suffer from significant hardship
involving unfunded liabilities if Executive accumulates a large amount of unused
vacation time and then terminates her employment. If Executive for any reason
does not take part of all of such three weeks off each year the parties agree
that any vacation time earned in a fiscal year but not used during that year may
accrue to any subsequent fiscal year, but the total amount of vacation time that
may be accrued by Employee shall not exceed three weeks at any one time.
Executive confirms that as of the date of this Agreement her total accrued
unused vacation time is 15 business days.
4.6 INSURANCE AND OTHER BENEFITS. Executive shall be entitled
to participate in Star's group health insurance, life insurance and other
employee benefit programs to the same extent as other employees of Star.
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5. EXPENSES. During the term of Executive's employment hereunder,
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by Executive in performing services hereunder, including all
expenses of travel while on business or at the request of and in the service of
Star, provided that such expenses are incurred and accounted for in accordance
with the policies and procedures established by Star.
6. CONFIDENTIAL INFORMATION. Executive agrees that she will not, during
the term of this Agreement or at any time thereafter, either directly or
indirectly, disclose or make known to any other person, firm or corporation any
confidential information, trade secret, or the names or addresses of any of the
customers or vendors of Star, or any other information pertaining to them that
Executive may acquire in the performance of Executive's duties hereunder. Upon
the termination of Executive's employment by Star, Executive agrees to deliver
forthwith to Star any and all literature, documents, correspondence, and other
materials and records furnished to or acquired by Executive during the course of
such employment.
7. TERMINATION PRIOR TO EXPIRATION OF TERM.
7.1 NOTICE. The President or the Board of Directors may
terminate this Agreement and Executive's employment at any time by giving
written notice to Executive. Termination for "cause" includes without limitation
termination because of the Executive's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any law,
rule, regulation (other than traffic violations or similar offenses), or
material breach of any provision of this Agreement. If any such termination is
without cause, or if any such termination is for "cause" (other than for a
conviction of a felony or of a misdemeanor involving moral turpitude), Executive
shall receive the severance compensation described in Section 7.4 below. If such
termination is for "cause" involving a conviction of a felony or of a
misdemeanor involving moral turpitude, Executive shall have no right to receive
compensation or other benefits for any period after such termination.
Executive may terminate this Agreement and
resign from her employment at any time by giving written notice to Star. In such
case, and provided that Executive has not been convicted of a felony or of a
misdemeanor involving moral turpitude, Executive shall receive the severance
payments described in Section 7.4 below.
7.2 TERMINATION UPON DEATH. This Agreement, and the
obligations of the parties hereunder, shall terminate upon the death of
Executive. In such event, Executive's estate shall be entitled to receive
compensation accrued and payable to her as of the date of death, and all other
amounts payable hereunder, including, but not limited to, any bonuses or the
rights to any severance payments, shall thereafter cease.
7.3 TERMINATION UPON DISABILITY. The employment of Executive
may be terminated at any time by Star if Executive becomes disabled. The term
"disabled" as used herein shall mean any mental or physical illness, condition
or disability that would render the Executive unable to perform the essential
functions of her position hereunder, despite reasonable accommodation of such
illness, condition or disability by Star. If Employee is disabled and thus
terminated, she will receive the payments described at Section 7.4, below.
7.4 EFFECT ON COMPENSATION. If, as described at Section 7.1,
Executive is terminated for "cause" involving conviction for a felony or for a
misdemeanor involving moral turpitude, Executive shall be entitled to receive
compensation accrued and payable to her as of the date of any such termination,
and all other amounts payable hereunder, including, but not limited to, any
bonuses or the
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rights to any severance payments, shall thereafter cease. If
Executive's employment is terminated under Section 7.1 (other than for "cause"
involving conviction for a felony or for a misdemeanor involving moral
turpitude, or under Section 7.3, Executive shall receive the following payments:
a. For the period commencing with the date of
termination (the "Termination Date") and ending six months after such
Termination Date (the "Initial Period"), Executive shall receive $7,000 per
month, with the first payment commencing on the one month anniversary after such
Termination Date; and
b. For the period commencing with the end of such
Initial Period and ending six months later (the "Second Period"), Executive
shall receive $7,000 per month, with the first payment commencing on the one
month anniversary after the end of such Initial Period, provided, however, that
any amounts earned by Executive during this Second Period by virtue of any other
employment during such Second Period shall be deducted from amounts to which she
would be entitled hereunder.
8. REMEDIES. Executive acknowledges and agrees that Star's remedy at
law for any breach of her obligations hereunder would be inadequate, and agrees
and consents that temporary and permanent injunctive relief may be granted in
any proceeding which may be brought to enforce any provisions of this Agreement
without the necessity of proof of actual damage.
9. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of Star, its successors (by operation of law or otherwise), and its
assigns. Executive may not assign all or any part of her interest under this
Agreement without the prior written consent of Star.
10. CALIFORNIA LAW. This Agreement is to be governed by and construed
under the laws of the State of California, except to the extent superseded by
federal laws and regulations. Venue and jurisdiction shall lie in Santa Xxxxxxx
County, California.
11. INVALID PROVISIONS. Should any part of this Agreement for any
reason be declared invalid, the validity and binding effect of any remaining
portion shall not be affected, and the remaining portion of this Agreement shall
remain in full force and effect as if this Agreement had been executed with the
invalid provision eliminated.
12. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the employment of Executive by Star during
the term of this Agreement and supersedes all prior and contemporaneous
agreements, representations, and understandings of the parties. No modification,
amendment, or waiver of any of the provisions of this Agreement shall be
effective unless in writing, specifically referring hereto, and signed by both
parties. The representations, warranties, covenants and agreements of the
parties shall survive the expiration or termination of Executive's employment in
accordance with their respective terms.
13. NOTICE. Any written notice required or permitted to be given shall
be deemed delivered either when personally delivered or when mailed, registered
or certified, postage prepaid with return receipt requested, if to Employee,
addressed to Employee at the last known residence address of Employee as shown
in the records of Star, and if to Star, addressed to the President of Star at
the principal office of Star.
14, ATTORNEYS' FEES. If either party to this Agreement shall bring any
action, suit, counterclaim or appeal against the other, to enforce the terms
hereof or to declare rights hereunder, the losing party shall pay to the
prevailing party a reasonable sum for attorneys' fees and costs.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
"STAR"
STAR VENDING, INC.
By
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Xxxxxxxxxxx X. Xxxxxxxx
President
"EXECUTIVE"
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Xxxx Xxxxx
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AMENDMENT NUMBER ONE TO EMPLOYMENT AGREEMENT
THIS AMENDMENT NUMBER ONE TO EMPLOYMENT AGREEMENT (this "Amendment") is
made and entered into as of January 1, 1996, by and among STAR VENDING, INC., a
Nevada corporation ("Star"), and XXXX XXXXX ("Executive").
RECITALS
A. Star and Executive are parties to that certain Employment Agreement
dated as of July 14, 1995 (the "Employment Agreement"), pursuant to which
Executive is employed by Star.
B. The parties desire to reflect Executive's promotion to President of
Star, lengthen the term of Executive's employment, adjust Executive's
compensation and make certain other changes to terms of the Employment
Agreement. In light of the foregoing, the parties hereto have determined to
amend certain provisions of the Employment Agreement as set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and
intending to be legally bound, the parties agree to amend the Employment
Agreement as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Employment Agreement.
From and after the date hereof, the term "Agreement" as used in the Employment
Agreement will mean the Employment Agreement as amended by this Amendment,
unless and until such Employment Agreement may again be amended.
2. AMENDMENT OF SECTION 2.1(a) OF EMPLOYMENT AGREEMENT. Section 2.1(a)
of the Employment Agreement shall be amended to read in its entirety as follows:
"(a) Assume and perform those duties customarily performed by the
President and Corporate Secretary of a start-up telecommunications
company, including general executive duties as may be assigned from
time to time by the Board of Directors and the Chief Executive
Officer."
3. AMENDMENT OF SECTION 2.2 OF EMPLOYMENT AGREEMENT. Section 2.2 of the
Employment Agreement, entitled "Services Defined by the President," shall be
amended to read in its entirety as follows:
"2.2 SERVICES DEFINED BY THE CHIEF EXECUTIVE OFFICER. The precise
services to be performed by Executive may be extended or curtailed,
from time to time, at the discretion of the Chief Executive Officer of
Star, provided such services shall at all times be of the nature
customarily performed by the President and Corporate Secretary of a
start-up telecommunications company."
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4. AMENDMENT OF SECTION 3 OF EMPLOYMENT AGREEMENT. Section 3 of the
Employment Agreement, entitled "Term," shall be amended to read in its entirety
as follows:
"3. TERM. The term of Executive's employment by Star pursuant to this
Agreement shall be for a period of three years, commencing January 1,
1996 and ending December 31, 1998. The term of Executive's employment
is subject to earlier termination as hereinafter provided in Paragraph
7."
5. AMENDMENT OF SECTION 4.1 OF EMPLOYMENT AGREEMENT. Section 4.1 of the
Employment Agreement, entitled "Salary," shall be amended to read in its
entirety as follows:
"4.1 SALARY. Star shall pay Executive a monthly salary during the term
of this Agreement. This salary shall initially be $10,333.33 per month.
Executive's monthly salary shall be increased for the respective
calendar years (or applicable portion thereof) commencing January 1,
1997, and January 1, 1998, as follows:
(a) Before January 30, 1997, the parties shall ascertain from
the official Consumers Price Index for All Urban Wage Earners and
Clerical Workers (Revised Series), Los Angeles-Anaheim-Riverside
Average (1982-1984 = 100) as published by the Bureau of Labor
Statistics, Department of Labor (the "Index"), the index figure for
December 1995 (the "Base Period Index") and for December 1996 (the
"Comparison Period Index"). If the Comparison Period Index exceeds the
Base Period Index, the monthly salary payable by Star to Executive for
the entire calendar year 1997 shall be increased (but not decreased) by
multiplying Executive's then-existing monthly salary by a fraction, the
numerator of which shall be the Comparison Period Index and the
denominator of which shall be the Base Period Index. If the Comparison
Period Index does not exceed the Base Period Index, the monthly minimum
salary payable to Executive by Company during calendar 1997 shall
remain at the initial monthly salary.
(b) A similar adjustment shall be made to Executive's monthly
salary for the entire calendar year 1998; but for the purpose of such
adjustment, the Base Period Index shall be calculated as of December,
1996 and the Comparison Period Index shall be calculated as of December
1997.
(c) If the Index is no longer published, then appropriate
index figures for the Base Period Index and the Comparison Period Index
shall be derived from any successor or comparable index mutually agreed
by the parties to be authoritative.
(d) The parties acknowledge that the Comparison Period Index
figures for each year of the Employment Agreement hereunder may not be
available in a timely manner. Therefore, the monthly salary in effect
during the preceding month shall continue in effect until the
respective average index figures for the Comparison Period Indexes have
been ascertained. Upon determination of the respective Comparison
Period Indexes for each year, an appropriate adjustment shall be made,
retroactive to January 1 of 1997 and 1998, respectively, and Star shall
immediately pay to Executive any increased salary found to be due.
Executive may receive such other increases in her salary in
addition to
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those set forth above as the Board of Directors of Star may approve
from time to time. Executive's salary shall not be reduced at any time
during the term of this Agreement, but the foregoing shall not limit
Star's rights under Section 7 hereof."
6. ADDITION OF SECTION 7.5 TO EMPLOYMENT AGREEMENT. The following shall
be added as a new Section 7.5 of the Employment Agreement:
"7.5 TERMINATION WITHOUT CAUSE AFTER CERTAIN TRANSACTIONS. If
Executive's employment is terminated under Section 7.1 (other than for
"cause" involving conviction for a felony or for a misdemeanor
involving moral turpitude) within four months after the consummation of
a Sale Transaction (as defined below) relating to Star, then, instead
of the payments provided in Section 7.4, Executive shall continue to
receive the compensation provided in this Agreement until the
expiration hereof. Any amounts earned by her (other than through her
personal investment activities) prior to such expiration by virtue of
other employment shall be deducted from amounts to which she is
entitled hereunder. For the purposes of this Section 7.5, a "Sale
Transaction" shall mean the acquisition by a single entity or group of
affiliated entities (other than existing shareholders of Star or their
affiliates) of more than seventy-five percent (75%) of the voting
securities of Star pursuant to a tender offer or exchange offer
approved in advance by the Board of Directors. "
7. CONFIRMATION. Except as specifically amended by this Amendment, the
Employment Agreement will continue unchanged, and the terms and conditions of
the Employment Agreement, as amended hereby, are hereby ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.
"STAR"
STAR VENDING, INC.
a Nevada corporation
By
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Xxxxxxxxxxx X. Xxxxxxxx,
Chief Executive Officer
"EXECUTIVE"
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Xxxx Xxxxx
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AMENDMENT NUMBER TWO TO EMPLOYMENT AGREEMENT
THIS AMENDMENT NUMBER TWO TO EMPLOYMENT AGREEMENT (this "Amendment") is
effective as of July 15, 1996, between STAR VENDING, INC., a Nevada corporation
("Star"), and XXXX XXXXX ("Executive").
RECITALS
A. Star and Executive are parties to that certain Employment Agreement
dated as of July 14, 1995 (the "Employment Agreement"), and that certain
Amendment Number One to Employment Agreement dated January 1, 1996 ("Amendment
Number One"), pursuant to which Executive is employed by Star.
B. The parties desire to adjust Executive's compensation, and thus have
determined to amend certain provisions of the Employment Agreement as set forth
in this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and
intending to be legally bound, the parties agree to amend the Employment
Agreement as follows:
1. DEFINED TERMS. Capitalized terms used in this Amendment and not
otherwise defined shall have the meanings ascribed to them in the Employment
Agreement and Amendment Number One. From and after the date hereof, the term
"Agreement" as used in the Employment Agreement will mean the Employment
Agreement as amended by Amendment Number One and this Amendment, unless and
until such Employment Agreement may again be amended.
2. AMENDMENT OF SECTION 4.1 OF EMPLOYMENT AGREEMENT. The first
paragraph of Section 4.1 of the Employment Agreement, entitled "Salary," shall
be amended to read in its entirety as follows:
"4.1 SALARY. Star shall pay Executive a monthly salary during the term
of this Agreement. This salary shall initially be $16,250.00 per month.
Executive's monthly salary shall be increased for the respective
calendar years (or applicable portion thereof) commencing January 1,
1997, and January 1, 1998, as follows:"
3. CONFIRMATION. Except as specifically amended by this Amendment, the
Employment Agreement and Amendment Number One will continue unchanged, and the
terms and conditions of the Employment Agreement and Amendment Number One, as
amended by this Amendment, are ratified and confirmed.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
"STAR"
STAR VENDING, INC. "EXECUTIVE"
a Nevada corporation
By
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Xxxxxxxxxxx X. Xxxxxxxx, Xxxx Xxxxx
Chief Executive Officer
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