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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
SATX, Inc.
THIS AGREEMENT made and entered into as of the 27th day of February,
2001, by and between SATX, Inc., a Nevada corporation (the "Company"), and
Xxxxx X. Xxxxxxx (the "Executive"), and in the plural hereby referred to as the
"Parties".
WHEREAS, the Company desires to employ the Executive as President and
CEO and the Executive desires to be employed in such capacity by the Company
under the terms and conditions contained hereafter.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants of the parties hereinafter set forth, it is agreed as follows:
ARTICLE 1. Term of Agreement. The Company agrees to employ the
Executive, and the Executive hereby agrees to serve the Company, on the terms
and conditions set forth herein for the period commencing on 2/27/2001, and
expiring on 2/27/2004 (the "Expiration Date"), unless sooner terminated as
hereinafter set forth. If mutually agreed by both parties hereunder, the
Expiration Date shall be extended for one (1) additional year beginning on the
first anniversary of employment or until otherwise terminated hereunder. Only
under termination for cause can Executive be terminated before eighteen (18)
months from commencement date has passed. In other words this is a "no-cut"
contract for eighteen months.
ARTICLE 2. COMPENSATION AND OTHER TERMS.
(a) Compensation. The Executive shall receive a salary
for his services during the term of this Agreement in the sum of One Hundred
Seventy-five Thousand Dollars ($175,000.00), subject to applicable withholding
allowances and payable in the same manner, which the Company pays other
executive employees. On February lst 2002, Executive will have an automatic
increase in salary of $25,000 making the total annual income $200,000. On
February lst 2003, Executive will have another automatic increase in salary of
$25,000 making the total annual income $225,000 and On February lst 2003,
Executive will have another automatic increase in salary of $25,000 making the
total annual income $250,000. Thereafter annual increases in Executive's Salary
will be at the discretion of the Board of Directors ("BOD") with such annual
increases being, at least, equivalent to what other Executives are receiving
and not less than the consumer price index, as published by the United States
Department of Labor, Bureau of Labor Statistics.
(b) Additional Compensation.
i) Executive shall receive performance bonus
or bonuses as approved by the Board of Directors of the Company, at such time
and in such amounts as the Board of Directors may determine. As a condition of
hiring Executive The BOD agrees that Executive will be entitled to an annual
bonus of 50% of Executive's base salary. The BOD may, at their discretion,
award the bonus or bonuses quarterly.
ii) As an inducement to accept employment as
CEO and President of SATX, Inc. Executive will receive 500,000 of SATX, Inc.
common stock immediately upon hiring. Such stock will be restricted stock under
the SEC 144 Rules.
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iii) Additionally, Executive shall immediately
receive stock options to acquire two million (2,000,000) shares SATX, Inc.
("SATX") Common Stock, or stock containing identical features, at the price of
($.3094) per share, which was the closing price on the commencement date, less
10%. Two Hundred Thousand (200,000) of such options shall become vested
immediately upon the commencement date and the remaining One Million Eight
Hundred Thousand (1,800,000) of such options shall become vested one third on
each anniversary of this Agreement, February 27 of each year, so long as
Executive shall then be employed by the Company pursuant to the terms hereof
and to the terms of the SATX, Inc. Stock Option Plan 2001 and Stock Option
Agreements, both of which must be executed by both Executive and the
Compensation Committee of the Board of Directors. In the event of Executive's
death during the term of this Agreement, all options for the issuance of SATX,
Inc. stock shall become vested immediately and all such options proceeds paid
to the Executive's Estate.
(c) Sick Leave. During the time of this Agreement and
any renewal, Executive shall be entitled to ten (10) business days' sick leave
per year because of sickness or accident without any adjustment in the
Executive's salary. In the event Executive is deemed to be totally disabled the
Company shall continue to pay Executive both salary and benefits until such
time as Executive commences receiving benefits under the disability insurance
policy as provided for hereafter.
(d) Fringe and Other Benefits. The Company shall provide
to the Executive the fringe benefits as listed below:
(i) Auto Expense @ Fifteen Hundred Dollars
($1,500.00) per month. (When approved by
the Compensation Committee of the BOD)
(ii) Auto Insurance
(iii) Health and Dental Insurance for Executive
and Dependents Reimbursement of COBRA until
Company insurance is effective
(iv) Directors and Officers Insurance as soon as
practical
In addition, the Company shall further provide such other ordinary
and usual fringe benefits provided to employees holding the same or similar
positions in the Company.
(a) Disability Insurance. The Company will provide, at
the discretion of the BOD, disability insurance to the Executive during the
term of this Agreement in the maximum amount, but not less than One Hundred
Fifty Thousand Dollars ($150,000.00), reasonably obtainable by the Company from
an insurance company with a Best's AAA rating. The cost at such insurance will
be advanced by the Company as additional compensation, but will be borne by the
Executive and will be treated as additional taxable income to the Executive on
information returns filed with applicable tax authorities. The disability
insurance shall provide for not more than a sixty- (60) day waiting period
before benefits are provided.
(f) Business Expenses. During the term of employment
hereunder, the Executive shall be entitled to be reimbursed (in accordance with
the policies and procedures established by the Board of Directors for Company
officers) for all reasonable expenses incurred by him in performing services
hereunder, provided that the Executive properly accounts therefor in accordance
with Company policy.
(h) Vacation. During the term of this Agreement, the
Executive shall be entitled to not less than twenty (20) business days per year
for vacation. The Executive shall be compensated during all vacation days. The
Executive shall also be entitled to all paid holidays given by the Company to
senior executive officers.
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ARTICLE 3. DUTIES. The Executive shall perform such senior
executive level duties for the Company as may be requested, either orally or in
writing, by the Board of Directors of the Company.
ARTICLE 4. ATTENTION TO BE DEVOTED TO AFFAIRS OF THE COMPANY.
During the continuation of this Agreement, the Executive shall devote
substantially all of his time, attention and influence to the affairs of the
Company. The Executive covenants and agrees that, without prior permission of
the Company, he will not directly or indirectly, engage or participate in any
activities at any time during the term of this Agreement in conflict with the
best interests of the Company. It is understood and agreed that work for other
business interests of Executive not in conflict with the business of the
Company, and other similar activities are not prohibited so long as the affairs
of the Company are given primary consideration, and so long as the duties of
the Executive are not materially affected thereby.
ARTICLE 5. THE EXECUTIVE AGREES to serve without additional
compensation, if elected or appointed thereto, in one or more offices or as a
director of any of the company's subsidiaries or affiliates.
ARTICLE 6. TERMINATION OF EMPLOYMENT.
(a) The Company may only terminate this Agreement with
cause, and shall provide ninety (90) days' written notice of such termination
and the reason therefore to Executive. Cause shall be defined for the purposes
hereof as the conviction of Executive of any felony crime, unless waived by the
Company, or the willful breach of duty by the Executive in the course of, or
embezzlement or theft by Executive, unless waived by the Company. In the event
of such termination, the Company shall be obligated to continue to pay
Executive the salary and benefits due him under this Agreement up to the date
of termination provided that Executive continues to reasonably perform his
duties hereunder.
(b) Executive may terminate this Agreement at any time
upon ninety (90) days' written notice to the Company. In the event of such
termination, the Company shall have the obligation to continue to pay Executive
the salary and benefits due him under this Agreement up to the date of
termination, and for a period of twelve (12) months following the effective
date of his resignation. Executive shall continue to satisfactorily perform his
duties hereunder to the end of such ninety- (90) day period and be available,
as mutually agreed between the Parties, to assist the Company during the 12
month period following the effective date of termination.
(c) Property of the Company. The Executive agrees that
upon the termination of his employment, he will surrender to the Company all
lists, books, records and similar materials, and all copies thereof in his
possession, and will also return to the Company all other property of the
Company, which has come into his possession while employed by the Company.
ARTICLE 7. DISABILITY.
(a) Total Disability. In the event the Executive shall
become physically or mentally incapacitated from performing his duties under
this Agreement, then he shall be deemed to be totally disabled. In such event,
the Executive shall be entitled to receive his normal salary and benefits to
and until such time as the Executive shall commence receiving benefits under
the policy of disability insurance provided for herein. Thereafter, the
Executive shall be entitled to
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receive no further compensation from the Corporation under the terms of this
Employment Agreement, except for such disability insurance.
(b) Partial Disability. In the event the Executive shall
become physically or mentally incapacitated from performing his duties under
this Agreement, but is still able to perform other services from the Company,
then the Company shall continue to employ the Executive for such purposes. In
such event, the Company shall pay to the Executive a monthly salary equal to
seventy-five percent (75%) of the salary to be paid to him under the provisions
of Article 2(a) above, less the amount of disability insurance proceeds, if
any, received by the partially disabled Executive for each month. The Company
shall further be required to continue to provide all benefits to Executive.
(c) Stock Options. In the event the Executive is either
totally or partially disabled, all options for the issuance of SATX, Inc. stock
as provided for herein which have not previously become vested shall become
vested immediately upon such determination of total or partial disability.
ARTICLE 8. DEATH BENEFIT. In the event of Executive's death
during the term of this Agreement, this Agreement shall terminate immediately,
however, Executive's heirs at law or estate shall be entitled to receive the
salary due Executive by way of this Agreement or any renewal thereof. Terminal
pay as provided for in this section shall be in addition to amounts otherwise
receivable by the Executive or his estate under this or any other agreement
with the Company.
ARTICLE 9. PURCHASE OF LIFE INSURANCE ON EXECUTIVE'S LIFE. If
at the time of termination of Executive's employment with the Company for any
reason other than death, the Company owns a policy of life insurance on the
life of the Executive. The Executive may purchase said policy of life insurance
from the Company for the amount of One Dollar ($1.00), or the total of cash
surrender value, plus the unearned premiums accumulated dividends and accrued
interest thereon, of such policy, whichever is greater; such purchase and sale
to be consummated within sixty (60) days following the termination of
Executive's employment.
ARTICLE 10. BINDING AGREEMENT. This Agreement and all
obligations of the Company hereunder shall be binding upon the successors and
assigns of the Company. This Agreement and all rights of the Executive
hereunder shall inure to the benefits of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
ARTICLE 11. NON-COMPETITION. During the term of employment
hereunder, Executive will not (a) directly or indirectly own, manage, operate,
control or participate in the ownership, management, operation or control of,
or be connected as an officer, employee, partner, director or otherwise with,
or have any financial interest in, or aid or assist anyone else in the conduct
of, any business which is in competition with any business conducted by the
Company or by any group, division or subsidiary of the Company in any area
where such business is being conducted by the Company at the time of such
termination (provided that ownership of five percent (5%) or less of the voting
stock of any publicly held corporation shall not constitute a violation hereof)
or (b) directly or indirectly solicit, interfere with, or endeavor to entice
away from the Company any customer, or person, firm, corporation or business,
regularly dealing with the Company or interfere with or entice away any
subsidiary, affiliate or employee of the Company or advise or recommend to any
other persons that they, directly or indirectly, so solicit, interfere with or
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endeavor to entice away. The Executive agrees that the covenants contained in
this Section are reasonably necessary to protect the legitimate interests of
the Company, are reasonable with respect to time and territory, and do not
interfere with the interests of the public. The Executive further agrees that
the description of the covenants contained in this Section are sufficiently
accurate and definite to inform the Executive of the scope of the covenants.
ARTICLE 12. Unauthorized Disclosure.
(a) During the period of his employment hereunder, the
Executive shall not, without the prior written consent of the Board of
Directors, or a person authorized thereby, disclose to any person, other than a
person to whom disclosure is necessary or appropriate in connection with the
performance by the Executive of his duties as an officer of the Company, or its
subsidiaries or its affiliates, any confidential information obtained by him
while in the employ of the Company with respect to any of the Company's
services, products, improvements, formulae, designs or styles, processes,
customers, methods of marketing or distribution, systems, procedures, plans,
proposals, policies or methods of operation, the disclosure of which he knows,
or should have reason to know, will be damaging to the Company or its
subsidiaries or its affiliates, nor shall he make any false statements
regarding the Company or its subsidiaries or its affiliates or take any other
action which he knows, or should have reason to know, will be damaging to the
Company or its subsidiaries or its affiliates; provided, however, that
confidential information shall not include any information known generally to
the public (other than as a result of unauthorized disclosure by the Executive)
or any information of a type not otherwise considered confidential by persons
engaged in the same business or a business similar to that conducted by the
company. Following the termination of employment hereunder, the Executive shall
not disclose any confidential information of the type described above or take
any action of the type described above except as may be required in the opinion
of the executive's counsel in connection with any judicial or administrative
proceeding or inquiry.
(b) The foregoing provision of this Section 12 shall be
binding upon the Executive's heirs, successors and legal representatives.
ARTICLE 13. WITHHOLDING OF TAXES. The Company may withhold from
any amounts payable under this Agreement all federal, state, city or other
taxes as shall be required pursuant to any law or government regulation or
ruling.
ARTICLE 14. AMENDMENT: Modification Waiver. This Agreement may
not be amended except by the written agreement of the parties hereto. No
provisions of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by both the
Executive and the Company. No waiver by either party hereto at any time of any
breach by the other party hereto or compliance with any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time.
ARTICLE 15. SEVERABILITY. If any provision of this Agreement
shall be held invalid or unenforceable, the remainder of this Agreement shall
nevertheless remain in full force and effect. If any provision is held invalid
or unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other circumstances.
ARTICLE 16. WAIVER. The waiver by either party of any breach or
violation of any provision of this Agreement shall not operate or be construed
as a wavier of any subsequent breath or violation thereof or of any other
provision hereof.
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ARTICLE 17. NOTICE. All notices required to be given under the
terms of this Agreement shall be in writing, shall be effective upon receipt,
and shall be delivered to the addressee in persona or mailed by certified mail,
return receipt requested, as follows:
If to the Company, addressed to:
SATX, Inc.
0000 Xxxxxxx Xxxx
#000
Xxxxxxx, Xxxxxxx 00000
If to the Executive, addressed to:
Xxxxx X. Xxxxxxx
000 Xxxxxxxx Xx.
Xxxxxxx, Xxxxxxx 00000
or such other address as either party shall have designated for notices to be
given to him or it in accordance with this paragraph.
ARTICLE 18. ENTIRE AGREEMENT. This Agreement contains the entire
Agreement between the parties hereto and shall not be modified except by a
written instrument between the parties.
ARTICLE 19. GOVERNING LAW. This Agreement has been negotiated
and executed in the State of Georgia, and the laws of that state shall govern
its construction and validity.
ARTICLE 20. BENEFIT. This Employment Agreement shall inure to
and shall be binding upon the parties hereto, the heirs and personal
representatives of the Executive, and the successors and assigns of the
Company, including any business entity which at any time, whether by merger,
purchase, or otherwise, acquires all or substantially all of the assets of the
Company.
WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed on the day and year first above written.
"SATX, INC." "EXECUTIVE"
(the "Company")
By:
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Signature Signature
Print Name: Print Name:
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