Amended and Restated Employment Agreement
Amended
and Restated
THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT ("Agreement") is entered into effective as of October 1st, 2008 (the
"Effective Date"), by and between Semotus Solutions, Inc., a Nevada corporation,
whose corporate headquarters is located at 000 Xxxxxxxxxx Xxx., Xxxxx 000, Xxx
Xxxxx, XX 00000 (to be named Flint Telecom Group, Inc.) (the "Company"), and
Xxxxxxx X. XxXxxx ("Executive"), whose address is 00000 Xxxx Xxxxxx, Xxx Xxxxx,
XX 00000.
This Agreement is entered into pursuant
to Sections 7.18 and 8.2(f) of that certain Contribution Agreement by and among
the Company, Flint Telecom, Inc. and Flint Telecom
Limited. Capitalized terms used herein but not defined shall have the
meanings set forth in the Contribution Agreement (as supplemented by that
certain Side Agreement entered into among the parties at the Closing of such
Contribution Agreement).
In consideration of the mutual promises
and conditions contained in this Agreement, the Company and Executive agree as
follows:
1. Employment. The
Company shall employ Executive and Executive accepts such employment upon the
terms and conditions as set forth in this Agreement from the Effective
Date.
2. Title
and Duties. Executive shall serve as Chairman of the Board of Directors of the
Company. Executive shall have the authority and duty to
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Lead
the Board and take overall responsibility for maintaining the Company’s
corporate governance and standards, and compliance with SEC rules in
conjunction with executive
management;
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Advise
and assist the CEO with operational aspects of the
Company,
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Support
the CEO and other executive management in generating significant financial
returns for the shareholders;
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Take
direct management responsibility for the business and financial
performance of the Semotus unit;
and
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Perform
such other duties and responsibilities as the Board of Directors of the
Company shall determine, assign, or delegate from time to time during the
period of this Agreement.
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Executive
agrees to devote substantially all his employable time to the “Semotus Business”
operations of the Company and shall abide by the rules, regulations,
instructions, personnel practices, and policies of the Company and any changes
to them that may be adopted by the Company, except to the extent inconsistent
with the terms of this Agreement. Executive shall report to the Board
of Directors of the Company. Executive shall be based in the Los Gatos,
California area and shall not be required to travel more often than he has
historically traveled on Company business.
a. Chairman
of the Board of Directors. Each year during the term of the
Agreement, the Board shall designate Executive as Chairman of the Board, shall
recommend Executive as a director, and the Board shall otherwise use its best
efforts to have Executive elected as a director and to have him remain as
Chairman of the Board during the term of this Agreement.
b. Other
Positions. Nothing in this Agreement shall prevent Executive, upon prior
approval of the Company's Board of Directors, from serving as a director or
trustee of other corporations or businesses that are not in competition with the
Company, as long as such activities or positions do not interfere with
Executive's duties and responsibilities to the Company. Nothing in this
Agreement shall prevent Executive from investing in or becoming a partner or
shareholder in any corporation, partnership, or other venture not in competition
with the Company, as long as such activities do not interfere with Executive's
duties and responsibilities to the Company.
3. Compensation
and Expenses.
a. Salary.
The Company will pay to Executive a base salary of Two Hundred Forty Thousand
Dollars ($240,000.00) per year, beginning as of the Effective Date of this
Agreement and running for twelve consecutive months thereafter, for a term of
three years. Such salary shall be earned monthly and shall be payable
semi-monthly in no fewer than 24 equal monthly installments in accordance with
the Company's customary practices for peer executives. The Company shall
withhold and deduct from the salary payments all taxes required by federal and
state laws and any other authorized deductions. The Company will review
Executive's salary at least annually. The Company may in its sole discretion
increase Executive's base salary beyond what is expressly provided for in this
paragraph 3.a., but it may not reduce Executive's base salary without
Executive's consent.
b. Bonus.
The Company shall issue to Xx. XxXxxx 3,508,000 shares of restricted common
stock (the “Shares”) on the Effective Date. The Shares shall be
restricted during the term of this Agreement unless mutually agreed upon, and
will be forfeited in their entirety if Xx. XxXxxx resigns without “Good Reason”
as outlined in section 4.d. below or is terminated for Cause at any time during
the term of this Agreement. . Xx. XxXxxx will participate fairly and prorata
with the management team on the issuance of future stock and stock options
compensation.
In addition to the foregoing and the
annual base salary set forth in paragraph 3.a. above, the Company's Compensation
Committee may, in its sole discretion, consider bonus compensation for
Executive.
c. Incentive,
Savings, and Retirement Plans. Executive shall be entitled to
participate in all incentive, savings, and retirement plans, policies, and
programs made available by the Company to other peer executives of the
Company.
d. Welfare
Benefit Plans. Executive may participate in and shall receive
benefits under welfare benefit plans, policies, and programs, including medical,
dental, disability, and life insurance plans and programs made available by the
Company to other peer executives of the Company.
e. Vacation.
Executive shall be entitled to 25 days of vacation per year with full pay.
Executive's vacation shall be taken in accordance with and shall be subject to
the terms of the plans and policies in effect generally as to other peer
executives of the Company.
f. Fringe
Benefits. Executive shall be entitled to fringe benefits in accordance with the
plans, practices, programs, and policies in effect generally as to other peer
executives of the Company during Executive's employment with the Company, plus a
car allowance of $1,000 per month.
g. Expenses.
The Company shall reimburse Executive for all reasonable business-related
expenses incurred by Executive in connection with his employment with the
Company, including entertainment, travel, meals, and lodging in accordance with
the policies, practices, and procedures in effect generally with respect to
other peer executives of the Company.
4. Termination
of Employment.
a. By
Death. Executive's employment with the Company shall terminate automatically
upon Executive's death and the certificates evidencing Xx. XxXxxx’x Shares will
have the restriction removed (except for the standard restriction legend
evidencing that the Shares have not been registered under the Securities Act of
1933, as amended (the “Standard Restrictive Legend”)).
b. By
Disability. The Company may terminate Executive's employment with the Company
during any period in which Executive is considered by the Company to be
disabled. Executive shall be considered "disabled" if, in the sole opinion of
the Company, as determined in good faith, Executive is prevented, after
reasonable accommodation by the Company, from properly performing his duties due
to a mental or physical illness for a period of 180 days in the aggregate in any
12-month period. The certificates evidencing Xx. XxXxxx’x Shares will have the
restrictions removed if so terminated (except for the Standard Restrictive
Legend).
c. For
Cause. Notwithstanding any other provision contained in this Agreement, the
Company may terminate this Agreement immediately, at any time, for Cause. For
purposes of this Agreement, "Cause" shall mean any of the
following: (i) the conviction of a felony, or a crime involving
dishonesty or moral turpitude; (ii) fraud, misappropriation or embezzlement; or
(iii) willful failure or gross negligence in the performance of assigned duties,
which failure or negligence continues for more than thirty (30) days following
written notice of such failure or negligence.
d. For Good
Reason. Notwithstanding any other provisions of this Agreement, Executive may
terminate Executive's employment immediately, at any time, for Good Reason. For
purposes of this Agreement, "Good Reason" shall include:
(1)
Assignment by the Company to Executive of any duties inconsistent in any
substantial respect with the position, authority, or responsibilities associated
with Executive's position as set forth in this Agreement, but excluding any
isolated, insubstantial, or inadvertent action not taken in bad faith which was
promptly remedied by the Company after receipt of notice by
Executive;
(2)
The Company's relocation of Executive to an office or location that is further
than 50 miles from the office at which Executive is currently providing services
for the Company;
(3)
Reduction by the Company of Executive's base salary from that provided in
paragraph 3.a. of this Agreement;
(4)
In the event that there is a successor to the Company, the failure of the
Company to obtain an agreement from any such successor that is satisfactory to
Executive to perform the obligations of the Company under this Agreement (and,
for purposes of this Agreement, any merger between Flint Telecom, Inc. and
Semotus Solutions, Inc. shall not be considered a “successor to the Company”);
and
(5)
Failure of the Company to fulfill any of its other material obligations to
Executive under this Agreement.
e. For
Other Than Cause , Good Reason, Death or Disability. The Company or Executive
may not terminate Executive's employment at any time for other than Cause, Good
Reason, Death or Disability.
f. Obligations
of Executive on Termination.
(1)
Executive acknowledges and agrees that all property, including keys, credit
cards, books, manuals, records, reports, notes, contracts, customer lists,
Confidential Information as defined in this Agreement, copies of any of the
foregoing, and any equipment furnished to Executive by the Company, belong to
the Company and shall be promptly returned to the Company upon termination of
employment.
(2)
Upon termination of employment (which shall include expiration of the initial
term of this Agreement unless extended by mutual agreement of Executive and the
Company), Executive shall be deemed to have resigned from all offices and
directorships then held with the Company.
g. Obligations
of the Company on Termination.
(1) For Any
Reason. Upon termination of this Agreement for any reason, the
Company's obligations to Executive under this Agreement shall include (a) the
prorated payment of Executive's salary through the date of termination to the
extent not paid by then; (b) the payment of earned and accrued bonus or
incentive payments due Executive, if any, at the time of termination under any
bonus or incentive plans in which Executive participated prior to termination;
(c) the payment of any unused accrued vacation through the date of termination;
and (d) the payment of any reimbursable business expenses that were documented
by Executive prior to termination in accordance with the Company's policies as
set forth in paragraph 3.g. of this Agreement and that were not reimbursed by
the Company at the time of the termination of this Agreement.
(2)
Death or Disability. If Executive's employment is terminated by reason of
Executive's death or disability, this Agreement shall terminate and the Company
will have no further obligation to Executive, except as otherwise provided by
law or by paragraph 4(g)(1) this Agreement.
(3)
Without Cause or For Good Reason, or if the Company is Acquired or Dissolves. If
Executive's employment is terminated by the Company Without Cause [see comment
above] or by Executive for Good Reason as provided in this Agreement, or if the
Company is acquired or dissolves, this Agreement shall terminate and all shares
of stock and stock options of the Company then owned by Executive which are
unvested shall become immediately fully vested with all restriction removed
(except for the Standard Restrictive Legend), and the Company shall pay to the
Executive severance pay equal to the remaining years and/or months of
Executive's then current base salary that are due under this
Agreement
(4) For
Cause. If Executive's employment is terminated for Cause, this Agreement shall
terminate and the Company will have no further obligation to Executive, except
as otherwise provided by law or by paragraphs 4(g)(1) and 3(b) of this
Agreement.
5. Covenants
of Executive.
a. Noncompetition
and Noninterference With Business. For so long as he is employed by
the Company, Executive will not directly or indirectly provide services for,
own, manage, or operate any business that is at that time in competition with
the Company.
b. Nonsolicitation
of Business or Customers. For so long as he is employed by the Company,
Executive will not influence or attempt to influence customers of the Company to
divert their business to any individual or entity then in competition with the
Company.
c. Nonsolicitation
of Employees. For so long as he is employed by the Company, Executive
will not disrupt, damage, impair, or interfere with the business of the Company
by directly or indirectly soliciting Company employees to work for any
individual or entity then in competition with the Company.
d. Confidential
Information.
(1)
"Confidential Information" as used in this Agreement shall mean information
disclosed to Executive, known to Executive, or developed by Executive, alone or
with others, in connection with his employment with the Company that is not
generally known in the industry in which the Company is or may become engaged,
about the Company's products, processes, and services, including information
relating to written lists of names, customers, sources of supply, personnel,
sources or methods of financing, marketing, pricing, merchandising, interest
rates, or sales.
(2)
Executive acknowledges that all Confidential Information is received or
developed by him in confidence. For so long as he is employed by the Company,
Executive will not, directly or indirectly, except as required by the normal
business of the Company or as expressly consented to in writing and in advance
by the Company's Board of Directors: (a) disclose, publish, or make available,
other than to an authorized employee, officer, or director of the Company, any
Confidential Information; (b) sell, transfer, or otherwise use or exploit any
Confidential Information; or (c) permit the sale, transfer, use, or exploitation
of any Confidential Information by any third party.
(3)
Nothing in this paragraph 5 shall be construed so as to prevent Executive from
using in connection with his employment for any individual or entity other than
the Company any knowledge that was acquired by Executive during the course of
his employment with the Company that is generally known to persons of
Executive's experience in other companies in the same industry as the
Company.
6. Assignment.
This Agreement is personal to Executive and shall not be assigned by Executive.
Any such assignment shall be null and void.
7. Successors.
This Agreement shall inure to the benefit and be binding upon the Company and
its subsidiaries, successors, and assigns and any person acquiring, whether by
merger, consolidation, purchase of assets, or otherwise, all or substantially
all of the Company's assets. The rights of Executive to receive payment of
compensation provided for in this Agreement shall inure to the benefit of, and
may be enforced by, Executive's estate in the event of his
death.
8. Waiver.
No delay or omission by the Company or Executive in exercising any right under
this Agreement shall operate as a waiver of that or any other right. No waiver
of any provision of this Agreement, or consent to any departure by either party
from any provision of this Agreement, shall be effective in any event unless it
is in writing, designated a waiver, and signed by the party waiving the breach.
Such a waiver shall be effective only in the specific instance and for the
purpose for which it is given.
9. Severability.
The provisions of this Agreement are divisible; if any provision shall be deemed
invalid or unenforceable, that provision shall be deemed limited to the extent
necessary to render it valid and enforceable and the remaining provisions of
this Agreement shall continue in full force and effect without being impaired or
invalidated in any way.
10. Amendment.
This Agreement may not be altered or amended except in a writing signed by both
Executive and the Company, following approval of the Company's Board of
Directors.
11. Construction
and Governing Law. The captions used in connection with this Agreement are for
reference purposes only and shall not be construed as part of this Agreement.
This Agreement shall be governed by and construed in accordance with the laws of
the State of California.
12. Entire
Agreement. This Agreement supersedes all prior agreements, understandings, and
communications between Executive and the Company, whether written or oral,
express or implied, relating to the subject matter of the Agreements and is
intended as a complete and final expression of the terms of the agreement
between Executive and the Company and shall not be changed or subject to change
orally. The parties further agree that neither they nor anyone acting on their
behalf made any inducements, agreements, promises, or representations other than
those set forth in this Agreement.
13. Notices.
Any notice required or permitted hereunder shall be given in writing and shall
be deemed effectively given (a) upon personal delivery or (b) upon facsimile
delivery, with written confirmation, or (c) within five (5) days of deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to Executive at his address shown on the Company's
records and to the Company at the address of its principal corporate offices
(attention: Corporate Secretary) or at such other address as such
party may designate by ten (10) days' advance written notice to the other
party hereto.
The
parties to this Agreement have executed this Agreement to be effective as of the
Effective Date.
SEMOTUS
SOLUTIONS, INC.,
a Nevada
corporation,
By: /s/
Xxxx Xxxxxx
Xxxx
Xxxxxx
Its:
General Counsel
Dated:
October 1, 2008
And:
/s/
Xxxxxxx X. XxXxxx
Xxxxxxx
X. XxXxxx
Dated:
October 1, 2008
