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EXHIBIT 10.1(b)
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into on this 1st day of October, 1995
(the "Effective Date"), by and between STARTRONIX INTERNATIONAL, INC., a
Delaware corporation (the "Company"), and XXXXXX XXXXX, a resident of the State
of California ("Employee").
In consideration of the employment by the Company and of the
compensation and other remuneration paid, and to be paid, by the Company and
received by Employee for such employment, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
Employee, it is agreed by and between the parties hereto as follows:
1. EMPLOYMENT: The Company agrees to employ Employee and Employee
agrees that he will devote his full productive time, skill, energy, knowledge
and best efforts during the period of his employment to such duties as the Board
of Directors of the Company may reasonably assign to him, and he will faithfully
and diligently endeavor to the best of his ability to further the best interest
of the Company during the period of his employment. However, Employee is not
prohibited from making personal investments in any other businesses, as long as
those investments do not require Employee to participate in the operation of the
companies in which he invests and such other businesses are not in competition
with the Company or any of its subsidiaries.
2. TERMS OF EMPLOYMENT: Employee's employment will begin on the 1st day
of October, 1995, and will end on the 30th day of September, 2000, a term of
five (5) years, unless earlier terminated in accordance with Paragraph 5, 6 or 8
hereof or extended upon the mutual consent of both parties.
3. COMPENSATION: On the terms and subject to the conditions of this
Agreement, (i) the Company will pay Employee a salary and a bonus determined in
accordance with Schedule A, (ii) Employee will be entitled to participate in the
Company's stock option plan as is in effect from time to time, and (iii) the
Company will provide Employee with employee benefits consistent with those
provided by the Company to similarly situated executives. The Company's Employee
Stock Option Plan is summarized in Schedule B. The employee benefits provided by
the Company as of the date hereof are summarized in Schedule C. The Company has
granted the Employee a Sign-up Bonus of 250,000 shares of Company stock and a
Stock Option Plan. Employee agrees in the event of termination of his employment
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during the terms of this Agreement the Company shall have the right but not the
obligation to repurchase the Bonus Stock within 60 days of the termination date,
based on the following schedule:
Length of Service Re-purchase Price
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0 to 12 months 25 percent of current market value.
13 to 24 months 50 percent of current market value.
25 to 36 months 75 percent of current market value.
thereafter 100 percent of current market value.
*Market value shall be determined by the average share price for the 20
trading days prior to the date of termination.
4. TITLE AND DUTIES: The Company hires Employee as Chief Operating
Officer. Employee shall perform such duties and functions for the Company as
shall be specified from time to time by the President and/or the Board of
Directors of the Company, including, but not limited to the duties and
functions expressly set forth on Schedule D, and which are consistent with
Employee's duties set forth on Schedule D.
5. ILLNESS OR INCAPACITY: Employee is entitled to absences because of
illness or incapacity of no more than a total of ninety (90) days in each
calendar year. If Employee cannot perform his duties because of illness or
incapacity for more than a total of ninety (90) days in any year, the Company
may terminate this Agreement upon thirty (30) days' written notice to Employee.
Employee is not entitled to receive, and the Company shall not be required to
pay, Employee's compensation hereunder for absences because of illness or
incapacity other than the total of ninety (90) days in each year granted to
Employee under this Paragraph 5. If Employee returns to work and is able to
discharge his duties in full, Employee shall be deemed reinstated and thereafter
shall be entitled to full compensation hereunder.
6. TERMINATION OF AGREEMENT UPON SALE OR TERMINATION OF COMPANY'S
BUSINESS:
a. Notwithstanding anything to the contrary contained in this
Agreement, the Company may terminate Employee's employment upon thirty (30)
days' written notice to Employee upon the occurrence of any of the following
events:
(1) The acquisition, directly or indirectly, of any "person"
(excluding any "Person" who on the date hereof owns or controls ten percent
(10%) or more of the voting power of the Company's common stock), as such term
is used in Sections 13(d) and
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14(d) of the Securities Exchange Act of 1934, as amended, within any twelve (12)
month period of securities of the Company representing an aggregate of fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding securities; provided, that for purposes of this Paragraph (a),
"acquisition" shall not include shares which are received by a person through
gift, inheritance, under a will or otherwise through the laws of descent and
distribution;
(2) During any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors of the
Company (the "Board"), cease for any reason to constitute at least a majority
thereof, unless the election of each new director was approved in advance by a
vote of at least a majority of the directors then still in office who were
directors at the beginning of such period; or
(3) The occurrence of any other event or circumstance which is
not covered by (1) or (2) above which the Board determines affects control of
the Company and, in order to implement the purposes of this Agreement, adopts a
resolution that such event or circumstance constitutes an "event" under this
Paragraph 6.
b. If the Company terminates Employee pursuant to Paragraph 6(a),
Company will, for the Applicable Period (as defined in Paragraph 8(c)), pay
Employee his then current salary (subject to decrease pursuant to Schedule A,
but without any increase pursuant to Schedule A) and provide Employee with Group
Health Insurance, but Company shall not be required to pay any other
compensation or provide any other benefits.
7. DISCLOSURE OF INFORMATION; NON-SOLICITATION.
a. DEFINITIONS. For purposes of this Paragraph 8, the following
terms shall have the meanings specified below:
"BUSINESS" - the development, marketing and distribution of
products or services of the type offered by the Company or any of its
subsidiaries, including (i) the development, marketing and distribution of (1)
screen phones, touch screens and other receiving hardware to provide home
shopping, xxxx paying, banking, utility meter reading, swipe-card services,
access to video and audio programming (whether from low-orbiting satellites or
other sources), wireless communications, emergency response, services for "On-
Line" home-based businesses accessing the Internet, and related hardware or
software, and (2) wireless communications and/or pagers, including without
limitation hardware and services related to a telecom/pager wrist watch with
access to information, including winning lottery numbers, weather conditions,
sports scores and stock market and financial data, and related hardware and
software; (ii) the provision of international long distance, domestic long
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distance or local telephone time or services in the United States, including (1)
the prepayment of telephone charges, (2) telephone debit cards, (3)
international or domestic long distance local telephone sales or resales, (4)
international calling from non-U.S. locations to the United States, (5) "1 plus
1" residential telephone service, (6) business telephone service and (iii) the
provision of environmental, surveying, engineering, mapping and right-of-way
acquisition consulting services;
"CONFIDENTIAL INFORMATION" - information relating to the
operations, customers, or finances of the Company, or the Business, that derives
value from not being generally known to other Persons, including, but not
limited to, technical or non-technical data, formulas, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data, and
lists of or identifying information about actual or potential customers or
suppliers, whether or not reduced to writing, certain unpatented information
relating to the research and development, manufacture or serving of the
Company's products, information concerning proposed new products, market
feasibility studies and proposed or existing marketing techniques or plans.
Confidential Information also includes the same types of information relating to
the operations, customers, finances, or Business of any affiliate of the
Company, if such information is learned by Employee during the term of this
Agreement or in connection with Employee's performance of Services. Confidential
Information also includes information disclosed to the Company by third parties
that the Company is obligated to maintain as confidential. Confidential
Information may include information that is not a trade secret, but Confidential
Information that is not also a trade secret shall constitute Confidential
Information only for three (3) years after the Termination Date;
"CUSTOMER" - any customer of the Company in the United States
that Employee, during the one year period prior to the Termination Date, (i)
provided goods or services to or solicited on behalf of the Company; or (ii)
about whom Employee possesses Confidential Information;
"PERSON" - any individual, corporation, partnership, limited
liability company, association, municipality, government agency, government,
unincorporated organization or other entity;
"SERVICES" - the duties and functions that Employee shall
provide in the United States as an employee of the Company and that Employee
shall be prohibited from providing in the United States in competition with the
Company in accordance with the terms of this Agreement, including the duties
and functions expressly set forth on Schedule B
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attached hereto. Employee acknowledges that Employee has been informed of and
discussed with the Company the specific activities that Employee will perform as
Services and that Employee understands the scope of the activities that
constitute Services under this Agreement;
"TERMINATION DATE" - the last day Employee is employed by the
Company, whether the termination is voluntary or involuntary and whether with or
without cause; and
b. CONFIDENTIAL INFORMATION. Employee shall protect Confidential
Information. Except as required in connection with work for the Company,
Employee will not use, disclose or give to others, during or after Employee's
employment, any Confidential Information.
c. RETURN OF MATERIALS. On the Termination Date or for any reason
or at any time at the Company's request, Employee will deliver promptly to the
Company all materials, documents, plans, records, notes, manuals, subcontracts,
procedures and other papers and any copies thereof in Employee's possession,
custody or control relating to the Company or the Business, all of which at all
times sha1l be the property of the Company.
d. SOLICITATION OF CUSTOMERS. During employment and for two (2)
years after the Termination Date, Employee will not solicit Customers within the
United States for the purpose of providing products or services comparable to
those provided by the Business, except on behalf of the Company.
e. SOLICITATION OF COMPANY EMPLOYEES. During employment and for
two (2) years after the Termination Date, Employee will not solicit for
employment with another Person anyone who is or was, at any time during the one
year period prior to the Termination Date, an employee of the Company.
f. DISPARAGEMENT. Employee shall not at any time make false,
misleading or disparaging statements about the Company, including the Business,
management, employees and Customers.
g. PRIOR AGREEMENTS. Employee represents and warrants that
Employee is not under any obligation, contractual or otherwise, limiting,
impairing or affecting Employee's performance of Services. Upon execution of
this Agreement, Employee sha1l give the Company any agreement with a prior
employer or other Person purporting to limit or
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affect, in any way, Employee's ability to work for the Company, to solicit
customers or potential customers or employees or to use any type of information.
h. FUTURE EMPLOYMENT OPPORTUNITIES. Prior to and for two (2)
years after the Termination Date, Employee shall (a) provide any prospective
employer with a copy of this Agreement, and (b) upon accepting any position,
provide the Company with the employer's name and a description of the services,
if any, Employee will provide for such employer.
i. WORK FOR HIRE ACKNOWLEDGMENT; Assignment. All writings,
drawings, photographs, tapes, recordings, computer programs and other works in
any tangible medium of expression, regardless of the form of medium, which have
been or are prepared by Employee, or to which Employee contributes, in
connection with Employee's employment by the Company (collectively the "Works")
and all copyrights and other rights in and to the Works, belong solely,
irrevocably and exclusively throughout the world to the Company as works made
for hire. However, to the extent any court or agency should conclude that the
Works (or any of them) do not constitute or qualify as a "work made for hire,"
Employee hereby assigns, grants and delivers, solely, irrevocably, exclusively
and throughout the world to the Company all copyrights and other rights to the
Works. Employee also agrees to cooperate with the Company and to execute such
other further grants and assignments of all rights as the Company from time to
time reasonably may request for the purpose of evidencing, enforcing,
registering or defending its ownership of the Works and the copyrights in them,
and Employee hereby irrevocably constitutes and appoints the Company as
Employee's agent and attorney-in-fact, with full power of substitution, in
Employee's name, place and stead, to execute and deliver any and all such
assignments or other instruments which Employee shall fail or refuse promptly to
execute and deliver, this power and agency being coupled with an interest and
being irrevocable. Without limiting the preceding provisions of this Paragraph
7(i), Employee agrees that the Company may edit and otherwise modify, and use,
publish and otherwise exploit, the Works in all media and in such manner as the
Company, in its discretion, may determine.
j. Inventions, Ideas and Patents. Employee shall disclose
promptly to the Company (which shall receive it in confidence), and only to the
Company, any invention or idea of Employee (developed alone or with others)
conceived or made during Employee's employment by the Company (or, if related
to the Business, during employment or within one year after the Termination
Date). Employee assigns to the Company any such invention or idea in any way
connected with Employee's employment or related to the Business, research or
development of the Company, or demonstrably anticipated research or development
of the Company, and will cooperate with the Company and sign all papers deemed
necessary by the
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Company to enable it to obtain, maintain, protect and defend patents covering
such inventions and ideas and to confirm the exclusive ownership of the Company
of all rights in such inventions, ideas and patents, and irrevocably appoints
the Company as its agent to execute and deliver any assignments or documents
Employee fails or refuses to execute and deliver promptly, this power and agency
being coupled with an interest and being irrevocable. This constitutes written
notification to Employee that this assignment does not apply to an invention
for which no equipment, supplies, facility or trade secret information of the
Company or any Customer was used and which was developed entirely on Employee's
own time, unless (a) the invention relates (i) directly to the Business or (ii)
to the actual or demonstrably anticipated research or development of the
Company, or (b) the invention results from any work performed by Employee for
the Company.
k. INDEPENDENCE OF COVENANTS. The covenants contained herein
shall be construed as agreements independent of each other and of any other
provision of this or any other contract between the parties hereto, and the
existence of any claim or cause of action by Employee against the Company,
whether predicated upon this or any other contract, shall not constitute a
defense to the enforcement by the Company of said covenants.
l. RIGHT TO INJUNCTIVE RELIEF. Employee recognizes and agrees
that the injury the Company will suffer in the event of the Employee's breach of
any covenant or agreement contained herein cannot be compensated by monetary
damages alone, and Employee therefore agrees that the Company, in addition and
without limiting any other remedies or rights that it may have, either under his
Agreement or otherwise, shall have the right to obtain an injunction against
Employee from any court of competent jurisdiction enjoining any such breach.
8. TERMINATION.
a. This Agreement and the employment of Employee may be terminated
as follows:
(l) By the Company (i) pursuant to Paragraph 5 or 6, (ii) upon
commission by the Employee of any felony or material misdemeanor under federal,
state or local laws or ordinances, except traffic violations or (iii) upon the
failure of Employee to diligently or competently discharge the duties assigned
to him pursuant to this Agreement; or
(2) (i) By Employee upon thirty (30) days' written notice to
the Company or (ii) by the Company upon thirty (30) days' written notice to
Employee, or
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(3) By the Company upon material violation by Employee of any
of the terms and conditions of this Agreement or the breach by Employee of any
representation or warranty made to the Company herein or in any other agreement,
document or instrument executed by Employee and delivered to the Company, or
should any representation or warranty made by Employee hereunder or thereunder
prove to have been false or misleading in any material respect when made or
furnished; or
(4) By the Company upon the death of Employee.
b. In the event Employee is terminated by the Company for any
reason (including, without limitation, in accordance with Paragraph 8(a)(2)(ii))
other than pursuant to Paragraph 8(a)(1) or 8(a)(3), the Company shall (i) pay
Employee his then current salary (subject to decrease pursuant to Schedule A,
but without any increase thereafter pursuant to Schedule A) and provide Employee
with Group Health Insurance, but no other compensation or benefits, for the
Applicable Period beginning with the date of termination and (ii) subject to the
Employee's strict adherence to and performance of the covenants set forth in
Paragraph 7. If Employee is terminated pursuant to Paragraph 8(a)(1) or 8(a)(3)
or Employee terminates his employment pursuant to Paragraph 8(a)(2)(i), Employee
shall be entitled only to compensation accrued through the date of termination
and all benefits accrued as of such date, and shall not be entitled to any
portion of the payment set forth in clause (ii) of this Paragraph (b).
c. For purposes of this Agreement, the term "Applicable Period"
means: (i) ninety (90) days, in the case of a notice given to Employee prior to
the first anniversary of the date on which Employee commenced his employment
with the Company or its affiliate (the "Employment Date"); (ii) one hundred
eighty (180) days, in the case of a notice given to Employee on or after the
first anniversary and prior to the second anniversary of his Employment Date,
and (iii) one (1) year, in the case of a notice given to Employee on or after
the second anniversary of his Employment Date.
9. MISCELLANEOUS.
a. This Agreement may be assigned by the Company to any successor
in interest to its business, which successor in interest shall be bound herein
to the same extent as the Company. Employee agrees to perform his duties for
such successor in interest to the same extent as he would for the Company.
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b. This is a personal agreement on the part of Employee and
may not be sold, assigned, transferred or conveyed by Employee.
c. The waiver by either party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any subsequent breach by the other party.
d. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
e. This Agreement states the entire agreement and
understanding between the parties and supersedes all prior understandings and
agreements.
f. No change or modification to this Agreement shall be valid
unless in writing and signed by both parties hereto.
g. Confidentiality. Employee agrees that the contents of this
Agreement are totally confidential in nature and will not be revealed to anyone
without the express written permission of Mr. Xxxx Xxxxxxx, the Chief Executive
Officer of the Company.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.
STARTRONIX INTERNATIONAL, INC.
By: /s/Xxxx Xxxxxxx
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Xxxx Xxxxxxx, President
Title:
EMPLOYEE:
/s/Xxxxxx Xxxxx
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Xxxxxx Xxxxx
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SCHEDULE A - SALARY AND BONUS
BASE SALARY. $120,000 Annually
SALARY ADJUSTMENT. Quarterly, commencing on the first day of the second fiscal
quarter of the Company the Company shall pay Employee for each of the next
twelve months a monthly salary based on the Net Income Amount (as defined below)
for the previous full fiscal year of the Company, according to the table below:
ANNUAL NET INCOME LEVELS MONTHLY SALARY
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greater than $1.5 million but less than or equal to $3 million $15,000
greater than $3 million $20,000
For purposes of this Agreement, "Net Income Amount" means the Company's
annual net income before income taxes. The Company will deduct from payments of
Monthly Salary to Employee all federal, state and local income tax, FICA, FUTA,
and other withholdings as required by law. For purposes of this Agreement, the
Company's net income and gross sales shall be determined in accordance with
generally accepted accounting principles in the United States, applied on a
basis consistent with prior periods.
CASH BONUS
The Company has the option to issue a Cash Bonus to employee at Company's
discretion
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SCHEDULE B - SUMMARY OF EMPLOYEE STOCK OPTION PLAN
As of the date hereof, the Company's Employee Stock Option Plan (the "Option
Plan") provides for the Employee to earn, as of the last day of the First fiscal
quarter of each fiscal year (the "Issuance Date") options for restricted common
stock of the Company in an aggregate amount (the "Annual Amount") equal to (I)
one percent (1%) of the Net Income Amount divided by the average closing price
of such common during the last thirty days of the previous fiscal year (the
"Stock Price"), on the following terms and conditions and the other terms and
conditions as now are, and may in the future be, set forth as the Option Plan:
The exercise price for the options issued shall equal seventy-five percent (75%)
of the Stock Price. The options shall vest over a five year period, exercisable
in an amount equal to up to twenty percent (20%) of the Annual Amount on each of
the first five anniversaries of the Issuance Date.
Employee understands that the above is a summary of key items in a proposed
stock plan, the details of the Stock Option Plan will be provided to Employee
upon the approval of the Board of Directors of the Company.
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SCHEDULE C - SUMMARY OF EMPLOYEE BENEFITS
1. Medical and Dental Plan
2. Auto allowance - $650 per month
3. Car/cell phone
4. Normal Company expenses
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SCHEDULE D - DUTIES AND FUNCTIONS
CHIEF OPERATING OFFICER
As the Chief Operating Officer of the Company, the Employee shall
direct, administer, and coordinate the activities of the organization in support
of policies, goals, and objectives established by the Chief Executive Officer
and in accordance with the lawful directives of the Company's Board of Directors
by performing various duties and responsibilities which shall include but not be
limited to the following:
Guide and direct management in the development, production, promotion,
and sale of the organization's products and services.
Direct the preparation of short term and long range plans and budgets
based on broad corporate goals and growth objectives.
Maintain a sound plan of corporate organization establishing policies
to insure adequate management development and to provide for capable management
succession.
Develop and install procedures and controls to promote communication
and adequate information flow.
Establish operating consistent with Chief Executive Officer's broad
policies an objectives and ensures their execution.
Evaluates the results of overall operations regularly and
systematically and reports these results to the Chief Executive Officer.
Ensures that the responsibilities, authorities, and accountability of
all direct subordinates are defined and understood.
Ensures that all organization activities and operations are carried out
in compliance with local, state, and federal regulations and laws governing
business operations.
