Exhibit 10.04
EMPLOYMENT AGREEMENT
I. This agreement is executed this 28st day of July, 2003 and made
effective as of August 1, 2003 ("Effective Date"), between Schimatic
Cash Transactions Xxxxxxx.xxx, Inc., a Florida corporation ("Employer"
or "Company"), and Xxxxxxx X. XxXxxx ("XxXxxx" or "Employee") and
(collectively the "Parties").
II. RECITALS
A. Employer is a Florida corporation, the principal business of
which is computer software solutions with particular expertise
in Smart Card Loyalty programs.
B. Employer's current headquarters office ("Corporate Office") is
located at 000 X. Xxxx Xxxxxxx Xx., Xxxxx , Xxx Xxxxx, XX
00000.
C. Company recognizes that XxXxxx has played a key role, and will
continue to play a key role, in the establishment of both
fiscal and administrative policy areas that has allowed the
Company to move forward as a going concern and as a stabilized
and viable force in the marketplace, and that, without the
continued contribution of XxXxxx'x input in these areas, the
Company's chances of success would be diminished.
D. Company desires to ensure the continued involvement of XxXxxx,
and is therefore entering this Employment Agreement for XxXxxx
to serve as CFO and Vice President of Administration reporting
to the Chief Executive Officer.
The Parties wish to enter into a written agreement to memorialize the
terms of Employee's employment by the Employer.
III. AGREEMENT.
In consideration of the employment of XxXxxx by the Employer and other
good and valuable consideration, the parties hereto agree as follows:
A. Employment. The Employer agrees to employ XxXxxx as CFO and
Vice President of Administration on the terms set forth
herein. XxXxxx accepts such employment and agrees to work full
time and use his best efforts in performing services for the
Employer.
B. Inventions. Employee shall promptly disclose to the company
any and all inventions, discoveries, developments,
improvements, machines, appliances, processes, software,
firmware, products, or the like whether patentable or not,
which are related to the Company's business (all of which are
referred to herein as "inventions") which Employee may invent,
conceive, produce, or reduce to practice, either solely or
jointly with others, at any time (whether or not during
working hours) during the period of employment. All such
inventions which in any way relate to the goods, materials, or
services developed, produced, used or sold by the Company or
any of it's subsidiaries shall at all times and for all
purposes be regarded as acquired and held by Employee in a
fiduciary capacity for, and solely for the benefit of the
Company. No termination of employment or of this agreement
shall release Employee or the Employee's heirs or legal
representatives from the foregoing obligations as to such
inventions.
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XxXxxx Employment Agreement (Cont.)
C. Terms & Salary. Employee's current salary will be one dollar
($1) per month. Except as provided herein, the term of this
Agreement shall be for a period of six (6) months commencing
on the Effective Date, from 1 August 2003 until January 31,
2004 and will automatically renew for one (1) month at a time,
every month, unless employee receives a notification by the
employer that his services are no longer required.
D. Place of Work. At the present time, the Company intends to
maintain its fiscal and administrative records at its
operational office center at 0000 Xxxxx Xxxxx, Xxx., # 000 in
Xxxx Xxxx Xxxx, Xxxx, 00000. Employee's principal place of
business is the Las Vegas Office at 000 X. Xxxx Xxxxxxx Xxxx
Xxx Xxxxx, XX. 00000 and is the company `s home office. Should
the Company decide to relocate the home office outside of Las
Vegas, then his principal office shall be his home office, for
which Company agrees to provide all equipment and supplies
deemed necessary by the Employee for the fulfillment of his
duties. Notwithstanding the foregoing, Employee agrees to
travel, as deemed necessary, to the Company's Operations
Office Center and any other locations necessary for the
fulfillment of his duties. The expenses associated with such
travel shall be reimbursed by the Company. The Company agrees:
1. To reimburse Employee for travel, lodging and
associated expenses during the term of this
Agreement;
2. In the event the company and employee elect to have
the Employee relocate to a new location upon
relocation of the company's home Office, Company
agrees to provide Employee a moving allowance not to
exceed $20,000; and
3. To reimburse Employee for any real estate commissions
and fees incurred by Employee on the sale of his
principal personal residence or the purchase of a new
residence associated with the above described
relocation, whichever is greater, as well as any
income or other taxes associated with such
reimbursement. Such reimbursements as noted in this
paragraph will be made to the Employee at such time
as the Company is operating with a run rate that is
cash flow positive.
E. Benefits.
1. Fringe Benefits. XxXxxx shall be entitled to and
shall receive all benefits of employment generally
available to other executives of the Employer,
including, without limitation, participation in the
following:
a. Group Health, Dental and Life Insurance.
XxXxxx will be eligible to participate in
such group health, dental and life insurance
plans, which the Employer may keep in effect
during the Term, subject to the terms of any
such plans. At any time that the Employer
does not have available Group Health and
Dental Insurance plans, during the Term and
for 12 months thereafter, Employer shall pay
any premiums associated with the enrollment
of the plan(s) of Employee's choice.
b. Long Term Disability. XxXxxx will be
eligible to participate in such long term
disability plans which the Employer may keep
in effect during the Term, and for 12 months
thereafter, subject to the terms of any such
plan.
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XxXxxx Employment Agreement (Cont.)
c. Commuting and Relocation Expenses. Employer
shall reimburse XxXxxx for all reasonable
business expenses including: travel and
lodging for commuting to the Company's
Corporate Office in Nevada and Operations
Center located at 0000 Xxxxx Xxxxx, Xxx., #
000, in Salt Xxxx Xxxx Xxxx, 00000, or
anywhere to which either may be relocated.
The Company also agrees to pay the moving
allowance to the Corporate Office or new
Operations Center Location (s) as described
in Section (E) above.
d. Business Expenses. The Employer shall pay
the actual and normal expenses incurred by
Employee for the benefit of the Employer in
performing his duties as CFO and Vice
President of Administration of the Employer
in accordance with the Employer's expense
reimbursement policy, as adopted from time
to time. At the option of Employee, any
portion of any expenses due to Employee
remaining unpaid after one hundred eighty
(180) days from when it was incurred, may be
converted to stock options as described
below, credited, or converted to any
deferred compensation package or investment
offering that the company may be offering at
that time. If converted to stock or stock
options, the number of stock or stock
options will be calculated at the
pre-reverse 5 cents ($.05) per share,
divided into the amount due. The strike
price of the stock or stock options will be
at the pre-reverse 5 cents ($.05) per share.
e. Vacation. XxXxxx shall be entitled to
vacation benefits in accordance with the
employer's vacation policy, as currently
stated or as increased in the future, at the
maximum level of accrued and unused vacation
benefits which Employer's executives or
employees are permitted to accrue in
accordance with the Employer's personnel
policies.
f. Sick Leave/Personal Leave. XxXxxx shall be
entitled to sick leave and personal leave
benefits in accordance with the Employer's
personnel policies, as adopted from time to
time.
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XxXxxx Employment Agreement (Cont.)
g. Accrual Year. Any of the benefits provided
under this Agreement or under Employer's
personnel policies generally which are
accrued on a "per year" basis, are deemed to
accrue during each of Employer's fiscal
years in accordance with Employer's
personnel policies applicable to its
employees generally. Any benefits accruing
from the Effective Date of hire through the
end of the current fiscal year will be
prorated for such year.
2. Indemnity. Employer shall indemnify XxXxxx to the
maximum extent permissible under law as an agent,
Director, and Officer for acts taken by him during
the Term on behalf of Employer provided such acts are
taken in good faith and in what is in the best
interest of Employer.
3. Directors' and Officers' Insurance. Employer agrees
to obtain and maintain a policy of directors and
officers insurance covering Employee's acts as a
Director or Officer, as the case may be and as may be
limited by the terms of any such insurance policy, in
a face amount of no less than ONE MILLION DOLLARS
($1,000,000.00).
4. Termination.
a. Termination as a result of a change of
control or for good cause. This Agreement is
terminable prior to the expiration of the
Term, in the manner and to the extent set
forth in this section 6.
b. Death, Disability or Resignation During
Term. This Agreement shall automatically
terminate upon the death of Simon or
Employee's voluntary resignation during the
Term. The Employer or Xxxxx xxx terminate
this Agreement upon reasonable determination
of Employee's total disability. As used
herein, total disability means Employee's
inability to perform his normal and usual
duties as the fiscal and/or administrative
employee of the Employer due to physical
disability or physical or mental illness for
a period of ninety (90) consecutive calendar
days.
c. Termination for Cause. The Employer may
terminate this Agreement immediately, and
except as otherwise set forth below, without
prior notice, for "Cause" which shall mean:
i. Employee's excessive use of alcohol
or illegal drug abuse;
ii. Any material dishonest act by
XxXxxx relating to the Employer's
business;
iii. Any intentional act by XxXxxx that
would be materially detrimental to
the business or reputation of the
Employer;
iv. Employee's rendering any services
to a firm or entity which does
business in a field competitive
with the business of Employer
except as may be expressly
authorized in writing pursuant by
the Board, or
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XxXxxx Employment Agreement (Cont.)
v. Employee's substantial failure to
perform the material services
contemplated by this Agreement, it
being understood and agreed that
the Employer must give XxXxxx
notice of such failure by the
Employer and not less than sixty
(60) days with in which to cure
such failure before invoking the
provisions of this subparagraph v.
in terminating Employee.
d. Without Cause or from Change of Control. The
Employer may terminate this Agreement during
the Term without Cause upon giving sixty
(60) days prior written notice of such
termination. Such notice is deemed to be
given in the event of change of control as
described in section 11 below.
7. Severance Pay. If Employee's employment terminates due to his
death, disability or by Employer notice without cause as
described in Section 6 above at any time prior to the Term,
Employer will pay to XxXxxx or his legal designee(s), an
amount equal to his annual Base Salary ("Severance Pay") and
will immediately pay all outstanding expenses and loans due to
XxXxxx from the Company if there are sufficient funds to pay
these items; otherwise, these expenses and loans will be paid
out over a twelve (12) month period and will earn a fifteen
(15%) rate of interest until fully paid. Any vesting rights in
any Stock Option Plan agreed to pursuant to Section 4 hereof
shall continue to accrue for a 36 month period following such
termination.
8. No Severance Pay upon Resignation. It is expressly understood
and agreed that XxXxxx (or his personal representative, as the
case may be) shall not be entitled to any Severance Pay if he
resigns during the Term, but will immediately be paid all
outstanding expenses and loans due from the Company if
sufficient funds are available to pay these items; otherwise,
these outstanding expenses and loans will be paid out over a
twelve (12) month period and will earn a fifteen (15%) percent
rate of interest until fully paid. At the option of Employee,
all or any portion of these expense or loans may be converted
to stock options as described below. If converted to stock
options, the number of stock options will be calculated at the
at the pre-reverse 5 cents ($.05) per share, divided into the
amount due. The strike price of the stock or stock options
will be at the pre-reverse 5 cents ($.05) per share.
9. Manner of Payment of Severance Pay. Any Severance Pay
hereunder will be paid at such intervals and in the manner
dictated by the Employer's normal pay practices but not to
exceed 90 days after severance.
10. Notice of Termination. The Employer shall give XxXxxx notice
of the termination of this Agreement pursuant to sub-section
b-d of this Section 6 and, except as otherwise provided
herein, the termination of this Agreement shall be effective
upon the giving of such notice
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XxXxxx Employment Agreement (Cont.)
11. Change of Control. As used in this section, the term "change
of control" means and refers to:
a. Any merger, consolidation, or sale of the Company
such that any individual, entity or group (within the
meaning of section 13 (d) (3) or 14 (d) (2) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act")) acquires beneficial ownership,
within the meaning of Rule 13d-3 of the Exchange Act,
of 20 percent or more of the voting common stock of
the Company or its subsidiary
b. Any transaction in which the Company sells all or
substantially all of its assets; A dissolution of
liquidation of the Company; or
d. The Company becomes a non-publicly held company.
e. A "change of control" as used in this section does
not include a direct capital investment in the
company. At the option of Employee, this agreement
will continue in full effect with, and be binding
upon, any successor organization following a Change
of Control.
IV. Integration. This Agreement contains the entire agreement between the
parties and supersedes all prior oral and written agreements,
understandings, commitments and practices between the parties,
including, without limitation, all prior employment agreements, whether
or not fully performed before the date of this Agreement. No amendments
to this Agreement may be made except by a writing signed by both
parties.
V. Arbitration. Any controversy or claim arising out of or relating to
this agreement, or breach of this agreement, shall be settled by
binding arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association and judgment on the award
rendered by the arbitrators may be entered in any court having
jurisdiction. Within five (5) business days after a demand has been
made to arbitrate a dispute, the parties will meet and attempt to agree
on a single arbitrator. If the parties are unable to agree on a single
arbitrator, then each party shall, before the expiration of such five
(5) day period, designate an arbitrator. Within (30) additional
business days thereafter the two arbitrators shall select a third
arbitrator. If for any reason they cannot agree on a third arbitrator,
they may apply to the Utah Superior Court for the name of a neutral
party. The three arbitrators shall hear all the evidence, and a
majority vote shall set the award of the arbitrators. Each party shall
pay the fees of the arbitrator he or it selects and of his or its own
attorneys, and the expenses of his or its witnesses and all other
expenses connected with presenting his or its case. Other costs of the
arbitration, including the cost of any record or transcripts of the
arbitration, administrative fees, the fee of the third arbitrator, and
all other fees and costs, shall be borne equally by the parties.
Notwithstanding the foregoing, the arbitrators may award reasonable
attorneys' fees and costs to the prevailing party in their award.
VI. Litigation. In the event legal action or arbitration is brought to
enforce any of the provisions of this Agreement or for any breach
thereof, reasonable attorneys' fees and costs shall be awarded to the
prevailing party or parties in said action. All legal action is to take
place in Salt Lake City, Utah, under the jurisdiction of the State of
Utah, County of Salt Lake.
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XxXxxx Employment Agreement (Cont.)
VII. Severability of Provision. If any provision of this Agreement is
invalid or illegal, the other provision shall nevertheless remain in
full force and affect.
VIII. Controlling Law. This Agreement is entered into in the State of Utah
and shall be interpreted and controlled by the laws of the State of
Utah, County of Salt lake.
IX Successors. The Agreement shall be binding on and shall inure to the benefit
of the parties to it and their respective successors and assigns. This
employment contract supercedes any other out-standing Sctn Employment Contract
between the two parties that may have been signed prior to this date for this
same time period.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on November 26th, 2003.
Employer: SCTN Employee: Xxxxxxx X. XxXxxx
0000 Xxxxx Xxxxx, Xxx., # 000 0000 Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx, 00000 Xxx Xxxxx, Xxxxxx, 00000
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxxx X. XxXxxx
---------------------------- ------------------------------
Xxxxx Xxxxx Xxxxxxx X. XxXxxx
Chairman and CEO CFO and VP of Administration
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