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EXHIBIT 6.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is dated as of June 1, 1999, between
DebitFone International, Inc., a Florida corporation ("DFI"), Satellite Control
Technology, Inc., a public Nevada corporation ("SATX"), the Parent Company,
both hereinafter referred to as the "Company", and Xxxxxx Xxxxx ("Employee").
WHEREAS, the Companies are presently in the business of selling and
reselling domestic and international telecommunications services; and
WHEREAS, Employee desires to become employed by the Company as Chief
Operating Officer, (COO) and Chief Financial Officer, (CFO) for the Company and
the Company desire to employ Employee in such capacity pursuant to the terms
hereof; and
WHEREAS, in such capacity, Employee has agreed to be responsible for all
day-to-day operations of the Company as more fully provided herein, all subject
to the direction of the President and CEO of DebitFone International, Inc. and
Satellite Control Technology, Inc.
NOW, THEREFORE, in consideration of the mutual promises and conditions
contained herein, and other good and valuable consideration, the adequacy of
which the parties hereby acknowledge, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. EMPLOYMENT OF EMPLOYEE. The Company hereby employs Employee, and
Employee hereby accepts employment, as COO/CFO of the Company upon the terms
and conditions of this Agreement.
2. TERM OF AGREEMENT. This Agreement shall remain in force and effect
for a three (3) year period commencing on June 1, 1999 (the "Employment Date")
and ending at the close of business on May 31, 2002, unless sooner terminated
pursuant to paragraph 9 below (the "Initial Term"). At the end of the Initial
Term, the Company may, in their sole discretion, extend the term of this
Agreement for up to three additional successive one-year periods (each such
one-year period referred to herein as a "Renewal Term") by providing written
notice to the Employee at least ninety (90) days prior to the expiration of the
Initial Term or of any Renewal Term, as applicable. (The Initial Term together
with any Renewal Term(s) granted by the Company is sometimes collectively
referred to herein as the "Term").
3. EMPLOYEE'S DUTIES. During the Term of this Agreement, Employee shall
serve as COO/CFO for the Company, and be responsible for all the day-to-day
activities of the Company. all activities including but not limited to the
foregoing activities shall be conducted by Employee under the direction of and
subject to the control of the President and CEO of DebitFone International,
Inc. and Satellite Control Technology, Inc.
4. LOYALTY TO THE COMPANY. Employee shall devote his full time,
attention and efforts to the business and affairs of the Company and to the
performance of his duties and responsibilities during the Term hereof. Employee
shall owe his full loyalty to the Company and shall not engage in any activity
or enter into any
Initials:
________ By: _______
Employee Company
RE EMPLOYMENT AGREEMENT REV 5-31.DOC
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transaction that would or might constitute a conflict of interest, or the
appearance thereof, with the duties and loyalties owed by him to the Company.
Without limiting the foregoing, Employee agrees that during the Term of this
Agreement, Employee will not engage in any business activity other than those
duties described in this Agreement, whether or not such business is pursued for
gain or profit, or other pecuniary advantage. However, it is understood by the
Parties that Employee is currently assisting existing prepaid cellular
participants in creating technology and business solutions which benefit those
clients and will likely benefit the Company in some measurable manner in the
near future. Such assistance is acceptable within the terms of this Agreement
as long as it is performed on a non-interference basis with Company business
and does not negatively impact the Company's position, and ability to compete,
in the prepaid cellular marketplace. In addition, Employee may invest his
assets in such form or manner as will not require his services in the operation
of the affairs of the companies in which such investments are made, provided
that such investments are not wholly or in part based upon confidential
information obtained in his employment with the Company. It is also acceptable
for Employee to serve on the Board of Directors or as Trustee to outside
companies as long as there is no competitive conflict of interest in the
association. If any such investment is contemplated to be made with a
competitor of the Company, the specific nature and amount of the investment
shall be disclosed to the Company in writing prior to such investment and such
investment may not be made without the prior approval in writing of the Board
of Directors of the Parent Company.
5. SALARY.
(a) BASE SALARY. In consideration of the performance by the Employee
of the duties and obligations contained in this Agreement, the Company shall
pay Employee an initial gross salary of $96,000 per year, payable in accordance
with the normal payroll practices of the Company. Any amounts shall be
prorated for periods less than a month. Salary payments shall be subject to
withholding and other applicable taxes and deductions. The aforementioned
initial salary will be subject to review by the Company, which may decide, in
their sole discretion to raise such salary. Such review shall occur at least
annually, on or about each Employment Date anniversary.
6. BONUS ELIGIBILITY.
(a) SIGNING BONUS. Employee shall receive 100,000 shares of the
common stock of SATX upon the signing of this employment contract.
(b) STOCK OPTIONS. In addition to the base salary described in
paragraph 5 above, Employee shall be eligible to receive an option to purchase
up to 100,000 shares of the common stock of SATX annually commencing on the
first anniversary date of this Agreement. The exercise price of the options
shall be ($.50) per share in year one. Thereafter, the exercise price of the
options shall be as follows:
Year 2. Sixty percent (60%) of the trading price as of the date of the
grant.
Year 3. Seventy percent (70%) of the trading price as of the date of
the grant.
Year 4. Eighty percent (80%) of the trading price as of the date of
the grant.
Year 5. Ninety percent (90%) of the trading price as of the date of
the grant.
Initials:
________ By: _______
Employee Company
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The actual number of shares awarded to employee each year shall be dependent
upon the pre-tax profit of SATX. For example, should SATX meet its projected
pre-tax profit (as approved by the Board of Directors) for the year, Employee
shall be entitled to an option grant of 100,000 shares. However, if SATX's
pre-tax profit is only 50% of projections, then Employee shall be entitled to a
grant of 50,000 shares. Employee shall not be entitled to more than 100,000
shares if SATX exceeds the projection. The option shall fully vest upon the
date of the grant and shall expire if not exercised within five (5) years of
the date of the grant.
(c) ADDITIONAL BONUS. The Employee may be eligible for an additional
quarterly Performance bonus equal to a range of twenty to forty percent
(20%-40%) of Employee's annual base salary to be paid out, if earned, on a
quarterly basis after completion of each of the Company's fiscal quarters. The
calculation of earned bonus is based upon the Company's financial performance
against certain performance criteria described in Exhibit A to this document
(Company Projections). The threshold for enacting the bonus pool for a specific
quarter shall be Company attainment of eighty percent (80%) or more performance
against the applicable goals in Exhibit A. Exhibit A will be officially revised
for bonus calculation purposes, as required by changes in business events and
forecasts, only as approved by the Board of Directors of SATX.
Each quarter's earned bonus will be calculated from the following sliding scale:
Level of Company goal performance 80% 100% 120%
Payout % of Employee's annual salary 20% 30% 40%
If goals are achieved, and a bonus is earned for a quarter, Employee shall have
the option of receiving the bonus in cash or in common stock in the Parent
Company (SATX). If stock is chosen, the number of shares to be issued will be
calculated using eighty percent (80%) of the average market price of the shares
of the Company over the most recent thirty (30) days prior to issue date.
In order to compensate for variations in quarterly performance, and to
recognize the ability to make up for previous lesser performance, the quarterly
bonus calculation will be made from year-to-date Company data. Thus, within any
given performance year, a previous quarter's shortcoming can be offset by
subsequent performance improvement. The instant quarter's bonus payout is
therefore calculated as the year-to-date earned bonus less the cumulative bonus
paid previously during the applicable year.
As additional management responsibilities are assumed by Employee due to
acquisitions by SATX, projections for those acquired entities will be added to
the performance criteria in Exhibit A, and the size of the applicable bonus
pool for Employee will be increased accordingly, as approved by the SATX Board
of Directors.
7. BENEFITS. Employee shall be entitled to receive benefits
made available to other Executive officers within the Company consistent with
the policies and practices of the Company effected from time to time. As of the
Employment Date, these benefits include insurance benefits.
8. BUSINESS EXPENSES. Employee may incur expenses in
connection with the performance of his duties as COO/CFO for the Company,
including expenses for business travel, meals, lodging and similar
Initials:
________ By: _______
Employee Company
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items. The Company will reimburse Employee for all such customary, reasonable
and necessary expenses upon Employee's periodic presentation of an itemized and
documented account of such expenditures and in accordance with the Company's
expense reimbursement policies, which are in effect at the time the expense is
incurred.
9. TERMINATION.
(a) TERMINATION BY THE COMPANY.
i. FOR CAUSE. The Company may terminate the Employee's
employment with the Company at any time for "cause," which termination shall be
effective immediately upon written notice to Employee. The Company shall pay
base salary through the date of termination and have no further obligations to
Employee as of the date of termination. For purposes of this Agreement, "cause"
is defined to mean such act, omission or course of conduct which the Companies
determine is (1) a willful violation of any of the provisions of this
Agreement; (2) willful misconduct which is demonstrably injurious to the
Company, monetarily or otherwise; (3) the commission of a felony involving the
Company and/or its business and suggesting moral turpitude on the part of the
Employee, whether or not the Employee ultimately is indicated, arraigned or
convicted; (4) improper or unethical business activity, including, but not
limited to, the Employee's fraud, misappropriation, embezzlement, dishonesty,
unlawful harassment, or gross negligence, (5) lack of sufficient effort or
willful neglect in the performance of his duties; or (6) inability to perform
the essential functions of the job, even with reasonable accommodation by the
Company, due to disability of thirty days or more.
ii. WITHOUT CAUSE. The Company may terminate the Employee's
employment with the Company without cause, effective upon thirty (30) days
written notice to Employee. Employee shall be entitled to (a) continuation of
compensation as provided in Paragraph 5 & 6 through the original term of
employment agreement, and (b) COBRA benefits. In such event, Employee, if
requested by the Company, shall continue to render his services and shall be
paid his regular salary and receive his normal benefits up to the effective
date of termination. All stock options in employment agreement shall be
considered vested at the time of termination.
(b) TERMINATION BY EMPLOYEE. Employee may terminate his employment
under this Agreement at any time upon thirty (30) day's notice to the Company.
In such event, Employee, if requested by the Company, shall continue to render
his services and shall be paid his regular salary and receive his normal
benefits only up to the effective date of termination. The Company's salary
obligations to the Employee shall cease as of the effective date of termination.
(c) TERMINATION UPON DEATH. This Agreement shall terminate
automatically upon the death of Employee during the Term hereof, and all salary
payments shall immediately cease upon death.
10. RESTRICTIVE COVENANTS.
(a) COVENANT NOT TO COMPETE. Employee acknowledges that as COO/CFO,
Employee shall be engaged, without limitation, in, and performing the other
duties set forth in Paragraph 3 herein. Employee also acknowledges that the
Companies are currently engaged in selling and reselling domestic and
Initials:
________ By: _______
Employee Company
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international telecommunication service (the "Services"). Employee agrees that,
during the term of his employment and for a period of one year after the
expiration or termination of his employment with the Company, whether such
termination is voluntary or involuntary, with or without cause, he shall not,
either directly or indirectly, for himself or through, on behalf of, or in
conjunction with any other person or legal entity, perform the same services
for any other business engaged in providing directly competitive Services.
(b) NON-INTERFERENCE WITH EMPLOYEES. During the term of Employee's
employment and for a period of one year after the expiration of termination of
his employment with the Company, whether such termination is voluntary or
involuntary, with or without cause, Employee will not, directly or indirectly,
on his own behalf or on behalf of or in conjunction with any person or legal
entity other than the Company, recruit, solicit, or induce or attempt to
recruit, solicit or induce any employee of the Company to become employed by or
to be engaged in a business engaged in providing the Services.
(c) NON-SOLICITATION COVENANT. Employee agrees that during the term
of his employment and for a period of one year after the expiration or
termination of his employment by the Company, whether such termination is
voluntary or involuntary, with or without cause, Employee will not, directly or
indirectly, on his own behalf or on behalf of or in conjunction with any person
or entity other than the Company, actively solicit the business or patronage of
any of the clients, customers or accounts of the Company served by Employee
during the term of this Agreement.
(d) NON-DISCLOSURE COVENANTS. Employee acknowledges that as an
integral part of the Company's business, the Company has developed, and will
develop, at a considerable investment of time and expense, plans, procedures,
methods of operation, methods of production, financial data, lists of actual
and potential customers, suppliers, marketing strategies, plans for development
and expansion, customer and supplier data, and other confidential and sensitive
information, and Employee acknowledges that the Company has legitimate business
interest in protecting the confidentiality of such information. Employee
acknowledges that as COO/CFO for the Company, he will be entrusted with such
information. Employee, therefore, acknowledges a continuing responsibility with
respect to the protection of the information and agrees:
i. "Trade Secrets" shall be defined as information, without
regard to form, belonging to the Company or licensed by it including, but not
limited to, technical or nontechnical data, formulae, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, product plans, or lists of actual or potential customers of
suppliers which is not commonly known by or available to the public and which
information: (a) derive economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons or entities who can obtain economic value from their disclosure or
use; and (b) are the subject of efforts that are reasonable under the
circumstances to maintain their secrecy.
ii. "Confidential Information" shall be defined, as any
information belonging to the Company or licensed by it other than Trade Secrets
which is material to the Company and not generally known to the public.
iii. Employee will treat as confidential and will not, without
the prior written approval of the Company, use (other than in the performance of
his duties of employment with the Company), publish, disclose, copyright or
authorize anyone else to use, publish, disclose or copyright, either
Initials:
________ By: _______
Employee Company
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during the term of Employee's employment or at any time subsequent thereto, any
information which constitutes Trade Secrets of the Company whether or not the
Trade Secrets are in written or tangible form.
iv. Employee will treat as confidential and will not, without
the prior written approval of the Company, use (other than in the performance of
his duties of employment with the Company), publish, disclose, copyright or
authorize anyone else to use, publish, disclose or copyright, any Confidential
Information either during the term of his employment or for two (2) years after
termination of employment, whether voluntary or involuntary, with or without
cause, and whether or not the Confidential Information is in written or other
tangible form.
v. All records, notes, files, drawings, documents, plans and
like items, and all copies thereof, relating to or containing or disclosing
Confidential Information or Trade Secrets of the Companies which be made or
kept by Employee or which are disclosed to or come into the possession of
Employee, shall be and remain the sole and exclusive property of the Company.
Upon termination of employment, Employee agrees to deliver to the Company or
its designee, the originals and all copies of any of the foregoing.
11. PROPRIETARY RIGHTS IN DEVELOPMENTS. In the course of rendering his
services to the Company, Employee may conceive, create or develop or invent
ideas, concepts, methods of operation, processes, programs or other matter or
material, whether or not constituting an advance to, or an improvement of, or
pertaining to existing Company proprietary matter (all of which are hereinafter
referred to as "Developments"). All Developments shall constitute Confidential
Information (and may constitute Trade Secrets) and shall be subject to all of
the restrictions imposed on Employee pursuant to this Agreement. In addition,
all Developments and all rights therein throughout the world constitute works
made for hire and in all circumstances shall be and remain the sole and
exclusive property of the Company whether or not protectible under any laws now
known or hereafter applicable, including but not limited to patent, copyright,
trademark or trade secret laws.
(a) ASSIGNMENT BY EMPLOYEE OF ALL RIGHTS IN DEVELOPMENTS. Employee
hereby assigns to the Company all rights throughout the world, however,
denominated (whether under patent, copyright, trademark, trade secret or like
or different laws), in all media now known or hereafter recognized, in and to
each such Development. This assignment is not intended to derogate any rights
the Company has as an author of a work made for hire. In order to fully
effectuate these provisions, Employee hereby represents and warrants, that,
with respect to each such Development: (i) to the extent of Employee's
contribution, all such matter is original and does not and will not infringe or
violate the rights of any other person or entity; and (ii) that neither
Employee nor anyone on his behalf have granted or will grant or purport to
grant to any other person or entity any rights, in whole or in part, in and to
such Developments.
(b) COOPERATION. Employee shall, during and after termination of
Employee's employment, cooperate with the Company in the prosecution or defense
of any claims, litigation, or other proceedings involving the Developments and
provide such information and execute such documents as the Company may
reasonably request to confirm, implement or enforce its rights in such
Developments. The Company shall be responsible for the expenses associated with
the filing of any patent, copyright, trademark or like applications.
Initials:
________ By: _______
Employee Company
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12. REMEDIES FOR BREACH. In the event of Employee's actual or threatened
breach of the provisions of Paragraphs 10 or 11, the Company, in addition to
all other rights, shall be entitled to an injunction-restraining Employee
therefrom. Nothing herein shall be construed as prohibiting the Companies from
pursuing any other available remedy for such breach or threatened breach,
including the recovery of damages from Employee. This provision shall remain in
full force and effect in the event Employee should claim that the Company
violated any of the terms of this Agreement. In such event, Employee agrees to
pursue such claim against the Company independently of his covenants set
forth in such Paragraphs.
13. GOVERNING LAW. This Agreement shall be construed under, governed by
and enforced in accordance with the laws of the State of Florida, not including
its conflicts of law principles.
14. RIGHT OF OFFSET. In the event Employee violates any of the terms or
conditions of this Agreement, the Company shall have the right, in addition
to and not in lieu of all other rights at law or in equity, to offset the
amount of any damages caused by such breach or violation against any sums due
or to become due to Employee under the terms of this Agreement.
15. NOTICE. Any notice required or desired to be given under this
Agreement shall be deemed given in writing and hand-delivered or sent by
Certified mail to his address shown herein below in the case of Employee, or to
its principal office in the case of the Company.
16. NO WAIVER BY COMPANY. The waiver by the Company of a breach of
any provision of this Agreement by Employee shall not operate or be construed
as a waiver of any subsequent breach by Employee. No waiver shall be valid
unless in writing and signed by an authorized officer of the Company.
17. ASSIGNMENT. Employee acknowledges that the services to be rendered by
him are unique and personal. accordingly, Employee may not assign any of his
rights or delegate any of his duties or obligations under this Agreement. The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the
Company.
18. SEVERABILITY. Should any part of this Agreement, for any reason, be
declared invalid by an arbitrator or a court of competent jurisdiction, such
decision or determination shall not affect the validity of any remaining
portion, and such remaining portion shall remain in force and effect as if this
Agreement had been executed with the invalid portion eliminated; provided, that
in the event of declaration of invalidity, the provision declared invalid shall
not be invalidated in its entirety, but shall be observed and performed by the
parties to the extent such provision is valid and enforceable.
19. COMPLETE AGREEMENT. This Agreement shall constitute the entire
agreement between the parties hereto and shall supersede all previous
negotiations, commitments and writings with respect to Employee's employment.
Any subsequent alteration or modification to this Agreement must be made in
writing and signed by both parties.
Initials:
________ By: _______
Employee Company
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EMPLOYEE ACKNOWLEDGES THAT HE HAS HAD THE OPPORTUNITY TO CONSULT WITH AN
ATTORNEY OR ANY OTHER INDIVIDUAL FROM WHOM HE WISHED TO OBTAIN ADVICE
CONCERNING THIS AGREEMENT. EMPLOYMENT STATES THAT HE HAS CAREFULLY READ THE
WITHIN AND FOREGOING "EMPLOYMENT AGREEMENT" AND KNOWS AND UNDERSTANDS THE
CONTENTS THEREOF AND THAT HE IS EXECUTING THE SAME AS HIS OWN FREE ACT AND DEED.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
COMPANY: EMPLOYEE:
DEBITFONE INTERNATIONAL, INC. XXXXXX XXXXX
a Florida corporation
By: /s/ XXXXXXX XXXXXX /s/ XXXXXX XXXXX
-------------------------- -------------------------
Xxxxxxx Xxxxxx
Its: President/CEO
SATELLITE CONTROL TECHNOLOGIES, Inc.,
a Nevada corporation
By: /s/ XXXXXXX XXXXXX
--------------------------
XXXXXXX XXXXXX
Its: President/CEO
Initials:
________ By: _______
Employee Company
RE EMPLOYMENT AGREEMENT REV 5-31.DOC
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