Exhibit 10.01
AGREEMENT FOR
INDEPENDENT CONTRACTOR SERVICES
DATE: February 1, 2003
I. PARTIES
Schimatic Cash Transactions Xxxxxxx.xxx, Inc. dba Smart Chip Technologies,
hereinafter "Company,"
and
Xxxxx Xxxxxx, hereinafter called "Contractor,"
hereby enter into this Agreement for Independent Contractor Services,
hereinafter "Agreement," effective February 1, 2003..
II. ENGAGEMENT OF CONTRACTOR
Company hereby engages Contractor, and Contractor accepts engagement, to provide
to Company the following services:
Chief Executive Officer. Xx. Xxxxx Xxxxxx will serve as the chief fund
raiser and executive manager of SCTN. He will establish financial controls,
install business planning, and build business operations. Finance, Human
Resources, Operations, Information Systems, New Product Development, Marketing &
Sales, Public Relations, Research & Development, and Production all fall under
the CEO's span of responsibility and operational control. Xx. Xxxxx Xxxxxx
reports to the SCTN Board of Directors.
III. TERM OF ENGAGEMENT
This Agreement shall be for one (1) year commencing on February 1, 2003 and
ending January 31, 2004, unless terminated sooner by failure to perform as
stated in this contractual agreement or by mutual agreement or terminated with
no liability for any further compensation for incompetence or moral turpitude.
This Agreement will be renewable for 2 additional one (1) year terms if Xxxxx
Xxxxxx performs as stated in this Agreement or by mutual agreement.
IV. WORKPLACE AND HOURS
Contractor shall render services primarily at his home office and at the
Company's Corporate Office. However, upon request, Contractor shall provide the
services at such other place or places as reasonably requested by Company as
appropriate for the performance of particular services.
Contractor's schedule and hours worked under this Agreement shall generally be
subject to Contractor's discretion. Company relies upon Contractor's discretion
to determine a sufficient time as is reasonably necessary to fulfill this
Agreement.
Xxxxx Xxxxxx Contractor Agreement (Cont.) Page 2
V. COMPENSATION
Company shall pay Contractor twenty thousand dollars ($20,000) per month,
($8,000) per month in cash and the balance of his monthly salary in 240,000 of
the pre-reverse sctn restricted stock share options priced at five (.05) cents
per share. The eight thousand ($8,000) per month cash salary shall be paid as
the Company's cash flow permits. At the option of Contractor, any portion of the
payment remaining unpaid after thirty (30) days from when it became due, may be
converted to stock options as follows; the number of stock options will be at
the pre-reverse 5 cents ($.05) per share, divided into the amount due. The
strike price of the stock options will be the pre-reverse 5 cents ($.05) per
share. This will continue for twelve (12) months until the company is generating
revenue and is profitable at which time the sctn Board of Directors can
reposition Xx. Xxxxx Xxxxxx salary compensation with a proposal to the board. In
addition to Xx. Xxxxx Xxxxxx salary compensation, he will also receive as
additional long term compensation bonuses, if earned by performance, to bring
his total equity position to ten (10%) percent of the sctn company, based on the
current outstanding stock position (approx.166,000,000 stock shares) of the SCTN
company as of this date; and also based on the following performance criteria:
Total equity of three (3%) percent, or 4,980,000 for 2003 (bonus of 2,100,000
ending January 31, 2004); Based on building a path to liquidity and Corporate
Operations, that includes providing the leadership and responsibility for
results in Sales, Marketing, Business Development, Product Development and
Financial Operations resulting in doubling the P/S every four (4) months; total
of three (3%) for 2004 as noted above or 4,980,000 total for 2004 (bonus of
2,100,000 ending January 31, 2005); and total of four (4%) for 2005 as noted
above or 6,640,000 for 2005 (bonus of 3,760,000 ending January 31, 2006). The
overall long term compensation percentage of ownership of the sctn company by
Xx. Xxxxx Xxxxxx based on the above performance factors shall not exceed ten
(10%) based on the authorized outstanding stock position (approx., 166,000,000
stock shares) of the Company as of this date. This may be accelerated if the
Company is acquired and if the above yearly criteria have been met.
Company shall bear all of Contractor's pre-approved expenses incurred in the
performance of this Agreement.
VI. CONFIDENTIALITY
"Confidential Information" for the purposes of this Agreement shall include
Company's proprietary and confidential information including, without
limitations, business plans, customer lists, marketing plans, financial
information, designs, drawing, specifications, models, software, source codes
and object codes. At termination of this Agreement, Contractor shall turn over
to Company all originals and copies of tangible material containing or
reflecting Company's Confidential Information. During the term of this
Agreement, and thereafter for 24 months, Contractor shall not, without the prior
written consent of Company, disclose to anyone any Confidential Information. The
parties agree that remedies available at law are inadequate to compensate for
breach of this paragraph, and that either party may apply to a Court of
competent jurisdiction for equitable relief upon proper showing.
Xxxxx Xxxxxx Contractor Agreement (Cont.) Page 3
VII. CONTRACTOR STATUS
It is expressly understood and agreed that Contractor is and throughout the term
of this Agreement shall be an independent contractor and not an employee,
partner, or agent of Company. Contractor shall not be entitled to nor receive
any benefit normally provided to Company's employees. Contractor agrees that
Company shall have ownership, title, and Company reserves all rights, including
copyrights, of all works created by Contractor under this Agreement, including
but not limited to source code. Contractor hereby prospectively assigns all such
works to Company, for the consideration provided in Paragraph V. Company shall
not be responsible for withholding income or other taxes from the payments made
to Contractor. Contractor shall be solely responsible for filing all returns and
paying any income, social security, or other tax levied upon or determined with
respect to the payments made to Contractor pursuant to this Agreement.
Contractor is solely responsible for the means, manner, and method of
Contractor's work, subject only to the general objectives and requirements, and
specific direction, of SCTN's Board.
VIII. CONTRACTOR'S TOOLS
Unless otherwise agreed by Company in advance, Company shall be solely
responsible for procuring, paying for, and maintaining any and all equipment,
software, paper, tools or other supplies necessary or appropriate for the
performance of Contractor's services hereunder.
X. CONTROLLING LAW
The validity and construction of this agreement shall be governed by the laws of
the State of Utah without reference to the choice of law principles thereof and
the parties hereto consent to and agree that the courts of the State of Utah,
County of Salt Lake, shall be the jurisdiction and forum for the resolution of
all disputes related to this agreement or arising there from.
XI. ENTIRE AGREEMENT
This Agreement constitutes the final understanding and agreement between the
parties. This Agreement cannot be amended or changed except by a writing signed
by both of the parties.
Xxxxx Xxxxxx Contractor Agreement (Cont.) Page 4
XII. NOTICES
Any notice required to be given or otherwise given pursuant to this Agreement
shall be in writing and shall be hand delivered, mailed by certified mail,
return receipt requested:
If to Contractor:
Xxxxx Xxxxxx
2851 Holiday Court
Morgan Hill, Ca., 95037
If to Company:
Smart Chip Technologies
000 X. 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the
date first above written.
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, Contractor
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx, Chairman
Smart Chip Technologies