EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into by and between
Freestar Technologies, Inc., a corporation formed under the laws of the State of
Nevada (the "Employer"), and Xxxx Xxxx, an individual (the "Executive").
AGREEMENT
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The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For the purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 1.
"AGREEMENT"--This employment agreement.
"BASIC COMPENSATION"--Salary and Benefits.
"BENEFITS"--As defined in Section 3.1(b).
"BOARD OF DIRECTORS"--The board of directors of the Employer.
"CONFIDENTIAL INFORMATION"--Any and all:
(a) Trade secrets concerning the business and affairs of the Employer,
product specifications, data, know-how, formulae, compositions,
processes, designs, sketches, photographs, graphs, drawings, samples,
inventions and ideas, past, current, and planned research and
development, current and planned manufacturing or distribution methods
and processes, customer lists, current and anticipated customer
requirements, price lists, market studies, business plans, computer
software and programs (including object code and source code), computer
software and database technologies, systems, structures, and
architectures (and related formulae, compositions, processes,
improvements, devices, know-how, inventions, discoveries, concepts,
ideas, designs, methods and information, including but not limited to
technology associated with off shore banking, and any other
information, however documented, that is a trade secret within the
meaning of applicable state or federal trade secret law; and
(b) Information concerning the business and affairs of the Employer
(which includes historical financial statements, financial projections
and budgets, historical and projected sales, capital spending budgets
and plans, the names and backgrounds of key personnel, personnel
training and techniques and materials, however documented; and
(c) Notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Employer containing or based, in whole
or in part, on any information included in the foregoing.
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"DISABILITY"--As defined in Section 6.2.
"EFFECTIVE DATE"--The date first appearing below.
"EMPLOYMENT PERIOD"--The term of the Executive's employment under this
Agreement.
"FISCAL YEAR"--The Employer's fiscal year, as it exists on the Effective Date or
as changed from time to time.
"FOR CAUSE"--As defined in Section 6.3.
"FOR GOOD REASON"--As defined in Section 6.4.
"INCENTIVE COMPENSATION"--As defined in Section 3.2.
"PERSON"--Any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust association, organization, or governmental body.
"SALARY"--As defined in Section 3.1(a).
2. EMPLOYMENT TERMS AND DUTIES
2.1 EMPLOYMENT
The Employer hereby employs the Executive, and the Executive hereby
accepts employment by the Employer, upon the terms and conditions set forth in
this Agreement.
2.2 TERM
Subject to the provisions of Section 5, the term of the Executive's
employment under this Agreement will be three (3) years, beginning on the
Effective Date and ending on the third anniversary of the Effective Date.
2.3 DUTIES
The Executive will have such duties as are assigned or delegated to the
Executive by the Board of Directors and will initially serve as a Director and
Chief Executive Officer of the Employer. The Executive will devote the time,
attention, skill, and energy necessary to accomplish the Executive's duties
under this Section 2.3, will use his best efforts to promote the success of the
Employer's business, and will cooperate fully with the Board of Directors in the
advancement of the best interests of the Employer. Nothing in this Section 2.3,
however, will prevent the Executive from engaging in additional activities that
are not inconsistent with the Executive's duties under this Agreement.
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3. COMPENSATION
(A) SALARY. The Executive will initially be paid an annual salary of
$150,000 U.S and will be increased in accordance with the schedule set
forth in the definitive agreement., subject to adjustment as provided
below (the "Salary"), which will be payable in equal periodic
installments according to the Employer's customary payroll practices,
but no less frequently than monthly. The Salary will be reviewed by the
Board of Directors not less frequently than annually, and may be
adjusted in the sole discretion of the Board of Directors, but in no
event will the Salary be less than $12,500 U.S. per month.
(B) BENEFITS. The Executive will, during the Employment Period, be
permitted to participate in such pension, profit sharing, bonus, life
insurance, hospitalization, major medical, and other employee benefit
plans of the Employer that may be in effect from time to time, to the
extent the Executive is eligible under the terms of those plans
(collectively, the "Benefits").
4. EXPENSES
4.1 GENERAL
The Employer will pay the Executive's dues in such professional
societies and organizations as the Board of Directors deems appropriate, and
will pay on behalf of the Executive (or reimburse the Executive for) reasonable
expenses incurred by the Executive at the request of, or on behalf of, the
Employer in the performance of the Executive's duties pursuant to this
Agreement, and in accordance with the Employer's employment policies, including
reasonable expenses incurred by the Executive in attending conventions,
seminars, and other business meetings, in appropriate business entertainment
activities, and for promotional expenses. The Executive must file expense
reports with respect to such expenses in accordance with the Employer's
policies.
4.2 AUTOMOBILE
The Employer will also pay the Executive's automobile expenses,
including lease and tax payments, maintenance and repair, insurance premiums,
and fuel charges. The Employer's obligation under this Section 4.2 shall not,
however, exceed the sum of $1,500 U.S. per month.
5. TERMINATION
5.1 EVENTS OF TERMINATION
The Employment Period, the Executive's Basic Compensation and any and
all other rights of the Executive under this Agreement, with the exception of
the rights of Executive under Section 5 of this Agreement, will terminate
(except as otherwise provided in this Section 6):
(a) Upon the death of the Executive;
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(b) Upon the disability of the Executive (as defined in Section 6.2)
immediately upon notice from either party to the other;
(c) For cause (as defined in Section 6.3), immediately upon notice from
the Employer to the Executive, or at such later time as such notice may
specify; or
(d) For good reason (as defined in Section 6.4) upon not less than
thirty days' prior notice from the Executive to the Employer.
5.2 DEFINITION OF DISABILITY
For purposes of Section 6.1, the Executive will be deemed to have a
"disability" if, for physical or mental reasons, the Executive is unable to
perform the essential functions of the Executive's duties under this Agreement
for 120 consecutive days, or 180 days during any twelve month period, as
determined in accordance with this Section 6.2. The disability of the Executive
will be determined by a medical doctor selected by written agreement of the
Employer and the Executive upon the request of either party by notice to the
other. If the Employer and the Executive cannot agree on the selection of a
medical doctor, each of them will select a medical doctor and the two medical
doctors will select a third medical doctor who will determine whether the
Executive has a disability. The determination of the medical doctor selected
under this Section 6.2 will be binding on both parties. The Executive must
submit to a reasonable number of examinations by the medical doctor making the
determination of disability under this Section 6.2, and the Executive hereby
authorizes the disclosure and release to the Employer of such determination and
all supporting medical records. If the Executive is not legally competent, the
Executive's legal guardian or duly authorized attorney-in-fact will act in the
Executive's stead, under this Section 6.2, for the purposes of submitting the
Executive to the examinations, and providing the authorization of disclosure,
required under this Section 6.2.
5.3 DEFINITION OF "FOR CAUSE"
For purposes of Section 6.1, the phrase "for cause" means: (a) the
Executive's material breach of this Agreement; (b) the appropriation (or
attempted appropriation) of a material business opportunity of the Employer,
including attempting to secure or securing any personal profit in connection
with any transaction entered into on behalf of the Employer; (c) the
misappropriation (or attempted misappropriation) of any of the Employer's funds
or property; or (d) the conviction of, or the entering of a guilty plea or plea
of no contest with respect to, a felony.
5.4 DEFINITION OF "FOR GOOD REASON"
For purposes of Section 6.1, the phrase "for good reason" means any of
the following:
(a) The Employer's material breach of this Agreement; (b) the assignment of the
Executive without his consent to a position, responsibilities, or duties of a
materially lesser status or degree of responsibility than his position,
responsibilities, or duties at the Effective Date; or (c) the requirement by the
Employer that the Executive be based anywhere other than in the southern
California region of California.
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5.5 TERMINATION PAY
Effective upon the termination of this Agreement, the Employer will be
obligated to pay the Executive (or, in the event of his death, his designated
beneficiary as defined below) only such compensation as is provided in this
Section 6.5, and in lieu of all other amounts and in settlement and complete
release of all claims the Executive may have against the Employer. For purposes
of this Section 5.5, the Executive's designated beneficiary will be such
individual beneficiary or trust, located at such address, as the Executive may
designate by notice to the Employer from time to time or, if the Executive fails
to give notice to the Employer of such a beneficiary, the Executive's estate.
Notwithstanding the preceding sentence, the Employer will have no duty, in any
circumstances, to attempt to open an estate on behalf of the Executive, to
determine whether any beneficiary designated by the Executive is alive or to
ascertain the address of any such beneficiary, to determine the existence of any
trust, to determine whether any person or entity purporting to act as the
Executive's personal representative (or the trustee of a trust established by
the Executive) is duly authorized to act in that capacity, or to locate or
attempt to locate any beneficiary, personal representative, or trustee.
(A) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. If the Executive
terminates this Agreement for good reason, the Employer will pay the
Executive (i) the Executive's Salary for the remainder, if any, of the
calendar month in which such termination is effective and for twelve
consecutive calendar months thereafter, and (ii) that portion of the
Executive's Incentive Compensation, if any, for the Fiscal Year.
(B) TERMINATION BY THE EMPLOYER FOR CAUSE. If the Employer terminates
this Agreement for cause, the Executive will be entitled to receive his
Salary only through the date such termination is effective, but will
not be entitled to any Incentive Compensation for the Fiscal Year
during which such termination occurs or any subsequent Fiscal Year.
(C) TERMINATION UPON DISABILITY. If this Agreement is terminated by
either party as a result of the Executive's disability, as determined
under Section 6.2, the Employer will pay the Executive his Salary
through the remainder of the calendar month during which such
termination is effective and for the lesser of (i) twelve consecutive
months thereafter, or (ii) the period until disability insurance
benefits commence under the disability insurance coverage furnished by
the Employer to the Executive.
(D) TERMINATION UPON DEATH. If this Agreement is terminated because of
the Executive's death, the Executive will be entitled to receive his
Salary through the end of the calendar month in which his death occurs,
and that part of the Executive's Incentive Compensation, if any, for
the Fiscal Year during which his death occurs, prorated through the end
of the calendar month during which his death occurs.
(E) BENEFITS. The Executive's accrual of, or participation in plans
providing for, the Benefits will cease at the effective date of the
termination of this Agreement, and the Executive will be entitled to
accrued Benefits pursuant to such plans only as provided in such plans.
The Executive will not receive, as part of his termination pay pursuant
to this Section 5, any payment or other compensation for any vacation,
holiday, sick leave, or other leave unused on the date the notice of
termination is given under this Agreement.
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6. NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS
6.1 ACKNOWLEDGMENTS BY THE EXECUTIVE
The Executive acknowledges that (a) during the Employment Period and as
a part of his employment, the Executive will be afforded access to Confidential
Information; (b) public disclosure of such Confidential Information could have
an adverse effect on the Employer and its business; and (c) the provisions of
this Section 7 are reasonable and necessary to prevent the improper use or
disclosure of Confidential Information and to provide the Employer with
exclusive ownership of all Employee Inventions.
6.2 AGREEMENTS OF THE EXECUTIVE
In consideration of the compensation and benefits to be paid or
provided to the Executive by the Employer under this Agreement, the Executive
covenants as follows:
(A) CONFIDENTIALITY.
(i) During and following the Employment Period, the Executive will hold
in confidence the Confidential Information and will not disclose it to
any person except with the specific prior written consent of the
Employer or except as otherwise expressly permitted by the terms of
this Agreement.
(ii) Any trade secrets of the Employer will be entitled to all of the
protections and benefits under applicable state and federal trade
secret law and any other applicable law. If any information that the
Employer deems to be a trade secret is found by a court of competent
jurisdiction not to be a trade secret for purposes of this Agreement,
such information will, nevertheless, be considered Confidential
Information for purposes of this Agreement. The Executive hereby waives
any requirement that the Employer submit proof of the economic value of
any trade secret or post a bond or other security.
(iii) None of the foregoing obligations and restrictions applies to any
part of the Confidential Information that the Executive demonstrates
was or became generally available to the public other than as a result
of a disclosure by the Executive.
6.3 DISPUTES OR CONTROVERSIES
The Executive recognizes that should a dispute or controversy arising
from or relating to this Agreement be submitted for adjudication to any court,
arbitration panel, or other third party, the preservation of the secrecy of
Confidential Information may be jeopardized. All pleadings, documents,
testimony, and records relating to any such adjudication will be maintained in
secrecy and will be available for inspection by the Employer, the Executive, and
their respective attorneys and experts, who will agree, in advance and in
writing, to receive and maintain all such information in secrecy, except as may
be limited by them in writing.
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7. GENERAL PROVISIONS
7.1 INJUNCTIVE RELIEF AND ADDITIONAL REMEDY
The Executive acknowledges that the injury that would be suffered by
the Employer as a result of a breach of the provisions of this Agreement
(including any provision of Sections 7) would be irreparable and that an award
of monetary damages to the Employer for such a breach would be an inadequate
remedy. Consequently, the Employer will have the right, in addition to any other
rights it may have, to obtain injunctive relief to restrain any breach or
threatened breach or otherwise to specifically enforce any provision of this
Agreement, and the Employer will not be obligated to post bond or other security
in seeking such relief. Without limiting the Employer's rights under this
Section 8 or any other remedies of the Employer, if the Executive breaches any
of the provisions of Section 7, the Employer will have the right to cease making
any payments otherwise due to the Executive under this Agreement.
If the Executive's employment hereunder expires or is terminated, this
Agreement will continue in full force and effect as is necessary or appropriate
to enforce the covenants and agreements of the Executive in Sections 7.
7.2 OBLIGATIONS CONTINGENT ON PERFORMANCE
The obligations of the Employer hereunder, including its obligation to
pay the compensation provided for herein, are contingent upon the Executive's
performance of the Executive's obligations hereunder.
7.3 WAIVER
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by either party in
exercising any right, power, or privilege under this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement can be discharged by one party, in whole or
in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement.
7.4 BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED
This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors, assigns, heirs, and
legal representatives, including any entity with which the Employer may merge or
consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Executive under this Agreement,
being personal, may not be delegated.
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7.5 ENTIRE AGREEMENT; AMENDMENTS
This Agreement and the documents executed in connection herewith
contain the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or
written, between the parties hereto with respect to the subject matter hereof.
This Agreement may not be amended orally, but only by an agreement in writing
signed by the parties hereto.
7.6 GOVERNING LAW
This Agreement will be governed by the laws of the State of California
without regard to conflicts of law principles.
7.7 JURISDICTION
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement shall be brought against either of
the parties in the courts of the State of California, County of Los Angeles, or,
if it has or can acquire jurisdiction, in the United States District Court for
the Central District of California, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
7.8 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require.
7.9 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable. Time is of the essence in this
Agreement and every provision hereof.
FSTI (EMPLOYER)
Dated: ______________________ By: /S/ Xxxxxx X. Xxxxxxxx
_____________________________ Xxxxxx X. Xxxxxxxx, Secretary
EMPLOYEE:
Dated: ______________________ /S/ Xxxx Xxxx
Xxxx Xxxx, Chief Executive
Officer and Chairman of Board of Directors
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