EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement (this “Agreement”) is entered into by and between FreeStar
Technology Corporation having an address at
Xxxx
Road, STE 430, Reno, Nevada 89502, United States of America
(the
“Employer”), and Xxxx Xxxx, an individual (the “Executive”).
AGREEMENT
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.
“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.
“Disability”
- As defined in Section 5.2.
“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
Good
Reason” - As defined in Section 5.3
“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.
“With
Cause” - As defined in Section 5.4.
“Without
Cause” - As defined in Section 5.5.
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 five (5) years, beginning on the Effective Date and
ending on the fifth 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 serve as a Director, President, Chairman of
the
Board of Directors 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.
3.
COMPENSATION
(A)
SALARY. The Executive will initially be paid an annual salary of €300,000 which
will be payable in equal periodic installments according to the Employer's
customary payroll practices, but no less frequently than monthly. The annual
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 €25,000 per month.
(B)
BONUS. The Executive will participate in an executive bonus plan (the “Executive
Bonus Plan”) whereby the Executive will be eligible for an annual bonus payable
in (i) unregistered shares of the Company’s common stock, and S-8 shares of the
Company’s common stock (ii) an option or options to purchase S-8 shares of the
Company’s common Stock. Such options will be convertible in a “cash-free”
conversion by the Executive, whereby the conversion price of the stock, upon
exercise, will be deemed additional compensation to the Executive and will
not
require the Executive to remit cash to the Company. Specific terms and trigger
events of the Executive Bonus Plan will be determined annually, prior to the
end
of the applicable fiscal year, by the Board of Directors and also maybe adjusted
at any time in the sole discretion of the Board of Directors; provided,
that,
once an
Executive Bonus Plan is approved, the Board may not reduce the compensation
payable or increase the targets, if any, under such plan for the then-current
fiscal year without the written consent of Executive.
(C)
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.
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.
4.2
AUTOMOBILE
The
Employer will also pay the Executive's automobile allowance of €1,500, to
include lease and tax payments, maintenance and repair, insurance premiums,
and
fuel charges, but in no event shall the automobile allowance be less than €1,500
per month.
5.
TERMINATION
5.1
EVENTS OF TERMINATION
The
Employment Period, the Executive's compensation and any and all other rights
of
the Executive under this Agreement, with the exception of the severance and/or
other rights of Executive under Section 5.6 of this Agreement, will terminate
(except as otherwise provided in this Section 5):
(a)
Upon
the death of the Executive;
(b)
Upon
the Disability of the Executive (as defined in Section 5.2) immediately upon
notice from either party to the other;
(c)
Upon
termination of this Agreement by Executive, For Good Reason (as defined in
Section 5.3) upon not less than thirty days' prior notice from the Executive
to
the Employer;
(d) Upon
termination of this Agreement by the Company With
Cause (as defined in Section 5.4); or
(e) Upon
termination of this Agreement by the Company Without
Cause (as defined in Section 5.5)
5.2
DEFINITION OF DISABILITY
For
purposes of Section 5.1, 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 5.2. 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 5.2 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 5.2, 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 5.2, for the purposes of submitting the Executive to the examinations,
and providing the authorization of disclosure, required under this Section
5.2.
5.3
DEFINITION OF “FOR GOOD REASON”
For
purposes of Section 5.1, 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
Dublin, Ireland or Santo Xxxxxxx, Dominican Republic.
5.4
DEFINITION OF “WITH CAUSE”
For
the
purposes of Section 5.1, the phrase “With Cause” means any of the following (a)
Executive is convicted of, pleads guilty to or confesses to any felony, any
act
of fraud, misappropriation or embezzelement; (b) Executive willfully refuses
to
implement or follow a reasonable and lawful policy or directive of the Employer,
which breach is not cured within thirty (30) days after written notice to the
Executive from the Employer; or (c) Executive materially breaches any term
of
this Agreement which breach is not cured within thirty(30) days after written
notice to the Executive from the Company.
5.5
DEFINITION OF “WITHOUT CAUSE”
For
the
purposes of Section 5.1, the phrase “Without Cause” means that Executive’s
employment is terminated by the Company for any reason other than With
Cause.
5.6
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 5.6, 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 5.6,
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.
If
any
Bonus Plan Compensation is due to Executive under this Section 5.6, then, in
cases where the Executive Bonus Plan is dependent upon the Company’s fiscal year
end financials, the Company shall pay the Executive Bonus Plan compensation
within 90 days of the end of the fiscal year, after such amounts have been
determined.
(A)
TERMINATION BY THE EXECUTIVE FOR GOOD REASON. If the Executive terminates this
Agreement For Good Reason, the Employer will pay the Executive (i) a lump sum
payment equivalent to a year’s annual salary and (ii) that portion of the
Executive’s entitlement under the Executive's Bonus Plan as set out in Section
3(B) for the Fiscal Year in which the termination “For Good Reason” occurs.
(B)
TERMINATION UPON DISABILITY. If this Agreement is terminated by either party
as
a result of the Executive's Disability, the Employer will pay the Executive
a
lump sum payment equivalent to one year’s annual salary of the Executive and his
entitlements under the Executive Bonus Plan, for the Fiscal Year during which
the Disability occurs.
(C)
TERMINATION UPON DEATH. If this Agreement is terminated because of the
Executive's death, the Executive will be entitled to receive a lump sum payment
equivalent to one year’s annual salary and his entitlements under the Executive
Bonus Plan, for the Fiscal Year during which his death occurs.
(D) TERMINATION
WITHOUT CAUSE. If the Company terminates this Agreement Without Cause, the
Employer will pay the Executive (i) a lump sum payment equivalent to a year’s
annual salary and (ii) that portion of the Executive’s entitlement under the
Executive's Bonus Plan as set out in Section 3(B) for the Fiscal Year in which
the termination Without Cause occurs.
(E) Termination
With Cause. If the Company terminates the Executive’s employment With Cause (or
the Executive voluntarily terminates his employment other than For Good Reason),
then the Company shall pay Executive all accrued salary through the date of
such
termination.
(F)
BENEFITS. In all cases, in addition to the amounts set forth above, the
Executive will receive, as part of his termination pay pursuant to this Section
5, (i) 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 and (ii) any expense reimbursements owed to Executive under the
provisions hereof or the Company’s expense reimbursement policies, and (iii) any
unpaid automobile allowance for the month that the termination
occurs.
6.
CONFIDENTIALITY AND NON-DISCLOSURE; TRADE SECRETS
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 6 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
CONFIDENTIALITY; TRADE SECRETS
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:
(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 submits proof of the economic value
of
any trade secret or posts 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.
7 MISCELLANEOUS
7.1
AUTHORITY; APPROVAL BY BOARD OF DIRECTORS
This
Agreement has been duly authorized and approved by the Company’s Board of
Directors. The undersigned person executing this Agreement on behalf of the
Company has been duly authorized by the Company to execute and deliver this
Agreement. The Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder, including all compensation
due
hereunder including the Executive Bonus Plan. The execution and delivery of
this
Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company. This
Agreement constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
7.2
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.
7.3
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.
7.4
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.
7.5
GOVERNING LAW
This
Agreement will be governed by the laws of the State of Nevada without regard
to
conflicts of law principles.
7.6
JURISDICTION
This
Agreement shall in all respects be interpreted, enforced, and governed by and
under the laws of the State of Nevada without giving effect to its conflicts
of
law provisions. The Parties each expressly agree to the appropriateness of
and
consent to the venue and jurisdiction of the State of California in the County
of Orange and all state and federal courts having geographical jurisdiction
for
such County as the exclusive forum for the purposes of any action to enforce
or
interpret this Agreement.
7.7
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. Unless otherwise
expressly provided, the word “including” does not limit the preceding words or
terms.
7.8
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.
EMPLOYER
FREESTAR
TECHNOLOGY CORPORATION
_________________________________________ Dated:________________________________
Name:____________________________________
Title:_____________________________________
EXECUTIVE
XXXX
XXXX
___________________________________ Dated:________________________________
Xxxx
Xxxx
