1
EXHIBIT 10.1(d)
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into on this 1st day of June, 1996
(the "Effective Date"), by and between StarTronix Inc., a Delaware corporation
(the "Company"), and J. Xxxxxxx Xxxxxxxx, a resident of the State of California
("Employee").
In consideration of the employment by the Company and of the
compensation and other remuneration paid, and to be paid, by the Company and
received by Employee for such employment, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
Employee, it is agreed by and between the parties hereto as follows:
1. EMPLOYMENT: The Company agrees to employ Employee and Employee
agrees that he will devote his full productive time, skill, energy, knowledge
and best efforts during the period of his employment to such duties as the Board
of Directors of the Company may reasonably assign to him, and he will faithfully
and diligently endeavor to the best of his ability to further the best interest
of the Company during the period of his employment. However, Employee is not
prohibited from making personal investments in any other businesses, as long as
those investments do not require Employee to participate in the operation of the
companies in which he invests and such other businesses are not in competition
with the Company or any of its subsidiaries.
2. TERMS OF EMPLOYMENT: Employee's employment will begin on the 1st day
of June, 1996, and will end on the 1st day of June, 2001, a term of five (5)
years, unless earlier terminated in accordance with Sections 7 or 9 hereof or
extended upon the mutual consent of both parties.
3. COMPENSATION: On the terms and subject to the conditions of this
Agreement, (i) the Company will pay Employee a salary and a bonus determined in
accordance with Schedule A, (ii) Employee will be entitled to participate in the
Company's Employee Stock Option Plan as in effect from time to time, and (iii)
the Company will provide Employee with employee benefits consistent with those
provided by the Company to similarly situated executives. The Company's Employee
Stock Option Plan is summarized in Schedule B. The employee benefits provided by
the Company as of the date hereof are summarized in Schedule C.
4. TITLE AND DUTIES: The Company hires Employee as Executive Vice
President. Employee shall perform such duties and functions for the Company as
shall be specified from time to time by the President or Board of Directors of
the Company, including, but not limited to the duties and functions expressly
set forth on Schedule D, and which are consistent with Employee's duties set
forth on Schedule D.
____________________________
2
5. ILLNESS OR INCAPACITY: Employee is entitled to absences because of
illness or incapacity of no more than a total of ninety (90) days in each
calendar year. If Employee cannot perform his duties because of illness or
incapacity for more than a total of ninety (90) days in any year, the Company
may terminate this Agreement upon thirty (30) days' written notice to Employee.
Employee is not entitled to receive, and the Company shall not be required to
pay, Employee's compensation hereunder for absences because of illness or
incapacity other than the total of ninety (90) days in each year granted to
Employee under this Section 5. If Employee returns to work and is able to
discharge his duties in full, Employee shall be deemed reinstated and thereafter
shall be entitled to full compensation hereunder.
6. TERMINATION OF AGREEMENT UPON SALE OR TERMINATION OF COMPANY'S
BUSINESS:
a. Notwithstanding anything to the contrary contained in this
Agreement, the Company may terminate Employee's employment upon thirty (30)
days' written notice to Employee upon the occurrence of any of the following
events:
(1) The acquisition, directly or indirectly, of any
"person" (excluding any "person" who on the date hereof owns or controls
ten percent (10%) or more of the voting power of the Company's common
stock), as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended, within any twelve (12)
month period of securities of the Company representing an aggregate of
fifty percent (50%) or more of the combined voting power of the
Company's then outstanding securities; provided, that for purposes of
this Paragraph (a), "acquisition" shall not include shares which are
received by a person through gift, inheritance, under a will or
otherwise through the laws of descent and distribution;
(2) During any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Company (the "Board"), cease for any reason to
constitute at least a majority thereof, unless the election of each new
director was approved in advance by a vote of at least a majority of the
directors then still in office who were directors at the beginning of
such period; or
(3) The occurrence of any other event or circumstance
which is not covered by (1) or (2) above which the Board determines
affects control of the Company and, in order to implement the purposes
of this Agreement, adopts a resolution that such event or circumstance
constitutes an "event" under this Paragraph 6.
b. If the Company terminates Employee pursuant to Paragraph
6(a), Company will, for the Applicable Period (as defined in Paragraph 8(c)),
pay Employee his then current salary (subject to decrease pursuant to Schedule
A, but without any increase pursuant to Schedule A) and provide Employee with
Group Health Insurance, but Company shall not be required to pay any other
compensation or provide any other benefits.
3
7. DISCLOSURE OF INFORMATION; NONSOLICITATION; NONCOMPETITION.
a. DEFINITIONS. For purposes of this Paragraph 8, the following
terms shall have the meanings specified below:
"BUSINESS" - the development, marketing and distribution of
products or services of the type offered by the Company or any of
its subsidiaries, including (i) the development, marketing and
distribution of (1) screen phones, touch screens and other receiving
hardware to provide home shopping, xxxx paying, banking, utility
meter reading, swipe-card services, access to video and audio
programming (whether from low-orbiting satellites or other sources),
wireless communications and emergency response, and related hardware
or software, and (2) wireless communications and/or pagers,
including without limitation hardware and services related to a
telecom/pager wrist watch with access to information, including
winning lottery numbers, weather conditions, sports scores and stock
market and financial data, and related hardware and software; (ii)
the provision of international long distance, domestic long distance
or local telephone time or services in the United States, including
(1) the prepayment of telephone charges, (2) telephone debit cards,
(3) international or domestic long distance local telephone sales or
resales, (4) international calling from non-U.S. locations to the
United States, (5) "1 plus 1" residential telephone service, or (6)
business telephone service and (iii) the provision of environmental,
surveying, engineering, mapping and right-of-way acquisition
consulting services;
"CONFIDENTIAL INFORMATION" - information relating to the
operations, customers, or finances of the Company, or the Business,
that derives value from not being generally known to other Persons,
including, but not limited to, technical or nontechnical data,
formulas, patterns, compilations, programs, devices, methods,
techniques, drawings, processes, financial data, and lists of or
identifying information about actual or potential customers or
suppliers, whether or not reduced to writing, certain unpatented
information relating to the research and development, manufacture or
serving of the Company's products, information concerning proposed
new products, market feasibility studies and proposed or existing
marketing techniques or plans. Confidential Information also
includes the same types of information relating to the operations,
customers, finances, or Business of any affiliate of the Company, if
such information is learned by Employee during the term of this
Agreement or in connection with Employee's performance of Services.
Confidential Information also includes information disclosed to the
Company by third parties that the Company is obligated to maintain
as confidential. Confidential Information may include information
that is not a trade secret, but Confidential Information that is not
also a trade secret shall constitute Confidential Information only
for three (3) years after the Termination Date;
"CUSTOMER" - any customer of the Company in the United
States that Employee, during the one year period prior to the
Termination Date, (i) provided
4
to any Person that offers or provides products or services of the types provided
by the Company in the Business.
g. DISPARAGEMENT. Employee shall not at any time make false, misleading
or disparaging statements about the Company, including the Business, management,
employees and Customers.
h. PRIOR AGREEMENTS. Employee represents and warrants that Employee is
not under any obligation, contractual or otherwise, limiting, impairing or
affecting Employee's performance of Services. Upon execution of this Agreement,
Employee shall give the Company any agreement with a prior employer or other
Person purporting to limit or affect, in any way, Employee's ability to work for
the Company, to solicit customers or potential customers or employees or to use
any type of information.
i. FUTURE EMPLOYMENT OPPORTUNITIES. Prior to and for two (2) years
after the Temination Date, Employee shall (a) provide any prospective employer
with a copy of this Agreement, and (b) upon accepting any position, provide the
Company with the employer's name and a description of the services, if any,
Employee will provide for such employer.
j. WORK FOR HIRE ACKNOWLEDGMENT; ASSIGNMENT. All writings, drawings,
photographs, tapes, recordings, computer programs and other works in any
tangible medium of expression, regardless of the form of medium, which have been
or are prepared by Employee, or to which Employee contributes, in connection
with Employee's employment by the Company (collectively the "Works") and all
copyrights and other rights in and to the Works, belong solely, irrevocably and
exclusively throughout the world to the Company as works made for hire. However,
to the extent any court or agency should conclude that the Works (or any of
them) do not constitute or qualify as a "work made for hire," Employee hereby
assigns, grants and delivers, solely, irrevocably, exclusively and throughout
the world to the Company all copyrights and other rights to the Works. Employee
also agrees to cooperate with the Company and to execute such other further
grants and assignments of all rights as the Company from time to time reasonably
may request for the purpose of evidencing, enforcing, registering or defending
its ownership of the Works and the copyrights in them, and Employee hereby
irrevocably constitutes and appoints the Company as Employee's agent and
attoney-in-fact, with full power of substitution, in Employee's name, place and
stead, to execute and deliver any and all such assignments or other instruments
which Employee shall fail or refuse promptly to execute and deliver, this power
and agency being coupled with an interest and being irrevocable. Without
limiting the preceding provisions of this Paragraph 8(j), Employee agrees that
the Company may edit and otherwise modify, and use, publish and otherwise
exploit, the Works in all media and in such manner as the Company, in its
discretion, may determine.
k. INVENTIONS, IDEAS AND PATENTS. Employee shall disclose promptly to
the Company (which shall receive it in confidence), and only to the Company, any
invention or idea
5
of Employee (developed alone or with others) conceived or made during Employee's
employment by the Company (or, if related to the Business, during employment or
within one year after the Termnination Date). Employee assigns to the Company
any such invention or idea in any way connected with Employee's employment or
related to the Business, research or development of the Company, or demonstrably
anticipated research or development of the Company, and will cooperate with the
Company and sign all papers deemed necessary by the Company to enable it to
obtain, maintain, protect and defend patents covering such inventions and ideas
and to confirm the exclusive ownership of the Company of all rights in such
inventions, ideas and patents, and irrevocably appoints the Company as its agent
to execute and deliver any assignments or documents Employee fails or refuses to
execute and deliver promptly, this power and agency being coupled with an
interest and being irrevocable. This constitutes written notification to
Employee that this assignment does not apply to an invention for which no
equipment, supplies, facility or trade secret information of the Company or any
Customer was used and which was developed entirely on Employee's own time,
unless (a) the invention relates (i) directly to the Business or (ii) to the
actual or demonstrably anticipated research or development of the Company, or
(b) the invention results from any work performed by Employee for the Company.
l. INDEPENDENCE OF COVENANTS. The covenants contained herein shall be
construed as agreements independent of each other and of any other provision of
this or any other contract between the parties hereto, and the existence of any
claim or cause of action by Employee against the Company, whether predicated
upon this or any other contract, shall not constitute a defense to the
enforcement by the Company of said covenants.
m. RIGHT TO INJUNCTIVE RELIEF. Employee recognizes and agrees that the
injury the Company will suffer in the event of the Employee's breach of any
covenant or agreement contained herein cannot be compensated by monetary damages
alone, and Employee therefore agrees that the Company, in addition and without
limiting any other remedies or rights that it may have, either under his
Agreement or otherwise, shall have the right to obtain an injunction against
Employee from any court of competent jurisdiction enjoining any such breach.
8. TERMINATION.
a. This Agreement and the employment of Employee may be terminated as
follows:
(1) By the Company (i) pursuant to Xxxxxxxxx 0, 0 xx 0, (xx)
upon commission by the Employee of any felony or material misdemeanor
under federal, state or local laws or ordinances, except traffic
violations or (iii) upon the failure of Employee to diligently or
competently discharge the duties assigned to him pursuant to this
Agreement; or
(2) (i) By Employee upon thirty (30) days' written notice to
the Company or (ii) by the Company upon thirty (30) days' written
notice to Employee, or
6
(3) By the Company upon material violation by Employee of any
of the terms and conditions of this Agreement or the breach by Employee
of any representation or warranty made to the Company herein or in any
other agreement, document or instrument executed by Employee and
delivered to the Company, or should any representation or warranty made
by Employee hereunder or thereunder prove to have been false or
misleading in any material respect when made or furnished; or
(4) By the Company upon the death of Employee.
b. In the event Employee is terminated by the Company for any reason
(including, without limitation, in accordance with Paragraph 8(a)(2)(ii)) other
than pursuant to Paragraph 8(a)(1) or 8(a)(3), the Company shall (i) pay
Employee his then current salary (subject to decrease pursuant to Schedule A,
but without any increase thereafter pursuant to Schedule A) and provide Employee
with Group Health Insurance, but no other compensation or benefits, for the
Applicable Period beginning with the date of termination and (ii) subject to the
Employee's strict adherence to and performance of the covenants set forth in
Paragraph 7, not later than twenty-four (24) months after the date of such
termination, an amount equal to [the lesser of (x) $250,000 and (y) two percent
(2%) of the average Net Income Amount (as defined in Schedule A) of the Company
for the two full twelve (12) month periods following the date of such
termination]. If Employee is terminated pursuant to Paragraph 8(a)(1) or 8(a)(3)
or Employee teminates his employment pursuant to Paragraph 8(a)(2)(i), Employee
shall be entitled only to compensation accrued through the date of termination
and all benefits accrued as of such date, and shall not be entitled to any
portion of the payment set forth in clause (ii) of this Paragraph (b).
c. For purposes of this Agreement, the term "Applicable Period" means:
(i) ninety (90) days, in the case of a notice given to Employee prior to the
first anniversary of the date on which Employee commenced his employment with
the Company or its affiliate (the "Employment Date"); (ii) one hundred eighty
(180) days, in the case of a notice given to Employee on or after the first
anniversary and prior to the second anniversary of his Employment Date, and
(iii) one (1) year, in the case of a notice given to Employee on or after the
second anniversary of his Employment Date.
9. MISCELLANEOUS.
a. This Agreement may be assigned by the Company to any successor in
interest to its business, which successor in interest shall be bound herein to
the same extent as the Company. Employee agrees to perform his duties for such
successor in interest to the same extent as he would for the Company.
b. This is a personal agreement on the part of Employee and may not be
sold, assigned, transferred or conveyed by Employee.
7
c. The waiver by either party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as
a waiver of any subsequent breach by the other party.
d. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
e. This Agreement states the entire agreement and understanding
between the parties and supersedes all prior understandings and
agreements.
f. No change or modification to this Agreement shall be valid
unless in writing and signed by both parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
STARTRONIX INC
By:/s/ Xxxxxx X. Xxxxx
-------------------------------
Xxxxxx Xxxxx, President
EMPLOYEE:
/s/ J. Xxxxxxx Xxxxxxxx
-------------------------------
J. Xxxxxxx Xxxxxxxx
8
SCHEDULE A - SALARY AND BONUS
SALARY. Commencing on the first day of the second fiscal quarter, the
Company shall pay Employee for each of the next twelve months, a Monthly Salary
(as defined below) based on the Net Income Amount (as defined below) for the
previous full fiscal year, according to the following table:
ANNUAL NET INCOME AMOUNT CORRESPONDING MONTHLY SALARY
less than or equal to $1.2 million $10,000
greater than $1.2 million but less than or equal to $6 million $12,500
greater than $6 million but less than or equal to $12 million $15,000
greater than $12 million $20,000
For purposes of this Agreement, "Net Income Amount" means the Company's
annual net income before income taxes and "Monthly Salary" means
Employee's monthly salary, before deductions. The Company will deduct
from payments of Monthly Salary to Employee all federal, state and
local income tax, FICA, FUTA, and other withholdings as required by
law. For purposes of this Agreement, the Company's net income and gross
sales shall be determined in accordance with generally accepted
accounting principles in the United States, applied as a basis
consistent with prior periods.
BONUS. On the last day of each of the second, third
and fourth fiscal quarters following the end of the previous full fiscal year of
the Company, the Company shall pay Employee a cash bonus equal to one-third of
the Net Income Amount for such full fiscal year multiplied by the Applicable
Percentage; provided that no cash bonus shall be payable to Employee on any date
unless Employee is employed by the Company on that date.
ANNUAL NET INCOME AMOUNT APPLICABLE PERCENTAGE
less than or equal to $1.2 million 0%
greater than $1.2 million but less than or equal to $6 million 1%
greater than $6 million but less than or equal to $12 million 2%
greater than $12 million 3%
9
Schedule B - Summary of Employee Stock Option Plan
As of the date hereof, the Company's Employee Stock Option Plan (the
"Option Plan") provides for the Employee to earn, as of the last day of the
first fiscal quarter of each fiscal year (the "Issuance Date") options for
restricted common stock of the Company in an aggregate amount (the "Annual
Amount") equal to (i) one percent (1%) of the Net Income Amount divided by the
average closing price of such common stock during the last thirty days of the
previous fiscal year (the "Stock Price"), on the following terms and conditions
and the other terms and conditions as now are, and may in the future be, set
forth as the Option Plan: The exercise price for the options issued shall equal
seventy-five percent (75%) of the Stock Price. The options shall vest over a
five year period, exercisable in an amount equal to up to twenty percent (20%)
of the Annual Amount on each of the first five anniversaries of the Issuance
Date.
