EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is entered
into as of this 1st day of November, 1997 between XXXXXXX X. XXXXXXX, XX,
(the "Executive"), whose address is Fourteen Xxxx Xxxx Xxxxxx, Xxxxxxxxxx, XX
00000 and SECURFONE AMERICA, INC., a Delaware corporation ("SecurFone" or
"Company") whose address is 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx, XX
00000.
RECITALS:
WHEREAS, SecurFone wishes to obtain the services of the Executive; and
WHEREAS, the Executive desires to obtain employment with SecurFone
pursuant to the terms of this Agreement;
NOW THEREFORE, in consideration of the mutual promises contained herein
and other consideration the receipt and sufficiency of which is hereby
acknowledged, the Executive and SecurFone agree as follows:
1. EMPLOYMENT. As of the date of this Agreement, SecurFone will employ
the Executive as President and Chief Executive Officer of SecurFone, in
accordance with the terms and conditions set forth herein. SecurFone will also
use its best efforts to cause its stockholders to elect Executive to the Board
of Directors of SecurFone.
2. DUTIES. The Executive will devote not less than 40 hours per week or
90% of his business time and best efforts to the business of SecurFone and its
related organizations performing such duties as are customary to his position
and as may be reasonably requested by the Chairman or Board of Directors of
SecurFone. The Executive will at all times conduct himself in conformity with
the policies of SecurFone. The Executive is required to perform the following
duties and responsibilities:
a. Development and implementation of the SecurFone's business
plan for sales and marketing of prepaid cellular telephone services;
b. Negotiate and obtain resale agreements with cellular,
paging and PCS carriers in markets designated by SecurFone's Board of
Directors or Chief Executive Officer;
c. Negotiate switch platform vendor agreements to provide
advance switching and voice processing services and access to domestic
and international long distance telephone services;
d. Negotiate with banks and clearing vendors for indirect
channel fund processing;
e. Advise and direct key personnel hiring to implement the
SecurFone business plan; and
f. Provide overall operational supervision to the SecurFone
business on a daily basis. SecurFone acknowledges that Executive
will not be required to relocate his residence to fulfill his
employment duties hereunder.
SecurFone acknowledges that Executive has certain existing business which
imposes preexisting obligations with certain cellular companies, which
Xxxxxxx shall disclose to SecurFone in writing prior to the execution of this
Agreement (the "Pre-Existing Obligations"). Executive represents that (i) the
Pre-Existing Obligations will not affect his ability to discharge his
obligations to SecurFone hereunder, and (ii) that he will not renew any of
the Pre-Existing Obligations, or create any new obligations of a similar
nature, without first obtaining the consent of SecurFone. In reliance on the
foregoing representations, SecurFone agrees to allow Executive to continue to
fulfill the Pre-Existing Obligations, so long as the representations remain
true and correct in all material respects.
3. COMPENSATION. For the performance of his duties during the term
of this Agreement, the Executive will earn a monthly salary of $20,833, of
which $15,000 will be payable monthly. The parties agree that the balance of
such monthly salary shall be accrued and deferred without interest and shall
be payable upon the earlier of (i) a determination by the Board of Directors
that the Company has sufficient revenues or capital, or (ii) May 1, 1998.
4. STOCK OPTION BENEFIT. The Company shall grant to the Executive a
Non-Qualified Stock Option for 400,000 Shares of the Company's Common Stock.
The Option shall be granted pursuant to a Plan adopted by the Company's Board
of Directors and approved by the Company's Shareholders. The exercise price
of the Option shall be $0.10 per Share. The Option shall be issued to
Executive on January 6, 1998. On or before January 20, 1998, the Company
shall file a Registration Statement to register the Shares underlying the
Option on a Form S-8 Registration Statement (or other applicable form as may
then be required for such registration) at the sole expense of the Company,
and shall diligently proceed to complete such registration. Executive shall
cooperate with the Company in any such registration and shall execute such
documents as may be requested by the Company so as to file and effectuate
such registration.
5. BENEFIT PLANS. During the term of this Agreement, Executive shall
be entitled to participate in all employee benefit plans which are maintained
or established by the Company from time to time and which cover SecurFone's
senior executives, provided he satisfies any applicable eligibility
requirements therefor. Executive acknowledges the right of the Company to
amend or terminate such plans at any time in the exercise of its discretion.
Executive further acknowledges that the Company may wish to maintain
insurance on his life for its benefit and agrees to submit to any physical
examination which may be required in order to obtain such insurance.
SecurFone has no current employee benefit plan in existence. Executive shall
receive four (4) weeks paid vacation per year, commencing six (6) months from
the date of this Agreement.
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6. EXPENSES. The Executive will be reimbursed for all reasonable
expenses incurred by him in performing his duties hereunder, provided that
such expenses are incurred and accounted for in accordance with the policies
and procedures established by SecurFone.
7. TERMINATION OF EMPLOYMENT.
a. DEATH; DISABILITY. In the event of Executive's death or
Disability (as hereinafter defined), his employment with the Company
shall be deemed terminated as of the end of the month in which such
death or Disability occurs, and all rights, duties and obligations of
the parties hereunder shall thereupon cease, except that in the case of
the termination due to Disability, Executive's obligations under
Section 11 shall continue. For purposes of this Section, Disability
shall be deemed to have occurred if (a) Executive shall be unable to
perform his duties on an active full-time basis by reason of disability
or impairment of health for a period of at least one hundred eighty
(180) consecutive calendar days or (b) the Company shall have received
a certificate from a physician reasonably acceptable to both the
Company and Executive (or his representative) to the effect that
Executive is incapable of reasonably performing services under this
Agreement in accordance with past practices.
b. BY COMPANY FOR GOOD CAUSE. Executive's employment with the
Company may be terminated at the option of and by written notice from
the Company if the Board of Directors of the Company shall find Good
Cause for termination. For purposes of this Agreement, Good Cause shall
mean only (i) Executive's willful failure to perform his duties under
this Agreement within a reasonable period of time after receipt of
written notice from the Company setting forth in reasonable detail the
duties which Executive has failed to perform and the corrective actions
expected of him; (ii) a breach of Executive's duty of loyalty to the
Company, including but not limited to a breach of Executive's
obligations under Sections 10 or 11 below; (iii) indictment for,
conviction of, or written confession to a crime against the Company or
a crime which otherwise materially adversely affects Executive's
ability to perform his obligations under this Agreement, any business
relationship which the Company maintains or the general reputation and
good will of the Company; or (iv) Executive shall have been found by
the Board of Directors of the Company to have been repeatedly and
excessively using alcohol, drugs and/or any other intoxicating or
controlled substance. Upon any such termination all rights, obligations
and duties of the parties hereunder shall immediately cease, except
that the Company shall fulfill its obligations to Executive under
Section 8 hereof, and except for Executive's obligations under Sections
10 and 11 hereof.
c. BY COMPANY WITHOUT GOOD CAUSE. The Company may also
terminate Executive's employment at any time by written notice without
Good Cause, whereupon all rights, obligations and duties of the parties
hereunder shall immediately cease, except that the Company shall
fulfill its obligations to Executive under Section 8 hereof, and except
for Executive's obligations under Section 11 hereof.
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d. BY EXECUTIVE FOR GOOD REASON. Executive may terminate his
employment with the Company upon not less than sixty (60) days advance
written notice for "Good Reason." Upon the effective date of any such
termination all rights, obligations and duties of the parties hereunder
shall immediately cease, except that (i) the Company shall fulfill its
obligations to Executive under Section 8(a) hereof, (ii) the Company
shall fulfill its obligations to Executive under Section 8(b) hereof,
and (iii) Executive's obligations under Section 11 hereof shall remain
effective. For purposes of this Agreement, the Executive will have
"Good Reason" if (iv) the Board of Directors of SecurFone shall fail to
re-elect, or shall remove Executive from the office of President and
Chief Executive Officer of SecurFone, (v) the Board of Directors of
SecurFone shall make significant negative change in the nature of scope
of the authorities, powers, functions or duties of Executive hereunder,
(vi) the Company shall fail to pay when due any compensation provided
for in this Agreement and such failure is not corrected within ninety
(90) days after notice thereof to the Company by the Executive,
provided however, that the Company's failure to pay compensation when
due shall not be considered Good Reason until April 1, 1998, or (vii)
any pattern of conduct done with the approval of the Board of Directors
of the Company which impedes the Executive in the exercise of his
authorities, powers, functions or duties, hereunder in the manner in
which they would normally be exercised by the President and Chief
Executive Officer.
e. BY EXECUTIVE WITHOUT GOOD REASON. Executive may terminate
his employment with the Company upon not less than sixty (60) days
advance written notice. Upon the effective date of any such termination
all rights, obligations and duties of the parties hereunder shall
immediately cease, except for Executive's obligations under Sections
10 and 11 hereof; provided, however, that the Company shall be required
to fulfill the obligations set forth in Section 8 hereof. The Company
shall not be prohibited from terminating Executive under Section 7(c)
above following receipt of a notice of termination from Executive,
subject to its obligations thereunder.
8. TERMINATION COMPENSATION.
x. XXXXXXXXX PAY. If Executive's employment is terminated
pursuant to Section 7(c) or 7(d), Executive shall be entitled to the
continued payment of the monthly salary described in Section 3 above
for a period of six (6) months following such termination. If
Executive's employment is terminated pursuant to Section 7(b) or 7(e),
Executive shall be entitled to the continued payment of the monthly
salary described in Section 3 above for a period of three (3) months
following such termination.
b. ACCELERATED PAY. Notwithstanding Section 8(a), in the event
of termination of Executive all compensation then due and owing and all
amounts then accrued to Executive shall become due and payable upon the
effective date of Executive's termination.
9. TERM. This Agreement will continue in effect from the date
hereof until November 1, 1998 unless sooner terminated under Section 7 hereof.
The Agreement shall automatically renew from year to year unless either party
gives no less than thirty (30) days and no more than ninety (90) days notice of
its/his intent not to renew this Agreement.
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10. NON-COMPETITION.
a. RESTRICTIONS. As consideration for the compensation and
benefits to be provided to the Executive under this Agreement, and as
an additional incentive for Executive to enter into this Agreement, the
Executive will not during the term of this Agreement and for a period
of twelve (12) months thereafter if Executive's employment is
terminated pursuant to Section 7(b) or 7(e), directly or indirectly,
for himself or for others, in any state of the United States or in any
foreign country where SecurFone or any of its Affiliates (as defined
below) is then conducting the Business (as defined below) or has,
during the previous twelve (12) months, conducted the business:
(1) engage in the Business;
(2) render advice, consultation, or services to or
otherwise assist any other person or entity who competes,
directly or indirectly, with SecurFone or any of its
Affiliates;
(3) transact any business in any manner pertaining to
suppliers or customers of SecurFone or any of its Affiliates
which, in any manner, would have, or is likely to have, an
adverse effect upon the conduct of the Business of SecurFone
or any of its Affiliates; or
(4) induce any employee, agent or representative of
SecurFone or any of its Affiliates to terminate his or her
employment with SecurFone or such Affiliate.
b. DEFINITIONS. For the purposes of this Section 10, the
"Business" will mean the business activities of SecurFone and its
Affiliates in sales and marketing or prepaid cellular telephone and
related services using a prepaid telephone card or related wireless
communications technology providing access to a national or local
prepaid cellular network with advance switching and voice processing
services carried on within a 100 mile radius of any facility or office
operated or maintained by SecurFone or any of its Affiliates. The term
"Affiliates" shall mean any entity controlling, controlled by or under
common control with SecurFone, including, but not limited to, SecurFone
divisions and subsidiaries, and any licensee, franchisee or agent of
SecurFone products or services.
c. REASONABLENESS; ENFORCEMENT. The Executive understands that
the foregoing restrictions may limit his ability to engage in certain
business pursuits during the period provided for above, but
acknowledges that he will receive sufficiently higher remuneration and
other benefits from SecurFone hereunder than he would otherwise receive
to justify such restriction. The Executive acknowledges that he
understands the effect of the provisions of this Section 10, that he
has had reasonable time to consider the effect of the provisions of
this Section 10, and that he was encouraged to and had an opportunity
to consult an attorney with respect to these provisions. SecurFone and
the Executive consider the restrictions contained in this Section 10 to
be reasonable and necessary. Nevertheless, if any aspect of these
restrictions is found to be unreasonable or otherwise unenforceable by
a Court of competent
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jurisdiction, the parties intend for such restrictions to be modified
by such Court so as to be reasonable and enforceable and, as so
modified by the Court, to be fully enforced. In the event of a breach
or threatened breach of this Section 10 by Executive, SecurFone will
be entitled to preliminary and permanent injunctive relief, without
bond or security, sufficient to enforce the provisions thereof and
SecurFone will be entitled to pursue such other remedies at law or
in equity which it deems appropriate.
11. CONFIDENTIAL INFORMATION.
a. PROHIBITION ON DISCLOSURE OR USE OF CONFIDENTIAL
INFORMATION. The Executive will at all times keep and maintain
Confidential Information (as defined below) confidential and will not,
at any time, either during or subsequent to his employment with
SecurFone, either directly or indirectly, use any Confidential
Information for his own benefit, or otherwise divulge, disclose, or
communicate any Confidential Information to any person or entity in any
manner whatsoever, other than employees or agents of SecurFone or its
Affiliates who have a need to know such information, and then only to
the extent necessary to perform their responsibilities an behalf of
SecurFone or its Affiliates.
b. DEFINITION OF CONFIDENTIAL INFORMATION. "Confidential
Information" will mean any and all information (excluding information
in the public domain) relating to the Business, including, without
limitation, all patents and patent applications; copyrights (whether
registered or to be registered in the United States or elsewhere) which
are applied for, issued to or owned by SecurFone or any of its
Affiliates; inventions; trade secrets; computer programs; engineering
and technical data; drawings or designs; manufacturing techniques;
information concerning pricing and pricing policies; marketing
techniques; suppliers; methods and manner of operations; and
information relating to the identity and location of all past, present
and prospective customers.
c. ENFORCEMENT. The Executive's obligations contained in this
Section 11 are of a special and unique character which gives them a
peculiar value to SecurFone. The parties recognize that SecurFone
cannot be reasonably or adequately compensated in damages alone in an
action at law should the Executive breach such obligations. The
Executive therefore expressly agrees that, in addition to any other
rights or remedies which SecurFone may possess, it will be entitled to
injunctive and other equitable relief in the form of preliminary and
permanent injunctions, without bond or other security, in the event of
any actual or threatened breach of such obligations by the Executive,
in order to enforce this Section 11.
12. SUCCESSORS. This Agreement is personal to the Executive and will
not be assignable by him without the prior written consent of SecurFone, except
that Executive's right to receive compensation may be assigned by Executive, in
writing. Any amounts payable after the death of the Executive shall be paid to
the executor or administrator of his estate. This Agreement will inure to the
benefit of and be binding upon SecurFone, its Affiliates and their successors
and assigns.
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13. INDEMNIFICATION. The Certificate of Incorporation of the Company
provides, in Article VII thereof, captioned "Indemnification," that the Company
shall indemnify certain persons under certain conditions. A copy of said Article
VII is attached hereto as Exhibit A. The Company agrees that the Executive shall
be a person covered by the attached Article VII, that the Executive shall be
entitled to the benefit of all of the provisions of Article VII, and that such
provisions shall remain in full force and effect with respect to the Executive
throughout the term of this Agreement, without regard to any amendment to
Article VII which might be adopted after the date hereof. The Company agrees
that to the extent the Company's obligations under this paragraph are insurable,
the Company agrees to purchase insurance, in the amount of $2,500,000 to secure
the Company's obligations hereunder.
14. TIME. The parties acknowledge that time is of the essence in the
performance of the obligations of each party hereto, and that the timely
performance of such obligations is a pre-condition to the continuation of the
obligations of the other party.
15. EUROPE. The parties acknowledge that the Executive is not being
compensated pursuant to the terms of this Agreement for any efforts he might
expend on behalf of the Company or its affiliates in Europe, and that they
intend to address compensation for such efforts in either a separate agreement
or in a subsequent addendum hereto.
16. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware without reference to
principles of conflict of laws. Any action brought to enforce this Agreement or
to seek relief based upon any provision of it will be brought in a court of
competent jurisdiction in the State of Delaware.
17. MERGER. This Agreement supersedes any and all prior agreements,
whether written or oral, with respect to the Executive's employment by SecurFone
or any of its Affiliates and contains all of the promises, representations,
warranties and agreements between the parties with respect to such employment.
18. MODIFICATION. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties or their
respective successors.
19. NOTICES. All notices or other communications hereunder will be in
writing and will be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, to the following:
If to the Executive:
Xxxxxxx X. Xxxxxxx, XX
Fourteen Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
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If to SecurFone:
SecurFone America, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
With a copy to:
Xxxx X. Xxxxxxxxx, Esq.
Xxxx Xxxx Xxxx Xxxxxxxxxx & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Any party may from time to time change its address for purposes of this
Agreement by giving notice of such change to the other party, but no such change
will be deemed effective, until actually received by the party to whom it is
directed. Notice and communications under this Agreement will be effective when
actually received by the party to whom they are directed.
IN WITNESS WHEREOF the parties have executed this Agreement the day and
year written above.
SECURFONE AMERICA, INC.
a Delaware Corporation
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------
Its: Secretary
-----------------------
/s/ Xxxxxxx X. Xxxxxxx, XX
---------------------------
XXXXXXX X. XXXXXXX, XX
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