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EXHIBIT 10.1(e)
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into on this 15th day of August, 1996
(the "Effective Date"), by and between StarTronix International Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇, 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.
2. TERMS OF EMPLOYMENT: Employee's employment will begin on the 15th
day of August, 1996, and will end on the 15th day of August, 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 Vice President,
Chief Financial Officer and Treasurer. Employee shall perform such duties and
functions for the Company as shall be specified from time to time by the Chief
Executive Officer 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. Employee shall
report directly to the Chief Executive Officer.
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
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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) The occurrence of any other event or circumstance
which is not covered by (1) above which the Board reasonably 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 and provide Employee, with Group Health
Insurance, but Company shall not be required to pay any other compensation or
provide any other benefits.
7. DISCLOSURE OF INFORMATION; NON-SOLICITATION; NON-COMPETITION.
a. DEFINITIONS. For Purposes Of this Paragraph 8, the following
terms shall have the meanings specified below:
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"BUSINESS" - the development and marketing and distribution of products
or services of the type offered by the Company or any of its subsidiaries,
utilizing a multi-level marketing structure, including (i) the development,
marketing and distribution of (1) screen phones, touch screens and other
receiving hardware to provide home shopping, ▇▇▇▇ paying, banking, swipe-card
services, access to video and audio programming (whether from low-orbiting
satellites or other sources), and (2) the provision of international long
distance, domestic long distance or local telephone time or services in the
United States and Canada;
"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 non-technical 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 non-patented 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
goods or services to or solicited on behalf of the Company; or (ii) about whom
Employee possesses Confidential Information;
"PERSON" - any individual, corporation, partnership, limited liability
company, association, municipality, government agency, government,
unincorporated organization or other entity;
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"SERVICES" - the duties and functions that Employee shall provide in
the United States as an employee of the Company and that Employee shall
be prohibited from providing in the United States in competition with
the Company in accordance with the terms of this Agreement, including
the duties and functions expressly set forth on Schedule B attached
hereto. Employee acknowledges that Employee has been informed of and
discussed with the Company the specific activities that Employee will
perform as Services and that Employee understands the scope of the
activities that constitute Services under this Agreement;
"TERMINATION DATE" - the last day Employee is employed by the
Company, whether the termination is voluntary or involuntary and
whether with or without cause; and
b. CONFIDENTIAL INFORMATION. Employee shall protect Confidential
Information. Except as required in connection with work for the Company,
Employee will not use, disclose or give to others, during or after Employee's
employment, any Confidential Information.
c. RETURN OF MATERIALS. On the Termination Date or for any reason or at
any time at the Company's request, Employee will deliver promptly to the Company
all materials, documents, plans, records, notes, manuals, subcontracts,
procedures and other papers and any copies thereof in Employee's possession,
custody or control relating to the Company or the Business, all of which at all
times shall be the property of the Company.
d. SOLICITATION OF CUSTOMERS. During employment and for two (2) years
after the Termination Date, Employee will not solicit Customers within the
United States for the purpose of providing products or services comparable to
those provided by the Business, except on behalf of the Company.
c. SOLICITATION OF COMPANY EMPLOYEES. During employment and for two (2)
years after the Termination Date, Employee will not solicit for employment with
another Person anyone who is or was, at any time during the one year period
prior to the Termination Date, an employee of the Company.
f. DISPARAGEMENT. Employee shall not at any time make false, misleading
or disparaging statements about the Company, including the Business,
management, employees and Customers.
g. 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
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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.
h. FUTURE EMPLOYMENT OPPORTUNITIES. Prior to and for two (2) years
after the Termination 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.
i. 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
attorney-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.
j. 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 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 Termination 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
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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.
k. 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.
l. 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 night 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 ▇▇▇▇▇▇▇▇▇ ▇, ▇ ▇▇ ▇,
(▇▇) upon commission by the Employee of any felony
under federal, state or local laws or ordinances,
except traffic violations or
(2) (i) By Employee upon thirty (30) days' written notice
to the Company,
or
(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
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prove to have been false or misleading in any material respect
when made or furnished. Company may terminate pursuant to this
paragraph only upon providing Employee written notice of
request to cure such material violation, breach or
misrepresentation and the failure of employee cure such
material violation, breach or misrepresentation within ninety
(90) days of notice; or
(4) By the Company upon the death of Employee.
b. In the event Employee is terminated by the Company for any
reason, the Company shall (i) pay Employee his then current salary 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 fol1owing the date of such
termination), however, in no event less than One Hundred Thousand
dollars ($100,000.00). If Employee terminates 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 one year.
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.
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 California.
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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 INTERNATIONAL INC. EMPLOYEE:
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇, President ▇▇▇▇▇ ▇▇▇▇▇
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SCHEDULE A - SALARY AND BONUS
ANNUAL SALARY: $120,000
SALARY ADJUSTMENT. Commencing on the first day of employment the
Company shall pay Employee for each of the next twelve months, a Monthly Salary
(as defined below) based upon the Net Income Amount (as defined below) for the
current fiscal year, according to the following table:
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 $ 15,000
greater than $6 million $ 20,000
For purposes of this Agreement, "Net Income Amount" means the Company's
annual net income before income taxes and employee bonuses 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 first, 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 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 0.5%
greater than $6 million but less than or equal to $12 million 1%
greater than $12 million 1.5%
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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 StarTronix International Inc., 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.
In addition to the Option Plan, the Employee is hereby granted a sign up stock
option bonus of one-hundred thousand shares (100,000) of common stock of the
Company at a purchase price of one dollar ($1.00) per share. Such stock shall be
subject to the legal restrictions imposed by the Securities and Exchange
Commission. The option shall be excercisable for a period of five (5) years from
the Employment Date.
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SCHEDULE C- SUMMARY OF EMPLOYEE BENEFITS
1. Employee shall receive full medical and dental benefits for
Employee and Employee's spouse and dependents. Included in the
benefit package will be a 401K plan, the terms of which are not
determined at the time of signing this Agreement.
2. Company shall provide, at Employees option: (a) Employee with the exclusive
use of a leased automobile with a monthly payment not to exceed $650 per month,
plus taxes, over a maximum five year term. Such automobile shall be replaced at
the end of the original lease term or sooner if needed due to serious mechanical
malfunction. At the end of the lease term, Employee shall have the right to
purchase the vehicle at its residual value pursuant to the lease agreement.
Company shall provide all maintenance and repair of the vehicle and automobile
insurance in an amount equal to or greater than the requirements of the lease
agreement, or (b) a monthly car allowance of six hundred fifty dollars ($650).
3. Company shall pay Employee $2,000 per month for unaccountable business
expenses, payable on the fifteenth (15th) day of each month commencing August
15, 1996 and continuing thereafter on a monthly basis for the term of this
Agreement and as extended upon mutual consent of the parties. This payment shall
not be offset for accountable Employee expenses, which shall be payable upon
presentation to Company.
4. Company shall pay for Employee's yearly membership fees for professional
societies and CPA license requirements.
5. Employee shall be entitled to four (4) weeks vacation per year.
6. Company shall pay Employee's Continuing Professional Education (CPE)
expenses. All coursework shall be acceptable to the California State Board of
Accountancy. Employee will use best efforts to attend eighty (80) hours per year
of CPE courses. Company shall pay tuition, supplies, travel and lodging.
Pre-approved time spent at the courses shall not be deducted from vacation time.
7. Company shall pay Employee's monthly cellular telephone ▇▇▇▇.
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SCHEDULE D - DUTIES AND FUNCTIONS
Employee will use his best efforts to carry out the following duties and
functions:
The Chief Financial Officer/Treasurer directs the organization's financial
planning and accounting practices as well as its relationship with lending
institutions, shareholders, and financial community by performing the following
duties personally or through subordinate managers.
Oversees and directs budgeting, audit, tax, accounting, purchasing and insurance
activities of the Company.
Provides direction and institutes procedures and systems necessary to maintain
proper records and to afford adequate accounting controls and services for the
Company.
Provides direction in activities as custodian of funds, securities, and assets
of the Company.
Appraises the Company's financial position and issues periodic financial and
operating reports.
Directs and coordinates the establishment of budget programs.
Analyzes, consolidates, and directs all cost accounting procedures together with
other statistical and routine reports.
Oversees and directs the preparation and issuance of the Company's Annual
Report.
Directs and analyzes studies of general economic, business, and financial
conditions and their impact on the Company's policies and operations.