EXHIBIT 10.23
PICKSAT, INC.
0000 X.X. 00xx Xxxxxxx, Xxxxx 000
Xxxxx, XX 00000
August 7, 2000
Xx. Xxxxxxxx Xxxxxx
Miami, Florida
Dear Xx. Xxxxxx:
The attached Employment Agreement shall take effect on January 1, 2001. In
consideration for your services rendered as a strategic consultant during the
period _________ to the present (such services anticipated to continue until
December 31, 2000), you are hereby vested in the equity grants of PICKSat, Inc.
("Corporation"), a Delaware corporation, listed below. The grants in Paragraphs
C, D, and E shall be contingent on the attainment of the performance conditions
listed in those paragraphs. The grants in Paragraphs (A) - (D) have vested, and
are not contingent on your continued association with the Company through
December 31, 2000.
(A) Stock The Corporation shall issue to Xxxxxxx Xxxxxx 250,000 shares
of the Company's common stock at a par value of $.001.
(B) Options On December 31, 2000 shall grant to the Executive options
for 250,000 shares of the Corporation's common stock at an exercise price of
forty-percent (40%) of (1) the price of the last exempt sale of stock or
exercise of options as of December 31, 2000; or (2) the price of the stock to
the public as of December 31, 2000 if the stock is sold in the public market at
that time. If both events have occurred as December 31, 2000, the price of the
event that was latest in time shall be used as the option-pricing milestone.
These options are intended to qualify as incentive stock options (collectively,
the "Options"). The Options shall have such terms and conditions, including but
not limited to with respect to vesting and exercisability, as are set forth in
the Corporation's stock option agreement(s). The Options shall be granted under
and shall be governed and construed in accordance with the terms and conditions
of the PICKSat, Inc. 2000 Stock Option Incentive Plan, and shall have piggyback
registration rights in the event of any registration of the Company's stock
after the exercise date.
(C) Sales-Based Incentive Compensation Options Xxxxxxxx Xxxxxx shall
receive options equal to twenty-five-percent (25%) of the
incentive options granted to Xxxxx Xxxxx for attainment of the
level(s) of net collected sales specified in Paragraph 3.4 (C) of
the Company's employment agreement with Xxxxx Xxxxx for the
positions of Executive Vice President of Sales and
Xx. Xxxxxxxx Xxxxxx
August 7, 2000
Page 2 of 4
Marketing, on the same terms and conditions specified in that
Paragraph 3.4(C). The pertinent portions of this (Xxxxx)
schedule, including terms and conditions, are attached as Exhibit
A to this letter.
(D) Investment Origination Xxxxxxxx Xxxxxx shall be entitled to receive
additional compensation of Company stock for any investment in the Company by an
investor (institutional or individual) originated by him. The additional
compensation entitlement shall be a grant of that amount of stock equal to
two-percent (2%) of the investment, calculated at a figurative price per share
equal to forty-percent (40%) of the investment price per share. This incentive
stock shall be issued to Xxxxxxxx Xxxxxx in conjunction with the issuance to the
investor.
(E) Sale of Company If Xxxxxxxx Xxxxxx shall actively participate in
the negotiation and execution of the sale of all or substantially all of the
business and/or assets of the Company ("Sale") (whether direct or indirect, by
purchase, merger consolidation or otherwise), he shall be entitled to additional
compensation equal to two-and-one-half-percent (2 and 1/2%) of the purchase
price, payable at the closing of the sale of the Company as follows: (I) in cash
if an all cash purchase; or (II) in the stock of the purchaser if an all stock
purchase, the amount of stock owed being measured by the stated cash value of
the stock consideration paid/transferred by the purchaser; or (III) by the
combination of (I) and (II) if the consideration is part cash and part stock.
The stock compensation provided for in this paragraph shall carry piggyback
registration rights, which shall be made a requirement of any contract for the
purchase of the Corporation.
The grants described in Paragraphs (A) - (E) above are independent obligations
of the Corporation to Xxxxxxxx Xxxxxx, and shall be valid and binding upon the
Corporation and its assigns until performance by the Corporation. On January 1,
2001, the Corporation shall assume responsibility for the performance of any
remaining obligations to Xxxxxxxx Xxxxxx under Paragraphs (A) - (E) as part of
the attached employment agreement.
PICKSAT, INC.
By: /s/ Salah Xxxxxx Xx-Xxxxxx
-------------------------------
Name: Salah Xxxxxx Xx-Xxxxxx
------------------------
Title: Chairman, Board of Directors
AGREED AND ACCEPTED:
/s/ Xxxxxxxx Xxxxxx
----------------------------------
Xxxxxxxx Xxxxxx
Xx. Xxxxxxxx Xxxxxx
August 7, 2000
Page 3 of 4
EXHIBIT A
Executive shall be entitled to twenty-five-percent (25%) of the
percentages of sales-based incentive compensation provided for in the
following Schedule:
Sales-Based Incentive Compensation Executive shall receive the
following cash/stock option upon attainment of the levels of net
collected sales for each Term year specified in the following schedule,
which shall be applicable to the world-wide sales of the Company and
its affiliates (defined as entities in which the Company has
fifty-percent (50%) ownership or control):
(1) 0 - $100,000,000.00 Net Collected Sales:
Cash Commission of Two-Percent (2%) of the net collected annual sales up to
$100,000,000.00, with the first $100,000.00 earned upon attainment of
$5,000,000.00 net collected sales.
Stock Options equal in value to Two-Percent (2%) of the net collected annual
sales up to $100,000,000.00, at an exercise price equal to forty-percent (40%)
of (1) the price of the last exempt sale of stock or exercise of options as of
December 31st of the applicable Term year; or (2) the price of the stock to the
public as of December 31st of the applicable Term year if the stock is sold in
the public market at that time. If both events have occurred as of December 31st
of the Term year, the price of the event that was latest in time shall be used
as the option-pricing milestone. These options are intended to qualify as
incentive stock options (collectively, the "Options"). The Options shall have
such terms and conditions, including but not limited to with respect to vesting
and exercisability, as are set forth in stock option agreements annexed hereto
as Exhibit B. The Options shall be granted under and shall be governed and
construed in accordance with the terms and conditions of the PICKSAT, Inc. 2000
Stock Option Incentive Plan, and shall have piggyback registration rights in the
event of any registration of the Company's stock after the exercise date.
(2) $100,000,001.00 - $200,000,000.00 Net Collected Sales:
Cash Commission of One-Percent (1%) of the net collected annual sales after
$100,000,001.00 up to $200,000,000.00.
Stock Options equal in value to One-Percent (1%) of the net collected annual
sales starting at $100,000,001.00 up to $200,000,000.00, at an exercise price
equal to forty-percent (40%) of (1) the price of the last exempt sale of stock
or exercise of options as of December 31st of the applicable Term year; or (2)
the price of the stock to the public as of December 31st of the applicable Term
year if the stock is sold in the public market
Xx. Xxxxxxxx Xxxxxx
August 7, 2000
Page 4 of 4
at that time. If both events have occurred as of December 31st of the Term year,
the price of the event that was latest in time shall be used as the
option-pricing milestone.
These options are intended to qualify as incentive stock options (collectively,
the "Options"). The Options shall have such terms and conditions, including but
not limited to with respect to vesting and exercisability, as are set forth in
stock option agreements annexed hereto as Exhibit B. The Options shall be
granted under and shall be governed and construed in accordance with the terms
and conditions of the PICKSat, Inc. 2000 Stock Option Incentive Plan, and shall
have piggyback registration rights in the event of any registration of the
Company's stock after the exercise date.
(3) $200,000,001.00 and higher Net Collected Sales:
Cash Commission of One-Half of One-Percent (1/2%) of the net collected annual
sales starting at $200,000,001.00.
Stock Options equal in value to One-Half of One-Percent (1/2%) of the net
collected annual sales after $200,000,001, at an exercise price equal to
forty-percent (40%) of (1) the price of the last exempt sale of stock or
exercise of options as of December 31st of the applicable Term year; or (2) the
price of the stock to the public as of December 31st of the applicable Term year
if the stock is sold in the public market at that time. If both events have
occurred as of December 31st of the Term year, the price of the event that was
latest in time shall be used as the option-pricing milestone. These options are
intended to qualify as incentive stock options (collectively, the "Options").
The Options shall have such terms and conditions, including but not limited to
with respect to vesting and exercisability, as are set forth in stock option
agreements annexed hereto as Exhibit B. The Options shall be granted under and
shall be governed and construed in accordance with the terms and conditions of
the PICKSat, Inc. 2000 Stock Option Incentive Plan, and shall have piggyback
registration rights in the event of any registration of the Company's stock
after the exercise date.
Payments and grants owed under this schedule shall be calculated annually and
payable/issued by January 30th of the year following the year of calculation.
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into this
______ day of _________, 2000, to be effective on January 1, 2001 between
PICKSat, Inc., a Delaware corporation with offices at 0000 Xxxxxxxxx 00xx
Xxxxxx, Xxxxx 000, Xxxxx, XX 00000 ("Company") and Xxxxxxxx Xxxxxx
("Executive").
RECITALS
A. The Company desires to employ the Executive as its President and
Chief Executive Officer.
B. The Executive desires to be employed by the Company and render
services to the Company as its President and Chief Executive Officer in
connection with the Company's business; and
C. The Executive and the Company desire to set forth the terms and
conditions pursuant to which the Company shall employ the Executive;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, and as a condition to, and
in consideration of, the employment of the Executive by the Company, the
Executive and the Company, intending to be legally bound, agree as follows:
1. Employment. The Executive is hereby employed as President and Chief
Executive Officer of the Company, subject to the supervision and direction of
the Company's Board of Directors (the "Board"). Employment of the Executive by
the Company shall be subject to and contingent upon the receipt by the Company
of sufficient proof that the Executive is authorized to work in the United
States.
2. Term.
2.1. Initial Term. The initial term of this Agreement shall be
for a period of Three (3) years ("Initial Term") commencing as of June 1, 2000,
unless terminated earlier pursuant to Paragraph 6 below.
2.2 Renewal Term. The Company may, at its sole discretion,
elect to renew this Agreement for an additional two (2) year periods (such
additional periods shall each
1
be regarded as the "New Term") upon notifying the Executive, in writing and at
least thirty (30) days prior to the end of the then current Term, that this
Agreement shall be renewed. Such renewal is subject to Board Approval.
3. Compensation; Reimbursement.
3.1 Base Salary. As compensation for all services performed by
the Executive on behalf of or for the benefit of the Company, the Company shall
pay the Executive a base salary (the "Base Salary") of Two Hundred Thousand
Dollars (U.S. $300,000.00) per annum, less all required payroll deductions
(e.g., federal, state and local income and employment tax withholding). Such
compensation shall be payable to the Executive in accordance with the Company's
standard pay cycle.
The Board may periodically review the Base Salary to be paid to the
Executive pursuant to this Paragraph 3.1 and may, at any time and from time to
time and at its sole discretion, increase but not decrease the amount of the
Base Salary to be paid to the Executive.
3.2 Incentive Compensation In addition to the Base Salary to
be paid to the Executive pursuant to Paragraph 3.1, the Executive also shall be
entitled to a year end bonus of a minimum of One Hundred Thousand Dollars
($100,000.00), and shall be considered for a discretionary bonus above that
amount ($100,000.00) in such amounts, at such times and subject to such terms
and conditions as the Board shall determine pursuant to any bonus plan approved
by the Board. The $100,000.00 bonus shall be paid quarterly in equal
installments of $25,000.00, payable within ten business day after the end of
each quarter.
During Term years 2 and 3, Executive shall be entitled to a bonus of $100,000.00
upon the Company's attainment of $5,000,000.00 net collected sales for the
respective Term year. Additional Incentive compensation during each Term year of
this Agreement shall be calculated in accordance with the cash/stock option
incentive schedule set forth in Paragraph 3.3(C), with the provision that during
Term years 2 and 3, the $100,000.00 earned for net collected sales of
$5,000,000.00 shall be credited against the total cash incentive due to
Executive for attainment of the highest range of the sales in the schedule.
No increase in the Base Salary to be paid to The Executive or the award
of any discretionary bonus to The Executive shall in any way abrogate, alter,
terminate or otherwise affect the other terms of this Agreement.
2
3.3 Deferred Compensation Executive may elect to participate
in the Company's Deferred Compensation Plan and receive Company stock in lieu of
Base Salary on a deferred basis.
3.4 Equity and Sales-Based Incentive Compensation
(A) Stock In addition to the compensation to be paid to the
Executive pursuant to Paragraph 3.1, 3.2, or 3.3 above and in
consideration of the Executive's services hereunder, the
Company shall grant to the Executive 250,000 shares of the
Company's common stock at a par value of $.001. These shares
shall become fully vested to Executive upon execution of this
Agreement.
(B) Options In addition to the compensation to be paid to the
Executive pursuant to Paragraph 3.1, 3.2 or 3.3 above and in
consideration of the Executive's services hereunder, the
Company shall on December 31, 2000 grant to the Executive
options for 250,000 shares at an exercise price of
forty-percent (40%) of (1) the price of the last exempt sale
of stock or exercise of options as of December 31, 2000; or
(2) the price of the stock to the public as of December 31,
2000 if the stock is sold in the public market at that time.
If both events have occurred as December 31, 2000, the price
of the event that was latest in time shall be used as the
option-pricing milestone. These options are intended to
qualify as incentive stock options (collectively, the
"Options"). The Options shall have such terms and conditions,
including but not limited to with respect to vesting and
exercisability, as are set forth in stock option agreements
annexed hereto as Exhibit B. The Options shall be granted
under and shall be governed and construed in accordance with
the terms and conditions of the PICKSat, Inc. 2000 Stock
Option Incentive Plan, and shall have piggyback registration
rights in the event of any registration of the Company's stock
after the exercise date.
(C) Sales-Based Incentive Compensation Options Executive shall
receive options equal to twenty-five-percent (25%) of the
incentive options granted to Xxxxx Xxxxx for attainment of the
level(s) of net collected sales specified in Paragraph 3.4 (C)
of the Company's employment agreement with Xxxxx Xxxxx for the
positions of Executive Vice President of Sales and Marketing
and Vice Chairman, on all the same terms and conditions
specified in that Paragraph 3.4(C). The pertinent portions of
this schedule, including terms and conditions, are attached as
Exhibit A.
3
(D) Investment Origination Executive shall be entitled to
receive additional compensation of Company stock for any
investment in the Company by an investor (institutional or
individual) originated by the Executive. The additional
compensation entitlement shall be a grant of that amount of
stock equal to two-percent (2%) of the investment, calculated
at a figurative price per share equal to forty-percent (40%)
of the investment price per share. This incentive stock shall
be issued to Executive in conjunction with the issuance to the
investor.
(E) Sale of Company If the Executive shall actively
participate in the negotiation and execution of the sale of
all or substantially all of the business and/or assets of the
Company ("Sale") (whether direct or indirect, by purchase,
merger consolidation or otherwise), he shall be entitled to
additional compensation equal to two-and-one-half-percent (2
and 1/2%) of the purchase price, payable at the closing of the
sale of the Company as follows: (I) in cash if an all cash
purchase; or (II) in the stock of the purchaser if an all
stock purchase, the amount of stock owed being measured by the
stated cash value of the stock consideration paid/transferred
by the purchaser; or (III) by the combination of (I) and (II)
if the consideration is part cash and part stock. The stock
compensation provided for in this paragraph shall carry
piggyback registration rights, which shall be made a
requirement of any contract for the purchase of the Company.
3.5 Health and Dental Insurance. The Executive and dependants
shall be eligible to participate in such health and dental insurance benefit
programs and other employee benefit programs as may be established from time to
time by the Company in accordance with the applicable policies of the Company in
effect from time to time.
3.6 Reimbursement. The Executive shall be entitled to
reimbursement by the Company for all ordinary, necessary and reasonable
business, travel and entertainment expenses incurred by the Executive in the
performance of his duties and responsibilities under this Agreement upon
presentation by the Executive to the Company of adequate and appropriate
documentation of said expenses that meet the requirements of Internal Revenue
Code ss.274. Additional items included in the reimbursement policy for the
Executive are the use of a cellular telephone and a laptop computer. On or about
the starting date of employment the Executive will sign a receipt for the
cellular phone and the laptop. The Executive will return both items at the end
of the contract.
4
3.7 Vacation and Personal Days. During the first year this
Agreement is in effect, the Executive shall be entitled to four (4) weeks of
paid vacation in accordance with the applicable policies of the Company in
effect from time to time. Thereafter, the Executive shall be entitled to four
(4) weeks of paid vacation per year in accordance with the applicable policies
of the Company in effect from time to time. Additionally, the Executive shall be
entitled to twelve (12) paid personal days off each year this Agreement is in
effect. Vacation time and personal days off are not cumulative and may not be
carried over from year to year. Any vacation time and personal days off not
taken in the year in which they were earned will not be carried over to the
following year. However, should Company needs require the Executive to forego
vacation because of scheduling or other reasons, then the Company, solely at its
option, may choose to give payment in lieu of vacation or personal days.
3.8 Life Insurance. The Company shall provide the Executive
with a term life insurance policy on the Executive's life in the amount of One
Million Dollars ($1,000,000.00). The Company shall be obligated only to provide
such life insurance based on the Executive's insurability at standard rates. In
the event the Executive is not insurable, or due to the Executive's insurance
rating, the cost of such life insurance is in excess of standard rates, the
Executive shall have the right to either (i) pay any excess premiums above the
standard rates for such insurance, or (ii) receive the amount of such standard
rate premiums, less all required payroll deductions, as additional compensation
in lieu of life insurance coverage.
3.9 Car Allowance. The Executive shall be paid a car allowance
of $800.00 per month, which sum shall be inclusive of an allocation for
automobile insurance. The Executive shall be solely responsible for maintaining
automobile insurance in the minimum amount of $100,000/$300,000/$100,000 and
shall provide the Company with written proof of such insurance. The Company
shall be responsible for the costs and expenses of registering and maintaining
the vehicle. The Company shall not be responsible to Executive for any mileage
rate or expenses. The Executive acknowledges that the car allowance to be paid
to him pursuant to this Paragraph 3.9 constitutes taxable income and, thus, will
be included in his gross income and shall be subject to withholding taxes.
3.10 Other Benefits. The Company agrees to pay up to $1,000.00
annually for professional advice sought by the Executive regarding tax issues or
tax preparation and up to $1,500.00 for club memberships for the Executive.
3.11 Additional Benefits. In addition to the compensation and
benefits set forth in Paragraphs 3.1 through 3.10 above, the Executive also
shall be entitled to receive all such other fringe benefits provided to other
executive officers of the Company from time to
5
time, as approved by the Board. The Executive understands that any employee
benefits provided by the Company may be modified or eliminated from time to time
at the Company's sole discretion to the extent permitted by law.
3.12 Additional Benefits. In addition to the compensation and
benefits set forth in Paragraphs 3.1 through 3.11, the Executive also shall be
entitled to receive all such other fringe benefits provided to other executive
officers of the Company from time to time, as approved by the Board. The
Executive understands that any employee benefits provided by the Company may be
modified or eliminated from time to time at the Company's sole discretion to the
extent permitted by law.
4. Scope of Duties.
4.1 Assignment of Duties. The Executive shall faithfully and
dutifully perform and discharge such tasks and duties as may be assigned to him
from time to time by the Board and that typically are performed by persons
serving as the President and Chief Executive Officer of businesses similar to
the Company. The Executive shall perform his tasks and duties in accordance with
the policies and procedures established by the Company from time to time, and
the Executive agrees to abide by such policies and procedures. The Executive
further agrees that, at all times, he shall comply with any and all applicable
laws, rules, regulations and/or ordinances when performing the services and
duties contemplated under this Agreement on behalf of or for the benefit of the
Company as stipulated under Foreign Corrupt Practices Act. The Executive further
agrees to disclose if he is bound by any agreements that may affect the
Executive's ability to discharge his duties as required and outlined by this
Agreement.
4.2 General Specification of Duties. The Executive's duties
shall be set forth to him by the Board of Directors of the Company.
4.3 Executive's Devotion of Time. The Executive shall devote
his business time, attention, energies and efforts to produce maximum benefit to
the Company's business. While employed by the Company, the Executive shall not,
without the prior written approval of the Board, engage in any other business
activity, whether or not such business activity is pursued for gain, profit, or
other pecuniary advantage, which may tend to (i) interfere with the performance
of his duties and responsibilities under this Agreement, (ii) create a conflict
of interest, or (iii) be competitive with the business activities or services of
the Company or its subsidiaries, affiliates, joint venturers or strategic
business partners. The ownership or control of up to five percent of the
outstanding voting securities or of other interest in any class of a company
shall not be deemed to be a violation of the provisions of this section 4.3.
6
4.4 Business Opportunities. The Executive agrees to refer to
the Company any and all business opportunities in the fields of wireless
communications and broad band software engineering, design, research,
application and development and any and all opportunities to provide the
services and products offered by the Company from time to time, which
opportunities the Executive learns or becomes aware of while employed by the
Company. The Company reserves the right within its sole discretion to pursue
such opportunities and accept or reject business as a result of such
opportunities. The Executive may refer any business opportunity to a third party
for exploitation so long as such referral is not to a business or entity in
direct competition with the Company.
5. Restrictive Covenants. The Executive's employment by the Company
shall be contingent upon the execution by the Executive of a Non-Solicitation
and Confidentiality and Employee Non-Disclosure Agreement in the form attached
hereto as Exhibit B. The terms and conditions of such Non-Solicitation and
Confidentiality and Employee Non-Disclosure Agreement are incorporated herein by
reference and, subject to the limitations therein contained, the Executive's
obligations thereunder shall survive the termination for any reason of the
Executive's employment with the Company.
6. Termination.
6.1 Termination upon the Death of the Executive. This
Agreement shall terminate immediately upon the death of the Executive.
6.2 Termination for Cause. The Company may terminate this
Agreement immediately, upon written notice to the Executive, for "good cause" as
that phrase is defined below. As used in this Agreement, the term "good cause"
shall mean: (i) the Executive's conviction for commission of a felony or other
crime, except for ordinary traffic violations; (ii) the commission by the
Executive of any act against the Company constituting willful and material
misconduct, dishonesty, fraud, theft or embezzlement; (iii) the Executive's
failure, inability or refusal to perform any of the material services, duties or
responsibilities required of him under this Agreement, or to materially comply
with the terms and conditions of this Agreement or the policies or procedures
established from time to time by the Company, for any reason other than his
illness or physical or mental incapacity; (iv) the Executive's engaging in any
transaction that, either directly or indirectly, constitutes self-dealing; (v)
conduct of the Executive disloyal to the Company; (vi) the Executive's
dependence, as determined in good faith by the Company, on any addictive
substance, including, but not limited to, alcohol, amphetamines, barbiturates,
methadone, cannabis, cocaine, PCP, THC, LSD or any other illegal or narcotic
drugs; (vii) the destruction of or material damage to Company property
7
caused by the Executive's willful or grossly negligent conduct; and (viii) the
willful engaging by the Executive in any other conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise.
With respect to "cause" as defined in 6.2(iii) above, the Company shall provide
Executive with notice of the breach and/or neglect ("Breach") of duty and allow
Executive the opportunity to cure the Breach within five (5) days. Any notice of
Breach given under this paragraph shall have a duration of twelve (12) months,
such that a second notice and cure period shall not be required prior to any
termination of Executive under this paragraph.
6.3 Termination Due to Disability. At the option of either the
Company or the Executive and upon notice to the other party, this Agreement
shall terminate immediately upon the Executive's "disability," as that phrase is
defined below, for a period of (i) six consecutive months, or (ii) twelve months
within any eighteen-month period. The term "disability" as used in this
Paragraph 6.3 shall mean the Executive's inability, by reason of physical or
mental impairment, to perform the essential functions of the Executive's job on
behalf of the Company, with or without reasonable accommodation. Alternatively,
"disability" shall exist upon a decision by an insurance company pursuant to an
employee benefit plan of the Company to pay disability benefits after a
specified waiting period to the Executive, the determination of which shall
relate back and be effective at the beginning of such waiting period. In
determining the existence of "disability," the Company at its option may
consider the results of a medical examination conducted by a qualified physician
who is not an employee of, or otherwise associated with, the Company.
6.4 Relocation of Company; Change in Control.
(a) Relocation Relocation of the Company and/or Company's base
of operations in the location where the Executive is employed
and/or of the functions of the Executive as defined in this
Agreement without the express written consent of the Executive
shall constitute a termination without cause hereunder and
entitle Executive to severance pay provisions of Paragraph 7
below as if he were terminated without cause.
(b) Change in Control The Executive shall be entitled to the
severance pay provisions of Paragraph 7 below, (as if he were
terminated without cause), if the Company undergoes a change
in control of fifty-one-percent (51%) or more (whether direct
or indirect, by purchase, merger consolidation or otherwise)
and this Agreement is not expressly assumed in its entirety by
the successor to all or substantially all of the business
and/or assets of the Company.
8
6.5 Mutual Consent to Terminate. This Agreement shall
immediately terminate upon the mutual consent of the parties to terminate the
Executive's employment with the Company, which consent shall be evidenced by a
written agreement of termination signed by the parties.
6.6 Effect of Termination. In the event of any termination of
the Executive's employment during the Term pursuant to Paragraphs 6.2 , 6.4 or
6.5 above, the Company shall pay to the Executive (a) the Executive's Base
Salary through the date his employment terminates and (b) all amounts due under
any employee benefit plan of the Company (including but not limited to any such
plans providing for the grant of stock options or other equity-based awards) in
which the Executive participates, in accordance with the terms of such plans,
and the Company shall have no further obligations to make any other payments,
including severance or other compensation, of any kind (the amounts described in
clauses (a) and (b) above being hereinafter referred to as the "Accrued
Obligations"). In the event of the termination of the Executive's employment
during the Term pursuant to Paragraphs 6.1 or 6.3 above, the Company shall pay
to the Executive or his estate (a) the Accrued Obligations and (b) subject to
Paragraph 3.7 above, an amount in cash in lieu of any vacation time accrued by
the Executive at the time of such termination.
7. Severance Payments
7.1 Rate. If Executive is terminated without cause under this
Agreement, he shall be entitled to receive severance pay equal to (A) the Base
Salary payable for the balance of the full Term of this Agreement (commencing on
the termination date) plus (B) any additional and/or incentive compensation owed
under Paragraph 3.4 of this Agreement for events and revenues originated by
and/or allocable to Executive during the full Term of this Agreement. For
purposes of this Paragraph Base Salary shall be the salary in effect at the time
of termination. In the event of any termination of the Executive's employment
without cause during the Term, the Company shall pay to the Executive (a) the
Accrued Obligations of Paragraph 6.6 above, and (b) subject to Paragraph 3.7
above, an amount in cash in lieu of any vacation time accrued by the Executive
at the time of such termination.
The Company may, in its sole discretion, pay the severance pay due
under sub-section (A) in a lump sum or through its normal payroll schedule. The
severance pay due under sub-section (B) shall be calculated annually, and paid
by January 30th of the year following the year of calculation.
9
This schedule shall apply only to a termination without cause that is expressly
acknowledged as such by the Company in writing. It shall not apply to any
"constructive termination" situation or categorization.
7.2 Parachute Payments. If any of the payments or benefits received or
to be received by the Executive in connection with a "change in control" (as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code") or the Executive's termination of employment (whether pursuant to the
terms of this Agreement or any other plan, arrangement or agreement with the
Company, any Person (within the meaning of Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended, as modified and used in Sections 13(d) and
14(d) thereof) whose actions result in a Change in Control or any Person
affiliated with the Company or such Person) (all such payments and benefits,
excluding the Gross-Up Payment, being hereinafter referred to as the "Total
Payments") will be subject to the excise tax imposed under section 4999 of the
Code (the "Excise Tax"), the Company shall pay to the Executive an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state and local income and employment taxes and Excise Tax upon the
Gross-Up Payment, shall be equal to the Total Payments.
The amount of the Gross-Up Payment shall be determined by the
accounting firm which was, immediately prior to the change in control, the
Company's independent auditor (the "Auditor) in accordance with such formula s
the Auditor deems appropriate. All determinations required under this Section 7,
including whether a Gross-Up Payment is required, the amount of the Total
Payments constituting excess parachute payments and the amount of the Gross-Up
Payment, shall be made by the Auditor. Any determination by the Auditor shall be
binding upon the Executive of the company.
In the event that the Excise Tax is finally determined to be less than
the amount taken into account hereunder in calculating the Gross-Up Payment, the
Executive shall repay to the Company, within five (5) business days following
the time that the amount of such reduction in the Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable to such reduction
(plus that portion of the Gross-Up Payment attributable to the Excise Tax and
federal, state and local income and employment taxes imposed on the Gross-Up
Payment being repaid by the Executive, to the extent that such repayment results
in a reduction in the Excise Tax and a dollar-for-dollar reduction in the
Executive's taxable income and wages for purposes of federal, state and local
income and employment taxes, plus interest on the amount of such repayment at
120% of the rate provided in section 1274(b)(2)(B) of the Code. In the event
that the Excise Tax is determined to exceed the amount taken into account
hereunder in calculating the Gross-Up Payment (including by reason of any
payment the existence or amount of which
10
cannot be determined at the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Executive with respect to such
excess) within five (5) business days following the time that the amount of such
excess is finally determined. The Executive and the Company shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Total Payments.
8. Other Obligations of the Executive. The Executive represents and
warrants to the Company that he currently is under no contract, agreement,
non-compete or other restrictive covenant, nor has he previously executed any
documents whatsoever with any other person, firm, association, or corporation,
that will, in any manner, prevent the Company from receiving the benefit of the
Executive's services contemplated under this Agreement.
9. Indemnification. The Company hereby agrees to indemnify and hold
harmless the Executive against any and all claims, losses, damages, judgments,
liabilities, fines, penalties, costs and expenses (including, but not limited to
reasonable attorneys' fees) incurred by reason of the fact that the Executive is
or was employed by the Company to perform the services and duties contemplated
under this Agreement or by reason of anything actually or allegedlly done or not
done by the Executive in his capacity as President and Chief Executive Officer
of the Company (collectively, the "Indemnifiable Events"). Notwithstanding
anything in this Agreement to the contrary, this indemnification provision shall
not apply to: (i) any actions of or any failures to act by the Executive which
constitute gross negligence or willful or intentional misconduct on the part of
the Executive; (ii) with respect to any criminal action or proceeding, any
actions of or any failures to act by the Executive that he had reasonable cause
to believe were unlawful; (iii) any amounts paid in settlement of any
Indemnifiable Event without the prior written consent of the Company; and (iv)
to the extent any amounts are paid to the Executive under any insurance policy
as a result of an Indemnifiable Event. To the extent that it may wish, the
Company shall have the right to assume the defense of any action, investigation
or proceeding relating to an Indemnifiable Event.
10. Miscellaneous.
10.1 Transfer and Assignment. This Agreement shall be binding
on any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the
Company. The duties of the Executive hereunder are personal in nature and may
not be assigned. This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall
die
11
while any amount would still be payable to the Executive hereunder (other than
amounts which, by their terms, terminate upon the death of the Executive) if the
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the Executive's estate.
10.2 Severability. If any term, condition, or provision of
this Agreement shall be found to be illegal or unenforceable to any extent for
any reason, such provision shall be modified or deleted so as to make the
balance of this Agreement, as modified, valid and enforceable to the fullest
extent permitted by applicable law.
10.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Florida, regardless of conflicts of
laws. Venue for any disputes arising under or connected with this Agreement
shall be in the Federal, State, or County courts located in Miami-Dade County,
Florida.
10.4 Counterparts. This Agreement may be executed in several
counterparts and all documents so executed shall constitute one agreement,
binding on all of the parties hereto, notwithstanding that all of the parties
did not sign the original or the same counterparts.
10.5 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the Executive's
employment by the Company, and the other subject matters addressed herein,
expressly superseding all prior written, oral or implied agreements and
understandings. In executing this Agreement, the Executive has not relied on any
promises or representations other than those contained in this Agreement.
10.6 Modification. This Agreement may be modified, amended,
superseded, or canceled, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
executed by the party or parties to be bound by any such modification,
amendment, supersession, cancellation, or waiver.
10.7 Dispute Resolution. The parties voluntarily agree that
any dispute or claim concerning or relating to this Agreement or the terms and
conditions of the Executive's employment by the Company, including any claim for
contractual and/or tort damages and/or as a result of a violation of any
applicable law, ordinance or regulation (including, but not limited to, any
applicable anti-discrimination laws, ordinances or regulations), including
whether such dispute or claim is arbitrable, shall be resolved by binding
arbitration in Miami-Dade County, Florida. The parties voluntarily waive their
rights to seek judicial determination
12
of such disputes or claims. However, nothing in this Paragraph 10.7 shall be
construed so as to deny the Company the right and ability to pursue in any court
of competent jurisdiction any claim to enforce or interpret the
Non-Solicitation, Non-Compete and Confidentiality and Employee Non--Disclosure
Agreement to be entered into by and between the Executive and the Company.
The arbitration proceedings shall be conducted in accordance with Rules
for Resolution of Employment Disputes promulgated by the American Arbitration
Association ("AAA"), as amended from time to time.
The parties agree that a demand for arbitration must be made on the
other party in writing within six (6) months from the date the dispute or claim
arises. The parties agree that one (1) arbitrator shall be chosen from a panel
of neutral arbitrators provided by the AAA.
The decision and award of the arbitrator shall be in writing and shall
be exclusive, final and binding on the parties, their heirs, executors,
administrators, successors and assigns. Any arbitration award may be entered in
any court of competent jurisdiction, or application may be made to such a court
for a judicial recognition of the award or an order to enforce the arbitration
award as the case may be. Each party shall bear its own costs and expenses of
arbitration, including attorney fees if incurred.
10.8 Waiver. The waiver by any party of any breach of any
provision, restrictive covenant or condition of this Agreement shall not be
construed as a waiver of any subsequent breach of such provision, restrictive
covenant or condition or of the breach of any other provision, restrictive
covenant or condition contained in this Agreement.
10.9 Cumulative Remedies. Each and all of the several rights
and remedies provided in this Agreement, or by law or in equity, shall be
cumulative, and no one of them shall be exclusive of any other right or remedy,
and the exercise of any one of such rights or remedies shall not be deemed a
waiver of, or an election to exercise, any other such right or remedy.
10.10 Headings. The section and other headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning and interpretation of this Agreement. This Agreement shall not be
construed against any party by reason of the fact that the party may be
responsible for the drafting of this Agreement or any provision hereof.
13
10.11 Notices. Any notice under this Agreement must be in
writing, sent by express 24-hour guaranteed courier, hand-delivered, or may be
served by depositing the same in the United States mail, addressed to the party
to be notified, postage-prepaid and registered or certified with a return
receipt requested. The addresses of the parties for the receipt of notice shall
be as follows:
If to the Company: PICKSat, Inc.
0000 XX 00xx Xxxxxx,
Xxxxx, XX 00000
With Copy to: Xxxxxx X. Xxxx, Esq.
Xxxxxxx & Xxxx, LLP
000 Xxxxxxxx Xxx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
If to the Executive: Xxxxxxxx Xxxxxx
With Copy to:
Each notice given by registered or certified mail shall be deemed delivered and
effective on the date of delivery as shown on the return receipt, and each
notice delivered in any other manner shall be deemed to be effective as of the
time of actual delivery thereof. Each party may change its address for notice by
giving notice thereof in the manner provided above.
10.12 Survival. Any provision of this Agreement which imposes an
obligation after termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement and be binding on the Executive and
Company.
14
10.13 Knowledge of Rights and Duties. The parties have carefully
reviewed and completely read all of the provisions of this Agreement and
understand and have been advised that they should consult with their own legal
counsel for any and all explanations of their rights, duties, obligations and
responsibilities hereunder. The Executive acknowledges that he enters into this
Agreement of his own free will.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.
PICKSat, Inc., Executive
a Delaware Corporation
By: /s/ Salah Xxxxxx Xx-Xxxxxx /s/ Xxxxxxxx Xxxxxx
---------------------------------- ----------------------------------
Xxxxxxxx Xxxxxx
Chairman, Board of Directors
15
EXHIBIT A
Executive shall be entitled to twenty-five-percent (25%) of the
percentages of sales-based incentive compensation provided for in the
following Schedule:
Sales-Based Incentive Compensation Executive shall receive the
following cash/stock option upon attainment of the levels of net
collected sales for each Term year specified in the following schedule,
which shall be applicable to the world-wide sales of the Company and
its affiliates (defined as entities in which the Company has
fifty-percent (50%) ownership or control):
(1) 0 - $100,000,000.00 Net Collected Sales:
Cash Commission of Two-Percent (2%) of the net collected annual sales
up to $100,000,000.00, with the first $100,000.00 earned upon
attainment of $5,000,000.00 net collected sales.
Stock Options equal in value to Two-Percent (2%) of the net collected
annual sales up to $100,000,000.00, at an exercise price equal to
forty-percent (40%) of (1) the price of the last exempt sale of stock
or exercise of options as of December 31st of the applicable Term year;
or (2) the price of the stock to the public as of December 31st of the
applicable Term year if the stock is sold in the public market at that
time. If both events have occurred as of December 31st of the Term
year, the price of the event that was latest in time shall be used as
the option-pricing milestone. These options are intended to qualify as
incentive stock options (collectively, the "Options"). The Options
shall have such terms and conditions, including but not limited to with
respect to vesting and exercisability, as are set forth in stock option
agreements annexed hereto as Exhibit B. The Options shall be granted
under and shall be governed and construed in accordance with the terms
and conditions of the PICKSat, Inc. 2000 Stock Option Incentive Plan,
and shall have piggyback registration rights in the event of any
registration of the Company's stock after the exercise date.
(2) $100,000,001.00 - $200,000,000.00 Net Collected Sales:
Cash Commission of One-Percent (1%) of the net collected annual sales after
$100,000,001.00 up to $200,000,000.00.
16
Stock Options equal in value to One-Percent (1%) of the net collected
annual sales starting at $100,000,001.00 up to $200,000,000.00, at an
exercise price equal to forty-percent (40%) of (1) the price of the
last exempt sale of stock or exercise of options as of December 31st of
the applicable Term year; or (2) the price of the stock to the public
as of December 31st of the applicable Term year if the stock is sold in
the public market at that time. If both events have occurred as of
December 31st of the Term year, the price of the event that was latest
in time shall be used as the option-pricing milestone. These options
are intended to qualify as incentive stock options (collectively, the
"Options"). The Options shall have such terms and conditions, including
but not limited to with respect to vesting and exercisability, as are
set forth in stock option agreements annexed hereto as Exhibit B. The
Options shall be granted under and shall be governed and construed in
accordance with the terms and conditions of the PICKSat, Inc. 2000
Stock Option Incentive Plan, and shall have piggyback registration
rights in the event of any registration of the Company's stock after
the exercise date.
(3) $200,000,001.00 and higher Net Collected Sales:
Cash Commission of One-Half of One-Percent (1/2%) of the net collected
annual sales starting at $200,000,001.00.
Stock Options equal in value to One-Half of One-Percent (1/2%) of the
net collected annual sales after $200,000,001, at an exercise price
equal to forty-percent (40%) of (1) the price of the last exempt sale
of stock or exercise of options as of December 31st of the applicable
Term year; or (2) the price of the stock to the public as of December
31st of the applicable Term year if the stock is sold in the public
market at that time. If both events have occurred as of December 31st
of the Term year, the price of the event that was latest in time shall
be used as the option-pricing milestone. These options are intended to
qualify as incentive stock options (collectively, the "Options"). The
Options shall have such terms and conditions, including but not limited
to with respect to vesting and exercisability, as are set forth in
stock option agreements annexed hereto as Exhibit B. The Options shall
be granted under and shall be governed and construed in accordance with
the terms and conditions of the PICKSat, Inc. 2000 Stock Option
Incentive Plan, and shall have piggyback registration rights in the
event of any registration of the Company's stock after the exercise
date.
Payments and grants owed under this schedule shall be calculated annually and
payable/issued by January 30th of the year following the year of calculation.
17
April 24th, 2001
Xxxxxxxx Xxxxxx
PICKSat, Inc.
0000 X.X. 00xx Xxx.,
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Re: Employment Agreement
Dear Wolfgang:
With reference to the letter agreement, dated August 7, 2000 (the
"Letter Agreement"), between you and PICKSat, Inc. (the "Company") and the
Employment Agreement, dated as of August 6, 2000 (the "Employment Agreement"),
between you and the Company, the Company hereby confirms that the Letter
Agreement and the Employment Agreement are hereby amended as follows:
1. Section A of the Letter Agreement with respect to issuance of shares
of the Company to you is hereby deleted and amended to read in its entirety:
"Intentionally Omitted."
2. Section B of the Letter Agreement with respect to issuance of stock
options to you for shares of the Company is hereby deleted and amended to read
in its entirety: "Intentionally Omitted."
3. Section C of the Letter Agreement with respect to issuance of
sales-based incentive stock options to you for shares of the Company is hereby
deleted and amended to read in its entirety: "Intentionally Omitted."
4. Exhibit A of the Letter Agreement with respect to sales-based
incentive compensation is hereby deleted in its entirety.
5. Section 3.4 of the Employment Agreement with respect to issuance of
shares of the Company, issuance of stock options for shares of the Company and
issuance of sales-based incentive stock options for shares of the Company is
hereby deleted in its entirety and is amended to read in its entirety as
follows:
"(A) Stock Options. The Company shall grant to the Executive a
non-qualified stock option to purchase 600,000 shares of the Company's common
stock (the "Options"). The Options shall be fully vested upon issuance and shall
be exercisable at a price of $1.00 per share. The term of the Options shall be
ten years from the date of the grant and the Options shall be immediately
exercisable by the Executive. The Options shall have such other terms and
Page 2
conditions as are set forth in the option plan of the Company and in the stock
option agreement pursuant to which the Options are granted.
(B) Intentionally Omitted.
(C) Intentionally Omitted."
6. Exhibit A of the Employment Agreement with respect to sales-based
incentive compensation is hereby deleted in its entirety.
Except as expressly amended herein, the Letter Agreement and the
Employment Agreement are in all respects ratified and confirmed in their
entirety and the terms thereof shall remain in full force and effect, and no
waiver or modification of the terms or conditions thereof is intended or to be
inferred.
If the foregoing comports with our agreement, please execute the
signature line below.
Very truly yours,
PICKSAT, INC.
By: /s/ Salah Xxxxxx Xx-Xxxxxx
--------------------------
Salah Xxxxxx Xx-Xxxxxx
Chairman of the Board
Acknowledged and Agreed:
/s/ Xxxxxxxx Xxxxxx
-----------------------------
Xxxxxxxx Xxxxxx
