EXHIBIT 10.09
EMPLOYMENT AGREEMENT
I. This agreement is executed this 9th day of February, 2000 and made
effective as of March 1, 2000 ("Effective Date"), between SCTN dba IC
ONE, Inc. ("Company"), a Florida corporation ("Employer"), and Xxx
Xxxxxxxx (collectively the "Parties").
II. RECITALS
A. Employer is a Florida corporation, the principal business of
which is as a software solutions company with particular
expertise in Smart Card Loyalty programs.
B. Employer's current headquarters office is in Salt Lake City,
Utah.
C. Xxx has been hired to serve as President and CEO. The parties
wish to enter into a written agreement to memorialize the
terms of Jim's employment by the Employer.
III. AGREEMENT.
In consideration of the employment of Xxx by the Employer and other
good and valuable consideration, the parties hereto agree as follows:
A. Employment. The Employer agrees to employ Xxx as President and
CEO and member of the Board of Directors on the terms set
forth herein. Xxx accepts such employment and agrees to work
full time and use his best efforts in performing services for
the Employer.
B. Restriction on Competitive Employment. For the period of
twelve months immediately following termination of employment
with Company, the employee shall not engage in any work or
other activity whether as an owner, stockholder, partner,
officer, consultant, employee involving a product or process
or business that is in direct competition with Company, or any
successor company without a prior written release from
Company.
C. Inventions. The employee shall promptly disclose to the
company any and all inventions, discoveries, developments,
improvements, machines, appliances, processes, software,
firmware, products, or the
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like whether patentable or not, which are related to the
Company's business (all of which are referred to herein as
"inventions") which the employee may invent, conceive,
produce, or reduce to practice, either solely or jointly with
others, at any time (whether or not during working hours)
during the period of employment. All such inventions which in
any way relate to the goods, materials, or services developed,
produced, used or sold by the Company or any of it's
subsidiaries shall at all times and for all purposes be
regarded as acquired and held by the employee in a fiduciary
capacity for, and solely for the benefit of the Company. No
termination of employment or of this agreement shall release
the employee or the employee's heirs or legal representatives
from the foregoing obligations as to such inventions.
D. Terms & Salary. This agreement shall be for a term of two (2)
years from the Effective Date unless sooner terminated as
provided in paragraph 6 ("Termination"). Xxx shall be paid a
salary for services hereunder commencing at the monthly rate
of $10,000 per month for the first six months, escalating to
$12,000 per month thereafter, with a review to occur each
quarter until Jim's compensation is consistent with the market
for this position. The Board may, from time to time in its
sole discretion, grant such increases to Base Salary and
bonuses to Xxx, as it deems appropriate during the Term.
Employer shall be granted the option of delaying payment of
salary during the first six (6) months or until an additional
$1,000,000 in funding is received by employer, provided that
the Company's obligations to pay employee for reimbursable
travel expenses is current within 30 days of submittal.
E. Place of Work. The Company acknowledges that its current
office location is temporary and that it will at some point
make a decision to locate its corporate office either in Salt
Lake City or in the Orange County area of California. The date
when such permanent location is noticed and occupied by the
Company will be the "Permanent Office Location". Prior to
Permanent Office Location, Employee will maintain his
principal place of work at his home office in California.
Employee commits to travel for no less than three weeks per
month to the Company's temporary office location.
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F. Benefits.
1. Fringe Benefits. Xxx shall be entitled to and shall
receive all benefits of employment generally
available to other executives and administrative
personnel of the Employer, including, without
limitation, participation in the following:
a. Group Health and Life Insurance. Xxx will be
eligible to participate in such group health
and life insurance plans, which the Employer
may keep in effect during the Term, subject
to the terms of any such plans.
b. Long Term Disability. Xxx will be eligible
to participate in such long-term disability
plans which the Employer may keep in effect
during the Term, subject to the terms of any
such plan.
c. Commuting and Relocation Expenses. Employer
shall reimburse Xxx for all reasonable
business expenses including: travel and
lodging for commuting from his principal
place of work to the Company's temporary
headquarters in Salt Lake City, Utah.
d. Business Expenses. The Employer shall pay
the actual and normal expenses incurred by
Xxx for the benefit of the Employer in
performing his duties as President and CEO
of the Employer in accordance with the
Employer's expense reimbursement policy, as
adopted from time to time.
e. Vacation. Xxx shall be entitled to vacation
benefits in accordance with the employer's
vacation policy, as adopted from time to
time, Jim's initial vacation accrual will be
at the rate of 20 days per year commencing
on the Effective Date. Xxx shall cease
accruing additional vacation benefits at any
time or times as he equals or exceeds the
maximum level of accrued and unused vacation
benefits which Employer's employees are
permitted to accrue in accordance with the
Employer's current personnel policies.
f. Sick Leave/Personal Leave. Xxx shall be
entitled to sick leave and personal leave
benefits in accordance with the Employer's
personnel policies, as adopted from time to
time.
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g. Accrual Year. Any of the benefits provided
under this Agreement or under Employer's
personnel policies generally which are
accrued on a "per year" basis, are deemed to
accrue during each of Employer's fiscal
years in accordance with Employer's
personnel policies applicable to its
employees generally. Any benefits accruing
from the Effective Date through the end of
the current fiscal year will be prorated for
such year.
2. Indemnity. Employer shall indemnify Xxx to the
maximum extent permissible under law as an agent and
officer for acts taken by him during the Term on
behalf of Employer provided such acts are taken in
good faith and in what is in the best interest of
Employer.
3. Directors' and Officers' Insurance. Employer agrees
to obtain and maintain a policy of directors and
officers insurance covering Jim's acts as an officer,
as the case may be and as may be limited by the terms
of any such insurance policy, in a face amount of no
less than ONE MILLION DOLLARS ($1,000,000.00), when
employer becomes eligible for this policy at standard
rates.
4. Stock Options. Employer has agreed to cause to be
issued, as of the date approved by the Board of
Directors, options for Xxx to purchase 2,250,000
shares of employer's stock at a purchase price of 48
cents per share. These options expire 10 years from
the date of the Grant. These options will vest
immediately but will be returned to the company at a
rate of 25% every six months from the date of the
grant if Xxx terminates his employment within two
year from the Effective Date. Subject to applicable
securities rules, if there is a change in control of
Company, all unvested options, including "Performance
Options" will immediately vest. Further, as a
condition to the issuance of any such options, Xxx
agrees to execute and deliver to Employer all such
forms as it may reasonably request in order to comply
with applicable securities laws.
5. Registration of Securities. The Company agrees to
forthwith register the securities underlying the
Stock Options described in Section 4 above and any
stock appreciation rights or plan interests (the
"SAR"s)l, which may be deemed by the Securities and
Exchange Commission
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(the "SEC") to require registration, in order for
employee to be able to freely assign or trade the
SAR's or the underlying securities.
6. Termination.
a. Termination as a result of a change of
control or for good cause. This Agreement is
terminable prior to the expiration of the
Term, in the manner and to the extent set
forth in this section 6.
b. Death, Disability or Resignation During
Term. This Agreement shall automatically
terminate upon the death of Xxx or Jim's
voluntary resignation during the Term. The
Employer or Xxx xxx terminate this Agreement
upon reasonable determination of Jim's total
disability. As used herein, total disability
means Jim's inability to perform his normal
and usual duties as President and CEO of the
Employer due to physical disability or
physical or mental illness for a period of
ninety (90) consecutive calendar days.
c. Termination for Cause. The Employer may
terminate this Agreement immediately, and
except as otherwise set forth below, without
prior notice, for "Cause" which shall mean:
i. Jim's excessive use of alcohol or
illegal drug abuse;
ii. Any material dishonest act by Xxx
relating to the Employer's
business;
iii. Any act by Xxx that would be
materially detrimental to the
business or reputation of the
Employer;
iv. Jim's rendering any services to a
firm or entity which does business
in a field competitive with the
business of Employer except as may
be expressly authorized in writing
pursuant by the Board, or
v. Jim's substantial failure to
perform the material services
contemplated by this Agreement, it
being understood and agreed that
the Employer must give Xxx notice
of such failure by the Employer and
not less than sixty (60) days with
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in which to cure such failure
before invoking the provisions of
this subparagraph v. in terminating
Xxx.
d. Without Cause or from Change of Control. The
Employer may terminate this Agreement during
the Term without Cause upon giving sixty
(60) days prior written notice of such
termination. Such notice is deemed to be
given in the event of change of control as
described in section 11 below.
7. Severance Pay. If Jim's employment terminates due to
his death, disability or by Employer notice without
cause as described in Section 6 above at any time
prior to the Term, Employer will pay to Xxx or his
legal designee(s), an amount equal to two times his
annual Base Salary ("Severance Pay"). Any vesting
rights in any Stock Option Plan agreed to pursuant to
Section 4 hereof shall continue to accrue for a
36-month period following such termination.
8. No Severance Pay upon Resignation. It is expressly
understood and agreed that Xxx (or his personal
representative, as the case may be) shall not be
entitled to any Severance Pay if he resigns during
the Term.
9. Manner of Payment of Severance Pay. Any Severance Pay
hereunder will be paid at such intervals and in the
manner dictated by the Employer's normal pay
practices.
10. Notice of Termination. The Employer shall give Xxx
notice of the termination of this Agreement pursuant
to sub-section b-d of this Section 6 and, except as
otherwise provided herein, the termination of this
Agreement shall be effective upon the giving of such
notice.
11. Change of Control. As used in this section, the term
"change of control" means and refers to:
a. Any merger, consolidation, or sale of the
Company such that any individual, entity or
group (within the meaning of section 13 (d)
(3) or 14 (d) (2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")
acquires beneficial ownership, within the
meaning of Rule 13d-3 of the Exchange Act,
of 20 percent or more of the voting common
stock of the Company;
b. Any transaction in which the Company sells
substantially all of its material assets;
c. A dissolution of liquidation of the Company;
or
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d. The Company becomes a non-publicly held
company.
e. A "change of control" as used in this
section does not include a direct capital
investment in the company.
IV. Integration. This Agreement contains the entire agreement between the
parties and supersedes all prior oral and written agreements,
understandings, commitments and practices between the parties,
including, without limitation, all prior employment agreements, whether
or not fully performed before the date of this Agreement. No amendments
to this Agreement may be made except by a writing signed by both
parties.
V. Arbitration. Any controversy or claim arising out of or relating to
this agreement, or breach of this agreement, shall be settled by
binding arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association and judgment on the award
rendered by the arbitrators may be entered in any court having
jurisdiction. Within five (5) business days after a demand has been
made to arbitrate a dispute, the parties will meet and attempt to agree
on a single arbitrator. If the parties are unable to agree on a single
arbitrator, then each party shall, before the expiration of such five
(5) day period, designate an arbitrator. Within (30) additional
business days thereafter the two arbitrators shall select a third
arbitrator. If for any reason they cannot agree on a third arbitrator,
they may apply to the Utah Superior Court for the name of a neutral
party. The three arbitrators shall hear all the evidence, and a
majority vote shall set the award of the arbitrators. Each party shall
pay the fees of the arbitrator he or it selects and of his or its own
attorneys, and the expenses of his or its witnesses and all other
expenses connected with presenting his or its case. Other costs of the
arbitration, including the cost of any record or transcripts of the
arbitration, administrative fees, the fee of the third arbitrator, and
all other fees and costs, shall be borne equally by the parties.
Notwithstanding the foregoing, the arbitrators may award reasonable
attorneys' fees and costs to the prevailing party in their award.
VI. Litigation. In the event legal action or arbitration is brought to
enforce any of the provisions of this Agreement or for any breach
thereof, reasonable attorneys' fees and costs shall be awarded to the
prevailing party or parties in said action. All legal action is to take
place in Salt Lake City, Utah or such other city where the Company
maintains permanent offices.
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VII. Notices. Any notice given pursuant to this Agreement must be sent by
United States Certified Mail (postage prepaid) and shall be deemed
given on dates on which the envelope or envelopes containing such
notices are deposited in the United States Mail. The Addresses of the
parties to be used for the giving of notices shall be as set forth on
the signature page of the Agreement. The parties hereto may change the
addresses to which notices to them may be sent by giving written notice
thereof in accordance with this paragraph.
VIII. Sever Ability of Provision. If any provision of this Agreement is
invalid or illegal, the other provision shall nevertheless remain in
full force and affect.
IX. Controlling Law. This Agreement is entered into in the State of Utah
and shall be interpreted and controlled by the laws of the State of
Utah.
X. Successors. The Agreement shall be binding on and shall inure to the
benefit of the parties to it and their respective successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
February 9, 2000.
Employer: IC ONE
By: /s/ Xxxxx Xxxxx By: /s/ Xxx Xxxxxxxx
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Xxxxx Xxxxx Xxx Xxxxxxxx
Chairman
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