Exhibit 10.7
EMPLOYMENT AND NON-COMPETE AGREEMENT
This Employment and Non-Compete Agreement ("Employment Agreement") is
made this 1st day of February, 1999 by and between Applied Cellular Technology,
Inc., a Missouri corporation, with its principal office located at 400 Royal
Palm Way, Suite 410, Palm Beach, Florida 33480 ("Employer") and Scott Silverman
("Employee").
WHEREAS, Employer is a builder of infrastructure services and solutions
for the communications industry; and
WHEREAS, Employer desires to retain the services of the Employee; and
WHEREAS, Employee is willing to be employed by Employer.
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Term of Employment. Subject to the provisions of Section 5 of this Employment
Agreement, Employer hereby agrees to employ Employee for a period of three (3)
years (the "Employment Term") commencing as of February 1, 1999.
2. Office and Duties.
(a) During the Employment Term, Employee shall serve as an Senior Vice
President-Business Development and Law of Employer. In such position, Employee
shall have such duties and authority as shall be determined from time to time by
the President or his designee. During the Employment Term, Employee's employment
by Employer shall be Employee's exclusive full time employment.
(b) During the Employment Term, Employee shall devote his best efforts
to performance of his duties hereunder and shall not directly or indirectly
engage in any other business, profession or occupation for compensation or
otherwise which would conflict with the limitation of such duties without the
prior written consent of the Board of Directors (the "Board"), which consent
shall not reasonably be withheld, delayed or conditioned.
3. Compensation of Employee. As compensation for the services provided by
Employee under this Employment Agreement, Employer will pay Employee Two Hundred
and Forty Thousand Dollars ($240,000.00) on an annual basis ("Base
Compensation") for the first year of this Employment Agreement in accordance
with Employer's usual payroll procedures. In each year thereafter Employee shall
receive annual increases of ten percent (10%) in his then Base Compensation
provided that at the time of each anniversary date Employee remains an active
Employee. Also, in addition to such Base Compensation, Employee shall be
eligible to receive a "Bonus". The amount of such Bonus shall be based upon the
Employer's financial performance and mutually agreed upon performance goals of
Employee. The maximum amount of Bonus Employee may earn in each year is forty
percent (40%) of Employee's Base Compensation in the previous year. Employee
will also receive a $500.00/ month car allowance.
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From time to time, Employer may develop and implement separate incentive and
stock option plans, for which Employee, if appropriate, may also be eligible.
The Employee shall also be entitled to participate in any and all employee
benefit plans, medical insurance plans, life insurance plans, disability income
plans, and other benefit plans, from time to time, in effect for employees of
Employer. Such participation shall be subject to the terms of the applicable
plan documents, generally applicable Employer policies and the discretion of the
Board or any administrative or other committee provided for in, or contemplated
by, such plan, except any waiting periods shall be waived if such waiver is
allowable under such plan and would not prejudice the rights of any other
participant. In addition, the Employee shall be entitled to receive benefits
which are the same or substantially similar to those which are currently being
provided to the other employees of Employer.
4. Reimbursement for Expenses. In accordance with Employer's policy, the
Employee will be reimbursed for all "out-of-pocket" and other direct business
expenses (exclusive of commuting costs), upon presentation of appropriate
receipts and documentation.
5. Termination.
(a) For Cause by Employer. Notwithstanding any other provision of this
Employment Agreement, Employee's employment hereunder may be terminated by
Employer at any time for Cause. For purposes of this Employment Agreement,
"Cause" shall mean (i) Employee's willful and continued failure to perform the
requirements of his duties hereunder (other than as a result of total or partial
incapacity due to physical or mental illness) for thirty (30) days after a
written demand is delivered to Employee on behalf of Employer, which
specifically identifies the manner in which it is alleged that Employee has not
substantially performed his duties, (ii) Employee's dishonesty in the
performance of his duties hereunder, (iii) an act or acts on Employee's part
involving moral turpitude or constituting a felony under the laws of the United
States or any state thereof, (iv) any other act or omission which materially
injures the financial condition or business reputation of Employer or any of its
subsidiaries or affiliates, or (v) Employee's material breach of his obligations
under Section 6 and 8 hereof.
(b) Permanent Disability. For the purposes of this Employment
Agreement, the term "permanent disability" shall mean the Employee's inability
to perform his duties as prescribed in this Employment Agreement, which,
following a written request by either Employer or the Employee, shall be
determined by agreement between the parties and, if they cannot agree, by a
panel of three (3) physicians, one of whom will be selected by Employer, one by
the Employee and the third by the first two so selected. Said panel shall also
fix the date of the occurrence of the "permanent disability." Said panel's
determination shall be conclusive. Notwithstanding anything to the contrary set
forth herein, the Employee shall be presumed to be permanently disabled, thus
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Agreement
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terminating this Employment Agreement, as of the date he is receiving payments
for permanent disability under any disability insurance policies or under the
Social Security Act.
(c) Temporary Disability. If due to physical or mental illness,
disability or injury, the Employee shall be disabled so as to be unable to
perform substantially all of his duties and responsibilities hereunder, the
Board may designate another person to act in his place during the period of such
disability. Notwithstanding any such designation, the Employee shall continue to
receive his full salary and benefits under Section 3 of this Employment
Agreement until he becomes eligible for disability income under Employer
disability income plan. In the absence of a disability income plan at the time
of such disability, Employer shall pay the Employee benefits equal to those the
Employee would have received if Employer's current disability income plan were
in effect at such time; provided however, that Employer's obligations hereunder
shall cease twelve (12) months from the onset of such disability.
(d) Death. Employee's employment hereunder shall terminate immediately
in the event of the Employee's death. If Employee's employment is terminated by
the death of Employee, Employer shall pay to Employee's estate or his legal
representative all amounts due through the date of Employee's death. The payment
to Employee of any other benefits following the termination of Employee's
employment pursuant to this Section 5(d) shall be determined by the Board in
accordance with the plans, policies and practices of Employer.
(e) Without Cause by Employer. The Employee's employment hereunder may
be terminated by Employer at any time without Cause. If Employee's employment is
terminated by Employer without Cause (other than by reason of disability or
death), Employer shall continue to pay Employee the compensation to which he is
entitled pursuant to Section 3 hereof for the balance of the Employment Term as
if such termination had not occurred. The payment to Employee of any other
benefits following the termination of Employee's employment pursuant to this
Section 5(e) shall be determined by the Board in accordance with the plans,
policies and practices of Employer.
(f) Termination by Employee. Employee's employment hereunder may be
terminated by Employee at any time upon not less than sixty (60) days prior
written notice from Employee to Employer. If Employee terminates his employment
with Employer pursuant to this Section 5(f), Employer shall pay Employee any
amounts due through the date of termination.
(g) Notice of Termination. Any purported termination of employment by
Employer or by Employee shall be communicated by written "Notice of Termination"
to the other party hereto in accordance with Section 15 hereof. For purposes of
this Employment Agreement, a Notice of Termination shall mean a notice which
shall indicate the specific termination provision in this Employment Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
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claimed to provide a basis for termination of employment under the provision so
indicated.
6. Non-Competition.
(a) Employee acknowledges and recognizes the highly competitive nature
of the businesses of Employer and its affiliates and accordingly agrees that
during the period commencing on the date hereof and continuing until the later
of (i) the date that Employee ceases to receive payments pursuant to Section 5
of this Employment Agreement or (ii) one (1) year from the date of the
termination of Employee's employment:
(i) Employee will not engage in any activity which is competitive
with any business now, or at any time during the Employment Term, conducted by
Employer, its subsidiaries or its affiliates, including without limitation
becoming an employee, investor (except for passive investments of not more than
one percent (1%) of the outstanding shares of, or any other equity
over-the-counter securities market), officer, agent, partner or director of, or
other participant in, any firm, person or other entity in any geographic area
which either directly competes with a line or lines of business of Employer, its
subsidiaries or its affiliates. Notwithstanding any provision of this Employment
Agreement to the contrary, upon the occurrence of any breach of this Section
6(a)(i), if Employee is employed by Employer, Employer may immediately terminate
the employment of Employee for Cause in accordance with the provisions contained
in Sections 5 and 15, whether or not Employee is employed by Employer, Employer
shall immediately cease to have any obligations to make payments to Employee
under this Employment Agreement.
(ii) Employee will not directly or indirectly assist others in
engaging in any of the activities in which Employee is prohibited to engage by
clause (i) above.
(iii) Employee will not directly or indirectly (A) induce any
employee of Employer, its subsidiaries or its affiliates to engage in any
activity in which Employee is prohibited from engaging by clause (i) above or to
terminate his employment with Employer, its subsidiaries or its affiliates, or
(B) employ or offer employment to any person who was employed by Employer, its
subsidiaries or its affiliates unless such person shall have ceased to be
employed by Employer, its subsidiaries or its affiliates for a period of at
least twelve (12) months.
(b) It is expressly understood and agreed that (i) although Employee
and Employer consider the restrictions contained in this Section 6 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Employment Agreement is unenforceable, this Employment Agreement shall not
be rendered void but rather shall be deemed to be enforceable to such maximum
extent as such court may judicially determine or indicate to be enforceable, and
(ii) if any restriction contained in this Employment Agreement is determined to
be unenforceable and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
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7. Resignation as Officer and/or Director. In the event that Employee's
employment is terminated for any reason whatsoever, the Employee agrees to, as
the case may be, resign immediately as an officer and/or director of Employer.
8. Confidentiality. Employee will not at any time (whether during or after his
employment with Employer) disclose or use for his own benefit or purposes or the
benefit or purposes of any other person, firm, partnership, joint venture,
association, corporation or other organization, entity or enterprise other than
Employer and any of its subsidiaries or affiliates, any Confidential
Information. As used herein, the term "Confidential Information" shall mean any
trade secrets, information, data, or other confidential information (excluding
information which is not unique to Employer or which is generally known to the
industry or development programs, costs, marketing, trading, investment, sales
activities, promotion, credit processes, formulas, data, software, drawings,
specifications, source and object code, financial and pricing information,
marketing information, and business and development plans or the business and
affairs of Employer generally, or of any subsidiary or affiliate of Employer.
Employee agrees that upon termination of his employment with Employer for any
reason, he will return to Employer immediately all copies of any Confidential
Information, together with any memoranda, books, papers, plans, information,
letters and other data, and all copies thereof or therefrom, in any way relating
to the business of Employer, its subsidiaries and its affiliates, except that he
may retain personal notes, notebooks and diaries. Employee further agrees that
he will not retain or use for his account at any time any trade name, trademark
or other proprietary business designation used or owned in connection with the
business of Employer, its subsidiaries or its affiliates.
9. Specific Performance. Employee acknowledges and agrees that Employer's
remedies at law for a breach or threatened breach of any of the provisions of
Section 6 or Section 8 would be inadequate and, in recognition of this fact,
Employee agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at law, Employer without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining orders, temporary or permanent injunctions or any other
equitable remedy which may then be available.
10. Vacation. The Employee shall be entitled to ten (10) days of paid vacation.
Such vacation shall be taken at a time mutually convenient to Employer and
Employee. Vacation days may not be accumulated.
11. Sick Days/Personal Business. The Employee shall be entitled to five (5) paid
sick or personal days off due to illness or personal business each year of
employment beginning on the first day of the Employee's employment.
12. Holidays. The Employee shall be entitled to the standard company holidays.
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13. Restriction on Authority of Employee. Notwithstanding anything set forth in
this Employment Agreement to the contrary, the Employee, in the performance of
his duties hereunder, shall not take any of the following actions without the
written consent of the Board:
a. Enter into negotiations or execute documents that would materially affect
the existing debt and/or structure or alter, modify or change any banking
relations.
14. Representations and Warranties. The Employee hereby represents and warrants
that he is free to enter this Employment Agreement and to render his services
pursuant hereto and that neither the execution and delivery of this Employment
Agreement, nor the performance of his duties hereunder, violates the provisions
of any other agreement to which he is a party or by which he is bound.
15. Notices. All notices required or permitted under this Employment Agreement
shall be in writing and shall be deemed delivered when delivered in person or
deposited in the United States mail, postage paid, addressed as follows:
Employer: Applied Cellular Technology, Inc.
400 Royal Palm Way, Suite 410
Palm Beach, Florida 33480
Employee: Scott Silverman
955 Gardenia Drive
Delray Beach, Florida 33483
Such addresses may be changed from time to time by either party by
providing written notice in the manner set forth above.
16. Entire Agreement. This Employment Agreement contains the entire agreement
of the parties and there are no other promises or conditions in any other
agreement, whether oral or written. This Employment Agreement supersedes any
prior written or oral agreements between the parties.
17. Expenses. Each party shall pay its own expenses incident to the performance
or enforcement of this Employment Agreement, including all fees and expenses of
its counsel for all activities of such counsel undertaken pursuant to this
Employment Agreement, except as otherwise herein specifically provided.
18. Waivers and Further Agreements. Any waiver of any terms or conditions of
this Employment Agreement shall not operate as a waiver of any other breach of
such terms or conditions or any other term or condition, nor shall any failure
to enforce any provision hereof operate as a waiver of such provision or of any
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other provision hereof; provided, however, that no such written waiver, unless
it, by its own terms, explicitly provides to the contrary, shall be construed to
effect a continuing waiver of the provision being waived and no such waiver in
any instance shall constitute a waiver in any other instance or for any other
purpose or impair the right of the party against whom such waiver is claimed in
all other instances or for all other purposes to require full compliance with
such provision. Each of the parties hereto agrees to execute all such further
instruments and documents and to take all such further action as the other party
may reasonably require in order to effectuate the terms and purposes of this
Employment Agreement.
19. Amendments. This Employment Agreement may not be amended, nor shall any
waiver, change, modification, consent or discharge be effected except by an
instrument in writing executed by or on behalf of the party against whom
enforcement of any waiver, change, modification, consent or discharge is sought.
20. Severability. If any provision of this Employment Agreement shall be held
or deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Employment Agreement
shall be reformed and construed in any such jurisdiction or case as if such
invalid, inoperative or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and enforceable
to the maximum extent permitted in such jurisdiction or in such case.
21. Counterparts. This Employment Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in pleading or
proving any provision of this Employment Agreement, it shall not be necessary to
produce more than one of such counterparts.
22. Section Headings. The headings contained in this Employment Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Employment Agreement.
23. Gender. Whenever used herein, the singular number shall include the plural,
the plural shall include the singular, and the use of any gender shall include
all genders.
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24. Governing Law. This Employment Agreement shall be governed by and construed
and enforced in accordance with the law (other than the law governing conflict
of law questions) of the State of Florida.
25. The parties have executed this Employment Agreement the day and year first
above written.
EMPLOYER
By: /S/ Garrett A. Sullivan
____________________________________
Its Duly Authorized President,
Garrett A. Sullivan
EMPLOYEE
______________________ By: /S/ Scott Silverman
____________________________________
Witness Scott Silverman