EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMEENT ("Agreement") is entered into on this 8th day of
June, 2000, by and between AMERICAN NORTEL COMMUNICATIONS, INC., a Wyoming
corporation (hereinafter "Employer"), and WILLIAM P. WILLIAMS, JR., an
individual (hereinafter "Employee").
RECITALS:
A. The services to be rendered by the Employee under this contract require
professional education, skills and experience; and
B. The parties desire to provide the terms and conditions of employment and
the benefits to be provided by the Employer to the Employee.
AGREEMENT:
1. Term of Agreement. This Agreement will be deemed to commence as of
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June 1, 2000, and shall continue until June 30, 2003, subject to the other
provisions hereof. The parties may extend this Agreement for additional
one-year terms by written agreement.
2. Positions with Employer. During the term of this Agreement,
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Employee will serve as President and Chief Executive Officer ("CEO") of
Employer, shall devote his full time to the affairs of Employer and shall
faithfully and diligently perform all duties commensurate with such positions
including, but not limited to:
(a) Those duties reasonably requested by Employer's Board of Directors;
(b) Those duties specifically set forth in Employer's by-laws that
relate to such positions.
3. Reporting Authority. Employee shall report to Employer's Board of
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Directors.
4. Board Seat. During the term of his employment as President and
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CEO, Employer shall use its reasonable best efforts to cause Employee to be
elected to the Board of Directors.
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5. Salary. Employee shall be entitled to receive a minimum base salary
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in the amount of $434,500 per year, payable in equal installments in accordance
with Employer's general salary payment policies in effect during the term hereof
(the "Minimum Base Salary"). Employee's Minimum Base Salary may, at the
discretion of Employer's Board of Directors, be increased at such times and in
such amounts as the Board of Directors, in its sole discretion, deem just and
equitable. However, in no event shall Employee's Minimum Base Salary be
decreased below the amount set forth above.
6. Bonus Plan. During each fiscal year of the Employer, Employee shall
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be eligible to receive bonuses up to an aggregate maximum amount of $200,000 per
fiscal year. Employee shall be entitled to be paid a bonus amount in cash of
$10,000 for each one percent increase in the pre-tax profits of the Employer
measured in relation to the prior fiscal year's pre-tax profit. Pre-tax profit
shall include unrealized gains and losses, but shall exclude any extraordinary
items. Employee shall be eligible to earn the bonus commencing with the fiscal
year of the Employer ending on June 30, 2000. The bonus shall be calculated
annually, as soon as practicable after the end of each fiscal year of Employer,
and shall be paid in cash within 15 days of determination.
If the increase in pre-tax profits for any fiscal year exceeds twenty
percent (20%), the excess dollar amount of pre-tax profits shall be carried
forward to the following fiscal year or years. For example, if the annual
pre-tax profits of the Employer for the fiscal year ending on June 30, 2000,
increased from $ 1,000,000 to $1,300,000, Employee would be entitled to the
maximum bonus for that fiscal year, and the excess
$100,000 of pre-tax profits would be added to, and treated as part of, the
increase in pre-tax profits for the fiscal year ending June 30,2001.
7. Financial Planning Allowance. Employer shall provide Employee an
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annual allowance for the purpose of Employee obtaining professional financial
planning. The allowance shall be $3,500 during the period ending on June 30,
2001 and $2,500 per year (measured by Employer's fiscal year) commencing July 1,
2001.
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8. Stock Options. Employer shall grant Employee options to acquire
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1,268,534 shares of common stock in accordance with the American Nortel
Communications, Inc. Stock Option Plan (the "Plan") and on the ten-ns and
conditions generally set forth in the Plan and the Stock Option Agreement
attached as Exhibit "A" hereto. The options shall not be incentive stock
options.
9. Benefit Plans. Employee shall be afforded the benefits associated
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with any group benefit plan, medical plan, life insurance plan and/or any other
benefit plans either currently in effect or as may be established from time to
time by Employer for which an officer of Employer is or may be eligible to
participate. Further, Employee shall have the option to participate in any
incentive compensation plan, pension or profit sharing plan and any stock
purchase plan either currently in effect or as may be established from time to
time by Employer for which an officer of Employer is or may be eligible to
participate. Notwithstanding the foregoing, Employee shall not be entitled to
participate in any discretionary plan unless participation is approved by
Employer in accordance with the terms and conditions of such plan.
10. Individual Disability Benefit. Employer shall afford Employee a
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personal disability income insurance policy in an amount equal to 60% of
Employee's Minimum Base Salary in effect from time to time (or the maximum
dollar amount available from an insurer of national reputation, if less), with
an insurer or insurers of national reputation reasonably acceptable to Employee.
All premiums payments under such individual disability policy shall be paid by
Employer. If employer maintains a group disability plan, the total benefit paid
to employee under both the personal disability plan and the group disability
plan shall not in the aggregate exceed 60% of the Minimum Base Salary.
11. Life Insurance Benefit, Employer shall provide Employee a
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$6,345,000 pre-retirement survivor life insurance benefit, with proceeds payable
to the beneficiary or beneficiaries specified from time to time by Employee,
with an insurer or insurers of national reputation reasonably acceptable to
Employee. All premiums payments under such life insurance policy shall be paid
by Employer. Notwithstanding the foregoing, a life insurance benefit need be
required under this Section only if life insurance coverage is obtained by
Employer on the life of Employee. Further, any benefit hereunder is limited to
that amount of life insurance proceeds paid upon Employee's death. The benefit
under this Section is described in more detail in the American Nortel
Communications, Inc. Life Insurance Plan which is attached as Exhibit "B"
hereto.
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12. Executive Physical. Employer shall provide Employee an allowance of
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$2,500 per year to obtain an executive physical examination at the Mayo Clinic
or other comparable medical facility.
13. Expenses. Employer shall pay for or reimburse Employee for all
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ordinary and necessary business expenses incurred or paid by Employee in
furtherance of Employer's business, all of which shall be paid in accordance
with Employer's policies and procedures of general application. If extensive
travel (defined for purposes of this section as more than 20 days in aggregate
per annum) of Employee, Employer shall afford Employee a spouse travel allowance
in the amount of the airfare (based upon Employer's then-current policy on
travel class), and a reasonable allowance for hotel, meals and entertainment.
14. Automobile Allowance. Employee shall receive a monthly payment of
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$1,667, so that Employee will have approximately $1,000 net after-tax cash as a
monthly automobile allowance. Employer shall reimburse Employee for the costs
of license, insurance and routine maintenance with respect to such automobile.
15. Vacation/Sick Leave. Employee shall be entitled to paid
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vacation and sick leave in accordance with Employer's policies and procedures
currently in effect or as may be established from time to time by Employer.
16. Retirement Benefits. Employer shall furnish Employee, in the form
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of a nonqualified Supplemental Executive Retirement Plan (" SERP "), an annual
retirement benefit equal to three percent (3%) of Employee's final average
compensation multiplied by his total years of service with Employer. This
benefit shall commence at age 65 and shall be payable for a period of 20 years.
This benefit shall be an unsecured obligation of Employer. This benefit is
described in more detail in the American Nortel Communications, Inc.
Supplemental Executive Retirement Plan which is attached as Exhibit "C" attached
hereto. Employer may find the retirement benefits contemplated under this
Section through earnings, annuities and/or life insurance policies, at its
election.
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17. Termination for Cause. Employer shall have the right to terminate
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Employee for cause upon the occurrence of one or more of the following events:
(a) Employee materially breaches this Agreement;
(b) Employee materially fails to follow any reasonable and
lawful direction of the Board of Directors or materially violates any reasonable
rule or regulation established by Employer from time to time regarding the
conduct of its business; or
(c) Employee takes or falls to take any action that, if he were
prosecuted and convicted, would constitute a felony involving dishonesty, fraud,
theft, embezzlement or the like.
The Employer shall provide written notice of a termination for cause
hereunder and, with respect to a purported violation of subsection (a) or (b)
above, shall afford Employee an opportunity to cure the purported violation for
the 30-day period following such notice. Upon a termination for cause, Employee
shall be entitled to receive only such compensation and benefits as are due
Employee through the effective date of such termination.
18. Termination Upon Voluntary Resignation. In the event Employee
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voluntarily resigns his employment with Employer, Employee shall be entitled to
receive only such compensation and benefits as are due Employee through the
effective date of such resignation.
19. Termination Upon Death of Employee. If during the term of this
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Agreement Employee dies, then this Agreement shall terminate and Employer shall
pay to the estate of Employee the compensation and benefits (including any life
insurance benefits provided to Employee's estate under Employer's standard
policies as in effect) due Employee through the date of his death.
20. Termination Upon Disability of Employee. If during the term of
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this Agreement Employee is unable to perform the services required of Employee
pursuant to this Agreement for a continuous period of six months due to
disability or incapacity by reason of any physical or mental illness or drug or
alcohol addition, then Employer shall have the right to terminate this Agreement
at the end of said six month period. Employee shall be entitled to his normal
compensation and benefits through the date of his termination.
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21. Termination by Employer Other than for Cause, Death, Disability or
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Voluntary Resignation. In the event Employer elects to terminate Employee for
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any reason other than for cause, death, disability or voluntary resignation of
Employee, Employee shall be entitled to receive severance compensation in the
amount of twelve months salary, payable at such times as such salary would have
been paid to Employee. In addition, Employer shall maintain in full force and
effect at its expense for twelve months or until Employer obtains coverage from
another source, such as by a new employer or through government assistance,
whichever occurs earlier, coverage under health or similar insurance plans as in
effect on the date of such termination (or substantially equivalent coverage).
22. Non-Competition. In the event Employee's employment is terminated
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under any circumstances other than death or disability, then Employee shall be
subject to the following covenants, terms and conditions:
(a) Covenant Not to Compete. For a period of twelve months from
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the date of termination, Employee shall not, directly or indirectly, for
Employee's own benefit or for, with or through any other individual, firm,
corporation, partnership or other entity, whether acting in an individual,
fiduciary or other capacity (collectively a "Person"), own, manage, operate,
control, advise, invest in (except as a one percent or less shareholder of a
publicly held company), loan money to, or participate or assist in the
ownership, management, operation or control of or be associated as a director,
officer, employee, partner, consultant, advisor, creditor, agent, independent
contractor or otherwise with, or acquiesce in the use of Employee's name by, any
Person, within the United States of America or any other country which Employer
conducts business in at the time of termination of Employee, that is in direct
competition with Employer, and shall not solicit any employee or customer of
Employer in connection with the business of any other Person; provided, however,
that nothing herein shall preclude Employee from selling non-competing products
or services not otherwise in violation of this covenant through the indirect
distribution channels used by Employer, nor from hiring any employee that
voluntarily approaches Employee without any inducement or solicitation on the
part of Employee.
(b) Acknowledgment of Restrictions. Employer and Employee
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acknowledge that the restrictions contained in subsection 22(a) above to be
reasonable for the purpose of preserving Employer's proprietary rights and
interests. If a court makes a final judicial determination that any such
restrictions are unreasonable or otherwise unenforceable against Employee,
Employee and Employer hereby authorize such court to amend this Agreement so as
to produce the broadest, legally enforceable agreement and for this purpose the
restrictions on time period, geographical area and scope of activities set forth
in subsection 22(a) above are divisible; if the court refuses to do so, Employer
and Employee hereto modify the provision or provisions held to be unenforceable
to preserve each party's anticipated benefits thereunder.
23. Notices. Any notice, election or communication to be given under
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this Agreement shall be in writing and delivered in person or deposited,
certified or registered, in the United States mail, postage prepaid, addressed
as follows:
If to Employer: American Nortel Communications, Inc. 7201 East Camelback
Road, Suite 320 Scottsdale, Arizona 85251
If to Employee: Mr. William P. Williams, Jr.
At the residence address of Employee shown in the books
and records of Employer
or to such other address as Employer or Employee may, from time to time,
designate in writing by notice hereunder. Notices delivered hereunder shall be
deemed effective upon, if personally delivered, the date of delivery of the same
or, if sent by mail, at midnight on the fourth business day after the date of
such mailing.
24. Entire Agreement. This Agreement (including Exhibits "A", "B" and
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"C" hereto) constitutes and embodies the full and complete understanding and
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior understandings or agreements, whether oral or in writing.
25. Amendment. This Agreement may only be amended in writing and
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signed by both parties hereto. No modification, supplement, amendment or waiver
of this Agreement shall be binding unless executed in writing by both Employer
and Employee. A waiver of any of the provisions of this Agreement shall be not
be deemed to or constitute a waiver of any other provision hereof, nor shall any
such waiver constitute a continuing waiver unless otherwise expressly provided.
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26. Binding Nature. This Agreement shall be binding upon and inure to
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the benefit of Employer and its successors and assigns, and upon Employee and
his heirs and legal representatives.
27. Captions; Headings. The captions and paragraph headings included
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in this Agreement are for convenience of reference only and do not constitute a
part of this Agreement.
28. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be considered a duplicate original.
29. Withholding. Employee acknowledges and agrees that payments made
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to Employee by Employer pursuant to the terms of this Agreement may be subject
to tax withholding and that Employer may withhold against payments due Employee
any such amounts as well as any other amounts payable by Employee to Employer.
30. Release. Receipt of any of the benefits to be provided to Employee
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under this Agreement following termination of Employee's employment hereunder
shall be subject to Employee's compliance with any reasonable and lawful
policies or procedures of Employer relating to employee severance including the
execution and delivery by Employee of a release reasonably satisfactory to
Employer of any and all claims that Employee may have against Employer or any
related person, except for the continuing obligations provided herein or the
gross negligence of Employer, and an agreement that Employee not disparage
Employer.
31. Assignment by Employer. Nothing in this Agreement shall preclude
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Employer from consolidating or merging into or with, or transferring all or
substantially all of Employer's assets to, another corporation or entity that
assumes this Agreement and all obligations and undertakings of Employer
hereunder. Upon such consolidation, merger or transfer of assets and
assumption, the term "Employer" as used herein shall mean such other corporation
or entity, and this Agreement shall continue in full force and effect.
32. Assignment by Employee. This Agreement, or any right or interest
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hereunder, may not be assigned by Employee, his beneficiaries or legal
representatives, without Employer's prior written consent; provided, however,
that nothing in this Paragraph 32 shall preclude Employee from designating a
beneficiary to receive any benefit hereunder upon Employee's death, or shall
preclude the executors, administrators or other legal representatives of
Employee or his estate from assigning any right or interest hereunder to the
person or persons entitled to such right or interest.
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33. Governing Law. This Agreement has been executed and delivered in
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the State of Arizona, and its validity, interpretation, performance and
enforcement shall be governed by the laws of that state.
IN WITNESS WHEREOF, this Agreement is entered into the day and year first
above written.
"EMPLOYER"
AMERICAN NORTEL COMMUNICATIONS, INC.
By: __________________________________________
Its: _________________________________________
"EMPLOYEE"
By_____________________________________________
William P. Williams, Jr., individually
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