Exhibit 10.24


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT
AGREEMENT (this “Agreement”) is made as of the 1st
day of May 2002 (the “Effective Date”) by and between WorldxChange
Corp., a Delaware corporation (the “Company”), and Kenneth L. Hilton (“Executive”).


 


The Executive
is skilled in business and financial matters and possesses knowledge of the
business, products and operations of the Company.  The parties hereto believe that it is in their respective
interests to enter into an employment agreement whereby, for the consideration
specified herein, Executive shall provide the services specified herein.
Certain definitions are set forth in Section 7 of this Agreement.


 


The parties
hereto agree as follows:


 


Section 1.                                          Employment.


 


(a)                                  Employment
Period. The Company agrees to employ Executive and Executive accepts such
employment for the period (the “Employment Period”) beginning as of the
Effective Date and ending upon (a) the fourth anniversary of the Effective Date
or (b) such earlier date upon which the employment of the Executive shall
terminate in accordance with Section 2 herein (the date of
termination being hereinafter called the “Termination Date”).  The Employment Period may be extended by
written agreement of the parties hereto. 
Any employment of Executive by the Company following the expiration of
the Employment Period shall be “at will” and may be terminated by the Company
at any time without any liability other than the payment of any base salary
through the effective date of termination.


 


(b)                                 Position
and Duties.


 


(i)                                     During
the Employment Period, Executive shall serve as the Chief Executive Officer of
the Company and shall report to the Board. 
Executive shall act as the chief executive officer of the Company and
shall be responsible for the general management and control of the business and
affairs of the Company and shall perform all duties and shall have all powers
which are commonly incident to the office of the chief executive as well as all
powers that are delegated to Executive by the Board.


 


(ii)                                  Executive
shall devote his best efforts and his full business time and attention to the
business and affairs of the Company, except for permitted vacation periods in
accordance with the Company’s policy, periods of illness or other incapacity,
reasonable time spent with respect to civic and charitable activities and
serving on the boards of directors of not more than two other companies that do
not compete with the Company and its Subsidiaries, provided that none of such
activities shall materially interfere with Executive’s duties to the Company or
its Subsidiaries.


 


(c)                                  Salary,
Bonus and Benefits.


 


(i)                                     During
the Employment Period, the Company will pay Executive a base salary at the rate
of $275,000 per annum (the “Annual Base Salary”).  The Annual Base Salary shall be paid in such
installments as is the policy of the Company with respect to executive officers
of the Company.


 


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(ii)                                  Commencing
with the fiscal year ending December 31, 2002, Executive shall be eligible for
a discretionary annual bonus of up to one hundred percent (100%) of Executive’s
Annual Base Salary (the “Bonus”). 
The amount of any Bonus to be awarded shall be determined by the Board,
based on performance criteria established at the beginning of each fiscal year,
and the timing of such award and the payment of any such Bonus shall be
consistent with the past practice of the Company.  Notwithstanding the foregoing, so long as Executive is employed
by the Company as of December 31, 2002, the Bonus for the fiscal year ending on
December 31, 2002 shall be in an amount of at least $55,000 and shall be paid
in January 2003.


 


(iii)                               Executive
shall be entitled to participate in all employee pension and welfare benefit
plans, programs and practices maintained by the Company for its employees
generally in accordance with the terms of such plans, programs and practices as
in effect from time to time, and in any other insurance, pension, retirement or
welfare benefit plans, programs and practices which the Company generally
provides to its executives from time to time.


 


(d)                                 Expenses.


 


(i)                                     The
Company shall pay, or reimburse the Executive (at the Company’s option), in
accordance with policies established by the Company, for all reasonable and
necessary expenses and other disbursements incurred by the Executive for or on
behalf of the Company in the performance of his duties hereunder, including,
without limitation, travel on behalf of or in connection with his services for
the Company in a manner customary for the Company’s senior executives,
including food and lodging expenses while the Executive is away from home
performing services for the Company.


 


(ii)                                  The
Company shall pay reasonable moving expenses incurred by the Executive to
relocate to the San Diego metropolitan area.


 


(iii)                               The
Company shall reimburse the Executive for the reasonable cost of maintaining an
apartment or house for Executive in the San Diego metropolitan area for up to
six (6) months following the Effective Date. 
During such six (6) month period, the Company will also pay the
reasonable expenses (including airfare and hotel accommodations) for a
reasonable number of trips between San Diego and either San Antonio or Dallas,
Texas.


 


(e)                                  Workplace
and Work Schedule.  Executive’s workplace
shall be the Company’s office in San Diego, California.  Executive agrees to relocate to the
metropolitan San Diego area within six (6) months after the Effective Date.  Executive shall be entitled to such holidays
as are established by the policies of the Company.  Executive shall be entitled to three (3) weeks of vacation per
year, which may be taken in various periods, subject to the Company’s needs.


 


Section 2.                                          Termination
Of Employment.


 


(a)                                  Death
or Disability.  The Company may
terminate the Executive’s employment hereunder due to the Executive’s death or
Disability.  If the Executive dies
during the Employment Period, the Termination Date shall be deemed to be the
date of the Executive’s death.


 


(b)                                 Cause.  The Company may terminate the employment of
Executive hereunder at any time for Cause (such termination being referred to
herein as a “Termination for Cause”) by giving the Executive written
notice of such termination, with such termination to take effect as of the date
of such notice.


 


(c)                                  Without
Cause.  The Company may terminate
the employment of the Executive at any time during the Employment Period
without Cause by giving the Executive written notice of such


 


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termination, with such termination
to take effect as of the date of such notice.


 


(d)                                 Good
Reason.  Executive may terminate his
employment hereunder for Good Reason by providing written notice to the Company
within 45 days of his knowledge of the event constituting Good Reason.  Notwithstanding the foregoing provisions to
the contrary, in no event shall the Executive terminate his employment
hereunder for Good Reason without providing the Company with at least fifteen
(15) days’ prior written Notice of Termination given by the Executive to the
Company and an opportunity for the Company to cure within that fifteen (15) day
period the Good Reason which the Executive believes provides him with grounds
to terminate his employment.


 


(e)                                  Notice
of Termination.  Any termination
pursuant to this Section 2 shall be communicated to Executive or
the Board, as applicable, by Notice of Termination.


 


Section 3.                                          Effect
Of Termination Of Employment.


 


(a)                                  Death
or Disability.  Upon the termination
of Executive’s employment hereunder due to death or Disability pursuant to Section 2(a),
neither Executive nor his beneficiary or estate shall have any further rights
or claims against the Company under this Agreement, except the right to receive
(i) the unpaid portion, if any, of the Annual Base Salary provided for in Section 1,
computed on a pro rata basis to the Termination Date (based on the actual
number of days elapsed over a year of 365 or 366 days, as applicable), (ii) the
unpaid portion, if any, of the Bonus and (iii) reimbursement for any expenses for
which Executive shall not have been reimbursed as provided for in Section 1
(such amounts being collectively referred to as “Accrued Compensation”).


 


(b)                                 Cause.  Upon a termination of Executive’s employment
hereunder by the Company for Cause pursuant to Section 2(b),
neither Executive nor his beneficiary or estate shall have any further rights
or claims against the Company under this Agreement, except the right to receive
(i) the unpaid portion, if any, of the Annual Base Salary provided for in Section 1,
computed on a pro rata basis to the Termination Date (based on the actual
number of days elapsed over a year of 365 or 366 days, as applicable) and (ii)
reimbursement for any expenses for which the Executive shall not have been
reimbursed as provided for in Section 1.


 


(c)                                  Without
Cause.  Upon a termination of
Executive’s employment hereunder by the Company without Cause pursuant to Section 2(c),
neither Executive nor his beneficiary or estate shall have any further rights
or claims against the Company under this Agreement, except the right to receive


 


(i)                                     any
Accrued Compensation;


 


(ii)                                  off
payroll, an amount equal to the amount of the Annual Base Salary, payable in
accordance with Section 1(c)(i), Executive would have received for
the period commencing on the Termination Date and ending on the first
anniversary of the Termination Date; and


 


(iii)                               provided
that Executive has met, as of the Termination Date, the performance criteria
established with respect to the Bonus for the fiscal year in which the Termination
Date occurs, the pro rata portion of the Bonus for such fiscal year (based on
the actual number of days elapsed from the beginning of the fiscal year to the
Termination Date), the timing of the payment of any such Bonus to be consistent
with the past practice of the Company.


 


(d)                                 Upon
a termination of the Executive’s employment hereunder by the Executive for Good
Reason pursuant to Section 2(d), neither the Executive nor his
beneficiary or estate shall have any further rights or claims against the Company
under this Agreement, except the right to receive


 


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(i)                                     any
Accrued Compensation; and


 


(ii)                                  off
payroll, an amount equal to the amount of the Annual Base Salary, payable in
accordance with Section 1(c)(i), Executive would have received for
the period commencing on the Termination Date and ending on the earlier of (x)
the first anniversary of the Termination Date and (y) the fourth anniversary of
the Effective Date.


 


(e)                                  Release.  Executive acknowledges and agrees that the
payments provided for in Sections 3(c)(ii) and 3(d)(ii) constitute
liquidated damages for any claim of breach of contract under this Agreement as
it relates to termination of his employment during the Employment Period
without Cause pursuant to Section 2(c) or with Good Reason pursuant
to Section 2(d). 
Notwithstanding the foregoing, if Executive is entitled to the payments
set forth in Section 3(c)(ii) or Section 3(d)(ii) of
this Agreement, Executive shall execute and agree to be bound by an agreement,
in form and substance satisfactory to the Company (the “Release”),
relating to the waiver and general release of any and all claims arising out of
or relating to Executive’s employment and termination of employment, and the
Company shall have no obligation to make the payments contemplated under Section 3(c)(ii)
or Section 3(d)(ii), as the case may be if Executive fails to
execute such Release or seeks to revoke such Release.  In addition, if Executive should violate or threaten to violate
the terms of Section 4 of this Agreement, the continuing
obligations of the Company to make the payments contemplated under Section 3(c)(ii)
or Section 3(d)(ii), as the case may be, shall immediately
terminate.


 


(f)                                    Mitigation.  Notwithstanding the foregoing and subject to
the limitations on competition hereunder, the amount of any payment by the
Company provided for in Section 3(c)(ii) or Section 3(d)(ii),
as the case may be, shall be reduced by the amount of any compensation earned
by the Executive from a competitor of the Company or any Subsidiary during the
period such payment is to be made by the Company.


 


Section 4.                                          Confidentiality.


 


(a)                                  Executive
agrees that at all times, both during and after Executive’s employment by the
Company, Executive will hold in a fiduciary capacity for the benefit of the
Company and not use or disclose to any third party any trade secret, or other
information, knowledge or data not generally known to the public which
Executive may have learned, discovered, developed, conceived, originated,
prepared or received during or as a result of Executive’s employment by the
Company or any Subsidiary or Affiliate with respect to the operations,
businesses, affairs, products, services, technology, intellectual properties,
Agents, customers, clients, pricing of products or services, policies,
procedures, accounts, personnel, concepts, format, style, techniques or
software of the Company or any Subsidiary or Affiliate of the Company (“Proprietary
Information”).  Executive agrees
that Company’s Proprietary Information includes, without limitation, the
business or other needs, requirements, preferences or other information
relating to Agents and customers of the Company or any Subsidiary or Affiliate
of the Company, acquisition targets of the Company or any Subsidiary or
Affiliate of the Company and all information or data collected by the Company
with reference thereto.  Executive
agrees to comply with any and all procedures which the Company may adopt from
time to time to preserve the confidentiality of any trade secret or other
non-public proprietary, information, knowledge or data; that the absence of any
legend indicating the confidentiality of any materials will not give rise to an
inference that the contents thereof or information derived therefrom are not
confidential; that immediately following the termination of Executive’s
employment by the Company, Executive will return to Company all materials,
except for Executive’s personal items, provided to Executive by the Company
during the term hereof, all works created by Executive or others during the
term of Executive’s employment hereunder and all copies thereof; and that the
Company may, in its sole discretion, upon or after termination of Executive’s


 


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employment by the Company,
notify Executive’s new employer, clients or other parties that Executive has
had access to certain trade secrets, information, knowledge or data which
Executive is under a continuing obligation not to use or disclose.  Notwithstanding the foregoing, the
limitations imposed on Executive pursuant to this Section 4(a)
shall not apply to Executive’s (i) compliance with legal process or subpoena or
(ii) statements in response to inquiry from a court or regulatory body;
provided, that Executive gives the Company reasonable prior written notice of
such process, subpoena or request.


 


(b)                           In
order to protect the Proprietary Information, Executive agrees that for a
period of eighteen (18) months following the expiration or termination of
Executive’s employment hereunder, Executive will not, directly or indirectly,
for Executive’s own account or as a partner, joint venturer, employee, agent,
or consultant: (a) employ as an employee, engage as an independent contrac­tor
or agent or otherwise retain or solicit or seek to so employ, engage, retain or
solicit any person who, during any portion of the two (2) years prior to the
date of expiration or termination of Executive’s employment was, directly or
indirectly, employed as an employee, engaged as an independent contractor or
Agent or otherwise retained by the Company or any Subsidiary or Affiliate of
the Company; or (b) induce any person or entity (except for individuals
considered to be clerical or secretarial staff) to leave his or her employ­ment
with the Company, terminate an independent contractor or Agent relationship
with the Company or terminate or reduce any contractual relationship with
Company or any  Subsidiary or Affiliate
of the Company or (c) directly or indirectly induce or influence any Agent,
customer, supplier, or other person that has a business relationship with the
Company or any Subsidiary or Affiliate of the Company to discontinue or reduce
the extent of such relationship. 
Notwithstanding the foregoing, the parties agree that Executive shall
not be deemed to have violated the provisions of this Section 4(b)
in the event that any Person of which Executive is a partner, joint venturer,
employee, agent or consultant takes any action that would otherwise violate the
terms of this Section 4(b), so long as such action is taken without
the knowledge of Executive and not with respect to any Person identified by
Executive to the Person taking such action.


 


(c)                                  All
processes, improvements, formulations, ideas, inventions, designs and
discoveries, whether patentable or not (collectively “Discoveries”) and
all patents, copyrights, trademarks, and other intangible rights (collectively
“Intellectual Property Rights”) that may be conceived or developed by
Executive either alone or with others, during the term of employment, whether
or not conceived or developed during working hours, and with respect to which
any equipment, supplies, facilities, or trade secret information of the Company
or any Subsidiary or Affiliate of the Company was used, or that related to the
business of the Company or any Subsidiary or Affiliate of the Company or to the
Company’s or any Subsidiary’s or Affiliate’s actual or demonstrably anticipated
research and development, or that result from any work performed by Executive
for the Company, shall be the sole property of the Company.  As provided in Section 2870 of the
California Labor Code, the requirement to assign inventions hereunder shall not
apply to an invention that Executive develops entirely on his own time without
using the Company’s or any Subsidiary’s or Affiliate’s equipment, supplies,
facilities, or trade secret information, except for those inventions that
either (a) relate, at the time of conception or reduction to practice of the
invention to the Company’s or any Subsidiary’s or Affiliate’s business, or
actual or demonstrably anticipated research or development of the Company or
any Subsidiary or Affiliate of the Company; or (b) result from any work
performed by Executive for the Company or any Subsidiary or Affiliate of the
Company.  Executive shall take all
action and execute and deliver all agreements, assignments and other documents,
including, without limitation, all patent applications and assignments,
requested by the Company or any Subsidiary or Affiliate of the Company to
establish the rights of the Company or any Subsidiary or Affiliate of the
Company under this Section 4(c) and to vest in the Company or any
Subsidiary or Affiliate of the Company title to all Discoveries and Intellectual
Property Rights which are the property of the Company or any Subsidiary or
Affiliate of the Company under this Section 4(c).  Executive shall disclose to the Company all
Discoveries and Intellectual Property Rights conceived during the term of employment
which Executive believes meet the criteria set forth in


 


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California Labor Code
Section 2870, whether or not the property of the Company or any Subsidiary
or Affiliate of the Company under the terms of the preceding sentence, provided
that such disclosure shall be received by the Company in confidence to the
extent it pertains to Discoveries and Intellectual Property Rights which are
not the property of the Company under this Section 4(c).


 


(d)                                 Because
the breach or attempted or threatened breach of this Section 4 may
result in immediate and irreparable injury to the Company for which the Company
may not have an adequate remedy at law, the Company shall be entitled, in
addition to all other remedies, to a decree of specific performance thereof and
to a temporary and permanent injunction enjoining such breach, without posting
bond or furnishing similar security. 
The parties’ obligations under this Section 4 shall survive
any termination of Executive’s employment or this Agreement.


 


Section 5.                                          Acknowledgments
By Executive.


 


Executive understands that the restrictions contained in Section 4
herein may limit the ability of Executive to earn a livelihood in a competing
business, but Executive nevertheless believes that Executive has received and
will receive sufficient consideration and other benefits as an employee of the
Company and as otherwise provided hereunder to clearly justify such
restrictions which, in any event (given the education, skills and ability of
Executive), Executive does not believe would prevent him from earning a
livelihood


 


Section 6.                                          Tax
Withholding.


 


The Company may withhold from any compensation or severance payable
under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.


 


Section 7.                                          Definitions.


 


“Affiliate”
of any particular Person means (i) any other Person controlling, controlled by,
or under common control with such particular Person, where “control” means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person whether through the ownership of voting securities, by
contract, or otherwise, and (ii) if such Person is a partnership, any partner
thereof.


 


“Agent”
means any Person which has received or is entitled to receive a commission from
the Company related to the sale or marketing of the Company’s products or
services.


 


“Board”
means the Board of Directors of the Company.


 


“Cause”
means (i) Executive’s conviction of, or plea of guilty or nolo  contendere to, a crime
constituting a felony, (ii) gross misconduct by the Executive that is
materially inconsistent with the terms hereof, (iii) material failure by the
Executive to perform his duties, which nonperformance continues after written
notice thereof and a fifteen (15) day chance to cure, (iv) the Executive’s
material breach of this Agreement,  (v)
habitual drug or alcohol use which impairs the ability of Executive to perform
his duties hereunder, or (vi) Executive’s engaging in fraud, embezzlement or
any other illegal conduct with respect to the Company which acts are harmful
to, either financially, or to the business reputation of, the Company or (vii)
breach of the fiduciary duty owed by Executive to the Company or of any of its
Subsidiaries or Affiliates.


 


“Disability”
means a physical or mental infirmity which impairs Executive’s ability to
perform substantially his duties for a total period exceeding six (6) months
during the Employment Period or for a period of four (4) consecutive
months.  Disability shall be determined
by a physician acceptable


 


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to both the Company and
Executive, or, if the Company and Executive cannot agree upon a physician within
15 days after the Company claims that Executive is suffering from a Disability,
by a physician selected by two physicians, one designated by each of the
Company and Executive.  Executive’s
failure to submit to any physical examination by any such physician after such
physician has given reasonable notice of time and place of such examination
shall be conclusive evidence of Executive’s inability to perform his duties
hereunder.


 


“Good
Reason” means, during the Employment Period and without Executive’s consent:


 


(i)                                     a material
diminution of Executive’s title, reporting structure, position or
responsibilities or


 


(ii)                                  a
reduction in, or failure to pay, Executive’s Annual Base Salary or any
reduction in the benefits being 
required to be provided herein or any other material breach of this
Agreement.


 


“Notice of Termination” means a written notice which indicates
the Termination Date, the specific termination provision in this Agreement
relied upon, and the facts and circumstances, if any, claimed to provide a basis
for such termination.


 


“Person”
means an individual, a partnership, a limited liability company, a corporation,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.


 


“Subsidiary”
means any corporation or other entity of which the securities having a majority
of the ordinary voting power in electing the board of directors are, at the
time as of which any determination is being made, owned by the Company either
directly or through one or more Subsidiaries.


 


 Section 8.                                       Notices.


 


Any notice
provided for in this Agreement must be in writing and must be either personally
delivered, mailed by first class mail (postage prepaid and return receipt
requested) or sent by reputable overnight courier service (charges prepaid) to
the recipient at the address below indicated:


If to Company:


 


WorldxChange Corp.


9775 Business Park Avenue


San Diego, California 92131


Attention: Chief Executive Officer


 


If to Executive:


 


3355 Blackburn #3301


Dallas, Texas 75204


 


or such other address or to the
attention of such other person as the recipient party shall have specified by
prior written notice to the sending party. 
Any notice under this Agreement will be deemed to have been given when
so delivered or sent or, if mailed, five days after deposit in the U.S. mail.


 


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Section 9.                                          General
Provisions.


 


(a)                                  Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.


 


(b)                                 Complete
Agreement.  This Agreement, those
documents expressly referred to herein and other documents of even date
herewith embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.


 


(c)                                  Counterparts.  This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.


 


(d)                                 Successors
and Assigns.  Except as otherwise
provided herein, this Agreement shall bind and inure to the benefit of and be
enforceable by Executive, the Company and their respective successors and
assigns; provided that the rights and obligations of Executive under
this Agreement shall not be assignable.


 


(e)                                  Choice
of Law.  This Agreement will be
governed by and construed in accordance with the internal laws of the State of
Delaware, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Delaware or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Delaware.


 


(f)                                    Remedies.  Except as provided in Section 4(d)
hereof, if any contest or dispute arises between the parties with respect to
this Agreement, such contest or dispute shall be submitted to binding
arbitration for resolution in New York City in accordance with the rules and
procedures of the American Arbitration Association then in effect.  The decision of the arbitrator shall be
final and binding on both parties, and any court of competent jurisdiction may
enter judgment upon the award.  Each
party shall pay its own legal fees and expenses incurred in connection
therewith.


 


(g)                                 Amendment
and Waiver.  The provisions of this
Agreement may be amended and waived only with the prior written consent of the
Company and Executive.


 


(h)                                 Insurance.  The Company, at its discretion, may apply
for and procure in its own name and for its own benefit life and/or disability
insurance on Executive in any amount or amounts considered available.  Executive agrees to cooperate in any medical
or other examination, supply any information, and to execute and deliver any
applications or other instruments in writing as may be reasonably necessary to
obtain and constitute such insurance. 
Executive hereby represents that he has no reason to believe that his
life is not insurable at rates now prevailing for healthy men of his age.


 


IN WITNESS
WHEREOF, the parties hereto have executed this Employment Agreement on the date
first written above.


 


	
   

  	
  WORLDXCHANGE CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Its:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Kenneth L. Hilton

  



 


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