**Exhibit 10.24**

 

**EMPLOYMENT AGREEMENT**

 

**THIS EMPLOYMENTAGREEMENT** (this “Agreement”) is made as of the 1stday of May 2002 (the “Effective Date”) by and between WorldxChangeCorp., a Delaware corporation (the “Company”), and Kenneth L. Hilton (“Executive”).

 

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

 

The partieshereto agree as follows:

 

**Section 1.****                                          Employment.**

 

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

 

(b)                                 Positionand Duties.

 

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

 

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

 

(c)                                  Salary,Bonus and Benefits.

 

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

 

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(ii)                                  Commencingwith the fiscal year ending December 31, 2002, Executive shall be eligible fora discretionary annual bonus of up to one hundred percent (100%) of Executive’sAnnual 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 beconsistent with the past practice of the Company.  Notwithstanding the foregoing, so long as Executive is employedby the Company as of December 31, 2002, the Bonus for the fiscal year ending onDecember 31, 2002 shall be in an amount of at least $55,000 and shall be paidin January 2003.

 

(iii)                               Executiveshall be entitled to participate in all employee pension and welfare benefitplans, programs and practices maintained by the Company for its employeesgenerally in accordance with the terms of such plans, programs and practices asin effect from time to time, and in any other insurance, pension, retirement orwelfare benefit plans, programs and practices which the Company generallyprovides to its executives from time to time.

 

(d)                                 Expenses.

 

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

 

(ii)                                  TheCompany shall pay reasonable moving expenses incurred by the Executive torelocate to the San Diego metropolitan area.

 

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

 

(e)                                  Workplaceand Work Schedule.  Executive’s workplaceshall be the Company’s office in San Diego, California.  Executive agrees to relocate to themetropolitan San Diego area within six (6) months after the Effective Date.  Executive shall be entitled to such holidaysas are established by the policies of the Company.  Executive shall be entitled to three (3) weeks of vacation peryear, which may be taken in various periods, subject to the Company’s needs.

 

**Section 2.****                                          TerminationOf Employment.**

 

(a)                                  Deathor Disability.  The Company mayterminate the Executive’s employment hereunder due to the Executive’s death orDisability.  If the Executive diesduring the Employment Period, the Termination Date shall be deemed to be thedate of the Executive’s death.

 

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

 

(c)                                  WithoutCause.  The Company may terminatethe employment of the Executive at any time during the Employment Periodwithout Cause by giving the Executive written notice of such

 

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

 

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

 

(e)                                  Noticeof Termination.  Any terminationpursuant to this Section 2 shall be communicated to Executive orthe Board, as applicable, by Notice of Termination.

 

**Section 3.****                                          EffectOf Termination Of Employment.**

 

(a)                                  Deathor Disability.  Upon the terminationof 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 rightsor 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 actualnumber of days elapsed over a year of 365 or 366 days, as applicable), (ii) theunpaid portion, if any, of the Bonus and (iii) reimbursement for any expenses forwhich 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 employmenthereunder by the Company for Cause pursuant to Section 2(b),neither Executive nor his beneficiary or estate shall have any further rightsor 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 actualnumber 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 beenreimbursed as provided for in Section 1.

 

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

 

(i)                                     anyAccrued Compensation;

 

(ii)                                  offpayroll, an amount equal to the amount of the Annual Base Salary, payable inaccordance with Section 1(c)(i), Executive would have received forthe period commencing on the Termination Date and ending on the firstanniversary of the Termination Date; and

 

(iii)                               providedthat Executive has met, as of the Termination Date, the performance criteriaestablished with respect to the Bonus for the fiscal year in which the TerminationDate occurs, the pro rata portion of the Bonus for such fiscal year (based onthe actual number of days elapsed from the beginning of the fiscal year to theTermination Date), the timing of the payment of any such Bonus to be consistentwith the past practice of the Company.

 

(d)                                 Upona termination of the Executive’s employment hereunder by the Executive for GoodReason pursuant to Section 2(d), neither the Executive nor hisbeneficiary or estate shall have any further rights or claims against the Companyunder this Agreement, except the right to receive

 

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(i)                                     anyAccrued Compensation; and

 

(ii)                                  offpayroll, an amount equal to the amount of the Annual Base Salary, payable inaccordance with Section 1(c)(i), Executive would have received forthe 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 ofthe Effective Date.

 

(e)                                  Release.  Executive acknowledges and agrees that thepayments provided for in Sections 3(c)(ii) and 3(d)(ii) constituteliquidated damages for any claim of breach of contract under this Agreement asit relates to termination of his employment during the Employment Periodwithout Cause pursuant to Section 2(c) or with Good Reason pursuantto Section 2(d). Notwithstanding the foregoing, if Executive is entitled to the paymentsset forth in Section 3(c)(ii) or Section 3(d)(ii) ofthis 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 ofor relating to Executive’s employment and termination of employment, and theCompany 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 toexecute such Release or seeks to revoke such Release.  In addition, if Executive should violate or threaten to violatethe terms of Section 4 of this Agreement, the continuingobligations of the Company to make the payments contemplated under Section 3(c)(ii)or Section 3(d)(ii), as the case may be, shall immediatelyterminate.

 

(f)                                    Mitigation.  Notwithstanding the foregoing and subject tothe limitations on competition hereunder, the amount of any payment by theCompany 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 earnedby the Executive from a competitor of the Company or any Subsidiary during theperiod such payment is to be made by the Company.

 

**Section 4.****                                          Confidentiality.**

 

(a)                                  Executiveagrees that at all times, both during and after Executive’s employment by theCompany, Executive will hold in a fiduciary capacity for the benefit of theCompany and not use or disclose to any third party any trade secret, or otherinformation, knowledge or data not generally known to the public whichExecutive may have learned, discovered, developed, conceived, originated,prepared or received during or as a result of Executive’s employment by theCompany 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 orsoftware of the Company or any Subsidiary or Affiliate of the Company (“ProprietaryInformation”).  Executive agreesthat Company’s Proprietary Information includes, without limitation, thebusiness or other needs, requirements, preferences or other informationrelating to Agents and customers of the Company or any Subsidiary or Affiliateof the Company, acquisition targets of the Company or any Subsidiary orAffiliate of the Company and all information or data collected by the Companywith reference thereto.  Executiveagrees to comply with any and all procedures which the Company may adopt fromtime to time to preserve the confidentiality of any trade secret or othernon-public proprietary, information, knowledge or data; that the absence of anylegend indicating the confidentiality of any materials will not give rise to aninference that the contents thereof or information derived therefrom are notconfidential; that immediately following the termination of Executive’semployment by the Company, Executive will return to Company all materials,except for Executive’s personal items, provided to Executive by the Companyduring the term hereof, all works created by Executive or others during theterm of Executive’s employment hereunder and all copies thereof; and that theCompany 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 hashad access to certain trade secrets, information, knowledge or data whichExecutive is under a continuing obligation not to use or disclose.  Notwithstanding the foregoing, thelimitations 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 ofsuch process, subpoena or request.

 

(b)                           Inorder to protect the Proprietary Information, Executive agrees that for aperiod of eighteen (18) months following the expiration or termination ofExecutive’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 contrac­toror agent or otherwise retain or solicit or seek to so employ, engage, retain orsolicit any person who, during any portion of the two (2) years prior to thedate of expiration or termination of Executive’s employment was, directly orindirectly, employed as an employee, engaged as an independent contractor orAgent or otherwise retained by the Company or any Subsidiary or Affiliate ofthe Company; or (b) induce any person or entity (except for individualsconsidered to be clerical or secretarial staff) to leave his or her employ­mentwith the Company, terminate an independent contractor or Agent relationshipwith the Company or terminate or reduce any contractual relationship withCompany or any  Subsidiary or Affiliateof the Company or (c) directly or indirectly induce or influence any Agent,customer, supplier, or other person that has a business relationship with theCompany or any Subsidiary or Affiliate of the Company to discontinue or reducethe extent of such relationship. Notwithstanding the foregoing, the parties agree that Executive shallnot 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 theterms of this Section 4(b), so long as such action is taken withoutthe knowledge of Executive and not with respect to any Person identified byExecutive to the Person taking such action.

 

(c)                                  Allprocesses, improvements, formulations, ideas, inventions, designs anddiscoveries, whether patentable or not (collectively “Discoveries”) andall patents, copyrights, trademarks, and other intangible rights (collectively“Intellectual Property Rights”) that may be conceived or developed byExecutive either alone or with others, during the term of employment, whetheror not conceived or developed during working hours, and with respect to whichany equipment, supplies, facilities, or trade secret information of the Companyor any Subsidiary or Affiliate of the Company was used, or that related to thebusiness of the Company or any Subsidiary or Affiliate of the Company or to theCompany’s or any Subsidiary’s or Affiliate’s actual or demonstrably anticipatedresearch and development, or that result from any work performed by Executivefor the Company, shall be the sole property of the Company.  As provided in Section 2870 of theCalifornia Labor Code, the requirement to assign inventions hereunder shall notapply to an invention that Executive develops entirely on his own time withoutusing the Company’s or any Subsidiary’s or Affiliate’s equipment, supplies,facilities, or trade secret information, except for those inventions thateither (a) relate, at the time of conception or reduction to practice of theinvention to the Company’s or any Subsidiary’s or Affiliate’s business, oractual or demonstrably anticipated research or development of the Company orany Subsidiary or Affiliate of the Company; or (b) result from any workperformed by Executive for the Company or any Subsidiary or Affiliate of theCompany.  Executive shall take allaction 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 toestablish the rights of the Company or any Subsidiary or Affiliate of theCompany under this Section 4(c) and to vest in the Company or anySubsidiary or Affiliate of the Company title to all Discoveries and IntellectualProperty Rights which are the property of the Company or any Subsidiary orAffiliate of the Company under this Section 4(c).  Executive shall disclose to the Company allDiscoveries and Intellectual Property Rights conceived during the term of employmentwhich Executive believes meet the criteria set forth in

 

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California Labor CodeSection 2870, whether or not the property of the Company or any Subsidiaryor Affiliate of the Company under the terms of the preceding sentence, providedthat such disclosure shall be received by the Company in confidence to theextent it pertains to Discoveries and Intellectual Property Rights which arenot the property of the Company under this Section 4(c).

 

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

 

**Section 5.****                                          AcknowledgmentsBy Executive.**

 

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

 

**Section 6.****                                          TaxWithholding**.

 

The Company may withhold from any compensation or severance payableunder this Agreement all federal, state, city or other taxes as shall berequired 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 thepossession, directly or indirectly, of the power to direct the management andpolicies of a Person whether through the ownership of voting securities, bycontract, or otherwise, and (ii) if such Person is a partnership, any partnerthereof.

 

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

 

“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 crimeconstituting a felony, (ii) gross misconduct by the Executive that ismaterially inconsistent with the terms hereof, (iii) material failure by theExecutive to perform his duties, which nonperformance continues after writtennotice thereof and a fifteen (15) day chance to cure, (iv) the Executive’smaterial breach of this Agreement,  (v)habitual drug or alcohol use which impairs the ability of Executive to performhis duties hereunder, or (vi) Executive’s engaging in fraud, embezzlement orany other illegal conduct with respect to the Company which acts are harmfulto, 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 itsSubsidiaries or Affiliates.

 

“Disability”means a physical or mental infirmity which impairs Executive’s ability toperform substantially his duties for a total period exceeding six (6) monthsduring the Employment Period or for a period of four (4) consecutivemonths.  Disability shall be determinedby a physician acceptable

 

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to both the Company andExecutive, or, if the Company and Executive cannot agree upon a physician within15 days after the Company claims that Executive is suffering from a Disability,by a physician selected by two physicians, one designated by each of theCompany and Executive.  Executive’sfailure to submit to any physical examination by any such physician after suchphysician has given reasonable notice of time and place of such examinationshall be conclusive evidence of Executive’s inability to perform his dutieshereunder.

 

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

 

(i)                                     a materialdiminution of Executive’s title, reporting structure, position orresponsibilities or

 

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

 

“Notice of Termination” means a written notice which indicatesthe Termination Date, the specific termination provision in this Agreementrelied upon, and the facts and circumstances, if any, claimed to provide a basisfor 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, anunincorporated organization and a governmental entity or any department, agencyor political subdivision thereof.

 

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

 

** Section 8.****                                       Notices.**

 

Any noticeprovided for in this Agreement must be in writing and must be either personallydelivered, mailed by first class mail (postage prepaid and return receiptrequested) or sent by reputable overnight courier service (charges prepaid) tothe 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 theattention of such other person as the recipient party shall have specified byprior written notice to the sending party. Any notice under this Agreement will be deemed to have been given whenso delivered or sent or, if mailed, five days after deposit in the U.S. mail.

 

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**Section 9.****                                          GeneralProvisions.**

 

(a)                                  Severability.  Whenever possible, each provision of thisAgreement will be interpreted in such manner as to be effective and valid underapplicable 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 anyjurisdiction, such invalidity, illegality or unenforceability will not affectany other provision or any other jurisdiction, but this Agreement will bereformed, construed and enforced in such jurisdiction as if such invalid,illegal or unenforceable provision had never been contained herein.

 

(b)                                 CompleteAgreement.  This Agreement, thosedocuments expressly referred to herein and other documents of even dateherewith embody the complete agreement and understanding among the parties andsupersede and preempt any prior understandings, agreements or representationsby or among the parties, written or oral, which may have related to the subjectmatter hereof in any way.

 

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

 

(d)                                 Successorsand Assigns.  Except as otherwiseprovided herein, this Agreement shall bind and inure to the benefit of and beenforceable by Executive, the Company and their respective successors andassigns; provided that the rights and obligations of Executive underthis Agreement shall not be assignable.

 

(e)                                  Choiceof Law.  This Agreement will begoverned by and construed in accordance with the internal laws of the State ofDelaware, without giving effect to any choice of law or conflict of lawprovision 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 theState of Delaware.

 

(f)                                    Remedies.  Except as provided in Section 4(d)hereof, if any contest or dispute arises between the parties with respect tothis Agreement, such contest or dispute shall be submitted to bindingarbitration for resolution in New York City in accordance with the rules andprocedures of the American Arbitration Association then in effect.  The decision of the arbitrator shall befinal and binding on both parties, and any court of competent jurisdiction mayenter judgment upon the award.  Eachparty shall pay its own legal fees and expenses incurred in connectiontherewith.

 

(g)                                 Amendmentand Waiver.  The provisions of thisAgreement may be amended and waived only with the prior written consent of theCompany and Executive.

 

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

 

IN WITNESSWHEREOF, the parties hereto have executed this Employment Agreement on the datefirst written above.

 
|   | WORLDXCHANGE CORP. |
|--------|--------------------|
|   |               |
|   | By:                |   |   |
|   | Name:              |
|   | Its:               |
|   |               |
|   |               |   |
|   | Kenneth L. Hilton  |

 

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