AMENDED EMPLOYMENT AGREEMENT
BETWEEN
INNOVACOM, INC.
AND
XXXX X. XXX
THIS AGREEMENT is entered into as of the _____ day of April, 1998, by
and between InnovaCom, Inc., a Nevada corporation (hereafter referred to as
"Employer") and Xxxx X. Xxx, an individual (hereafter referred to as
"Employee")(the "Agreement").
WHEREAS, Employer and Employee wish to amend that certain Employment
Agreement entered into between them as of May 15, 1997.
NOW, THEREFORE, in consideration of this premise and for valuable
consideration including the mutual promises contained in this Agreement, the
parties agree to the following terms and conditions.
TERM OF EMPLOYMENT
Section 1.01. Employment and Term. Employer hereby employs Employee and Employee
hereby accepts employment with Employer, upon the terms and conditions
hereinafter set forth, from May 1, 1998 until May 15, 2002 or until the
employment relationship is sooner terminated by either party in accordance with
the terms of this Agreement.
Section 1.02. "Employment Term" Defined. As used in this
Agreement, the phrase "Employment Term" refers to the entire
period of employment of Employee by Employer hereunder.
DUTIES OF EMPLOYEE AS SENIOR VICE PRESIDENT,
CHIEF TECHNICAL OFFICER AND CHAIRMAN OF THE BOARD
Section 2.01. General Duties. Employee shall serve as the Senior Vice President,
Chief Technical Officer and Chairman of the Board of InnovaCom, Inc., a Nevada
Corporation. In his capacity as Senior Vice President and Chief Technical
Officer of Employer, Employee shall do and perform all services, acts, or things
necessary or advisable to manage and conduct the new products research and
development activities of Employer, subject at all times to the overall
direction of the Employer's Chief Executive Officer and the policies and
directions set by Employer's Board of Directors (the "Board"). The Employee
shall develop an annual plan and budget for new product research and development
which shall be submitted to the Board for approval. To the extent not
inconsistent with Employer's articles and bylaws, Employee shall preside at all
meetings of Employer's stockholders and at all meetings of the Board. Employee
shall also have such other powers, duties and responsibilities as may be
prescribed by the Board and the Employer's corporate articles and bylaws.
Finally, Employee shall serve as a director of the Employer and on the Executive
Committee of the Board, if one
exists now or in the future, and shall be nominated as a director as one of the
Boards' slate of directors from year to year and subject only to the continued
approval of the stockholders of Employer as required by law.
Section 2.03. Passive Investments and Endeavors. This Agreement shall not be
interpreted to prohibit Employee from making passive personal investments or
conducting private business affairs if those activities do not materially
interfere with the services required of Employee under this Agreement. However,
Employee shall not directly or indirectly acquire, during the Employment Term, a
controlling interest in any business competing with the business of Employer
without the prior consent of the Board.
OBLIGATIONS OF EMPLOYER
Section 3.01. General Obligations. Employer shall provide Employee with the
compensation, incentives, benefits, and business expense reimbursements
specified elsewhere in this Agreement. Employer shall also provide Employee with
an office located in Santa Clara, California, stenographic help, office
equipment, a cellular phone, supplies, and other facilities and services,
suitable to Employee's position and adequate for the performance of his duties.
Employer may not change the domicile of Employee's office without Employee's
prior consent.
Section 3.02. Indemnification. Employer shall indemnify and hold Employee
harmless for any actions taken or decisions made by him in good faith while
performing services in his capacity as an employee, officer and director of
Employer during the Employment Term. To the extent permitted by law, Employer
shall pay, indemnify and hold Employee harmless from any liability, cost or
expense (including, without limitation, reasonable attorneys' fees) incurred by
him in the defense of any claim, proceeding or action arising out of his
performance of services for Employer or out of his status as an officer and
director of Employer. Employer will use its best efforts to obtain coverage for
Employee under any insurance now in force or hereafter obtained during the term
of this Agreement covering any employee, officer or director of Employer.
Notwithstanding the foregoing, Employer does not intend to and shall not
indemnify Employee against any act or omission by him constituting fraud,
willful misconduct or gross negligence.
COMPENSATION OF EMPLOYEE
Section 4.01. Annual Salary. As compensation for the services to be performed
hereunder, Employee shall receive a salary at the rate of two hundred forty
thousand dollars ($240,000) per annum, payable not less frequently than the
regular payroll schedule of Employer during the Employment Term.
Section 4.02. Annual Increases. Employee shall receive such annual increases in
salary as may be determined by the Board in its sole discretion. Notwithstanding
the foregoing, Employee shall be entitled to a seven percent (7%) cost of living
increase annually for the period through May 15, 2000, at which time the Board,
in its sole discretion, may change the amount of the annual cost of living
increase.
Section 4.03. Tax Withholding. Employer shall have the right to deduct or
withhold from the compensation due to Employee hereunder any and all sums
required for federal income and Social Security taxes and all state or local
taxes now applicable or that may be enacted and become applicable in the future.
Section 4.04. Vehicle Allowance. As additional compensation to the Employee,
Employer shall pay to Employee a vehicle allowance of one thousand five hundred
dollars ($1,500) per month during the Employment Term.
Section 4.05 Whole Life Policy. The Company shall purchase and provide Employee
with a $2,000,000.00 Whole Life Insurance policy on the life of Employee,
payable to Employee's designated beneficiaries. Upon expiration or termination
of this Agreement, said policy, together with any accumulated cash value shall
become the sole and exclusive property of Employee.
Section 4.06. Intellectual Property. Compensation to be paid by
Employer to Employee for intellectual property created by
Employee shall be governed by a separate agreement between the
Employee and Employer.
EMPLOYEE BENEFITS
Section 5.01. Annual Vacation. Employee shall be entitled to thirty (30) days
vacation time each year without loss of compensation. Accrued unused vacation
shall accumulate from year to year up to a maximum of sixty (60) days.
Section 5.02. Illness. Employee shall be entitled to thirty (30) days per year
as sick leave with full pay. Sick leave may be accumulated from year to year up
to a maximum of one hundred eighty (180) days and may be used only during
periods of bona fide illness.
Section 5.03. Employee Benefits Generally. During the Employment Term, Employee
shall be entitled to participate in and to receive benefits from all present and
future accident, disability, medical, dental and similar plans, pension plans,
savings plans, profit sharing plans, stock option plans or other similar
employee benefit plans available generally to all other officers or employees of
Employer. The amount and extent of these benefits, including employee-paid
premiums, co-payments and
deductibles, shall be governed by the specific benefit plan, as it may be
amended from time to time.
BUSINESS EXPENSES
Section 6. Reimbursement of Business Expenses. Employer shall promptly reimburse
Employee for all reasonable business expenses incurred by Employee in connection
with the business of Employer. Employee shall furnish to Employer adequate
records and other documentary evidence required by federal and state tax
statutes and regulations for the substantiation of each such expenditure prior
to reimbursement.
TERMINATION OF EMPLOYMENT
Section 7.01. Termination for Cause. Employer reserves the right to terminate
this Agreement upon: (a) Employee's willful and continued failure to
substantially perform his duties with Employer (other than such failure
resulting from his incapacity due to physical or mental illness) after there is
delivered to Employee by the Board of Directors, a written demand for
substantial performance which sets forth in detail the specific respects in
which the Board believes Employee has not substantially performed his duties,
and giving Employee not less than thirty (30) days to correct the deficiencies
specified in the written demand, (b) Employee's willful engagement in gross
misconduct as determined by the Board which is materially and demonstrably
injurious to Employer, or (c) Employee's commission of a felony or an act of
fraud against Employer or its affiliates. No act, or failure to act, by Employee
shall be considered "willful" if done, or omitted to be done, by Employee in
good faith and with the reasonable belief that the act or omission was in the
best interest of Employer and/or required by applicable law. Anything contained
in this Section 7.01 to the contrary notwithstanding, Employee shall not be
deemed to have been terminated for cause for purposes of Sections (a) or (b) of
this Section 7.01 unless and until there shall have been delivered to Employee a
copy of a resolution duly adopted by the affirmative vote of not less than
seventy-five percent (75%) of the entire membership of the Board at a meeting of
the Board called and held for that purpose (after reasonable notice to and an
opportunity for Employee, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board, Employee was guilty
of conduct set forth in Sections (a) or (b) of this Section 7.01 and specifying
the particulars thereof in detail. Termination under this Section 7.01 shall be
considered "for cause" for the purposes of this Agreement.
Section 7.02. Termination Without Cause. This Agreement shall
terminate upon the death of Employee. Employer reserves the
right to terminate this Agreement after three (3) continuous
months of physical or mental disability suffered by Employee that would prevent
the performance of Employee's duties under this Agreement. Such a termination
shall be effected by giving thirty (30) days written notice of termination to
Employee. Notwithstanding anything else to the contrary, physical or mental
disability shall not include periods of bona fide illness for which Employee is
entitled to sick leave pursuant to Section 5.02 of this Agreement. Other than on
death or upon the physical or mental disability of Employee, Employer reserves
the right at any time to terminate this Agreement upon sixty (60) days written
notice to Employee which notice shall include a copy of the resolution duly
adopted by the affirmative vote of not less than seventy-five percent (75%) of
the entire membership of the Board at a meeting of the Board called and held for
that purpose and, in such an event, Employee shall be paid his severance benefit
hereinafter provided.
Section 7.03. Termination by Employee. Employee may terminate this Agreement at
any time upon sixty (60) days written notice to Employer. Other than upon
Employee's termination of this Agreement pursuant to Section 7.05, Employer
shall not be obligated to pay any severance benefit if Employee terminates this
Agreement pursuant to this Section 7.03.
Section 7.04. Severance Benefit Upon Termination Without Cause.
Notwithstanding any other provision of this Agreement, if
Employer terminates this Agreement other than for cause as defined in Section
7.01, Employer shall pay Employee a lump sum cash payment equal to one years
annual salary as provided for in this Agreement, or Employee's then current rate
of compensation, whichever is greater.
Section 7.05. Severance Benefit Upon Change in Control. Notwithstanding any
other provision of this Agreement, if Employer terminates this Agreement for any
reason, other than "for cause" pursuant to Section 7.01, within six months of a
"change of control" as hereinafter defined, Employer shall pay Employee a lump
sum cash payment equal to three years annual salary as provided for in this
Agreement, or Employee's then current rate of compensation, whichever is
greater. Notwithstanding any other provision of this Agreement, if Employee
terminates this Agreement within six months following a "change of control," as
hereinafter defined, as a result of Employee's determination, in his sole and
complete discretion, that the policies and procedures of the Board of Directors
of Employer are unacceptable to Employee, Employer shall pay Employee a lump sum
cash payment equal to one year of Employee's annual salary as provided for in
this Agreement, or Employee's then current rate of compensation, whichever is
greater. For the purposes of this Section 7.04, a "change of control" shall mean
an event involving one transaction or a related series of transactions, in which
(i) the Employer issues securities equal
to 51% or more of the issued and outstanding capital stock of Employer to any
individual, firm, partnership or other entity, including a "group" within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, (ii) the
Employer issues securities equal to 51% or more of the issued and outstanding
capital stock of Employer in connection with a merger, consolidation or other
business combination, (iii) the Employer is acquired in a merger or other
business combination transaction in which the Employer is not the surviving
corporation, or (iv) 51% or more of the Employers' consolidated assets or
earning power are sold or transferred.
Section 7.06. Noncompetition. If the Employee services with the
Company are terminated pursuant to paragraph 7.01(a), in further
consideration for this Agreement, the Employee agrees that for a
period of two years following termination, Employee will not
engage, directly or indirectly, either personally or as an
employee, associate, partner, manager, agent or otherwise, or by
means of any corporation or other entity which is in competition
with the Company at the date of such termination, in any
territory within a radius of 50 miles of any city in which the
Company does business or has customers.
GENERAL PROVISIONS
Section 8.01. Notices. Any notice to be given hereunder by either party to the
other shall be in writing and may be transmitted by personal delivery, facsimile
transmission, overnight courier or by mail, registered or certified, postage
prepaid with return receipt requested. Mailed notices shall be addressed to the
parties at the following addresses:
EMPLOYER InnovaCom, Inc.
0000 Xxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
EMPLOYEE Xxxx Xxx
00000 Xxxxxx
Xxxxxxxx, XX 00000
Any party may change the address at which notice is to be provided by providing
a written notice to the other party specifying a new address. Notices delivered
personally or by facsimile transmission shall be deemed communicated as of the
date of actual receipt; notices mailed shall be deemed communicated as of the
third day after mailing.
Section 8.02. Arbitration. Any controversy between Employer and
Employee involving the construction or application of any of the
terms, provisions, or conditions of this Agreement shall on the
written request of either party which is served on the other be
submitted to arbitration. Arbitration shall comply with and be
governed by the provisions of the American Arbitration Association. Employer and
Employee shall each appoint one person who shall then choose a third person, all
three of which shall hear and determine the dispute. The decision of the
arbitrators shall be final and conclusive upon both parties.
Section 8.03. Attorneys' Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which that party may be
entitled.
Section 8.04. Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Employee by Employer and contains all of the covenants and
agreements between the parties with respect thereto. Each party to this
Agreement acknowledges that no representation, inducements, promises, or
agreements, orally or otherwise, have been made by any party, or anyone acting
on behalf of any party, which are not embodied herein, and that no other
agreement shall be valid or binding on either party.
Section 8.05. Modification. Any modification of this Agreement
will be effective only if it is in writing and signed by the
party to be charged.
Section 8.06. Effect of Waiver. The failure of either party to insist on strict
compliance with any of the terms, covenants, or conditions, of this Agreement by
the other party shall not be deemed a waiver of that term, covenant, or
condition, nor shall any waiver or relinquishment of any right or power at any
one time or times be deemed a waiver or relinquishment of that right or power
for all or any other time.
Section 8.07. Partial Invalidity. If any provision in this Agreement is held by
a court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
Section 8.08. Law Governing Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the
State of California.
Section 8.09. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be an original but
all of which together shall constitute one instrument.
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IN WITNESS WHEREOF, the Employer and Employee have duly executed this
Employment Agreement as of the day and year first above written.
EMPLOYER
InnovaCom, Inc.
By: F. Xxxxx Xxxxxxxx
Its: Director of Strategic Planning
EMPLOYEE
Xxxx X. Xxx, an individual
