EXHIBIT 10.12
EMPLOYMENT AGREEMENT EXECUTED IN MONTREAL, QUEBEC, ON MAY 24 , 2002
BETWEEN: TOUCHTUNES MUSIC CORPORATION, a corporation incorporated under
the Laws of Nevada.
C/O TOUCHTUNES DIGITAL JUKEBOX INC., a corporation
incorporated under the CANADA BUSINESS CORPORATIONS ACT,
having its head office at Three Commerce Place, 4th floor,
Nuns' Island, Verdun, Province of Xxxxxx X0X 0X0;
(hereinafter referred to as the "CORPORATION")
AND : XX. XXX XXXXXXXXXX, 000 Xxxxxx Xxxx Xx Xxxxxxx XX 00000
(hereinafter referred to as the "EXECUTIVE")
IT IS AGREED AS FOLLOWS:
WHEREAS the Corporation wishes to retain the services of Executive to
provide the services hereinafter described during the term hereinafter set out;
NOW THEREFORE THIS AGREEMENT WITNESSSES that in consideration of the
mutual covenants and agreements herein contained and for other good and valuable
consideration, the parties agree as follows;
1 TERM
1.1 The Corporation shall employ Executive for an indefinite term,
such employment having started May 1, 2002. Executive shall be
located initially in Oreland, Pennsylvania.
2 DUTIES
2.1 The Corporation hereby confirms having agreed to engage Executive as
Vice President Coin-Operated Sales. In such capacity, Executive shall
perform such duties and exercise such powers pertaining to the
management of Sales.
------------- -----------
CORPORATION EXECUTIVE
------------- -----------
2
2.2 By his acceptance hereof, Executive agrees to devote substantially all
of his working time, attention and skill to the Corporation and to make
every effort necessary to promote the success of the Corporation's
business and perform adequately the duties that are assigned to him.
3 REPORTING PROCEDURES
3.1 Executive shall report directly to the Chief Operating Officer of
the Corporation or such other person as may be designated by the
Corporation from time to time.
4 REMUNERATION
4.1 The Annual Base Salary payable to Executive for his services hereunder
shall be $100,000.00 USD, exclusive of bonuses, benefits and other
compensation. The Annual Base Salary payable to Executive pursuant to
the provisions of this Section 4 shall be payable in accordance with
the Corporation's normal practices less, in any case, any deductions or
withholdings required by law.
4.2 The Corporation provides the Executive with an automobile and
reimburses the Executive for all expenses related to the operation of
the automobile. Upon termination of the lease for the existing
automobile, the Corporation agrees to provide the Executive with a
monthly automobile allowance of $500.00. The Corporation will, in
addition, reimburse the Executive solely for gasoline charges for the
automobile.
4.3 The Corporation xxxxx provide Execuitve with employee benefits
comparable to those provided to those provided by the corporation
from time to time to other senior executives of the Corporation.
5 SHORT-TERM INCENTIVES
5.1 The short-term incentives as set out in this Section 5 will be revised
for each fiscal year currently ending December 31. The targets will be
set for the Executive and will be approved by the Corporation's CEO and
the Compensation Committee of the Board of Directors of the Company.
Executive is entitled to the following short-term incentives: a
monthly, quarterly and annual bonus. These short-term incentives for
the fiscal year 2002 are as set out in Sections 5.2.1, 5.2.2 and 5.2.3
(xxxx one of which has its own targets):
5.2 For purposes of this Section 5, New Jukeboxes are defined as
newly-manufactured and refurbished Maestro and Genesis digital jukebox
models and are net of any returns, adjustments and unpaid amounts. For
any product other than the Maestro and Genesis jukeboxes, these are
excluded from the above definition and may be compensated for under a
separate plan to be determined by the Company.
------------- -----------
CORPORATION EXECUTIVE
------------- -----------
3
5.2.1 Monthly Bonus
For each month in which the Corporation ships New Jukeboxes, in excess
of 125, the Executive is entitled to an additional bonus of $2,500 plus
an additional $40 for each New Jukebox shipped over 125 and up to 150.
For each month in which the Corporation ships New Jukeboxes in excess
of 150, the Executive is entitled to an additional bonus of $1,000 plus
an additional $40 for each New Jukebox shipped over 150 up to 175.
For each month in which the Corporation ships New Jukeboxes in excess
of 175, the Executive is entitled to an additional bonus of $1,000 plus
an additional $40 for each New Jukebox shipped over 175 and up to 200.
For each month in which the Corporation ships New Jukeboxes in
excess of 200, the Executive is entitled to an additional bonus of
$1,000 plus an additional $40 for each New Jukebox shipped over 200.
5.2.2 Quarterly Bonus
For each calendar quarterly in which the Corporation ships New
Jukeboxes in excess of 120% of the Quarterly Target, the Executive is
entitled to a maximun quarterly bonus of $3,500.00. For the 2002 fiscal
year the Quarterly Target is set at 375 New Jukeboxes (120% of which is
450 New Jukeboxes).
5.2.3 Yearly Bonus
For each fiscal year in which the Corporation ships New Jukeboxes in
excess of the Annual Target, the Executive is entitled to an annual
bonus of up to $15,000.00. The annual bonus shall be calculated on a
pro-rata basis on New Jukeboxes shipped in excess of the Annual Target
with the maximum $15,000.00 Annual Bonus earned when 120% of the Annual
Target is achieved. For the 2002 fiscal year, the Annual Target is set
at 1,500 New Jukeboxes.
6 VACATION
6.1 Executive shall be entitled to four (4) weeks of paid vacation per
fiscal year of the Corporation. Should Executive decide not to take all
the vacation to which he is entitled in any fiscal year, Executive
shall be entitled to take up to one (1) of such vacation weeks during
the following fiscal year. Upon termination under Section 8, Executive
is entitled to payment for a maximum of one (1) week of unused
vacation.
------------- -----------
CORPORATION EXECUTIVE
------------- -----------
4
7 EXPENSES
7.1 Executive shall be reimbursed for all reasonable travel and other
out-of-pocket expenses incurred by Executive from time to time in
connection with carrying out his duties hereunder. Executive shall
furnish to the Corporation supporting evidence for expenses in respect
of which Executive seeks reimbursement.
8 TERMINATION
8.1 This Agreement may be terminated, except for continuing obligations
hereunder as at any such termination, in any of the following
eventualities and with the following consequences:
8.1.1 at any time, for Cause, on simple notice from the Corporation to
Executive the whole without any other notice or any pay in lieu of
notice or any indemnity whatsoever from the Corporation to Executive,
and any further claims or recourse by Executive against the Corporation
or its affiliates in respect of such termination; or
"CAUSE" shall mean cause for dismissal without either notice or payment
in lieu of notice for reasons of fraud, embezzlement, gross negligence,
willful breach or careless disregard or gross dereliction of duty,
incapacity or refusal to perform employment functions due to drug use
or alcohol addiction, conviction of a felony, any of such, not
corrected within thirty (30) days of notice to that effect and
discriminatory practices governed by statute.
8.1.2 upon three-(3) month notice in writing from Executive to the
Corporation, specifying his intention to resign, in which event the
Corporation shall only be obliged to pay Executive his Annual Base
Salary earned before the date of termination calculated to and
including the date of termination and the Corporation shall have no
further obligations hereunder in the event of such resignation; or
8.1.3 Upon written notice from the Corporation to Executive in the event of
termination of his employment without Cause, in which event the
Corporation shall pay Executive an indemnity in lieu of notice in a
lump sum equal to six (6) months of Executive's Annual Base Salary at
the time of termination, and the Corporation shall have no further
obligations hereunder in the event of such termination. Executive shall
have no further claims or recourse against the Corporation or any of
its affiliates in respect of such termination; or
8.2 For Disability/Death
8.2.1 The Corporation may immediately terminate this Agreement by notice to
Executive if Executive becomes permanently disabled. Executive shall be
deemed to have become permanently disabled in the event of any mental
incapacity or physical disability of such severity that Executive shall
have been unable to attend to any
------------- -----------
CORPORATION EXECUTIVE
------------- -----------
5
normal duties with the Corporation for more than nine (9)
consecutive months in any year or for twelve (12) months out of any
period of twenty-four (24) consecutive months during the employment
period.
8.2.2 This Agreement shall terminate without notice upon the death of
Executive.
9 SEVERANCE PAYMENTS
9.1 Upon termination of Executive's employment for Cause or by the
voluntary termination of employment of Executive as set forth in
Sections 9.1.1 and 9.1.2, Executive shall not be entitled to any
severance payment or any other payments at law or otherwise other than
Annual Base Salary earned by Executive before the date of termination
calculated up to and including the date of termination.
9.2 If Executive's employment is terminated for any reason other than the
reasons set forth in Section 9.1.1 or 9.1.2, Executive shall be
entitled to receive an indemnity in lieu of notice, severance payment
or any other amount at law or otherwise, in a lump sum amount equal to
six (6) months of Executive's Annual Base Salary at the time of
termination. The Corporation shall have no further obligations
hereunder in the event of such termination. Executive shall have no
further claims or recourse against the Corporation or any of its
affiliates in respect of such termination.
9.3 Upon termination of Executive's employment for disability or death
as set forth in Section 9.2, all options to purchase common shares
in the share capital of TTMC granted to Executive shall become
vested immediately.
10 CONFIDENTIALITY
10.1 Executive shall not, directly or indirectly, without the specific prior
written consent of the Corporation, at any time after the date hereof,
divulge to any business, enterprise, person, firm, corporation,
partnership, association or other entity, or use for Executive's own
benefit, (i) any confidential information concerning the businesses,
affairs, customers, suppliers or clients of the Corporation or its
affiliates, including, without limitation, any trade secret (process,
plan, form, marketing strategy, etc.), all computer programs in any
form (diskette, hard disk, tape, printed circuit, etc.), all access
codes to computer programs together with any plan, sketch, diagram,
card, contract, bid, price list and client list relative to the
Corporation's business, or (ii) any non-public data or statistical
information of the Corporation or its affiliates, whether created or
developed by the Corporation or its affiliates or on their behalf or
with respect to which Executive may have knowledge or access
(including, without limitation, any of the foregoing created or
developed by Executive), it being the intent of the Corporation and
Executive to restrict Executive from disseminating or using any data or
information that is at the time of such use or
------------- -----------
CORPORATION EXECUTIVE
------------- -----------
6
dissemination unpublished and not readily available or generally
known to persons involved or engaged in businesses of the type
engaged in from time to time by the Corporation (the "Confidential
Information"). For purposes of this Employment Agreement,
Confidential Information shall not be deemed to include:
10.1.1 Information that, at the time of disclosure under this Employment
Agreement or during Executive's employment, is in the public domain or
that, after disclosure under this Employment Agreement or in connection
with Executive's employment, becomes part of the public domain by
publication or otherwise through no action or fault of Executive or any
other party subject to an obligation of confidentiality;
10.1.2 Information that the Corporation authorizes Executive to disclose in
writing; or
10.1.3 Information that Executive is required to disclose pursuant to a final
court order that the Corporation has had an opportunity to contest
prior to any such disclosure.
10.2 This undertaking to respect the confidentiality of the Confidential
Information and to not make use of or disclose or discuss it to or with
any person shall continue to have full effect notwithstanding the
termination of Executive's employment with the Corporation for a period
of three (3) years following the date of such termination.
11 NON-SOLICITATION
11.1 Executive agrees that he shall not, during his employment and for a
period of eighteen (18) months following the termination of his
employment, on his own behalf or on behalf of any person, whether
directly or indirectly, in any capacity whatsoever, alone, through or
in connection with any person, employ, offer employment to or solicit
the employment or the engagement of or otherwise entice away from the
employment of the Corporation or its subsidiaries, any individual who
is employed by the Corporation or its subsidiaries at the time of the
termination of Executive's employment or who was employed by the
Corporation or its subsidiaries in the six (6) month period preceding
the termination of Executive's employment.
12 NON-COMPETITION
12.1 Executive agrees that during his employment and for a period of twelve
(12) months after Executive ceases to be employed by the Corporation,
Executive shall not, directly or indirectly, for Executive's own
account or as an employee, officer, director, partner, joint venture,
shareholder, investor, consultant or otherwise (except as an investor
in a corporation whose stock is publicly traded and in which Executive
holds less than 5% of the outstanding shares) engage in any business or
------------- -----------
CORPORATION EXECUTIVE
------------- -----------
7
enterprise, in the United States of America, that directly or
indirectly competes with the business of the Corporation, as it exists
now or in the future during his employment.
13 INTELLECTUAL PROPERTY
13.1 For the purposes of this Agreement, the term "Inventions" means
ideas, designs, concepts, techniques, inventions and discoveries,
whether or not patentable or protectable by copyright and whether or
not reduced to practice, including but not limited to devices,
processes, drawings, works of authorship, computer programs, methods
and formulas together with any improvement thereon or thereto,
derivative works therefrom and know-how related thereto made, developed
or conceived by Executive while at the employment of the Corporation
during working hours using the Corporation's data or facilities and
which relates to the Corporation's areas of business.
13.2 Executive shall assign and hereby does assign all Inventions to the
Corporation. Executive shall disclose all Inventions in writing to the
Corporation, shall assist the Corporation in preparing patent or
copyright applications for Inventions, and execute said applications
and all other documents required to obtain patents or copyrights for
those Inventions and/or to vest title thereto in the Corporation, at
the Corporation's expense, but for no additional consideration to
Executive. In the event that the Corporation requires assistance under
this Section after termination of employment, Executive shall provide
such assistance at the cost and expense of the Corporation.
13.3 During the term of this Agreement or after termination, on request of
the Corporation and at the cost and expense of the Corporation,
Executive shall execute specific assignments in favor of the
Corporation or nominees of any of the Inventions covered by this
Section, as well as execute all papers and perform all lawful acts that
the Corporation considers reasonably necessary or advisable for the
preparation, prosecution, issuance, procurement and maintenance of
patent or copyright applications and patents and copyrights for the
Inventions, and for transfer of any interest Executive may have, and
shall execute any and all papers and lawful documents required or
necessary to vest title in the Corporation or its nominee in the
Inventions.
14 ENFORCEABILITY
14.1 Executive agrees that, for the purposes of Sections 11 to 15, all
covenants and restrictions in favor of the Corporation are also made in
favor of its subsidiaries and that the remedies provided for in this
Section 15 also apply to its subsidiaries.
------------- -----------
CORPORATION EXECUTIVE
------------- -----------
8
14.2 Executive hereby confirms and agrees that the covenants and
restrictions pertaining to Executive contained in this Agreement,
including, without limitation those contained in Sections 11 to 15
hereof, are reasonable and valid.
14.3 Without limiting the remedies available to the Corporation, Executive
hereby expressly acknowledges and agrees that a breach of the covenants
contained in Sections 11 to 15 may result in materially irreparable
harm to the Corporation for which there is no adequate remedy at law;
that it will not be possible to measure damages for such injuries
precisely, and that, in the event of such a breach, the Corporation
shall be entitled to obtain any or all of a temporary restraining order
and a preliminary or permanent injunction restraining Executive from
engaging in activities prohibited by the provisions of Sections 11 to
15 or such other relief as may be required to enforce specifically any
of the covenants of Sections 11 to 15. Such proceedings shall not
preclude the Corporation from claiming for damages that it has
suffered.
15 RETURN OF MATERIALS
15.1 All files, forms, brochures, books, materials, written correspondence,
memoranda, documents, manuals, computer disks, software products and
lists (including lists of customers, suppliers, products and prices)
pertaining to the business of the Corporation or any of its affiliates
and associates that may come into the possession or control of
Executive shall at all times remain the property of the Corporation or
such subsidiary or associate, as the case may be. On termination of
Executive's employment for any reason, Executive agrees to deliver
promptly to the Corporation all such property of the Corporation in the
possession of Executive or directly or indirectly under the control of
Executive. Executive agrees not to make for his personal or business
use or that of any other party, reproductions or copies of any such
property or other property of the Corporation.
16 GOVERNING LAW
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York. To the extent permitted by
applicable law, the parties hereby irrevocably submit in any suit,
action or proceeding arising out of or related to this Agreement or any
of the transactions contemplated hereby to the jurisdiction of any
federal court located in Chicago, Illinois and waive any and all
objections to jurisdiction that they may have.
17 SEVERABILITY
17.1 If any provision of this Agreement, including the breadth or scope of
such provision, shall be held by any court of competent jurisdiction to
be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not
------------- -----------
CORPORATION EXECUTIVE
------------- -----------
9
affect the validity or enforceability of the remaining provisions,
or part thereof, of this Agreement and such remaining provisions, or
part thereof, shall remain enforceable and binding.
18 NO ASSIGNMENT
18.1 Executive may not assign, pledge or encumber Executive's interest in
this Agreement nor assign any of the rights or duties of Executive
under this Agreement without the prior written consent of the
Corporation.
19 SUCCESSORS
19.1 This Agreement shall be binding on and inure to the benefit of the
successors and assigns of the Corporation and the heirs, executors,
personal legal representatives and permitted assigns of Executive.
20 SURVIVAL OF COVENANTS
20.1 Insofar as any of the obligations contained in this Agreement are
capable of surviving termination of this Agreement they shall so
survive and continue to bind Executive notwithstanding the termination
of the Agreement for whatsoever reason.
21 COMPLETE UNDERSTANDING
21.1 Once signed, this Agreement replaces all prior written and/or oral
agreements between Executive and the Corporation with regard to
Executive's terms of employment with the Corporation. This Agreement
may not be changed orally, but only in an agreement in writing signed
by both parties.
22 LEGAL ADVICE
22.1 Executive hereby represents and warrants to the Corporation and
acknowledges and agrees that he had the opportunity to seek and was not
prevented nor discouraged by the Corporation from seeking independent
legal advice prior to the execution and delivery of this Agreement and
that, in the event that he did not avail himself of that opportunity
prior to signing this Agreement, he did so voluntarily without any
undue pressure and agrees that his failure to obtain independent legal
advice shall not be used by him as a defense to the enforcement of his
obligations under this Agreement.
23 LANGUAGE
23.1 The parties hereto specifically requested that the present Agreement
be drawn up in English. Les parties aux presentes ont specifiquement
requis que cette convention soit redigee en anglais.
------------- -----------
CORPORATION EXECUTIVE
------------- -----------
10
(SIGNATURES ON PAGE 11.)
------------- -----------
CORPORATION EXECUTIVE
------------- -----------
11
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above written.
TOUCHTUNES MUSIC CORPORATION
/s/ Xxxxxxx Xxxxxx
-----------------------------------
per: Xxxxxxx Xxxxxx
Vice President Finance, CFO
EXECUTIVE
/s/ Xxx XxXxxxxxxx
-----------------------------------
Xxx XxXxxxxxxx
