EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (“Agreement”) made effective as of the 25th day of March
2006 (the “Effective Date”), by and between INTERSTATE
DATA USA, INC.,
a
Delaware corporation (referred to as the “Corporation”), with its principal
operating offices located in Houston, Texas, and
XXXXX X. XXXXXXXXX,
an
individual resident of the State of Kentucky (referred to as
“Employee”).
WITNESSETH
WHEREAS,
the Corporation is engaged in the business of providing on - line interstate
highway mapping and other related services (the “Business”); and
WHEREAS,
heretofore the Employee has served as the President of the Corporation;
WHEREAS,
the Corporation desires to employ Employee as an employee and as its President;
and.
WHEREAS,
Employee is willing to accept such employment by Corporation, on the terms
and
subject to the conditions set forth in this Agreement.
AGREEMENT
NOW,
THEREFORE,
for and
in consideration of the premises and mutual agreements herein set forth, and
other good and valuable consideration, the receipt of which is hereby
acknowledged, Employee and Corporation covenant and agree as
follows:
1. DEFINITIONS
For
the
purposes of this Agreement, the following terms have the meanings specified
or
referred to in this Section 1:
“Agreement”
this
Employment Agreement, as amended from time to time.
“Base
Salary”
as
defined in Section 3.1(a).
“Benefits” as
defined in Section 3.1(b).
“Board
of Directors”
the
board of directors of the Corporation.
“Cause”
as
defined in Section 7.3.
“Confidential
Information”
any and
all
(a) trade
secrets concerning the business and affairs of the Corporation and its
subsidiaries and affiliates (collectively, the “Affiliates”), business models,
data, know - how, formulae, compositions, processes, designs, sketches,
photographs, graphs, drawings, samples, inventions and ideas;
(b) certain
corporate books and records;
(c) information
regarding marketing and selling plans, business models, business plans, budgets
and unpublished financial information, prices and costs, and clients, that
reasonably relate to Corporation’s and/or the Affiliates current or proposed
services, products and business plans;
(d) information
regarding the skills and compensation of other employees or consultants of
Corporation and/or the Affiliates;
(e) client
and prospective client information; and
(f) information
concerning the business and affairs of the Corporation and/or the Affiliates
which includes historical financial statements, financial projections and
budgets, historical and projected sales, capital spending budgets and plans,
the
names and backgrounds of key personnel, personnel training and techniques and
materials, however documented.
As
used
in this Agreement, the term “Confidential Information” excludes any information
that: (i) is or becomes generally available to the public on a non-confidential
basis other than as a result of actions by the Employee in violation of this
Agreement; (ii) is or becomes available to the Employee on a non-confidential
basis from a source other than the Corporation and/or the Affiliates or its
representatives that is not, to the knowledge of the Employee prohibited from
disclosing such information to the Employee by a legal, contractual, fiduciary
or other obligation to the Corporation and/or the Affiliates or another party;
or (iii) was known to the Employee at the time of its first
disclosure.
“Disability”
as
defined in Section 7.2.
“Effective
Date”
the date
stated in the first paragraph of the Agreement.
“Good
Reason”
as defined
in Section 7.4.
“Person”
any
individual, corporation (including any nonprofit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, or governmental body.
“Term”
the term
of the Employee's employment under this Agreement.
2. EMPLOYMENT
TERMS AND DUTIES
2.1 Employment.
The
Corporation hereby employs the Employee, and the Employee hereby accepts
employment by the Corporation, upon the terms and conditions set forth in this
Agreement.
2.2 Term.
The
Employment Period will commence on the Effective Date and will continue until
termination as specified in Section 6 (the “Term”).
2.3 Duties.
The
Employee will serve as President of the Corporation and the Corporation will
cause Employee to be elected as a director on the Board of Directors of the
Corporation. Employee shall have such duties, authority, and responsibilities
provided for in the Corporation agreement of the Corporation and as customarily
recognized for such offices and titles under Delaware law. The Employee will
devote his time, attention, skill, and energy to promote the success of the
Corporation's business, and will cooperate fully with the Board of Directors
in
the advancement of the best interests of the Corporation. Nothing in this
Section 2.3, however, will prevent the Employee from engaging in additional
activities in connection with personal investments and community affairs that
are not inconsistent with the Employee's duties under this Agreement. The
foregoing shall not be construed as preventing Employee from making investments
in other businesses or enterprises provided such investments do not require
the
provisions of substantial services by Employee to the operations or the affairs
of such businesses or enterprises such that the provisions thereof would
interfere in any material respect with the performance of Employee's duties
hereunder. The Employee will not be assigned additional duties, authority or
offices without the Employee’s consent.
3. COMPENSATION
3.1 Basic
Compensation
(a) Base
Salary.
The
Employee will be paid an annual salary of $150,000.00, from the Effective Date
through the first calendar year from the Effective Date. The Employee will
be
paid an annual salary of $200,000.00, from the end of the first calendar year
from the Effective Date through the end of the second calendar year from the
Effective Date. The Employee will be paid an annual salary of $250,000.00,
from
the end of the second year from the Effective Date through the end of the third
year after the Effective Date. The Base Salary will be subject to upward
adjustment as provided below which will be payable, subject to such withholdings
as are required by law, in equal periodic installments according to the
Corporation's customary payroll practices, but not less frequently than monthly.
The Base Salary will be reviewed by the Board of Directors not less frequently
than annually, and may be adjusted upward at any time in the sole discretion
of
the Board of Directors.
(b) The
Employee will, during the Employment Period, receive Corporation-sponsored
benefits that are available to other senior executives of the Corporation,
including life and health insurance and shall be permitted to participate in
such employee benefit plans of the Corporation that
may
be in effect from time to time, to the extent the Employee is eligible under
the
terms of those plans (collectively, the “Benefits”). Employer shall pay all
premiums for Employee and his dependents under any group medical and dental
insurance plans.
3.2 Bonus.
The
Employee shall be eligible for bonus compensation in the amount of $180,000
at
the end of the first year after the Effective Date in the event the initial
public offering of the Corporation is successful. The Employee shall be eligible
for other bonus compensation to be awarded at such times and in such amounts
as
determined by the Corporation in its sole discretion.
4. EXPENSES
4.1 Business
Expenses. The
Employee is encouraged and is expected, from time to time, to incur reasonable
expenses for promoting the business of the Corporation, including expenses
for
meals, entertainment, travel, business related charges to Employee’s cellular
phone account, if any, and similar items. The Corporation agrees that during
the
Term of Employment it will reimburse the Employee for such out-of-pocket
expenses reasonably incurred by Employee in connection with the performance
of
Employee’s services hereunder and the promotion of the business and goodwill of
the Corporation. In addition, Corporation shall provide Employee with parking
within or adjacent to the Employee’s office location.
5. VACATIONS
AND HOLIDAYS
During
the Employment Period, the Employee will be entitled to vacations with pay,
of
not less than 30 days per year, and additional time, in accordance with the
established practices of the Corporation now or hereafter in effect for
executive personnel. Employee is vested in 30 days vacation with pay upon
execution of this Agreement. Any unused vacation time in any given calendar
year
shall be carried forward to succeeding calendar years.
6. TERMINATION
PRIOR TO EXPIRATION OF EMPLOYMENT PERIOD
6.1 Events
of Termination
The
Employment Period will terminate (except as otherwise provided in this Section
6):
(a)
for
disability (as defined in Section 6.2), upon not less than sixty days'
prior
notice from the Corporation to the Employee, or at such later time as such
notice may specify; or
(b)for
Cause
(as defined in Section 6.3)
immediately upon notice from the Corporation to the Employee, or at such
later
time as such notice may specify; or
(c)for
Good
Reason (as defined in Section 6.4) upon not less than thirty days' prior
notice
from the Employee to the Corporation or at such later time as such notice
may
specify; or
(d)
upon
the
death of the Employee; or
(e)
upon
thirty (30) days written notice from Employee; or
(f)
upon
thirty (30) days written notice from Employer.
6.2 Definition
of Disability.
For
purposes of Section 6.1, the Employee will be deemed to have a “disability” if,
for physical or mental reasons, the Employee is unable to perform the essential
functions of the Employee's duties under this Agreement for ninety (90)
consecutive days, or ninety (90) days during any twelve (12) month period,
as
determined in accordance with this Section 6.2. If the Employee is covered
under
a disability insurance policy, then whether the Employee has a “disability”
shall be determined in accordance with the terms of such policy. Otherwise,
the
disability of the Employee will be determined by a medical doctor selected
by
written agreement of the Corporation and the Employee upon the request of either
party by notice to the other. If the Corporation and the Employee cannot agree
on the selection of a medical doctor, each of them will select a medical doctor
and the two medical doctors will select a third medical doctor who will
determine whether the Employee has a disability. The determination of the
medical doctor selected under this Section 6.2 will be binding on both parties.
The Employee must submit to a reasonable number of examinations by the medical
doctor making the determination of disability under this Section 6.2, and the
Employee hereby authorizes the disclosure and release to the Corporation of
such
determination and all supporting medical records. If the Employee is not legally
competent, the Employee's legal guardian or duly authorized attorney - in -
fact
will act in the Employee's stead, under this Section 6.2, for the purposes
of
submitting the Employee to the examinations, and providing the authorization
of
disclosure, required under this Section 6.2.
6.3 Definition
of “Cause.” “Cause”
means:
(a) the
Employee's willful breach of this Agreement;
(b) the
appropriation of a material business opportunity of the Corporation, including
attempting to secure or securing any personal profit in connection with any
transaction entered into on behalf of the Corporation without the consent of
the
Corporation;
(c) the
misappropriation of any of the Corporation's funds or property;
(d) the
conviction of, the indictment for (or its procedural equivalent), or the
entering of a guilty plea or plea of no contest with respect to, a felony or
a
misdemeanor involving fraud, embezzlement or theft.
The
Corporation shall not be entitled to give notice of termination of employment
for Cause pursuant to subsection (a) through (c) above until the Corporation
gives Employee at least fifteen (15) days written notice of any such cause,
stating with particularity the facts and circumstances forming the basis of
such
cause and Employee is given an opportunity to cure such claims within such
fifteen (15) day period.
6.4 Definition
of “Good Reason.”
The
phrase “Good Reason” means any of the following:
(a) the
Corporation's material breach of this Agreement;
(b) the
assignment of the Employee without his consent to a position, responsibilities,
or duties of a materially lesser status or degree of responsibility than his
position, responsibilities, or duties at the Effective Date;
(c) the
requirement by the Corporation that the Employee be based anywhere other than
the Corporation's principal executive offices, in either case without the
Employee's consent;
(d) a
material decrease in Employee’s Base Salary in violation of Section
3.1(a);
(e) a
material change in the Corporation’s operating policy, as compared to
Corporation’s operations immediately prior to such change that materially and
adversely curtails or interferes with the Employee’s ability to perform the
services required of Employee’s position;
(g) a
Change
of Control (as defined below); or
(h) the
occurrence of circumstances establishing constructive discharge under the common
law of the State of Texas.
6.5 Effect
of Termination Upon Disability.
In the
event of termination of employment by reason of disability:
(a) The
Corporation will pay Employee his Base Salary in accordance with the
Corporation’s payroll schedule until the end of the month in which the first
anniversary of Employee’s termination for disability is effective;
and
(b) The
Corporation will pay Employee the cash value of any accrued unused vacation
time
from previous calendar years; and
(c) The
Corporation will pay Employee all earned or accrued and unpaid Benefits through
the end of the month in which Employee’s termination for disability occurs;
and
(d) The
Corporation will reimburse Employee for all unreimbursed expenses, in accordance
with Sections 4.1 and 4.2.
6.6 Effect
of Termination for Cause. In
the
event the Corporation terminates Employee’s employment for cause:
(a) The
Corporation will pay Employee his Base Salary through the end of the month
in
which termination is effective; and
(b) The
Corporation will pay Employee the cash value of any accrued unused vacation
time
from previous calendar years; and
(c) The
Corporation will pay Employee all earned or accrued and unpaid Benefits;
and
(d) The
Corporation will reimburse Employee for all unreimbursed expenses, in accordance
with Sections 4.1 and 4.2; and
(e) The
Corporation’s obligation to make any other payments shall immediately
terminate.
6.7 Termination
by the Employee for Good Reason.
If the
Employee terminates this Agreement for good reason:
(a) The
Corporation will pay the Employee's Base Salary for eighteen (18) months from
the end of the month in which the termination is effective; and
(b) The
Corporation will pay Employee the cash value of any accrued unused vacation
time
from previous calendar years; and
(c) The
Corporation shall pay Employee all earned or accrued and unpaid Benefits for
eighteen (18) months from the end of the month in which the termination is
effective; and
(d) The
Corporation will reimburse Employee for all unreimbursed expenses, in accordance
with Sections 4.1 and 4.2; and
(e) The
Employee shall receive all Benefits (including health insurance) in accordance
with Section 3.1 and life insurance in accordance with Section 4.3 for eighteen
(18) months after the month in which the termination is effective;
and
(f) The
Employee may exercise the Put Option.
6.8 Termination
upon Death.
If this
Agreement is terminated because of the Employee's death, the Employee’s legal
representatives shall be entitled to receive:
(a) the
Employee's Base Salary for the a period of twelve (12) months from the end
of
the month in which the Employee’s death occurs; and
(b) the
cash
value of any accrued unused vacation time from previous calendar years; and
(c) all
earned or accrued and unpaid Benefits through the end of the month in which
the
Employee’s death occurs; and
(d) all
unreimbursed expenses, in accordance with Sections 4.1 and 4.2.
6.9 Termination
upon Notice by Employee.
If the
Employee terminates this Agreement without Good Reason, then:
(a) The
Corporation shall pay Employee his Base Salary through the end of the month
in
which the termination is effective; and
(b) The
Corporation shall pay Employee the cash value of any accrued unused vacation
time from previous calendar years; and
(c) Employee
shall receive all earned or accrued and unpaid Benefits through the end of
the
month in which Employee’s termination is effective; and
(d) The
Corporation will reimburse Employee for all unreimbursed expenses, in accordance
with Sections 4.1 and 4.2; and
(e) the
Corporation’s obligation to make any other payments shall immediately
terminate.
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6.10 Termination
upon Notice by Employer.
If the
Employer terminates this Agreement without Cause, then:
(a) The
Corporation will pay the Employee's Base Salary for eighteen (18) months from
the end of the month in which the termination is effective; and
(b) The
Corporation will pay Employee the cash value of any accrued unused vacation
time
from previous calendar years; and
(c) The
Corporation shall pay Employee all earned or accrued and unpaid Benefits for
eighteen (18) months from the end of the month in which the termination is
effective; and
(d) The
Corporation will reimburse Employee for all unreimbursed expenses, in accordance
with Sections 4.1 and 4.2; and
(e) The
Employee shall receive all Benefits (including health insurance) in accordance
with Section 3.1 and life insurance in accordance with Section 4.3 for eighteen
(18) months after the month in which the termination is effective;
and
(f) The
Employee may exercise the Put Option.
6.11 Other
Benefits upon Termination.
The
Employee's accrual of, or participation in employee benefit plans will cease
at
the effective date of the termination of this Agreement, and the Employee will
be entitled to accrued benefits pursuant to such plans as provided in such
plans
or as required under applicable law. Except in the case of termination by the
Corporation for Cause, the Employee will receive compensation for any vacation,
holiday, sick leave, or other leave unused as of end of the month in which
the
termination of employment occurs.
7.
CHANGE
IN CONTROL
For
purposes of this Agreement, a "Change of Control" shall be deemed to have taken
place if: (i) a third person, entity or group of persons, including a "group"
as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes
the
beneficial owner of fifty percent 40% or more of either the outstanding shares
of common stock or the combined voting power of Corporation’s then outstanding
voting securities entitled to vote generally upon any corporate action proposed
to shareholders for approval or adoption; or (ii) as a result of, or in
connection with, any cash tender or securities exchange offer, merger, or other
business combination, sale of assets or contested election, or any combination
of the foregoing transactions (a "Transaction"), the persons who were directors
of the Corporation before the Transaction shall cease to constitute a majority
of the Board of the Corporation or any successor corporation.
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8. NON
- DISCLOSURE COVENANT
8.1 Acknowledgments
by the Employee.
The
Employee acknowledges that:
(a) during
the Employment Period and as a part of his employment, the Employee will be
afforded access to Confidential Information;
(b) public
disclosure of such Confidential Information could have an adverse effect on
the
Corporation and its business; and
(c) the
provisions of this Section 8 are reasonable and necessary to prevent the
improper use or disclosure of Confidential Information.
8.2 Agreements
of the Employee.
In
consideration of the compensation and benefits to be paid or provided by the
Corporation under this Agreement, the Employee covenants as
follows:
(a) Confidentiality.
During
the Employment Period and for a period of one (1) year after the date of
termination of the Term of Employment, regardless of the reason for termination
and regardless of whether termination be by Corporation or Employee, the
Employee will hold in confidence the Confidential Information and will not
disclose it to any person except with the specific prior written consent of
the
Corporation or except as otherwise expressly permitted by the terms of this
Agreement.
(b) Non-Competition
Covenant.
So long
as Employee is employed by Corporation and for a period of one (1) year after
the date of termination of the Term of Employment, unless such termination
is by
Employee for Good Reason as provided in Section 6.7 or by the Corporation
without Cause as provided in Section 6.10, in which event the provisions of
this
Section 8.2(b) shall not apply, the Employee specifically agrees that he will
not in North America, for himself, on behalf of, or in conjunction with any
person, firm or corporation other than the Corporation (either as principal,
employee, shareholder, member, director, manager, partner, advisor, consultant,
owner or part - owner of any corporation, Corporation or any type of business
entity) do any of the following:
(i) engage
or
participate in the Business of the Corporation;
(ii) enter
the
employ of or render any services to any person actively engaged in or directly
competitive with the Business;
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(iii) directly
or indirectly participate in the ownership, management, operation, financing
or
control of, or be employed by or consult for or otherwise render services to,
any person, corporation, firm or other entity that actively and directly
competes with Corporation in the Business; or
(iv) directly
solicit for employment any employee of the Corporation or any person who was
employed by the Corporation within six (6) months prior to such
solicitation.
9. GENERAL
PROVISIONS
9.1 Injunctive
Relief and Additional Remedy.
(a) The
Employee acknowledges that the injury that would be suffered by the Corporation
as a result of a breach of the provisions of Section 8 of this Agreement would
be irreparable and that an award of monetary damages to the Corporation for
such
a breach would be an inadequate remedy. Consequently, the Corporation will
have
the right, in addition to any other rights and remedies, including the recovery
of money damages, it may have, to obtain injunctive relief to restrain any
breach or threatened breach or otherwise to specifically enforce any provision
of this Agreement, and the Corporation will not be obligated to post bond or
other security in seeking such relief. Without limiting the Corporation's rights
under this Section 9, or any other remedies of the Corporation, if the Employee
breaches any of the provisions of Section 8, the Corporation will have the
right
to cease making any payments otherwise due to the Employee under this
Agreement.
(b) The
Employee's covenants in Section 8 are independent covenants and the existence
of
any claim by the Employee against the Corporation under this Agreement or
otherwise, or against the Buyer, will not excuse the Employee's breach of any
covenant in Section 8.
(c) If
the
Employee's employment hereunder expires or is terminated, this Agreement will
continue in full force and effect as is necessary or appropriate to enforce
the
covenants and agreements of the Employee in Section 8; provided that the
Corporation has fulfilled all obligations to Employee hereunder upon such
termination.
9.2 Waiver.
The
rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by either party in exercising
any
right, power, or privilege under this Agreement will operate as a waiver of
such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege.
To
the maximum extent permitted by applicable law:
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(a) no
claim
or right arising out of this Agreement can be discharged by one party, in whole
or in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party;
(b) no
waiver
that may be given by a party will be applicable except in the specific instance
for which it is given; and
(c) no
notice
to or demand on one party will be deemed to be a waiver of any obligation of
such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this
Agreement.
9.3 Binding
Effect; Delegation of Duties Prohibited.
This
Agreement shall inure to the benefit of, and shall be binding upon, the parties
hereto and their respective successors, assigns, heirs, and legal
representatives, including any entity with which the Corporation may merge
or
consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Employee under this Agreement,
being personal, may not be delegated.
9.4 Notices.
All
notices, consents, waivers, and other communications under this Agreement must
be in writing and will be deemed to have been duly given when:
(a) delivered
by hand (with written confirmation of receipt),
(b) sent
by
facsimile (with written confirmation of receipt), provided that a copy is mailed
by registered mail, return receipt requested, or
(c) when
received by the addressee, if sent by a nationally recognized overnight delivery
service (receipt requested), in each case to the appropriate addresses and
facsimile numbers set forth below (or to such other addresses and facsimile
numbers as a party may designate by notice to the other parties):
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If
to Corporation:
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Interstate Data USA, Inc. | |
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c/o
Xx. Xxxxx Xxxx
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0000
Xxxx Xxx Xxxx. Xxxxx 0000
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Xxxxxxx,
Xxxxx 00000
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If
to Employee:
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Xxxxx X. Xxxxxxxxx |
10.5 Entire
Agreement; Amendments.
This
Agreement and the Option Agreement contain the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, between the parties hereto
with
respect to the subject matter hereof. This Agreement may not be amended orally,
but only by an agreement in writing signed by the parties hereto.
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10.6 Governing
Law.
This
Agreement will be governed by the laws of the State of Texas without regard
to
conflicts of laws principles.
10.7 Section
Headings; Construction.
The
headings of Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to “Section”
or “Sections” refer to the corresponding Section or Sections of this Agreement
unless otherwise specified. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word “including” does not limit the preceding words or
terms.
10.8 Severability.
If any
provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain
in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to
the
extent not held invalid or unenforceable.
10.9 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as
of
the date above first written above.
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EMPLOYEE:
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/s/
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Xxxxx
X. Xxxxxxxxx
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CORPORATION:
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INTERSTATE
DATA USA, INC.
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| By: /s/ Xxxxxxx X. Xxxx | ||
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Name:
Xxxxxxx X. Xxxx
Title:
Chairman
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