THIS AGREEMENT made as of the 31st day of October, 2000.
BETWEEN:
YAPALOT COMMUNICATIONS, INC.
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(hereinafter called the "Employer")
- and -
XXXXX XXXXXXXX, also known as XXXXX XXXXXXXX;
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(hereinafter called the "Employee")
WHEREAS it is a condition of the Employee's employment by the Employer that
the Employee execute this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the sum of
$2.00 now paid by each party to the other (the receipt and sufficiency whereof
is hereby acknowledge by each party to this Agreement), the mutual covenants and
agreements hereinafter set forth and other good and valuable consideration, the
parties agree as follows:
ARTICLE 1
ACKNOWLEDGEMENT
1.1 The Employee acknowledges that this Agreement shall govern his rights and
obligations as an employee of the Employer and agree to all times be
subject to the terms of this Agreement.
ARTICLE 2
ENGAGEMENT AND JOB DESCRIPTION
2.1 The Employee acknowledges that he has been engaged by the Employer as
Chairman, President and Chief Executive Officer of the Employer and each of
its subsidiaries.
2.2 The Employee shall be responsible for managing and supervising all of the
aspects of the business of the Employer and each of its subsidiaries.
2.3 The Employer and each of the Subsidiaries hereby covenant and agree to
indemnify and forever save the Employee harmless from and against any and
all costs, damages, losses and expenses (including, without limitation,
actual legal fees, disbursements) which the Employer may suffer or incur as
a result of the Employee being an officer, director, shareholder or
employee of the Employer or any of its Subsidiaries or which relates in any
manner or capacity to the Corporation or any of its subsidiaries.
ARTICLE 3
TERM
3.1 Subject to early termination as permitted by the provisions of the
Agreement, this Agreement shall be for a term of 10 years commencing on the
30th day of October, 2000 and ending on the 30th day of October, 2005, and
will be renewed for subsequent one year terms (the initial term or the
applicable renewal thereof being hereinafter referred to as the "Term").
ARTICLE 4
RENUMERATION AND BENEFITS
4.1 In consideration of the Employee's performances of his obligations
contained in this Agreement, the Employer shall pay and grant the following
salary and benefits to the Employee:
(a) (i) a salary of $200,000 per annum, payable in twelve equal monthly
installments for the first year of employment. The Employee's salary
shall be subject to an annual review within six (6) months or earlier
by the Employer. (ii) during each year of the Term the Employee shall
be entitled to a minimum 6% increase of his salary.
(b) Such medical, dental and other benefits as are made generally
available from time to time to the employees of the Employer.
(c) The Employee shall also be reimbursed for all car expenses incurred by
the Employee in using his car for the purposes for the Employer, upon
providing the Employee with receipts in respect of such expenses
including, without limitation, oil, gas, repairs and insurance. Such
expenses shall include the cost of purchasing or leasing such an
automobile for the Employee's sole use and such automobile to be
satisfactory to the Employee.
(d) 6 weeks paid vacation during each year of the Term or such greater
amount as the Employer and the Employee may agree upon from time to
time.
(e) The Employee will be entitled to participate in whatever pension plans
are created from time to time by the Employer for its senior employees
and executives.
(f) Upon receipt of proper invoices, the Employee shall be reimbursed for
all reasonable expenses incurred by the Employee in connection with
the performance of his duties including, without limitation, travel,
business and entertaining expenses.
(g) The Employer shall pay for any and all professional fees incurred by
the Employee during the term of this agreement for income tax planning
and in connection with the preparation of annual tax return for the
Employee and the members of his immediate family.
(h) The Employer shall pay the cost of all membership dues incurred by the
Employee during the term of this Agreement.
(i) The Employer shall furnish to the Employee such computer equipment and
supplies as the Employee shall require to carry out his employment
duties from his home.
ARTICLE 5
LIFE INSURANCE
5.1 The Employer shall apply for, take out and maintain in full force and
effect, throughout the Term, at its sole expense, a life insurance policy
on the Employee, in an amount of not less than $2,000,000. The Employee's
estate will be the beneficiary of such insurance policy. The beneficiary of
the policy will not be changed without the Employee's prior written
consent.
5.2 The Employer shall also take out and maintain, in full force and effect
throughout the Term, a disability insurance policy for the Employee, all in
form acceptable to the Employee.
5.3 In the event the Employee's employment with the Employer is terminated, the
life insurance policy described in section 6.1 hereof shall be transferred
to the Employee or his nominee.
5.4 The Employer shall reimburse the Employee for income or other taxes payable
by the Employee as a result of the life insurance provided for in section
6.1 hereof or the transfer of such insurance to the Employee pursuant to
section 6.3 hereof including, without limitation, the receipt of any
proceeds pursuant to such insurance policy.
ARTICLE 6
STOCK OPTIONS
6.1 The Employer covenants and agrees that the Employee shall be entitled to
participate in all present and future stock option plans which the Employer
puts in place for its employees, officers and directors.
ARTICLE 7
CONFIDENTIALITY
7.1 In this Agreement, the following words and phrases shall have the following
meanings unless the context otherwise requires "Confidential Information"
means information known or used by the Employer in connection with its
business including but not limited to trade secrets and confidential
information concerning the business of the Employer, its subsidiaries and
affiliates, information disclosed to the Employee as a result of his
employment by the Employer about any formula, design, prototype,
compilation on information, data program, code, method, technique or
process information relating to any product, device, equipment or machine,
computer programs, client information, financial information, marketing
information, intellectual property or business opportunities, or research
and development, but does not include any of the foregoing which is or
becomes a matters of public knowledge;
7.2 The Employee acknowledges that:
(i) during the course of his employment by the Employer, the Employee will
be exposed to and will have an opportunity to learn or otherwise
become aware of Confidential Information.
(ii) the Confidential Information is a valuable asset which is the property
of the Employer exclusively, the unauthorized use or disclosure of
which would cause very serious harm to the economic interests of the
Employer;
(iii)it is important in the interests of the Employer that the
Confidential Information remain the exclusive confidential property of
the Employer and that it not be used or disclosed except in accordance
with the knowledge and consent of the Employer and in the Employer's
best interests.
(a) The Employee agrees that at all times during the period of the
Employee's employment and at all times following the cessation or
termination of the Employee's employment for any reason whatsoever:
(i) the Employee shall hold in confidence and keep confidential all
Confidential Information;
(ii) the Employee shall not directly or indirectly, use any
Confidential Information except in the course of performing
duties as an Employee of the Employer with the knowledge and
consent of the Employer and in the Employer's interests; and
(b) (i) during the term of this Agreement, or any renewal term, the
Employee shall not remove any Confidential Information or property of
the Employer from the Employer's offices or is premises without the
Employer's consent except as strictly necessary to carry out the terms
of this Agreement;
(iii)upon termination of the Employee's employment whether by the
Employer or the Employee, the Employee shall promptly deliver to
the Employer all documents, manuals, lists, data, records,
computer programs, codes, materials, prototypes, products,
samples, analyses, reports, equipment, tools and devices relating
or pertaining to the Employer's business or containing or
pertaining to any Confidential Information, including, any copies
or reproductions of same, save as specifically provided for in
paragraph 5.1 (1) hereof.
ARTICLE 8
NON-SOLICITATION
8.1 In consideration of the mutual covenants and agreements contained in this
Agreement, the sum of Ten ($10.00) Dollars now paid by the Employer to the
Employee (the receipt and sufficiency whereof is hereby acknowledged by the
Employee) and conditionally, on the Employee's receipt of the severance
payment described in Article 10 hereof, and other good and valuable
consideration, the Employee covenants and agrees with the Employer that he
will not, during the Term and for a period of 12 months after the date (the
"Termination Date") that this Agreement is terminated by either party and
for any reason whatsoever:
(a) directly or indirectly, solicit for employment, or advise or recommend
to any other person, firm, corporation or entity that they employ or
solicit for employment any person employed by the Employer;
(b) directly or indirectly, solicit any customer of the Corporation for
the purpose of causing a customer to purchase any product or service
competitive with the products and services sold by the Employer on the
Termination Date.
8.2 Subject to the Employer's receipt of the severance payment described in
Article 10 hereof, the Employee acknowledges that his relationship with the
Employer is of a special, unique, unusual and extraordinary character which
gives it peculiar value, the loss of which cannot adequately be compensated
in damages in an action at law. Consequently, the parties agree that the
Employer will be entitled to all equitable and legal remedies, including
interlocutory and permanent injunctive relief, relating to any violation or
breach of the provisions of Articles 8 or 9 hereof by the Employee.
8.3 The Employer acknowledges that the Employee's non-solicitation obligations
contained in this Article is in consideration of the severance payments to
be paid by the Employer to the Employee in accordance with the provisions
of Article 10 hereof and that in the absence of such payment, the Employer
acknowledges that the Employee will be under no obligation pursuant to
Article 9 hereof.
ARTICLE 9
TERMINATION OF EMPLOYMENT
9.1 This Agreement and the employment of the Employee may be terminated at
anytime upon the Employer paying to the Employee, a severance payment equal
to 5 times the Employee's total annual remuneration package including
salary, benefits and car allowance. For the purposes of this Section, the
Employee shall be deemed to be earning a salary of not less than $250,000
per annum.
9.2 The Employee shall be entitled to receive and the Employee covenants and
agrees to pay the Employee the severance payment described in Section 10.1
hereof in a lump sum payment on the date of termination of the Employee's
employment. The severance payment to the Employee shall be without any
obligation to mitigate on the part of the Employee.
ARTICLE 10
ENTIRE AGREEMENT
10.1 Any and all previous agreements, written or oral, between the parties or on
their behalf, relating to the services set out herein, are hereby
terminated and cancelled and each of the party hereby releases and forever
discharges the other party of and from all manner of actions, causes of
action, claims and demands whatsoever under or in respect of any such
agreement.
ARTICLE 11
NOTICES
11.1 Any demand, notice or other communications to be given in connection with
this Agreement shall be given in writing and may be given by personal
delivery, by telecopier, telegram or telex or by registered mail addressed
to the party concerned at the addresses set forth below.
If to Employer
If to the Employee
Any notice delivered as aforementioned shall be deemed to have been given
and received on the date it was delivered or telecopied, or if mailed, on
the third business day following the date of its mailing.
ARTICLE 12
SUCCESSORS AND ASSIGNS
12.1 This Agreement shall enure to the benefit of and be binding upon, the
respective heirs, executors, administrators, legal personal
representatives, successors, and assigns of the parties.
ARTICLE 13
GOVERNING LAW
13.1 This Agreement shall be deemed to have been made in, and shall be construed
in accordance with, the laws of the Province of Ontario and for the
purposes of all legal proceedings, this Agreement shall be deemed to have
been performed in such province and the courts of such province shall have
jurisdiction to entertain any action arising under this Agreement.
ARTICLE 14
CONFIRMATION
14.1 The Subsidiaries confirm that they are jointly and severally responsible
for all of the obligations of the Employer pursuant to this Agreement.
ARTICLE 15
SEVERABILITY
15.1 If any article, section or any portion of any section of this Agreement is
determined to be unenforceable or invalid, that unenforceability or
invalidity shall not effect the remaining portions of this Agreement and
such unenforceable or invalid article, section or portion there shall be
deemed to be severed from the remainder of this Agreement.
ARTICLE 16
RECITALS
16.1 The parties acknowledge that the recitals to this Agreement are true and
correct in substance and in fact and are hereby incorporated into and form
part of this Agreement.
ARTICLE 17
TIME OF THE ESSENCE
17.1 Time will be of the essence of this Agreement and every part hereof,
provided that if the parties establish a new time for the performance of an
obligation, time will again be of the essence of the new time established.
ARTICLE 18
WAIVER
18.1 No party to this Agreement will be deemed or taken to have waived any
provision of this Agreement unless such waiver is in writing, and such
waiver will be limited to the circumstances set forth in such written
waiver.
ARTICLE 19
STATUES
19.1 Any reference in this Agreement to a statute includes any amendment
thereto, its regulations and applicable successor legislation.
ARTICLE 20
COUNTERPARTS
20.1 This Agreement may be executed in one or more counterparts, each of which
will be deemed an original, but all of which together will constitute one
and the same agreement.
ARTICLE 21
CURRENCY
21.1 All dollar amounts in this Agreement refer to currency of the United States
of America.
ARTICLE 22
APPLICATION OF AGREEMENT
22.1 In consideration of the sum of $10.00 and other good and valuable
consideration (the receipt and sufficiency whereof is hereby acknowledged)
and to induce the Employee to enter into this Agreement, the Subsidiaries
each covenants and agrees that they are jointly and severally liable and
obligated with the Employer pursuant to this Agreement.
22.2 This Agreement shall apply mutates, mutandis to any future subsidiaries of
the Employer, each of which shall at the request of the Employee execute a
counterpart of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
SIGNED, SEALED AND DELIVERED
In the presence of )
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XXXXX XXXXXXXX
YAPALOT COMMUNICATIONS, INC.
Per: ______________________________________________________
Xxxxx Xxxxxxxx Chairman, President and Ceo
Per: _______________________________________________________
Xxxxxxx Xxxxxxx Chief Operating Officer and Director
Per: ______________________________________________________
Xxxxx Keslassy Chief Financial Officer and Director
Per: _____________________________________________________
Xxxxxx Kshoznicer Director
Per: _____________________________________________________
Xxxx Xxxxxxxx Director
