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Exhibit 10.40
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
the 24th day of September 1996, between The Tracker Corporation of America a
Delaware corporation (the "Company") and I. Xxxxx Xxxxx (the "Executive").
RECITALS
A. The Company provides a unique service for its registered members to
encode their personal possessions for identification purposes. The Company
maintains a database of stored membership information and is the owner of, or
has the right to use this unique identification system, and is the owner of, or
has the right to use the patents, design, trademarks, copyrights and other
intellectual property embodied therein, including certain confidential
information relating to the system and business records, customer and supplier
lists and information with respect to the method of carrying on the business of
the Company. The Executive has been employed by the Company and consequently has
substantial experience and expertise in managing and operating the business of
the Company.
B. The Company desires to retain the services of the Executive as its
President, Chief Executive Officer and Chief Operating Officer, and the
Executive desires and is willing to be employed by the Company in those
capacities.
C. The Company and the Executive desire to embody the terms and
conditions of the Executive's employment in a written agreement, which will
supersede all prior agreements of employment, whether written or oral, between
the Company and the Executive, pursuant to the terms and conditions hereinafter
set forth.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of their mutual covenants and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
DUTIES AND TERM
1.1 Employment
(a) The Executive is employed as the President, Chief Executive Officer
and Chief Operating Officer of the Company. The Executive shall have such duties
and responsibilities as shall be assigned to the Executive from time to time by
the Board of Directors of the Company (the "Board") in the Executive's capacity
as the President, and Chief Executive Officer and Chief Operating Officer of the
Company.
(b) The Executive may agree to serve, if elected, as a director of the
Company and as an officer or director of any subsidiary or affiliate of the
Company.
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(c) During the period of his employment hereunder, the Executive shall
devote substantially all of his business time, attention, skill and efforts to
the faithful performance of his duties hereunder; provided, however, that the
Executive may serve or continue to serve on the board of directors or hold other
offices or positions in companies or organizations if they involve no conflict
of interest with the interests of the Company and may engage in customary
professional activities which in the judgment of the Board will not materially
affect the performance by the Executive of his duties hereunder. The Executive
has disclosed to the Board all material business ventures in which he is
currently involved, and subject to approval by the Board (after written notice
to it), may in the future have other business investments and participate in
other business ventures which may, from time to time, require portions of his
time, but shall not interfere with his duties hereunder.
1.2 Term. The term of this Agreement shall commence on October 1, 1996 and
shall continue, unless sooner terminated as provided herein, for three (3) years
(the "Initial Term"). Thereafter, the term of this Agreement shall automatically
be extended for successive one (1) year periods ("Renewal Terms") unless either
the Board or the Executive gives written notice to the other at least ninety
(90) days prior to the end of the Initial Term or any Renewal Term, as the case
may be, of its or his intention not to renew the term of this Agreement. The
Initial Term and any Renewal Terms of this Agreement shall be collectively
referred to as the "Term."
1.3 Location. During the Term of this Agreement, the Executive shall be
based in the principal offices of the Company in the greater Xxxxxxx, Xxxxxxx,
Xxxxxx metropolitan area (hereinafter collectively referred to as the "Base
City"), and shall not be required to be based anywhere other than the Base City,
except for travel reasonably required in the performance of his duties hereunder
and except as may be otherwise agreed to by the Executive in his sole
discretion.
ARTICLE II
COMPENSATION
2.1 Base Salary
(a) Subject to the further provisions of this Agreement, the Company
shall pay the Executive during the Term of this Agreement a base salary at an
annual rate of not less than One Hundred Seventy Five Thousand Dollars
($175,000)(United States currency) (the "Base Salary"). The Base Salary shall be
increased on April 1, 1997 and April 1, 1998 by Thirty Seven Thousand Five
Hundred Dollars ($37,500) (United States currency), respectively, if the Company
generates Positive Cash Flow for the previous fiscal year (for the purposes of
this Agreement, Positive Cash Flow will be determined when the sum of the net
cash used in operating activities, plus the current and long-term deferred
revenue for the fiscal year as disclosed in the Company's annual Consolidated
Financial Statements, is a positive number), which increased salary shall then
become the Base Salary. The Base Salary of the Executive shall not be decreased
at any time during the Term of this Agreement from the amount of Base Salary in
effect from time to time. Participation in deferred compensation, discretionary
bonus, retirement, stock option and other employee benefit plans and in fringe
benefits shall not reduce the Base Salary payable to the Executive under this
Section 2.1. The Base Salary under this Section 2.1 shall be payable by the
Company to the Executive not less frequently than semi-
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monthly.
2.2 Discretionary Bonuses. Subject to the further provisions of this
Agreement, during the Term of this Agreement the Executive shall be entitled to
participate in an equitable matter with all other senior executives of the
Company in such discretionary bonuses an may be authorized, declared and paid to
the Company's senior executives generally. The foregoing shall not give the
Executive the right to participate in any individualized bonus programs whether
or not such bonus programs are applicable to any or all of the Company's other
senior executives.
2.3 Participation in Retirement and Employee Benefit Plans; Fringe
Benefits. The Executive shall be entitled to participate in all plans of the
Company relating to stock options, stock purchases, pension, thrift, profit
sharing, life insurance, hospitalization and medical coverage, disability,
travel or accident insurance, education or other retirement or employee benefits
that the Company has adopted or may adopt for the benefit of its senior
executives, subject to the terms and conditions of such plans. In addition, the
Executive shall be entitled to participate in any other annual fringe benefits,
such as club dues and fees of professional organizations and associations, which
are now or may become applicable to the Company's senior executives, a car
allowance the amount of which shall not exceed $10,000 per annum and any other
benefits which are commensurate with the duties and responsibilities to be
performed by the Executive under this Agreement. The Executive shall, during the
Term of his employment hereunder, continue to be provided with benefits at a
level which shall in no event be less in any material respect than the benefits
available to the Executive as an employee of Tracker Canada as of the date of
this Agreement.
2.4 Vacations. The Executive shall be entitled, without loss of pay, to be
absent voluntarily for reasonable periods of time from the performance of his
duties and responsibilities under this Agreement. All such voluntary absences
shall count as paid vacation time, unless the Board otherwise determines. The
amount and timing of paid vacations shall be scheduled in a manner reasonably
acceptable to the Company and shall conform to the standards set forth in the
policies and procedures, if any, established by the Company with respect to
vacations and other absences.
2.5 Expense Reimbursements. The Company, in accordance with such uniform
expense reimbursement policies and procedures as it may adopt, shall reimburse
all of the Executive's out-of-pocket expenses properly incurred by the Executive
in connection with the performance of his duties hereunder and substantiated to
the Company. Except as provided herein to the contrary, all expense
reimbursements, and other amounts due under this Section 2.6, shall be paid to
the Executive on or before the twenty-fifth (25th) day following the receipt by
the Company of the annual audited financial statements of the Company; provided
however, that the foregoing shall not prevent the Company from paying expense
reimbursements as they are incurred and reported by the Executive.
2.6 Relocation Expenses. If the Company decides to relocate the Executive,
the Company shall pay the Executive, twenty-five percent (25%) of the
Executive's Base Salary (not in excess of $25,000 per occurrence) or shall
reimburse the Executive for expenses in connection with the relocation of the
Executive and his family whichever is less. Such expenses shall include, but
shall not be limited to, real estate sales commissions and expenses incurred in
connection with the sale by the Executive of his principal residence, expenses
associated with
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moving the Executive's household goods, transportation of the Executive and his
family in connection with such relocation and temporary housing as reasonably
required by such relocation.
ARTICLE III
TERMINATION OF EMPLOYMENT
3.1 Death or Retirement of Executive. This Agreement shall automatically
terminate upon the death or Retirement (as defined in Section 3.4) of the
Executive.
3.2 By the Executive. The Executive shall be entitled to terminate this
Agreement by giving written notice to the Company.
(a) at least ninety (90) days prior to the end of the Initial Term of
any Renewal Term of this Agreement;
(b) for Good Reason (as defined in Section 3.4) prior to a Change of
Control (as defined in Section 3.4); and
(c) for Good Reason following a Change of Control.
3.3 By the Company. The Company shall be entitled to terminate this
Agreement by giving written notice to the Executive, executed by at least
two-third (2/3) of the members of the Board:
(a) at least ninety (90) days prior to the end of the Initial Term of
any Renewal Term of this Agreement;
(b) in the event of the Executive's Disability (as defined in Section
3,4); and
(c) for Cause (as defined in Section 3,4).
3.3 Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:
(a) "Cause" shall mean any of the following:
(i) the conviction of or a plea of guilty or nolo contendere by the
Executive to a felony or serious misdemeanor involving fraud, embezzlement,
theft, dishonesty any other crime involving moral turpitude;
(ii) an act or acts of dishonesty on the part of the Executive in
connection with the performance of his duties hereunder that constitute a felony
or serious misdemeanor and resulting or intended by the Executive to result
directly or indirectly in personal gain or enrichment at the expense of the
Company;
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(iii) failure of or refusal on the part of the Executive to
substantially perform all of his duties hereunder, which failure or refusal
shall not be cured within fifteen (15) days following (A) receipt by the
Executive of a written notice, executed by at least two-thirds (2/3) of the
Board, specifying the factors or events constituting such failure or refusal,
and (B) a reasonable opportunity for the Executive to correct such deficiencies;
(iv) the Executive's use of drugs and/or alcohol in violation of
then current Company policy;
(v) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company, momentarily or otherwise;
or
(vi) other material breach of this Agreement by the Executive, which
breach shall not be cured within fifteen (15) days after written notice thereof
to the Executive, executed by at least two-thirds (2/3) of the members of the
Board.
(b) "Change of Control" shall mean a change in ownership or control of
the Company effected through any of the following transactions (other than a
transaction contemplated by the Reorganization Agreement entered into by and
between the Company and Tracker Canada as of May 26, 1994);
(i) the direct or indirect acquisition by any person or related
group of persons (other than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of securities possession more than fifty
percent (50%) of the total combined voting power of the Company's outstanding
securities pursuant to a tender or exchange offer made directly to the Company's
stockholders or other transaction, in any case whether or not the Board
recommends that the Company' stockholders accept this offer.
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the Board
members (rounded up to the next whole number) ceases, by reason of one or more
contested elections for Board membership, to be comprised of individuals who
either (A) have been Board members continuously since the beginning of such
period, or (B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in
clause (A) who were still in office at the time such election or nomination was
approved by the Board;
(iii) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which the Company is incorporated;
(iv) the sale, transfer or other disposition of all or substantially
all of the assets of the Company in complete liquidation or dissolution of the
Company; or
(v) any reverse merger in which the Company is the surviving entity
but in which securities possessing more than 50% of the total combined voting
power of the Company's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately prior to
such merger.
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(c) "Disability" shall mean the Executive's failure substantially to
perform his duties hereunder on a full-time basis for a period exceeding one
hundred eighty (180) consecutive days or for periods aggregating more than one
hundred eighty (180) days during any twelve (12) month period as a result of
incapacity due to physical or mental illness not due to drug or alcohol abuse.
If there is a dispute as to whether the Executive is or was physically or
mentally unable to perform his duties under this Agreement, such dispute shall
be submitted for resolution to a licensed physician agreed upon by the Board and
the Executive, or if an agreement cannot be promptly reached, the Board and the
Executive will each select a physician, and if these physicians cannot agree,
they will pick a third physician whose decision shall be binding on all parties.
If such a dispute arises, the Executive shall submit to such examinations and
shall provide such information as such physician(s) may request, and the
determination of the physician(s) as to the Executive's physical or mental
condition shall be binding and conclusive; provided, however, that the Executive
shall be conclusively presumed not to be Disabled until the Board provides
written notice to the Executive or his representative, signed by at least
two-thirds (2/3) of the members of the Board, concerning its final determination
of the Executive's status under this Section 3.4(c).
(d) "Good Reason" shall mean any of the following if the same shall
occur without the Executive's express prior written consent:
(i) a material change by the Company in the Executive's function,
duties or responsibilities (including reporting responsibilities), which would
cause the Executive's position with the Company to become of less dignity,
responsibility and importance than those associated with his functions, duties
or responsibilities as of the date of this Agreement, or in the case of a change
of Control, involving duties of a scope less than that associated with the
Executive's most significant position with the Company during the ninety (90)
day period immediately preceding the date such Change of Control occurs;
(ii) the Executive's Base Salary is reduced by the Company;
(iii) relocation of the Executive's principal place of employment to
a place located outside of the Base City;
(iv) the failure by the Company to obtain the assumption by
operation of law or otherwise of this Agreement by any entity which is the
surviving entity in any merger or other form of corporate reorganization
involving the Company or by any entity which acquires all or substantially all
of the Company's assets; or
(v) other material breach of this Agreement by the Company, which
breach shall not be cured within fifteen (15) days after written notice thereof
to the Company.
(e) "Retirement" shall mean normal retirement at age 60 or in
accordance with retirement rules generally applicable to the Company's senior
executives.
ARTICLE IV
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COMPENSATION UPON TERMINATION OF EMPLOYMENT
4.1 Termination by the Company for Cause or by the Executive Without Good
Reason. If the Executive's employment is terminated by the Company for Cause or
by the Executive without Good Reason, the Company shall:
(a) pay the Executive (or his estate or beneficiaries) any Base Salary
which has accrued but not been paid as of the termination date (the "Accrued
Base Salary");
(b) reimburse the Executive (or his estate or beneficiaries) for
allowable expenses incurred by him prior to the date of termination which are
subject to reimbursement hereunder pursuant to applicable Company policies then
in effect (the "Accrued Reimbursable Expenses");
(c) provide to the Executive (or his estate or beneficiaries) any
accrued and vested benefits required to be provided by the terms of any
Company-sponsored benefit plans or programs (the "Accrued Benefits");
(d) pay the Executive (or his estate or beneficiaries) any
discretionary bonus and any individualized bonuses or other payment due to the
Executive under the terms of this Agreement or any other agreement between the
Executive and the Company, which has accrued and been earned but has not been
paid (the "Accrued Bonus"); and
(e) in addition, the Executive (or his estate or beneficiaries) shall
have the right to exercise all vested, unexercised stock options outstanding a
the termination date in accordance with the terms of the plans and agreements
pursuant to which such options were issued.
4.2 Termination by the Company Without Cause or by the Executive for Good
Reason Prior to a Change of Control or due to the Expiration of the Term of this
Agreement, or the Death or Disability of the Executive. If the Executive's
employment is terminated by the Company without Cause or by the Executive for
Good Reason, in each case prior to a Change of Control, or due to the expiration
of the Term of this Agreement, or the death or Disability of the Executive, the
Company shall:
(a) pay the Executive the Accrued Base Salary;
(b) pay the Executive the Accrued Reimbursable Expenses;
(c) pay the Executive the Accrued Benefits pursuant to the terms of the
plans, programs or arrangements governing such Accrued Benefits, including any
benefits required to be paid or provided in the event of the Executive's death
or Disability under applicable law;
(d) pay the Executive the Accrued Bonus;
(e) pay the Executive his Base Salary, as and when the same would have
been paid to the Executive pursuant to Section 2.1 had the termination not
occurred, until the end of the then current Term of this Agreement; provided,
however, than in no event shall the Base Salary paid to the Executive pursuant
this Section 4.2(e) be for less than one (1) year;
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(f) maintain in full force and effect, for the continued benefit of the
Executive and his eligible beneficiaries, until the first to occur of (I) his
attainment of alternative employment; provided that, except in the case of death
or Disability, the Executive agrees to use reasonable efforts to obtain suitable
employment with another company following termination; or (ii) twelve (12)
months following the termination date, the employee benefits pursuant to
Company-sponsored benefit plans, programs or other arrangements in which the
Executive was entitled to participate immediately prior to such termination, but
only to the extent that the Executive's continued participation is permitted
under the general terms and provisions of such plans, programs and arrangements;
and
(g) in addition, the Executive (or his estate or beneficiaries) shall
have the right to exercise all vested, unexercised stock options outstanding at
the termination date in accordance with the terms of the plans and agreements
pursuant to which such options were issued.
4.3 Upon Termination by the Company Without Cause or by the Executive for
Good Reason Following a Change of Control.
(a) If, following a Change of Control, the Executive's employment is
terminated by the Company without Cause or by the Executive for Good Reason, the
Company shall make the payments and provide to the Executive the same benefits
set forth in Section 4.2 hereof. In addition, all unvested stock options owned
by the Executive at the date of termination shall become fully vested at the
termination date, and the Executive (or his estate or beneficiaries) shall have
the right to exercise all vested, unexercised stock options outstanding at the
termination date (including the accelerated options) in accordance with the
terms (except the vesting terms with respect to the accelerated options) of the
plans and agreements pursuant to which such options were issued.
(b) Notwithstanding anything herein to the contrary, if the
deductibility by the Company of any payments to be made to the Executive under
this Agreement would be limited by Section 280G of the Internal Revenue Code of
1986, as amended (the "Code") or if an excise tax would be imposed with respect
to such payments under Section 4999 of the Code, or any successor provisions
thereto, the payments to be made to the Executive hereunder shall automatically
be limited to an amount equal to the maximum amount that would otherwise be
deductible by the Company under Code Section 280G and that will not result in an
excise tax under Code Section 4999; provided, however, that if pursuant to a
final determination of a court of competent jurisdiction or an Internal Revenue
Service proceeding that, notwithstanding the good faith of the Executive and the
Company in applying the terms of this Agreement, any portion of the aggregate
payments made hereunder would not be deductible by the Company under Code
Section 280G, the Executive agrees to pay to the Company, upon demand, an amount
equal to the sum of (I) the portion of such amount that would not be deductible
by reason of Code Section 280G, and (ii) interest on the amount set forth in
clause (I) of this sentence at the Applicable Federal Rate (as defined in
Section 1274(d) of the Code) from the date of receipt of such excess payment
through the date of repayment. In applying the provisions of this Section, if,
for any reason, any exemption from the applicable of the rules of Sections 280G
and/or 4999 of the Code shall be available under the terms of said sections or
under any applicable regulations or rulings thereunder, such exemption shall be
fully applied.
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No payment under this Agreement or otherwise that is not a "parachute payment"
under Section 280G of the Code shall be taken into account in applying the
provisions of this Section. Calculations necessary to be made in applying the
provisions of this Section shall be made by the public accounting firm serving
as the Company's independent auditor immediately prior to a Change of Control,
whose determination, made in good faith, shall be binding and conclusive upon
both the Company and the Executive.
4.4 Restricted Stock. If the Executive's employment is terminated pursuant
either to Section 4.2 or Section 4.3 hereof at a time when the Executive holds
Company stock which constitutes "restricted securities" within the meaning of
Securities and Exchange Commission Rule 144(a)(3), then the Company will use its
best efforts to eliminate the restrictions applicable to such shares of Company
stock and to make such shares of Company stock freely tradable by the Executive.
ARTICLE V
RESTRICTIVE COVENANTS
5.1 Confidentiality.
(a) The executive agrees that, during the Term of this Agreement, and
at any time following its termination, he will keep all trade secrets and/or
proprietary information (collectively, "Confidential Information") of the
Company in strict confidence and agrees not to disclose any Confidential
Information to any other person, firm, association, partnership, corporation or
other entity for any reason except as such disclosure may be required in
connection with his employment hereunder. The Executive further agrees, during
the Term of this Agreement, and at any time following its termination not to use
any Confidential Information for any purpose except on behalf of the Company.
(b) For purposes of this Agreement, "Confidential Information" shall
mean any information, process or idea that is not generally known in the
industry, that the Company considers confidential, and/or that gives the Company
a competitive advantage, including, without limitation, computer program
listings, source code and object code; all information relating to hardware,
software and other technology under development by or licensed to the Company,
including but not limited to schematics, prototypes, flow charts, design
statistics, specifications, evaluations, test results and beta-test results;
customer lists and records; hardware design and/or programming techniques and
development tools; joint ventures with other companies; suppliers, production
costs or production information; business or marketing plans; business
forecasts; management information systems; trade secrets; processes; formulae;
know-how; methods and procedures of operation; proposals; budgets and forecasts;
sales records and any other licensed, patented or copyrighted documentation. The
Executive understands that the above list is intended to be illustrative and
that other Confidential Information may currently exist or arise in the future.
If the Executive is unsure whether certain information or material is
Confidential Information, the Executive shall treat that information or material
as confidential unless the Executive is informed by the Company, in writing, to
the contrary. "Confidential Information" shall not include any information
which; (I) is or becomes publicly available through no act or failure of the
Executive; (ii) was or is rightfully learned by the Executive from a source
other than the Company before being received from the Company; or (iii) becomes
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independently available to the Executive as matter of right from a third party.
If only a portion of the Confidential Information is or becomes publicly
available, then only that portion shall not be Confidential Information
hereunder.
(c) In the event that the Executive shall make any invention,
discovery, design improvement or copyright work (collectively, an "Invention")
relating to or capable of being used in the business of the Company, the
Executive shall promptly disclose to the Company the full details thereof. The
Executive hereby acknowledges and agrees that the Company shall have full
ownership rights in any such Invention, by virtue of the fact that the Executive
is employed by the Company. Without limiting the generality of the foregoing,
the Executive agrees that he shall execute any and all documentation reasonably
requested by the Company to assign all right, title and interest in any
Invention to the Company.
(d) The Executive further agrees that upon termination of his
employment with the Company, for whatever reason, the Executive will surrender
to the Company all of the property, client lists, notes, manuals, reports,
documents and other things in the Executive's possession, including copies or
computerized records thereof, which relate directly or indirectly to
Confidential Information.
5.2 Competition.
(a) The Executive agrees that during his employment with the Company
and for a period of one (1) year following the date of termination of his
employment hereunder for any reason (whether such termination shall be voluntary
or involuntary), the Executive, either individually or in conjunction with any
other person or entity, shall not, within the geographic boundaries or the North
American continent (the "Area"):
(i) except as a passive investor in publicly-held companies, and
except for investments held as of the date hereof, directly or indirectly own,
operate, manage, consult with, control, participate in the management or control
of, be employed by, maintain or continue any interest whatsoever in any person
or entity that directly or indirectly competes with the Company, or has as a
business purpose either competition with the Company or carrying on business
dealings which are reasonably capable of having an adverse effect on the
business of the Company; or
(ii) directly or indirectly solicit any business of a nature that is
directly competitive with the business of the Company from, or in any way
interfere with the Company's business relationships with, any individual or
entity that obtained products or services from the Company or its affiliates, or
that was a supplier of the Company or its affiliates, with whom the Company had
active business dealings, whether or not solicited by the Executive on behalf of
the Company, at any time during his employment with the Company, or in any other
way try to divert or attempt to divert from the Company any business, the origin
of which is within the Area; or
(iii) employ, or directly or indirectly solicit, or cause the
solicitation of, or in any way interfere with the employment by the Company or
its affiliates of, any employees (or independent contractors) of the Company who
are in the employ of the Company or its
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affiliates on the termination date of his employment hereunder for employment by
the Executive or others.
(b) The Executive expressly agrees and acknowledges that:
(i) this covenant not to compete is reasonably necessary for the
protection of the interests of the Company and is reasonable as to time and
geographical area and does not place any unreasonable burden upon him;
(ii) the general public will not be harmed as a result of
enforcement of this covenant not to compete;
(iii) his personal legal counsel has reviewed this covenant not to
compete; and
(iv) he understands and hereby agrees to each and every term and
condition of this covenant not to compete.
5.3 Remedies. The Executive expressly agrees and acknowledges that the
covenant not to compete set forth in Section 5.2 is necessary for the Company's
and its affiliates' protection because of the nature and scope of their business
and his position with the Company. Further, the Executive acknowledges that, in
the event of his breach of his covenant not to compete, money damages will not
sufficiently compensate the Company for its injury caused thereby, and he
accordingly agrees that in addition to such money damages he may be restrained
and enjoined from any continuing breach of the covenant not to compete without
any bond or other security being required. The Executive acknowledges that any
breach of the covenant not to compete would result in irreparable damage to the
Company The executive further acknowledges and agrees that if the covenant not
to compete herein is deemed to be unenforceable and/or the Executive fails to
comply with this Article V, the Company has no obligation to provide any
compensation or other benefits described in Article IV hereof. The Executive
acknowledges that the remedy at law for any breach or threatened breach of
Sections 5.1 and 5.2 will be inadequate and, accordingly, that the Company
shall, in addition to all other available remedies (including without
,imitation, seeking such damages as it can show it has sustained by reason of
such breach), be entitled to injunctive relief or specific performance.
ARTICLE VI
MISCELLANEOUS
6.1 No Assignments. This Agreement is personal to each of the parties
hereto. No party may assign or delegate any rights or obligations hereunder
without first obtaining the written consent of the other party hereto. This
Agreement shall be binding upon and inure to the benefit of any successor
corporation to the Company. The provisions of this Section 6.1 shall not
prevent, or require the consent of the parties hereto to, the assignment of this
Agreement in connection with the transactions contemplated by the Reorganization
Agreement entered into by and between the Company and Tracker Canada as of May
26, 1994.
(a) The Company shall use reasonable efforts to require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of
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the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as defined herein
and any successor to its business and/or assets which assumes this Agreement by
operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Executive and his personal or legal representatives, executors,
administrators, successors, heirs, distributes, devisees and legatees. If the
Executive should die while any amount would still be payable to him hereunder
had he continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to his devisee,
legatee or other designee, or if there is not such designee, to his estate.
6.2 Notices. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or within five (5) business days
after mailing if mailed by United States or Canadian certified or registered
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth below, or to such other addresses as either party may have
furnished to the other in writing in accordance herewith, except that notice of
a change of address shall be effective only upon actual receipt:
To the Company: The Tracker Corp. of America
000 Xxxxxx Xxxxxx Xxxx
Xxxxx #0000
Xxxxxxx, Xxxxxxx X0X 0X0
To the Executive: I. Xxxxx Xxxxx
00 Xxx Xxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxx
Xxxxxx X0X 0X0
Notices pursuant to Article III of this Agreement shall specify the specific
termination provision relied upon by the party giving notice and shall state the
effective date of the termination.
6.3 Amendments or Additions. No amendments or additions to this Agreement
shall be binding unless in writing and signed by each of the parties hereto.
6.4 Section Headings. The section headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.
6.5 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If, in any
judicial proceedings, a court shall refuse to enforce one or more of the
covenants or agreements contained herein because the duration thereof is too
long, or the scope thereof is too broad, it is expressly agreed between the
parties hereto that such scope or
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duration shall be deemed reduced to the extent necessary to permit the
enforcement of such covenants or agreements.
6.6 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be original but all of which together shall
constitute one and the same instrument.
6.7 Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively in the manner set forth in this
Section 6.7. If the Company and the Executive disagree on any matter arising
under or in connection with this Agreement, either party shall have the right to
deliver to the other party a written request ( a "Consent Request") that the
other party consent to the position of the requesting party with respect to the
matter in question. The parties shall negotiate in good faith to resolve the
matters set forth in the Consent Request. If the parties are unable to agree on
a matter set forth in a Consent Request within ten (0) days following delivery
thereof, then the parties shall select one arbitrator, who shall be
knowledgeable in the high technology industry. If the parties fail to agree upon
an arbitrator within ten (10) days, either party may request the Office of the
president of the American Arbitration Association to do so. Each party shall
then submit its or his position in writing to the arbitrator within ten (10)
days of the arbitrator's selection. After receiving the written positions of the
parties, and after a hearing, if the arbitrator deems a hearing to be necessary,
the arbitrator shall and must select the position offered by one of the parties.
Such arbitration procedure shall be commenced immediately upon selection of the
arbitrator and shall be completed within forty-five (45) days. The decision of
the arbitrator shall be final and binding on the parties. Notwithstanding any
other provision of this Agreement, if any termination of this Agreement becomes
subject to arbitration, the Company shall not be required to pay any amounts to
the Executive (except those amounts required by law) until the completion of the
arbitration and the rendering of the arbitrator's decision. The amounts, if any,
determined by the arbitrator to be owned by the Company to the Executive shall
be paid within five (5) days after the decision by the arbitrator is rendered.
All matters approved pursuant to this Section 6.7 shall be deemed conclusively
to have been approved or agreed upon by the parties for all purposes of this
Agreement. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The costs and expenses of such arbitration shall be borne in
accordance with the determination of the arbitrator.
6.8 Modifications and Waivers. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer of the Company
as may be specifically designated by the Board. No waiver by either party hereto
at any time of any breach by the other party hereto of, compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver or similar or dissimilar provisions or conditions a the
same or at any prior or subsequent time.
6.9 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Arizona without regard to its conflicts of law principles.
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6.10 Survival. The obligations of the Company under Article IV hereof and
the obligations of the Executive under Article V hereof shall survive the
expiration of this Agreement.
6.11 Assignment. Notwithstanding Article 6.1, the Executive and the
Company agree that the Executive may assign the benefits but not the obligations
of this Agreement to an entity controlled by him or under common control with
him.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the date first indicated above.
THE COMPANY
THE TRACKER CORPORATION OF AMERICA
WITNESS: __________________ BY: /S/ XXXX XXXXXXXXX
ITS: DEPUTY CHAIRMAN OF THE BOARD
OF DIRECTORS, PURSUANT TO
COMPENSATION COMMITTEE
THE EXECUTIVE
WITNESS: __________________ /S/ XXXXX XXXXX
I. XXXXX XXXXX
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