Exhibit 10.2
EMPLOYMENT AGREEMENT
AGREEMENT between ITSA Ltd. a Cayman Islands corporation (the
"Company"), ITSA-Intercontinental Telecomunicacoes Ltda., a Brazilian limitada
and subsidiary of the Company ("ITSA") (the Company and ITSA being referred to
collectively as the "Employer"), and Xxxxxx Xxxxx Xxxxxxx Xxxx de Albuquerque
("Executive").
RECITALS
WHEREAS, Executive was employed by TV Filme, Inc., a Delaware
corporation, pursuant to an employment agreement dated July 26, 1996;
WHEREAS, the Company is the successor to TV Filme, Inc.;
WHEREAS, the Company and ITSA, through their Affiliates (as defined
below), are engaged in the subscription television business; and
WHEREAS, the parties hereto desire to provide for the employment of
Executive upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT; TERM.
(a) EMPLOYMENT. Subject to the terms and conditions set forth herein,
Executive shall be employed (i) by the Company as its President and Chief
Operating Officer, (ii) by ITSA in comparable executive positions, and (iii) if
the Company and ITSA so elect and without additional compensation, as an
executive officer or director of any company in which either or both of the
Company and ITSA hold a majority interest ("Affiliates"), subject to appropriate
authorization and any limitations under applicable law. Executive agrees to
perform such services and have such powers and authority as may be assigned to
Executive by the Board of Directors of the Company (the "Board") provided, that
the same is not inconsistent with such position. Executive agrees that he will
use his full business time to promote the interests of the Company and ITSA and
their Affiliates and to fulfill his duties hereunder. However, nothing in this
Agreement shall preclude Executive from (i) engaging in charitable and community
affairs, (ii) managing any passive investment made by Executive in publicly
traded equity securities or other property (provided, that no such investment
may exceed five percent of the equity of any entity, without the prior approval
of the Board), or (iii) serving as a member of the board of directors or as a
trustee of any other corporation, association or entity, so long as, in the
reasonable determination of the Board, any such activities do not interfere with
the execution of his duties and responsibilities hereunder.
(b) TERM. The term of Executive's employment hereunder shall commence on
June ___, 2000 (the "Effective Date") and shall continue thereafter for a period
of two years, unless sooner terminated under Section 3.
2. COMPENSATION. During the employment term hereunder, the Executive shall be
compensated as follows:
(a) BASE SALARY. The Executive shall be paid a salary at a rate of US
$203,000 per year, payable in accordance with ITSA's usual payroll policy. The
Board or, if applicable, the Compensation Committee of the Board will review
annually Executive's performance and compensation, and may, in its sole
discretion, increase his salary.
(b) BONUS. Executive shall be entitled to an annual bonus in an amount to
be determined by the Board, based on the achievement of certain criteria which
shall be established each year by the Board; provided, however, that the bonus
for any year shall be no less than 25 percent and no greater than 120 percent of
Executive's salary for any such year.
(c) BENEFITS. Executive shall be eligible to participate in all benefit
programs of ITSA for which senior executives are eligible.
(d) VACATION. Executive shall be entitled each year to (i) vacation for a
period or periods consistent with the normal policy of ITSA in effect from time
to time, but in any event not less than twenty vacation days each year and (ii)
such holidays as may be customarily afforded to its employees by ITSA, during
which periods Executive's compensation shall be paid in full.
(e) REIMBURSEMENT OF EXPENSES; AUTOMOBILE. All reasonable expenses incurred
by Executive in the course of performing his duties under this Agreement or
otherwise promoting the Employer and its business shall be reimbursed by the
Employer. Such reimbursement shall be made to Executive promptly following
submission to the Employer of receipts and other documentation of such expenses
reasonably satisfactory to the Employer. In addition, the Employer shall also
provide Executive with the use of an automobile.
(f) LIFE AND DISABILITY INSURANCE. During the term of this Agreement, the
Employer shall obtain (i) a life insurance policy on the life of Executive with
a face amount of US $1,000,000, naming Executive or his designee as the
beneficiary thereof and (ii) a disability insurance policy covering Executive in
the event he becomes disabled, that provides a monthly payment equal to 60
percent of Executive's base salary in effect immediately prior to the onset of
such disability, naming Executive as the beneficiary thereof.
3. TERMINATION.
(a) DEATH. Executive's employment hereunder shall terminate upon his death.
(b) DISABILITY. Executive's employment hereunder may be terminated by the
Employer in the event of his physical or mental incapacity or inability to
perform the duties as contemplated under this Agreement for a period of at least
120 consecutive days. Until such termination occurs, Executive shall continue to
receive his base salary as then in effect, provided,
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however, that such salaryshall be reduced to the extent of any disability
benefits provided to Executive under a disability plan sponsored by the
Employer. The determination of disability shall be made by an independent
physician selected by the Board or, if applicable, the Compensation Committee
and approved by Executive or his legal representative.
(c) CAUSE. The termination of Executive's employment hereunder upon the
occurrence of any of the following events shall be deemed to be a termination
for cause ("Cause"):
(i) Executive's intentional breach of any provision hereof, provided
such breach has a material adverse effect on either the Company or ITSA.
(ii) Executive's intentional violation of any other duty or obligation
owed by him to either the Company or ITSA which has a material adverse
effect on either the Company or ITSA, as determined by the Board.
(iii) Executive is convicted or pleads guilty or nolo contendre to any
felony (other than a traffic violation) or any crime involving fraud,
dishonesty or misappropriation.
(iv) Executive willfully engages in misconduct that causes material
harm to either the Company or ITSA.
A termination for Cause hereunder shall not take effect unless the
following provisions are complied with: Executive shall be given written notice
by the Employer of the Employer's intention to terminate him for Cause. Such
notice shall (1) specifically identify the particular act or acts or failure or
failures to act which are the basis for such termination and (2) be given within
90 days of the Employer's learning of such act or acts or failure or failures to
act. Executive shall have 30 days after the date (the "Notice Date") that such
written notice is given to him in which to cure such conduct or, if such conduct
is not curable within such 30-day period, to commence such cure. If Executive
fails to cure such conduct or commence such cure, as applicable, within such
30-day period, Executive shall then be entitled to a hearing before the Board at
which Executive shall be entitled to appear. Such hearing shall be held within
35 days of the Notice Date, provided Executive requests such hearing within ten
days of the Notice Date. If, within five days following such hearing, Executive
is furnished written notice by the Board confirming that, in its judgement,
grounds for Cause on the basis of the original notice exist, he shall thereupon
be terminated for Cause.
(d) GOOD REASON. Executive shall be deemed to terminate his employment for
good reason ("Good Reason") if such termination by Executive occurs within 90
days after:
(i) written notice of a failure by the Employer to comply with any
material provision of this Agreement which failure has not been cured 30
days after such written notice of noncompliance has been given by Executive
to the Employer; or
(ii) a significant diminishment in the nature or scope of the
authority, power, function or duty attached to the position which Executive
maintains as of the Effective Date without the express written consent of
Executive, and which is not remedied by the
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Employer within 30 days after Executive's notice to the Employer of his
reasonable objection thereto; or
(iii) Executive is relocated more than 50 miles from the Employer's
office in Brasilia, DF without his prior written consent; or
(iv) Executive involuntarily ceases to be a director of the Company
and ITSA or any of their successors or assigns; or
(v) the attempted assignment of this Agreement by the Employer without
Executive's consent; or
(vi) a Change in Control (For this purpose, a Change in Control shall
be deemed to have occurred: (A) if stock representing more than 50 percent
of the combined voting power of either the Company's or ITSA's then
outstanding stock is acquired by any persons or entities who (I) were not
stockholders of the Company as of the Effective Date or (II) did not
control, were not controlled by, or were not under common control with, any
such stockholders; (B) if, during any period of 24 consecutive months,
present directors (i.e., individuals who at the beginning of such 24-month
period were members of the Board) and/or new directors (i.e., any director
whose election by the Board or whose nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were present directors) cease for any
reason to constitute a majority of the Board; or (C) upon the sale, lease,
exchange or other transfer of all, or substantially all, of the assets of
the Company or ITSA to an unrelated person or entity.).
(e) EFFECT OF TERMINATION.
(i) If Executive terminates his employment for Good Reason, or if the
Employer terminates Executive's employment for reasons other than Cause or
Executive's death or disability, Executive's obligations under this
Agreement shall terminate, except that the covenants contained in Section
4(a) shall continue indefinitely, and the obligations in this Section shall
continue pursuant to their terms. In such event, the Employer shall pay to
Executive the following amounts: (i) any compensation hereunder accrued and
unpaid as of the date of such termination; (ii) Executive's base salary as
in effect on the date of such termination, for a period of 18 months
commencing on such date, in accordance with customary payroll procedures
(provided, however, that the Employer, in its discretion, may pay such
salary in a lump sum); and (iii) any Performance Bonus (in accordance with
Section 2(b)) that Executive would have earned in the year his employment
is terminated, prorated as of the date of such termination. For such
18-month period, the Employer shall continue to provide medical coverage to
Executive under substantially the same terms as were in effect on the date
of such termination. Additionally, any and all options, warrants or other
securities awarded to Executive pursuant to the Company's stock option plan
or any other similar plan shall, as of the date of Executive's termination,
immediately vest and become exercisable and all such options, warrants or
other securities shall remain exercisable by Executive for the
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duration of the period during which the options, warrants or other
securities would have remained exercisable if he had remained employed by
the Employer.
(ii) Except as otherwise provided herein, if Executive terminates his
employment for any reason other than Good Reason or if the Employer
terminates Executive's employment for Cause, the obligations of Executive
and the Employer under this Agreement shall terminate immediately,
provided, however, that the covenants of Executive contained in Section
4(a) shall continue indefinitely and the covenants of Executive contained
in Section 4(b) shall continue until the first anniversary of the date of
such termination. In such event, Executive shall be entitled to receive
only the compensation (including but not limited to reimbursement of
expenses pursuant to Section 2(e)) hereunder accrued and unpaid as of the
date of such termination.
(iii) If Executive's employment terminates due to disability, as
defined in Section 3(b), his obligations under this Agreement shall
terminate, except that the covenants contained in Section 4(a) shall
continue indefinitely. In such event, the Employer shall pay to Executive
the following amounts: (i) any compensation (including but not limited to
reimbursement of expenses pursuant to Section 2(e)) hereunder accrued and
unpaid as of the date of such termination; and (ii) Executive's base salary
as in effect on the date of such termination, for a period of one year
commencing on such date, in accordance with customary payroll procedures,
provided, however, that the payment of such salary shall be reduced to the
extent of any disability benefits provided to Executive under any
disability plan sponsored by the Employer. The vesting and exercise of any
and all options, warrants or other securities awarded to Executive pursuant
to the Company's stock option plan (or any other similar plan) shall be
governed by the terms of such plan.
(iv) No amount payable to Executive pursuant to this Agreement shall
be subject to mitigation due to his acceptance or availability of other
employment.
4. RESTRICTIVE COVENANTS; NON-COMPETITION.
Executive, in consideration of his employment hereunder, agrees as
follows:
(a) Except as otherwise permitted hereby or by the Board, Executive shall
treat as confidential, and not communicate or divulge to any other person or
entity, any information related to the Employer or its Affiliates or the
business, affairs, prospects, financial condition or ownership of the Employer
or any of its Affiliates (the "Information") acquired by Executive from the
Employer or the Employer's other employees or agents, except (i) as may be
required to comply with legal proceedings (provided, that, prior to such
disclosure in legal proceedings, Executive notifies the Employer and reasonably
cooperates with any efforts by the Employer to limit the scope of such
disclosure or to obtain confidential treatment thereof by the court or tribunal
seeking such disclosure) or (ii) while employed by the Employer, as Executive
reasonably believes necessary in performing his duties. Executive shall use the
Information only in connection with the performance of his duties hereunder, and
not otherwise for his benefit or the benefit of any other person or entity. For
purposes of this Agreement, Information shall include, but not be limited to:
any confidential information concerning the customers,
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marketing, business, contracts, financial or other data, and operational methods
of the Employer or its Affiliates; and any technical data or any other
confidential or proprietary information possessed, owned or used by the Employer
or its Affiliates. Excluded from Executive's obligation of confidentiality is
any part of such Information that: (i) was in the public domain prior to the
date of commencement of Executive's employment with the Employer or (ii) enters
the public domain other than as a result of Executive's breach of this covenant.
This Section (4)(a) shall survive the expiration or termination of the other
provisions of this Agreement.
(b) During Executive's employment with the Employer and for a period of one
year after the termination of Executive's employment hereunder by the Employer
for Cause or by Executive (other than for Good Reason):
(i) Executive will not, in any geographical area within which the
Employer is, at the time of Executive's termination or during the term of
Executive's employment, marketing its products or services or conducting
other business activities, directly or indirectly, engage in, own or
control an interest in (except as a passive investor in publicly held
companies and except for investments held at the date hereof) or act as an
officer, director, or employee of, or consultant or adviser to, any firm,
corporation or institution directly or indirectly that is in competition
with the Employer or engaged in business activities substantially similar
to those conducted by the Employer at the time of Executive's termination
or during the term of Executive's employment with the Employer; and
(ii) Executive will not recruit or hire any employee of the Employer,
or otherwise induce such employee to leave the employment of the Employer,
to become an employee of, or otherwise be associated with, Executive or any
company or business with which Executive is or may become associated.
5. NO VIOLATION.
Executive warrants that the execution and delivery of this Agreement
and the performance of his duties hereunder will not violate the terms of any
other agreement to which he is a party or by which he is bound. Additionally,
Executive warrants that he has not brought and will not bring to the Employer or
use in the performance of his responsibilities at the Employer any materials or
documents of a former employer that are not generally available to the public,
unless Executive has obtained express written authorization from the former
employer for their possession and use. Executive represents that he is not and,
since the commencement of his employment with the Employer, has not been a party
to any employment, proprietary information, confidentiality, or non-competition
agreement with any of Executive's former employers which remains in effect as
the date hereof. The warranties set forth in this Section 5 shall survive the
expiration or termination of the other provisions of this Agreement.
6. BREACH BY EXECUTIVE.
Both parties recognize that (i) the services to be rendered under this
Agreement by Executive are special, unique and extraordinary in character, and
(ii) in the event of the breach by Executive of the terms and conditions of this
Agreement to be performed by him or in
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the event Executive performs services for any person, firm or corporation
engaged in a competing line of business with Employer, the Employer shall be
entitled, if it so elects, to institute and prosecute proceedings in any court
of competent jurisdiction, whether in law or in equity, to, by way of
illustration and not limitation, obtain damages for any breach of this
Agreement, or to enforce the specific performance thereof by Executive, or to
enjoin him from competing with the Employer or performing services for himself
or any such other person, firm or corporation in violation of this Agreement.
The Employer may obtain an injunction restraining any such breach by Executive
and no bond or other security shall be required in connection therewith.
7. MISCELLANEOUS.
(a) This Agreement shall be binding upon and inure to the benefit of the
Employer, its successors and permitted assigns and may not be assigned by
Executive. The obligations of the Company and ITSA hereunder shall be joint and
several.
(b) This Agreement contains the entire agreement of the parties hereto and
supersedes all prior or concurrent agreements, whether oral or written, relating
to the subject matter hereof. This Agreement may be amended only by a writing
signed by the party against whom enforcement is sought.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the Cayman Islands without regard to its conflicts of laws, rules or
principles.
(d) Any notices or other communications required or permitted hereunder
shall be in writing and shall be deemed effective when delivered in person to
the other party at the respective address of such party as shall have been
specified in writing by either party to the other in accordance herewith.
(e) The provisions of Sections 4(a), 4(b) and 5, and the other provisions
of this Agreement which by their terms contemplate survival of the termination
of this Agreement, shall survive termination of this Agreement and be deemed to
be independent covenants.
(f) If any term or provision of this Agreement or its application to any
person or circumstance is to any extent invalid or unenforceable, the remainder
of this Agreement, or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision shall be valid and
enforced to the fullest extent permitted by law.
(g) No delay or omission to exercise any right, power or remedy accruing to
any party hereto shall impair any such right, power or remedy or shall be
construed to be a waiver of or an acquiescence to any breach hereof. No waiver
of any breach of this Agreement shall be deemed to be a waiver of any other
breach of this Agreement theretofore or thereafter occurring. Any waiver of any
provision hereof shall be effective only to the extent specifically set forth in
the applicable writing. All remedies afforded under this Agreement to any party
hereto, by law or otherwise, shall be cumulative and not alternative and shall
not preclude assertion by any
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party hereto of any other rights or the seeking of
any other rights or remedies against any other party hereto.
8. INDEMNIFICATION.
The Employer agrees to indemnify Executive to the fullest extent
permitted by applicable law, as such law may be hereafter amended, modified or
supplemented and to the fullest extent permitted by the Certificates of
Incorporation and By-Laws of the Company and ITSA, as from time to time amended,
modified or supplemented. The Employer further agrees that Executive is entitled
to the benefits of any directors and officers liability insurance policy, in
accordance with the terms and conditions of that policy, if such a policy is
maintained by the Employer.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
July 20, 2000. ITSA Ltd.
By: /s/ Hermano X. Xxxx Albuquerque
--------------------------------
Name: Hermano X. Xxxx Albuquerque
Title: Chief Executive Officer
ITSA-Intercontinental
Telecomunicacoes Ltda.
By: /s/ Hermano X. Xxxx Albuquerque
--------------------------------
Name: Hermano X. Xxxx Albuquerque
Title: Chief Executive Officer
Executive
/s/ Xxxxxx Xxxxx Albuquerque
--------------------------------------
Xxxxxx Xxxxx Albuquerque
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