123
EXHIBIT 99.2
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT made effective the 5th day of May, 1999
BETWEEN:
TSUNAMI MEDIA CORPORATION, a body corporate, incorporated
under the laws of the State of Delaware (hereinafter
referred to as the "Corporation")
and
Xxxxxxx X. Buterman, of the City of Calgary, in the Province
of Alberta (hereinafter referred to as "Employee")
WHEREAS the Corporation is in the business of developing and
marketing computer games software to be marketed in a variety of
methods to the mass market and selling advertising via such
computer games software (the "Corporation's Business");
AND WHEREAS the Corporation is desirous of hiring the
Employee to fill the position of Chief Operating Officer and to
perform and fulfil such duties as normally expected of such
position (the "Duties");
AND WHEREAS the Employee is desirous of working for the
Corporation and performing and fulfilling the Duties for the
Corporation as Chief Operating Officer;
AND WHEREAS the parties hereto are desirous of entering into
a written employment agreement (the "Agreement") setting out the
terms and conditions of the employment relationship;
NOW THEREFORE IN CONSIDERATION OF THESE PREMISES and the
mutual covenants and agreements hereinafter contained the parties
have agreed as follows:
TERM
1. The Corporation agrees to hire and employ the Employee in
the capacity of Chief Operating Officer to perform and
fulfil the Duties and the Employee hereby accepts such
employment on the terms set out herein.
2. Employment shall be for an indeterminate length of time and
shall commence effective the I st day of April, 1999.
124
TERMINATION
3. The Employee is not entitled to any notice of, or salary in
lieu of, the termination of the employment of the Employee,
where the termination is due to any breach of this Agreement
or other cause deemed sufficient in law or in any other
circumstances in which no notice or salary in lieu thereof
is required by law.
4. Subject to paragraph 5, herein, in the event the Employee is
terminated by the Corporation, without cause, then the
Employee shall be entitled to damages or salary in lieu of
notice for termination equivalent to a total of 6 months of
the existing agreement. The parties hereby agree that such
damages are a true and accurate reflection of the actual
loss, which will be sustained by the Employee in the event
of termination without cause.
5. In the event of a change in control of the Corporation, or
the Corporation disposes of all or substantially all of its
assets, or if a majority of the existing senior management
is replaced and any of which result in the Employee's
employment being terminated, without cause, the Employee
shall be entitled to payment equivalent to twelve (12)
months of the existing agreement. The date of closing of any
such event will be assumed to be the Corporations year-end
and all bonuses, calculated on that basis, will be due and
payable.
6. The Employee shall be required to give the Corporation two
months notice of his intended resignation or voluntary
cessation of employment.
DUTIES
7. The Employee covenants and agrees to perform all of the
prescribed duties to the best of his ability and hereby
covenants to use his best efforts to promote the interests
of the Corporation.
8. The Employee, throughout the term of his employment, shall
devote his full time and attention to the business and
affairs of the Corporation and shall not, without the
consent of the Board of Directors, undertake any other
business or occupation or become a director, officer,
employee or agent of any other company or firm.
9. The Employee shall conform to all lawful instructions and
directions given to him by the President or the Board of
Directors, and obey all policies and procedures of the
Corporation from time to time in force.
125
10. The Employee shall well and faithfully serve the Corporation
and covenants that he shall not disclose the confidential
information, private affairs or trade secrets of the
Corporation to any person or persons other than such
Employees, directors and officers of the Corporation as may
be necessary to carry out his Duties.
CORPORATION POLICIES AND PROCEDURES
11. The policies and procedures of the Corporation shall form
part of the terms and conditions of this Agreement and must
be strictly adhered to at all times. Once finalized, a copy
of such policies and procedures will be provided to the
Employee. New policies and procedures may be enacted at any
time and all policies and procedures are subject to deletion
or change at any time. The Employee will be informed of any
new policies and procedures and will also be advised of any
deletions or changes.
REMUNERATION AND BENEFITS
12. The remuneration of the Employee for services hereunder
shall be $112,000 U.S., for the first year of service,
payable in equal monthly installments, and for the second
year, and for each year thereafter, until and unless varied
by the Corporation, shall be $150,000 U.S., payable in equal
monthly installments.
13. The Employee shall be entitled to a bonus in the sum of
$50,500 upon the successful completion of a debt or equity
financing by the Corporation, for a gross amount of not less
than $2,500,000 U.S.
14. The Employee shall also be entitled to an annual bonus, to
be based upon the satisfaction of certain milestones, to be
determined and established by the Corporation and the
Employee, both acting in good faith. The satisfaction of the
milestones pertaining to said bonus shall be determined by
the parties in good faith.
The Corporation shall have the option to make payment of all
or part of the annual bonus, as calculated in this section
by way of cash or common shares of the Corporation, subject
to valuation and applicable regulatory approval, provided
that the Employee shall be at liberty to require that at
least 50% of any bonus due and payable to the Employee shall
be made in cash. In any event, the annual bonus shall be due
and payable within 10 days of the Corporations fiscal year
end.
126
15. Upon execution of this agreement, and subject to regulatory
approval, the Employee, or his designee, shall also be
granted the irrevocable option to acquire up to 200,000
shares of common stock of the Corporation at the exercise
price of $ 1.00 US per share. The Employee shall deliver
written notice to the Corporation of his election to
exercise all or part of the options conferred herein.
PROVIDED THAT any options not duly exercised:
a) within three years of the effective date of this
Agreement; or
b) upon the just termination or resignation of the
Employee
shall expire and be of no further force or effect.
16. The Employee shall be entitled to a paid vacation of 4 weeks
in each calendar year. In scheduling such vacations, the
Employee shall have regard to the procedures of the
Corporation concerning same and to the operations of the
Corporation. The Employee must use the entire annual
vacation entitlement during the year it is available for use
or he will lose the right to the unused portion of that
vacation entitlement and will not be compensated for such
loss.
17. The Employee shall be reimbursed for all travelling and
other expenses actually and properly incurred by him in
connection with performing or fulfilling the Duties. For all
such expenses, the Employee shall furnish the Corporation
with statements, receipts and vouchers.
TRADE SECRETS, CONFIDENTIAL INFORMATION AND NON-COMPETITION
18. This Agreement is conditional upon the Employee entering
into a Confidentiality and Non-Competition Agreement
substantially in the form attached hereto as Schedule "A".
GENERAL
19. Time shall be of the essence hereof.
20. If any provision of this Agreement is determined to be
unenforceable by a Court then such provision shall be
severable from the remainder of this Agreement and the
remainder of this Agreement shall be unaffected thereby and
shall remain in full force and effect.
21. The Schedules to this Agreement are incorporated herein by
this reference and are deemed to be a part hereof.
127
22. Other than the Confidentiality and Non-Competition Agreement
referred to in section 18 hereof, this Agreement
constitutes the entire understanding and agreement between
the parties with respect to the subject matter hereof and
cannot be amended, modified or supplemented in any respect
except by a subsequent written agreement entered into by
both parties.
23. Any notices or other communications required to be given
hereunder shall be in writing, and shall be facsimiled,
delivered personally or mailed by registered mail, postage
prepaid, to the parties at their respective addresses set
forth hereunder, namely:
To the Employee: To the Corporation:
0000X 00xx Xxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx
Attention:
Chief Financial Officer
or at any other such address or addresses as may be given by
either of them to the other in writing from time to time.
Such notice delivered or sent by facsimile shall be deemed
to have been received on the date of delivery or that date
acknowledged by the facsimile as being received. Such
notice, if mailed, shall be deemed to have been received on
the third business day (except Saturdays and Sundays and
holidays) following such mailing, or if delivered
personally, shall be deemed to have been received on the day
of delivery of a business day, if not a business day, on
the business day following the date of delivery; PROVIDED
THAT if such notice shall be mailed and if regular mail
service shall be interrupted by strike or other
irregularity before the deemed receipt of such notice as
aforesaid, then such notice shall not be effected unless
delivered.
24. The waiver by any party of any breach of any provision of
this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
25. This Agreement may not be assigned by either party hereto
without the express written consent of the other party,
such consent not to be unreasonably withheld or delayed.
26. This Agreement shall ensure to the benefit of and be binding
upon the parties hereto and their respective successors and
permitted assigns.
128
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date first above written.
TSUNAMI MEDIA CORPORATION
Per: ____________________
Xxxxx Xxxxxx, CFO
Per: ____________________
Xxxxxx X. Xxxxx, Director
_________________________ ______________________________
Xxxxxxx X. Buterman Witness
129
SCHEDULE "A"
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
THIS AGREEMENT dated for reference the _____ day of
__________, 199___.
BETWEEN:
Xxxxxxx X. Buterman, of Calgary, Alberta (the "Employee")
and
Tsunami Media Corporation, a corporation incorporated under
the laws of the State of Delaware (the "Corporation")
WHEREAS:
1. The Corporation is principally engaged in the business of
researching and developing and marketing computer hardware
and software technology, principally games;
2. An Executive Employment Agreement has been entered into
between the Corporation and the Employee;
3. The Employee and the Corporation wish to incorporate all of
the terms of this Agreement into the Executive Employment
Agreement between them;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the mutual entering into of the Executive Employment
Agreement, and for other good and valuable consideration, the
parties agree as follows:
4. Trade Secrets. The Employee understands that in the
performance of his the Duties with the Corporation, it will
be exposed to the trade secrets of the Corporation. "Trade
Secrets" means technical information or material that is
commercially valuable to the Corporation and not generally
known in the industry. This includes, without limiting the
generality of the foregoing, the following:
(a) any and all versions of the Corporation's proprietary
computer software (including source code and object
code), hardware, firmware and documentation; and
(b) technical information concerning the Corporation's
products, processes and services, including product and
process data and specifications, diagrams, flow charts,
drawings, test results, know-how, inventions, research
projects and product development.
130
5. Confidential Information. The Employee understands that in
the performance of the Duties with the Corporation, it will
be exposed to confidential information of the Corporation.
"Confidential Information" means non-technical information
or material that is commercially valuable to the Corporation
and not generally known in the industry. This includes,
without limiting the generality of the foregoing, the
following:
(a) information concerning the Corporation's business,
including cost information, profits, sales information,
accounting and unpublished financial information,
business plans, markets and marketing methods, customer
lists and customer information, purchasing techniques,
supplier lists and supplier information and advertising
strategies;
(b) information concerning the Corporation's consultants,
including their salaries, strengths, weaknesses and
skills;
(c) information submitted by the Corporation's customers,
suppliers, consultants, consultants or co-ventures with
the Corporation for study, evaluation or use; and
(d) any other information not generally known to the public
which, if misused or disclosed, could reasonably be
expected to adversely affect the Corporation's
business.
6. Nondisclosure of Trade Secrets. The Employee will keep the
Corporation's Trade Secrets, whether or not prepared or
developed by the Employee, in the strictest confidence. It
will not use or disclose such Trade Secrets to others
without the Corporation's written consent, except when
necessary to perform the Duties.
7. Nondisclosure of Confidential Information. The Employee will
keep the Corporation's Confidential Information, whether or
not prepared or developed by the Employee, in the strictest
confidence. It will not use or disclose such Confidential
Information to others without the Corporation's written
consent, except when necessary to perform the Duties.
8. Confidential Information of Others. The Employee will not
disclose to the Corporation, use in the Corporation's
business, or cause the Corporation to use, any information
or material that is confidential information or a trade
secret of others.
131
9. Return of Materials. When the Employee's contract with the
Corporation ends, for whatever reason, it will promptly
deliver to the Corporation all originals and copies of all
documents, records, computer hardware, computer software
programs, media and other materials containing any of the
Corporation's Trade Secrets or Confidential Information. It
will also return to the Corporation all equipment, files,
software programs and other personal property belonging to
the Corporation.
10. Trade Secrets Confidentiality Obligation Survives Contract.
The Employee understands and agrees that his obligation to
maintain the confidentiality and security of the
Corporation's Trade Secrets remains even after the contract
with the Corporation ends and continues for so long as such
material remains a Trade Secret.
11. Confidential Information Confidentiality Obligation Survives
Contract. The Employee understands and agrees that its
obligation to maintain the confidentiality and security of
the Corporation's Confidential Information remains even
after its contract with the Corporation ends and continues
for so long as such material remains Confidential
Information.
12. Disclosure of Developments. During the term of the
Consulting Agreement, the Employee will promptly inform the
Corporation of the full details of all its inventions,
discoveries, improvements, innovations, ideas, products and
processes (collectively called "Developments"), whether or
not patentable, copyrightable or otherwise predictable, that
he conceives, completes or reduces to practice, (whether
jointly or with others), in the course of performing or
fulfilling the Duties and which:
(a) relate to the Corporation's present or prospective
business, or actual or demonstrably anticipated
research and development;
(b) result from any work the Employee does using any
equipment, facilities, materials, Trade Secrets,
Confidential Information or personnel of the
Corporation; or
(c) result from or are suggested by any work that he may do
for the Corporation.
132
13. Assignment of Rights. The Employee acknowledges and agrees
that the Corporation or the Corporation's designee retains
all right, title and interest in the Developments which
arise during the course of its contract with the
Corporation. Accordingly, the Employee hereby assigns to the
Corporation or the Corporation's designee, any and all
right, title and interest in all
(a) patent rights,
(b) copyrights,
(c) trade secret rights, and
(d) mask work rights,
(collectively called "Rights") which arise with respect to
the Developments.
14. Execution of Documents. The Employee agrees to promptly
execute written assignments of specific Rights and such
other documents as are properly required to enable the
Corporation to obtain, maintain and enforce patents,
copyrights, and mask work right registrations relating to
the Developments, when so requested by the Corporation from
time to time. In the event Corporation is unable, after
reasonable effort, to secure the Employee's signature on any
such document, whether because of any physical or mental
incapacity or for any other reason whatsoever, the Employee
hereby irrevocably designates and appoints the Corporation
and its duly authorized officers and agents as his agent and
attorney-in-fact to act for and in his behalf and stead to
execute and file any patent, copyright and mask work right
application relating to the Developments and to do all other
lawfully permitted acts to further the prosecution,
issuance, maintenance and enforcement of letters patent,
copyright, and mask work rights thereon with the same legal
force and effect as if executed by the Employee.
15. Conflict of Interest. During the Employee's contract by the
Corporation, it will not engage in any business activity
competitive with the Corporation's business activities nor
will it engage in any other activities that conflict with
the best interests of the Corporation.
16. Post-Contract Non-Competition Agreement. The Employee
understands that during its contract with the Corporation it
may become familiar with the Confidential Information and
Trade Secrets of the Corporation. Therefore, it is possible
that grave harm could be caused to the Corporation if the
Employee worked for a competitor. Accordingly, the Employee
agrees for two years following the end of its contract with
the Corporation not to engage in, or contribute its
knowledge to any work that is competitive with or
functionally similar to any Developments or to a service or
product on which it worked while with the Corporation at any
time during the two years immediately before its contract
with the Corporation ended. The Employee further agrees that
133
during the two years following the end of its contract with
the Corporation it will not compete with the Corporation in
any of its businesses, directly or indirectly (it being
understood that competition includes the design,
development, production, promotion or sale of products or
services competitive with those of the Corporation) and that
it will not divert or attempt to divert from the Corporation
any business the Corporation enjoyed or solicited from their
customers during the one year prior to the termination of
its contract. For the purposes of this section, the
post-contract restrictions on the Employee shall apply in
the following areas:
(a) The World,
(b) North America,
(c) the United States of America including all of its
territories and possessions,
(d) Canada,
(e) Ontario, British Columbia, Alberta and
(f) all states, provinces or territories and possessions of
the United States of America or Canada in which the
Company carries on business.
The Employee acknowledges and agrees that the hardware and
software developed by the Corporation, or is intended to be,
distributed to customers across Canada and throughout the
World. Accordingly, the Employee agrees that these
restrictions on its post-contract activities shall apply
throughout Canada and the World. The Employee further agrees
that the time and territorial restrictions set out herein
are fair and reasonable and hereby waives its right to use
as a defense to any action brought against it hereunder that
the time and territorial restrictions are unreasonable in
scope or length.
In the event that a court of competent jurisdiction finds
any subsection or subsections dealing with the territorial
restriction of this section to be unenforceable, then that
subsection or subsections as the case may be, shall be
severed from this Agreement and the following subsection(s)
shall be deemed the governing restriction.
17. Noninterference with Corporation Employees. While employed
by the Corporation and for two years afterwards, the
Employee agrees that it will not induce, or attempt to
induce, any Corporation Employee to quit the Corporation's
employ or recruit or hire away any Corporation Employee.
18. Enforcement. The Employee acknowledges and agrees that in
the event of a breach or threatened breach of this
Agreement, money damages would be an inadequate remedy and
extremely difficult to measure. The Employee therefore
agrees that the Corporation shall be entitled to an
injunction to restrain it from such breach or threatened
breach. In addition, any breach or threatened breach of this
134
Agreement will result in the Corporation taking disciplinary
action against the Employee up to and including termination of
contract. Nothing in this Agreement shall be construed as
preventing the Corporation from pursuing any remedy at law or in
equity for any breach or threatened breach.
19. Effective Date. It was understood and agreed between the
Corporation and the Employee when the Employee commenced its
contract with the Corporation that an agreement
substantially similar to this Agreement was a condition of
contract. The Employee and Corporation hereby incorporate
all of the terms of this Agreement into the contract between
them and further agree that the terms of this Agreement are
incorporated effective as of the entering into of the said
contract of contract by the Employee and Corporation.
20. Notices. Except as otherwise expressly provided herein, any
and all notices or demands which must or may be given
hereunder or under any other instrument contemplated hereby
shall be given by delivery in person or by regular mail or
by facsimile transmission as follows:
To Employee: To Corporation:
Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx
Attention:
Chief Financial Officer
Ph: Facsimile: (403)
All such communications, notices or presentations and
demands provided for herein shall be deemed to have been
delivered when actually delivered in person to the
respective party, or if mailed, then on the date it would be
delivered in the ordinary course of mail, or if sent by
facsimile transmission, on the date of receipt of
confirmation that the transmission has been received. Any
party may change its address hereunder on twenty days notice
to the other party in compliance with this section.
21. Severability. If any provision of this Agreement is wholly
or partially unenforceable for any reason, such
unenforceable provision shall be severed from the whole
thereby preserving the enforceability to the balance of this
Agreement, and all provisions of this Agreement shall, if
alternative interpretations are applicable, be construed so
as to preserve the enforceability thereof.
22. General. Time will be of the essence hereof. The Employee
acknowledges and declares that it has been provided with
sufficient time and opportunity to consider all factors
relating to this Agreement, has retained and consulted
independent counsel to advise it, or in the alternative has
elected to waive its right to retain and consult independent
counsel. It further acknowledges and declares that it has
read and understands the terms of this Agreement and has
135
signed it voluntarily with full awareness of its
consequences. This Agreement may not be assigned by the
Employee without the express written consent of the other
parties hereto. Wherever the singular, masculine, or neuter
is used in this Agreement, the same shall be construed as
meaning the plural or feminine, and vice versa, where the
context or the parties so require. The headings used herein
are for convenience of reference only and shall not affect
the interpretation of this Agreement. Facsimile or
photostatic copies of signatures are acceptable and are of
the same force and effect as original signatures for all
intents and purposes. The waiver by either party of any
breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach. The
provisions of sections 6, 7, 8, 10, 11, 13, 14, 15, 16, 17,
18 and 19 herein shall survive any termination of the
contract of contract which embodies this Agreement. This
Agreement may be executed in several counterparts, each of
which so executed shall be deemed to be an original, and
such counterparts together shall constitute but one and the
same instrument. The preambles or recitals hereto are hereby
incorporated herein and form an integral part of this
Agreement. This Agreement shall enure to the benefit of the
parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns.
IN WITNESS WHEREOF the parties hereto have duly executed
this Agreement under seal this _____ day of __________, 1999
_______________________
Signature
_______________________
Name (Print)
TSUNAMI MEDIA CORPORATION
Per: __________________
