EXHIBIT 10.11
MANAGEMENT EMPLOYMENT AGREEMENT
THIS AGREEMENT dated the 1st day of February, 2000.
BETWEEN:
MDU COMMUNICATIONS INTERNATIONAL, INC., a body corporate duly incorporated under
the laws of State of Delaware and having its offices at Xxxxx 000, 00000
Xxxxxxxxxxx Xxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0;
(the "Company")
AND:
XXXXXXX XXXXXX, an individual having his residence at Xxxxx 0000, 000 Xxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxx, X0X 0X0;
(the "Executive")
RECITALS
WHEREAS, the Company wishes to obtain the services of the Executive and the
Executive is willing to provide his service to the Company upon the terms and
conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants and
agreements herein set forth, the parties hereto mutually covenant and agree as
follows:
CONTRACT FOR SERVICES
1.1 The Company hereby engages the Executive to be the Chief Executive
Officer of the Company and the Executive hereby agrees to act as Chief
Executive Officer of the Company. The Executive shall perform all duties
incident to such position of Chief Executive Officer and other duties as may
reasonably be required from time to time by the Board of Directors of the
Company.
1.2 The Executive consents to acting as a Director of the Company or one or
more affiliated or associated companies.
1.3 In addition, during the term of this Agreement the Company may also
request that the Executive assume senior executive management roles with its
associated companies pursuant to the terms of agreements executed between its
associated companies.
LOCATION
2. The Executive agrees to provide the services at the time and in the
manner set forth herein. The Executive shall perform his duties out of the
Richmond, British Columbia office of the Company, but the Company may, in its
discretion, direct that the duties be provided on occasion in other locations
maintained by the Company.
EXTENT OF SERVICE
3. The Executive shall, during the term of this contract, devote at least 35
hours per work week to the business of the Company, but may continue as a
director or consultant to any other company, firm, or individual that is not in
competition with the Company, so long as his association with such company,
firm or individual does not interfere with his attention to the Company's
business.
SALARY AND EXPENSES
4.1 In consideration of Executive providing the employment duties, the
Company shall pay to the Executive a base salary before customary payroll
deductions, in equal semi-monthly installments, at $15,000.00 per month. The
Company may pay to the Executive bonuses as and when declared by the Company's
Board of Directors. The Company shall reimburse the Executive directly for all
reasonable, necessary and approved travel and other expenses incurred by the
Executive in connection with the provision of services hereunder, however, for
all such expenses the Executive shall furnish statements and receipts.
4.2 At the end of each employment year or sooner if determined by the
Company's Board of Directors (the "Board"), the Executive's base salary shall
be reviewed by the Board and increased as determined by the Board in its sole
discretion.
OPTIONS
5. In addition to the fees provided for in Section 4 and all other amounts
payable to the Executive hereunder, the Executive shall be entitled to
participate in other company incentive plans or employee incentive stock
options in respect of unissued Common shares in the capital stock of the
Company and its associated companies, such options to be exercisable for a
minimum period of five years from the date of grant, a maximum vesting period
of three (3) years and with such other conditions as are determined by the
Board of Directors of each company and as are prescribed by the policies of the
stock exchanges on which the Common shares of the each company are listed.
VACATION
6. The Executive shall be entitled to vacation from time to time without any
abatement or reduction of the compensation payable herein, provided that such
vacation does not exceed:
(a) 5 weeks per year during the first year of the term of this
Agreement; and
(b) 6 weeks per year thereafter.
While the Company shall endeavor to accommodate the Executive's wishes with
respect to the timing of such vacation, they shall be taken at such time as the
Company shall determine having regard to the requirements of the Company's
business.
CONFIDENTIAL INFORMATION
7. The Executive shall well and faithfully provide the service to the
Company, and use his best efforts to promote the interest thereof and shall not
disclose (either during the term of this Agreement or at any time thereafter)
the private affairs of the Company or any trade secret of the Company, to any
persons other than the Directors of the Company and shall not use (either
during the continuance of this Agreement or at any time thereafter) for his own
purposes, or for any purposes other than those of the Company, any information
their may acquire with respect to the Company's
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affairs. The Executive further agrees to execute such further and other
agreements concerning the secrecy of the affairs of the Company, as the
Directors of the Company shall reasonably request. Furthermore, without
restricting the generality of the foregoing, the Executive shall not either
during the term of this Agreement or any time thereafter, directly or
indirectly divulge to any person, firm or corporation:
(a) any intellectual property, proprietary information, know-how,
trade secrets, processes, product specifications, new product
information or methods of doing business acquired in the course of
providing the services hereunder;
(b) any information with respect of Company personnel or
organization, or any of the financial affairs or business plans of the
Company; or
(c) any information in respect of Company pricing policies, sales
statistics, sales and marketing plans and strategies, profits, costs,
or sourcing of clients.
DISABILITY
8. If the Executive shall, at any time, by reason of illness or mental or
physical disability, be incapacitated from providing all or a material part of
the services required by of this Agreement, the Executive shall furnish the
Directors of the Company with medical evidence to prove such incapacity and
cause thereof, and thereupon the Executive shall be entitled to receive the
compensation payable pursuant to Section 4 without abatement or reduction for a
maximum period of 180 days from the commencement of the disability. If the
Executive is unable to return to the performance of the services at the
standard they were performed prior to the incapacity, the Company may terminate
the Agreement at any time after the 180 days, by written notice.
TERM OF AGREEMENT
9. This Agreement shall become effective on the 1st day of February 2000,
and shall continue thereafter unless terminated upon mutual consent of the
Executive and the Company, or until termination by the Executive or the Company
in accordance with Sections 10 or 11, whichever is earlier.
TERMINATION FOR CAUSE
10. Without prejudice to any remedy the Company may have against the
Executive for any breach or non-performance of this Agreement, the Company may
terminate this Agreement, subject to Section 16, for breach by the Executive at
any time effective immediately and without notice and without any payment for
any compensation either by way of anticipated earnings or damage of any kind to
him whatsoever, save and except in respect of compensation payable to the date
of such termination. For the purposes of this paragraph, any one of the
following events shall constitute breach of this Agreement sufficient for
termination, provided however, that the following events shall not constitute
the only reasons for termination:
(a) guilty of any material dishonesty or gross neglect in the
provision of the services hereunder; or
(b) conviction of the Executive of any criminal offense, other
than an offense which in the reasonable opinion of the Company does
not affect the Executive's position as a representative of the
Company; or
(c) bankruptcy of the Executive or making any arrangement or
composition with its creditors; or
(d) alcoholism or drug addiction of the Executive which impairs
his ability to provide the services required hereunder; or
(e) excessive and unreasonable absence of the Executive from the
performance of the services for any reason other than for absence or
incapacity specifically allowed hereunder.
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TERMINATION WITHOUT CAUSE
11.1 The Executive shall be entitled to terminate this Agreement, at any time
by giving four (4) weeks notice in writing to the Board of Directors of the
Company.
11.2 The Company shall be entitled to terminate this Agreement at any time by
the Company upon giving the Executive notice in writing of such termination and
upon payment to the Executive of all compensation and other amounts owing up to
the date of termination and a termination payment in an amount equal to the
compensation due under Section 4.1 for a period of 24 months in full
satisfaction of all claims that the Executive may have against the Company.
11.3 In the event of a change in control of the Company and for a period of 12
months after the closing of a change in control transaction, the Company shall
be entitled to terminate this Agreement upon giving the Executive notice in
writing of such termination and upon payment to the Executive of all
compensation and other amounts owing up to the date of termination and a
termination payment in an amount equal to the compensation due under Section
4.1 for a period of 36 months in full satisfaction of all claims that the
Executive may have against the Company. For a period of 12 months following the
change in control of the Company, at the option of the Executive, the Executive
may terminate the Agreement upon giving notice to the Company and the Company
will pay to the Executive all compensation and other amounts owing up to the
date of termination and a termination payment in an amount equal to the
compensation due under Section 4.1 for a period of 36 months in full
satisfaction of all claims that the Executive may have against the Company.
INDEMNITY AND RESIGNATION
12.1 As a Delaware corporation, the Company hereby indemnifies the Executive,
his heirs, executors, administrators and personal representatives
(collectively, the "Indemnitees") to the maximum extent of the law of the State
of Delaware and the Company's certificate of incorporation.
12.2 As the Company's head office, subsidiaries and majority of operations are
located in Canada and subject to the CANADA BUSINESS CORPORATIONS ACT, as
amended from time to time (the "Act"), the Company hereby indemnifies the
Indemnities and save the Indemnitees harmless against all cost, charges and
expenses actually and reasonably incurred by the Indemnitees in law, in equity
or under any statute or regulation in connection with any civil, criminal or
administrative claim, action, proceeding or investigation to which the
Indemnitees are made a party or in which they are otherwise involved as a
witness or other participant by reason of the Executive being or having been an
officer or Director of the Company or its affiliated or associated companies,
including any action brought by the Company or affiliated companies, if:
(a) the Executive acted honestly and in good faith with a view to
the best interests of the Company or affiliated companies; and
(b) in the case of a criminal or administrative claim, action,
proceeding or investigation, the Executive had reasonable grounds for
believing that his conduct was lawful.
12.3 The Executive hereby jointly and severally indemnifies the Company and
its affiliated or associated companies (the "Group"), its officers, Directors
and agents and save the Group harmless against all cost, charges and expenses
actually and reasonably incurred by the Group in law, in equity or under any
statute or regulation in connection with any civil, criminal or administrative
claim, action, proceeding or investigation to which the Group are made a party
or in which they are otherwise involved as a witness or other participant by
reason of the Executive:
(a) having breached a non-competition agreement;
(b) having used or having caused, permitted, or acquiesce in the
use by the Group of proprietary or confidential business information
or intellectual property of a third party or third parties in
contravention of any law or agreement to which the Executive or the
Group is subject or to which any is a party or by which any is bound;
(c) having an undisclosed conflict of interest; or
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(d) having breached any term of this Agreement, or in the case of
the Executive, having breached his fiduciary duty to the Company.
12.4 Without limiting. the generality of Section 12.2 and 12.3, the costs,
charges and expenses against which the Group and the Executive will indemnify
each other include:
(a) any and all fees, costs and expenses actually and reasonably
incurred by the defending party in investigating, preparing for,
defending against, providing evidence in, producing documents or
taking any other action in connection with any commenced or threaten
action, proceeding or investigation, including reasonable legal fees
and disbursements, travel and lodging costs;
(b) any amounts reasonably paid in settlement of any action,
proceeding or investigation;
(c) any amounts paid to satisfy a judgment or penalty, including
interest and costs; and
(d) all costs, charges and expenses reasonably incurred by the
defending party in establishing their right to be indemnified pursuant
to this Agreement.
12.5 If the Indemnitees, the Group or any of them are required to include in
their income, or in the income of the estate of the Executive, any payment made
under this Section 12 for the purpose of determining income tax payable by the
Indemnitees or the Group or any of them or the estate, the Company shall pay an
amount by way of indemnity that will fully indemnify the Indemnitees or estate
for the amount of all liabilities described in Section 12.2 and all income
taxes payable as a result of the receipt of the indemnity payment and the
Executive shall pay an amount by way of indemnity that will fully indemnify the
Group for the amount of all liabilities described in Section 12.3 and all
income taxes payable as a result of the receipt of the indemnity payment.
12.6 Any failure by the Executive in his capacity as a Director or officer of
the Company to comply with the provisions of the Act or of the Articles of
Incorporation or Bylaws of the Company will not invalidate any indemnity to
which he is entitled under this Agreement.
12.7 When practical, the Company will apply for an appropriate level of
directors and officers liability insurance in support of the indemnity given
herein.
12.8 Upon the termination of this Agreement, the Executive will tender to the
Company his resignation as an officer and or Director of the Company or any
affiliate of the Company.
NON-COMPETITION
13.1 For a period of 12 months following the termination of this Agreement,
for any reason whatsoever, the Executive shall not become employed by, or enter
into a contract of service or for service or be involved with or assist in any
way, whether directly or indirectly, with any company, person or other entity
which competes directly with the Company.
13.2 The Executive acknowledges and agrees that there can be no geographical
limit to his covenant not to compete directly due to the nature of the business
of the Company, the market for the Company's products, services and the
technologies with which the Company is involved.
13.3 The parties to this Agreement recognize that a breach by the Executive of
any of the covenants herein contained would result in damages to the Company
and that the Company cannot be adequately compensated for such damages by
monetary award. Accordingly, the Executive agrees that in the event of any such
breach, in addition to all other remedies available to the Company at law or in
equity, the Company shall be entitled as a matter of right to apply to a court
of competent equitable jurisdiction for such relief by way of restraining
order, injunction, decree or otherwise, as may be appropriate to ensure
compliance with the provisions of this Agreement.
13.4 The Executive will execute the Company's standard non-competition
agreement as required by all senior executive staff.
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OWNERSHIP AND USE OF WORK PRODUCTS
14.1 The Executive agrees that any work product produced by the Executive in
furtherance of the business of the Company either developed solely by the
Executive or jointly with any other party will be the sole and exclusive
property of the Company.
14.2 The Company acknowledges that general knowledge and experience including
general techniques, concepts, methods and formulae not developed for the
Company's specific application or work gained by the Executive prior to or in
the course of his association with the Company, may be used by the Executive at
any time prior to, during or subsequent to his association with the Company,
unless a specific agreement to the contrary is entered into by the Executive
and the Company, as long as the Executive is not in breach of his covenants of
non-competition contained herein.
14.3 This Agreement does not apply to general techniques, formulae, concepts
or method for which no equipment, supplies, facility or other resources or
trade secret information of the Company was used and which was developed
entirely on the Executive's own time unless such general techniques, formulae,
concepts or method relates directly to the actual or specifically targeted
business of the Company.
14.4 At any and all times, either during the term of this Agreement or after
termination hereof, the Executive will promptly, on the request of the Company,
perform all such reasonable acts and execute and deliver all such documents
that may be necessary to vest in the Company the entire right, title and
interest in and to any such work products determined, by the Company, to be the
exclusive property of the Company. Should any such services be rendered after
termination of this Agreement, a reasonable fee, mutually agreed upon by the
Executive and the Company will be paid to the Executive on a per diem basis in
addition to reasonable traveling and accommodation expenses incurred as a
result of rendering such services.
14.5 The Executive will execute the Company's standard invention assignment
agreement as required by all senior executive staff.
RETURN OF PROPERTY
15.1 In the event of termination of this Agreement, the Executive agree to
return to the Company any property, which may be in the possession or control
of the Executive.
15.2 The Executive will execute the Company's standard non-solicitation
agreement as required by all senior executive staff.
SURVIVAL
16. Notwithstanding the termination of this Agreement for any reason
whatsoever the provisions of Section 7, 12, 13, 14 and 15 hereof and any other
provision of this Agreement necessary to give efficacy thereto shall continue
in full force and effect following such termination.
NOTICE
17. Any notice or other communication (each a "Communication") to be given in
connection with this Agreement shall be given in writing and will be given by
personal delivery addressed as follows:
TO: MDU Communications International, Inc.
Xxxxx 000, 00000 Xxxxxxxxxxx Xxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
ATTENTION: CORPORATE SECRETARY
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TO: Xxxxxxx Xxxxxx
Suite 1504, 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx
X0X 0X0
or at such other address as shall have been designated by Communication by
either party to the other. Any Communication shall be conclusively deemed to
have been received on the date of delivery. If the party giving any
Communication knows or ought reasonably to know of any actual or threatened
interruptions of the mails, any such Communication shall not be sent by mail
but shall be given by personal delivery.
ENTIRE AGREEMENT
18. This Agreement constitutes and expresses the whole agreement of the
parties hereto with reference to the services of the Executive by the Company,
and with reference to any of the matters or things herein provided for, or
hereinbefore discussed or mentioned with reference to such services; all
promises, representations, and understandings relative thereto being merged
herein.
AMENDMENTS AND WAIVERS
19. No amendment of this Agreement shall be valid or binding unless set forth
in writing and duly executed by all parties hereto. No waiver or any breach of
any provision of this Agreement shall be effective or binding unless made in
writing and signed by the party purporting to give the same and, unless
otherwise provided in the written waiver, shall be limited to the specific
breach waived.
BENEFIT OF AGREEMENT
20. The provisions of this Agreement shall enure to the benefit of and be
binding upon the legal personal representatives of the Executive and the
successors and assigns of the Company.
SEVERABILITY
21. If any provision of this Agreement is deemed to be void or unenforceable,
in whole or in part, it shall not be deemed to affect or impair the validity of
any other provision of this Agreement, and each and every section, subsection
and provision of this Agreement is hereby declared and agreed to be severable
from each other and every other section, subsection or provision hereof and to
constitute separate and distinct covenants. The Executive hereby agrees that
all restrictions herein are reasonable and valid.
JURISDICTION
22. This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia. The Company and the Executive hereby
irrevocably consent to the jurisdiction of the courts of the Province of
British Columbia.
COPY OF AGREEMENT
23. The Executive hereby acknowledges receipt of a copy of this Agreement
duly signed by the Company.
NUMBER AND GENDER
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24. Wherever the singular is used in this Agreement it is deemed to include
the plural and wherever the masculine is used it is deemed to include the
feminine or body politic or corporate where the context or the parties so
require.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written:
MDU COMMUNICATIONS INTERNATIONAL, INC.
---------------------------------
Authorized Signatory
In the presence of: EXECUTIVE
/s/ Xxxxxxx Xxxxxx
--------------------------------- --------------------------------
Witness Xxxxxxx Xxxxxx
---------------------------------
Name
---------------------------------
Address
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