Exhibit 10.24
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EMPLOYMENT AGREEMENT
InnovaCom, Inc., a Nevada corporation, located at 0000 Xxxxxxx Xxxxx, Xxxxx
Xxxxx, XX 00000, hereinafter referred to as "Employer", and Xxxxx Xxxxxx,
hereinafter referred to as "Employee", in consideration of the mutual promises
made herein, agree as follows:
DUTIES, OBLIGATIONS, AND AUTHORITIES OF EMPLOYEE:
Employee shall serve as the President and acting Chief Executive Officer of
InnovaCom, Inc. In this capacity and as President of InnovaCom, Inc., Employee
shall and may do and perform all services, acts, or things necessary or
advisable to manage and conduct the business of Employer, including the hiring
and firing of all employees other than the officers of Employer, subject at all
times to the policies set by Employer's Board of Directors. The responsibilities
of Employee will include building and supervising the management team for
Employer, selecting the strategic and tactical direction of Employer, and
conducting the necessary oversight to ensure that the Employer meets its
revenue, profitability, and cash-flow goals. Employee will report to the Board
of Directors of InnovaCom, Inc.
COMPETITIVE ACTIVITIES:
During the term of this Agreement Employee shall not, directly or
indirectly, engage or participate in any business that is in competition with
the business of Employer. This Agreement shall not be interpreted to prohibit
Employee from making passive personal investments.
PLACE OF EMPLOYMENT
Unless the parties agree otherwise in writing, Employee will perform the
services he is required to perform under this Agreement at Employer's offices in
Santa Xxxxx County; provided, however, that Employer may from time to time
require Employee to travel temporarily to other locations on Employer's
business.
OBLIGATIONS OF EMPLOYER:
Employer shall provide Employee with the compensation, incentives,
benefits, and business expense reimbursement specified elsewhere in the
Agreement and will not unduly interfere with Employee in the exercise of his
responsibilities.
COMPENSATION OF EMPLOYEE:
Annual Salary: As compensation for the services to be performed hereunder,
Employee shall receive a salary at the rate of $135,000 per annum, payable in
accordance with the normal payroll practices of the Employer.
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Salary Continuation During Disability: If Employee for any reason becomes
disabled so that he is unable to perform the duties prescribed herein, Employee
agrees to first attempt to obtain disability benefits under any applicable
Employer disability income benefit plan in which he is covered. If the
requirements of such insurance plan for any reason do not provide coverage for
Employee, Employer agrees to pay Employee that amount which Employee would
otherwise have received under the maximum benefits available under such
insurance plan had he been eligible to receive such benefits. However, payment
of such benefits shall be limited to a maximum amount of twelve (12) months. Ths
provision does not affect or will be affected by any other benefits which
Employee may be able to otherwise receive under any other private or government
benefits available to Employee. Nor does such disability affect any stock
vesting provisions.
Tax Withholding: Employer shall have the right to deduct or withhold from
the compensation due Employee hereunder any and all sums required for federal
income and Social Security taxes and all state or local taxes now applicable or
that may be enacted and become applicable in the future.
EMPLOYEE BENEFITS:
Annual Vacation: Employee will be entitled to four weeks of cumulating paid
vacation each twelve-month period, which shall accrue on a prorate basis from
June 26, 1998 (hereinafter referred to as "Commencement Date").
Additional Benefits: During employment, Employee shall be entitled to
receive all other benefits of employment generally available to Employer's other
employees when and as he becomes eligible for them, including, but not limited
to, medical, dental, life and disability insurance benefits, and participation
in Employer's pension plan and profit-sharing plans, stock option or stock
purchase plans, etc.
Expense Reimbursement: During employment, Employer shall reimburse Employee
promptly for reasonable business expenses, including, but not limited to,
travel, entertainment, parking, business meetings, and professional dues, made
and substantiated in accordance with the policies and procedures established
from time to time by Employer with respect to Employer's other executive and
managerial employees.
STOCK OPTION:
Employer grants Employee an option to purchase 1,000,000 share of
Employer's common stock at a purchase price of $.26 per share. This option vests
and is exercisable in the following increments and times:
1. 16.667% of the Option entitling Employee to purchase 166,667 shares of
common stock shall vest and become exercisable on June 26, 1998
(Commencement Date);
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2. 16.667% of the Option, entitling Employee to purchase 166,667 shares
of the Company's common stock shall vest and become exercisable on
June 26, 1999;
3. 16.666% of the Option entitling Employee to purchase 166,666 shares of
the Company's common stock shall vest and become exercisable on June
26, 2000;
4. The remaining 500,000 shares of the Option shall vest and become
exercisable on June 26, 2003 (the "Final Vesting Date"). Vesting of
these shares will be accelerated based upon the performance goals to
be agreed upon in good faith between the Employee and the compensation
committee of the Employer by September 1, 1998;
5. All 1,000,000 shares will be vested and exercisable immediately in the
event of a Change in Control of Employer or if Employee is terminated
without cause at any time prior to the Final Vesting Date. For the
purposes of this Agreement, a "Change in Control" shall be deemed to
have occurred if and when any of the following shall occur:
a) Individuals who as of the date six months after the Commencement
Date (the "Six Month Date") constitute the entire Board and any
new directors whose election by the Board, or whose nomination
for election by the Employer's stockholders, shall have been
approved by a vote of at least a majority of the directors then
in office whether they were directors as of the Six Month Date or
whose election or nomination for election shall have been so
approved shall cease for any reason to constitute a majority of
the members of the Board.
b) Any person (as such term is used in Section 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") shall after the Commencement Date become the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act), directly or indirectly, of securities of the Employer
representing thirty percent (30%) or more of the voting power of
all then outstanding securities of the Employer having the right
under ordinary circumstances to vote in an election of the Board
(it being understood and agreed that, for this purpose, any
securities of the Employer that any person has the right to
acquire pursuant to any agreement, upon exercise of any
conversion rights, warrants or options or by any other means,
shall be deemed beneficially owned by such person);
c) There shall be approved by a vote of the Employer's shareholders
or other appropriate corporation action any corporation
transaction, including a consolidation or merger, involving the
Employer (regardless of whether the Employer is the continuing or
surviving corporation) or pursuant to which shares of the
Employer's capital stock are converted into cash, securities or
other property, other than a consolidation or merger of the
Company in which the holders of the Company's
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voting stock immediately prior to the consolidation or merger
shall, upon consummation thereof, own half number of shares of
the capital stock of the continuing or surviving corporation
sufficient to provide such holders with at least fifty-one
percent (51%) of the voting power of all shares of the capital
stock of the continuing or surviving corporation;
d) There shall be approved by a vote of the Employer's shareholders
or other appropriate corporate action any sale, lease, exchange,
or transfer (whether in a single transaction or a series of
related transactions) of all or substantially all of the assets
or business of the Employer or any liquidation, dissolution or
winding up of the Employer.
6. The option shall remain exercisable until, and shall not expire
earlier than two (2) years from the date of change of control.
7. As soon as practical following the Employee's request, the Employer
shall register the shares of common stock subject to the Option under
the federal securities laws and shall take such other steps as may be
necessary to enable such shares to be offered and sold to the public
under the federal securities laws and any other such laws.
INDEMNIFICATION:
As part of the consideration provided by this Agreement and separate from
any other legal requirements for indemnification of Employee by Employer, the
Employer will indemnify and hold harmless the Employee and his legal
representatives, from and against all judgments, fines, penalties, excise taxes,
amounts paid in settlement liabilities, losses, costs and expenses, including
reasonable attorneys' fees and legal costs, if the Employee is made, is
threatened to be made, or in good faith expects to be made a party or a witness
to any threatened or pending or completed action, suit, proceeding or
investigation, whether civil, criminal administrative or otherwise, including an
action by or in the right of the Employer or any of its affiliated companies to
procure a judgment in its favor, by reason of the Employee having provided
services to the Employer or being or having been a director, officer, consultant
or employee of the Employer or by reason of the Employee serving or having
served in any capacity whatsoever (including as a director, officer or employee)
any other corporation, partnership, joint venture, limited liability company,
trust, employee benefit plan or other enterprise at the request of the Employer.
The Employee's right to indemnification shall continue after the Employee has
ceased to be a director or officer and shall inure to the benefit of the
Employee's heirs, executors, administrators, attorneys, agents, and assigns. Any
reimbursement obligation arising hereunder shall be satisfied on an as-incurred
basis. The Employer agrees to immediately secure and maintain in effect
customary and appropriate directors' and officers' liability insurance
throughout Employee's employment and for a period of not less than six years
commencing immediately after termination of Employee's employment, it being
understood and agreed that the Employee shall be immediately added as a named
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insured to any and all such insurance policies. Employee shall additional be
entitled to the protection of any and all such insurance policies on no less
favorable a basis than is now or hereafter provided to any other officer or
director of the Company or any of its affiliated companies.
TERMINATION:
Employer and Employee agree that Employee's employment is on an "at-will"
basis. Either Employer or Employee may terminate this Agreement at any time for
any reason. The following additional issues, not otherwise covered by this
Agreement, pertain to such termination actions:
a) Employee is requested to provide a minimum two week notice period to
Employer in the event of his resignation;
b) If the Employer elects to terminate Employee's employment without
cause, Employer agrees to pay Employee a minimum severance salary of
three months pay of Employee's then-existing salary. Employer also
agrees to pay for twelve (12) additional months of medical and dental
insurance coverage for Employee and his dependents. Additional
compensation will be negotiated at the time as the circumstances may
then warrant such additional compensation.
c) A termination for "cause" as used in this Agreement will mean a
willful breach of the duties Employee is required to perform under the
terms of this Agreement, or the commission of such acts of dishonesty,
fraud, or other acts of moral turpitude as would prevent the effective
performance of his duties.
GENERAL PROVISIONS:
This Agreement shall not be terminated by Employer's voluntary or
involuntary dissolution or by any merger in which Employer is not the surviving
or resulting corporation, or in any transfer of all or substantially all of
Employer's assets. In the event of any such merger or transfer of assets, the
provisions of the Agreement shall be binding on and/or inure to the benefit of
the surviving business entity of the business entity to which such assets shall
be transferred.
If any provision of this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining provisions
shall nevertheless continue in full force without being impaired or invalidated
in any way.
If there is any dispute over the terms and conditions of this Agreement or
any breach thereof, the parties mutually agree that prior to instituting any
legal action they will engage in good faith to resolve such dispute in
mediation. The mediator will be jointly agreed upon by the parties.
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This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
Dated this 15th day xx Xxxxx, 0000, xx Xxxxx Xxxxx, XX.
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
Dated this 15th day of March, 1999, at Santa Clara, California.
InnovaCom, Inc.
By: /s/ Xxxxxxx Xxxxxxx
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Title: CFO
