EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
effective (the "Effective Date") as of the closing date of the proposed initial
public offering of Global Traffic Network, Inc., a Delaware corporation located
at 0000 Xxxx Xxxx Xxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000 (the
"Company"), by and between the Company and Xxxx X. Xxxxxx, with a mailing
address of 00000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx Xxxxx, Xxxxxxx 00000 (the
"Employee").
BACKGROUND
A. The Company desires to employ Employee as the Company's Treasurer and
Secretary in accordance with the terms and conditions of this Agreement, and
wishes to obtain reasonable protection against unfair competition from Employee
following termination of employment and to protect itself against unfair
competition and the use of its confidential business and technical information.
B. Employee wishes to provide services to the Company in exchange for
compensation and is willing to grant the Company the benefits of the various
covenants contained herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing facts, the mutual
covenants set forth herein and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Employment. The Company hereby employs Employee as the Company's
Treasurer and Secretary, and Employee hereby accepts such employment and agrees
to serve the Company to the best of his ability, promoting the Company's
interests and business and devoting substantially all of his business time,
energy and skill to such employment.
2. Duties and Powers. While Employee is employed hereunder, and excluding
any periods of vacation, sick, disability or other leave to which Employee may
be entitled, Employee agrees to devote substantially all of Employee's attention
and time during normal business hours to the business and affairs of the Company
and, to the extent necessary to discharge the responsibilities assigned to
Employee pursuant hereto and under the Company's bylaws as amended from time to
time, to use Employee's reasonable best efforts to perform faithfully and
efficiently such responsibilities as set forth in EXHIBIT A attached hereto.
Employee shall perform such duties under the direction of, and shall report to,
the Company's Chief Executive Officer, President or Board of Directors (the
"Board") or a committee thereof. Employee shall comply with the Company's
policies and procedures; provided, however, that to the extent such policies and
procedures are inconsistent with this Agreement, the provisions of this
Agreement shall control.
3. Term. The Employee's appointment and position hereunder shall be
effective as of the Effective Date. This Agreement shall continue for three (3)
years after the Effective Date or until earlier terminated as provided pursuant
to Section 8.
4. Salary. As described above, the Company shall pay to Employee an annual
salary of Fourteen Thousand Five Hundred Eighty-Three and 33/100 Dollars
($14,583.33) per month, the
equivalent of One Hundred Seventy-Five Thousand Dollars ($175,000) per year,
according to the Company's normal payroll business practice, commencing on the
Effective Date. On or prior to each anniversary date of this Agreement, the
Board will review and evaluate the performance of Employee, and may increase
Employee's salary hereunder.
5. Discretionary Annual Bonus. The Board may in its discretion determine to
grant cash bonus compensation to Employee or a bonus in the form of stock awards
or grants of options to purchase capital stock of the Company.
6. Other Benefits. Employee shall be entitled to participate in or receive
benefits under any employee-benefit plan made available by the Company in the
future to its employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans, specifically Employee is
entitled to receive medical, dental and life insurance consistent with plan
benefits enjoyed by members of the Company management. Nonetheless, in its sole
discretion the Company may amend or terminate any such employee-benefit plan
providing benefits generally to its employees. Employee shall be entitled to an
aggregate of two weeks of paid vacation in each calendar year.
7. Reimbursement of Business Expenses. Upon presentation of appropriate
receipts and/or vouchers, the Company shall reimburse Employee for the
reasonable and necessary expenses he incurs in connection with the performance
of his duties, in accordance with any and all Company's policies and procedures
governing such expenses.
8. Termination. Notwithstanding the term set forth in Section 3 hereof,
this Agreement may be earlier terminated as set forth below:
(a) by the Company without Cause (as defined below) upon 30 days
written notice to Employee;
(b) by the Company, immediately upon written notice to Employee for
the following events, each of which would constitute "Cause": (i) Employee
is convicted of a felony; (ii) Employee has materially breached this
Agreement; (iii) Employee's material violation of a Company policy that has
a materially adverse effect on the Company; (iv) Employee's failure to
perform his duties as the Company's Treasurer and Secretary as required by
this Agreement, which failure has not been cured by Employee after ten days
written notice thereof to Employee by the Company; or (v) Employee's
habitual intoxication, drug use or chemical substance abuse by any
intoxicating or chemical substance;
(c) by Employee, upon 30 days written notice to the Company, in the
event of a material breach of this Agreement by the Company;
(d) by Employee voluntarily upon at least 30 days written notice to
the Company, specifying an effective date for such termination; and
(e) upon the death or disability of Employee. For the purposes of this
Agreement, Employee's "disability" shall occur if Employee shall become
incapacitated by accident or illness and, in the sole determination of the
Board, shall be unable to perform the duties of the positions he then
occupies with reasonable accommodation for a period of time of not less
than 90 consecutive days, and the Company provides 30 days written notice
to the Employee at any time after such period of disability.
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In the event of any termination occurring by virtue of
paragraphs (a) through (e) above, Employee shall be entitled to
compensation and benefits, if any, accrued through the effective date
of termination. Furthermore, if Employee's employment is terminated
pursuant to paragraphs (a) or (c) above, he shall continue to receive
the salary payments specified in Section 4 for the 18-month period
immediately following the effectiveness of any such termination (the
"Severance Payments").
9. Confidential Information.
(a) Employee will hold all Confidential Information (as defined
below) in the strictest confidence and never use, disclose or publish
any Confidential Information without the prior express written
permission of the Company and its Board. Employee agrees to maintain
control over any Confidential Information obtained, and restrict
access thereto to the Company's employees, agents or other associated
parties who have a need to use such Confidential Information for its
intended purpose. Employee agrees to advise and inform any party to
whom he has provided access to the Confidential Information of its
confidential nature, and further agrees to ensure that such parties be
bound by the terms and obligations of this Agreement that relate to
confidentiality.
(b) Upon the Company's request, all records and any compositions,
articles, devices and other items which disclose or embody
Confidential Information, including all copies or specimens thereof in
Employee's possession, whether prepared or made by Employee or others,
will be delivered to the Company.
(c) All documents and tangible items provided to Employee by the
Company or created by Employee for use in connection with his
employment by the Company are the sole and exclusive property of the
Company and shall be promptly returned to the Company upon termination
of employment with the Company, together with all copies, recordings,
notes or reproductions of any kind made from or about the documents
and tangible items or the information they contain.
(d) For purposes of this Agreement and subject to the following
paragraph, the term "Confidential Information" shall mean all
information developed by Employee as a result of his work with, for,
on behalf of or in conjunction with the Company and any information
relating to the Company's processes and products, including
information relating to research, development, manufacturing,
know-how, formulae, product ideas, inventions, trade secrets, patents,
patent applications, systems, products, programs and techniques and
any secret, proprietary or confidential information, knowledge or data
of the Company. All information disclosed to Employee or to which
Employee obtains access, whether originated by Employee or by others,
which is treated by the Company as "Confidential Information," or
which Employee has a reasonable basis to believe is "Confidential
Information," will be presumed to be "Confidential Information."
Notwithstanding the foregoing definition, the term
"Confidential Information" will not apply to information which (i)
Employee can establish by documentation was known to Employee prior to
its receipt by Employee from the Company, (ii) is lawfully disclosed to
Employee by a third party not deriving such information from the
Company, or (iii) is presently in the public domain or becomes a part
of the public domain through no fault of Employee.
(e) The Company shall in turn keep all personal nonpublic
information about Employee that the Company may now have or hereafter
acquire in strict confidence and shall not
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disclose any such personal nonpublic information except as required by
law or ordered by a court of competent jurisdiction, or with the
consent, express or implied, of Employee himself.
10. Restrictive Covenants. Employee agrees that during the period Employee
is employed by the Company (commencing on the Effective Date) and continuing for
a period one year following the termination of this Agreement for any reason or
no reason, Employee will not, without the prior express written consent of the
Company, directly or indirectly, engage in any of the following actions:
(a) render services, advice or assistance to any corporation, person,
organization or other entity which engages in the provision of traffic
and/or news information to radio and television stations anywhere outside
of the United States, or engage in any such activities in any capacity
whatsoever, including without limitation as an employee, independent
contractor, officer, director, manager, beneficial owner, partner, member
or shareholder of any provider of traffic and/or news information;
provided, however, that Employee may be a shareholder of a corporation
other than the Company, required to file periodic reports with the
Securities and Exchange Commission under Section 13 or 15(d) of the
Securities Exchange Act of 1934 where his total holdings are less than one
percent of the issuing corporation's issued and outstanding publicly traded
securities; or
(b) induce, solicit, endeavor to entice or attempt to induce any
customer, supplier, licensee, licensor or other business relation of the
Company to cease doing business with the Company, or in any way interfere
with the relationship between any such customer, vendor, licensee, licensor
or other business relation and the Company; or
(c) induce, solicit or endeavor to entice or attempt to induce any
employee of the Company to leave the employ of the Company, or to work for,
render services or provide advice to or supply confidential business
information or trade secrets of the Company to any third person or entity,
or to in any way interfere adversely with the relationship between any such
employee and the Company.
11. Conflicts of Interest. Employee agrees that he will not, directly or
indirectly, transact business with the Company for his own benefit, or as agent,
owner, partner or shareholder of any other entity; provided, however, that any
such transaction may be entered into if approved by a majority of the
disinterested directors serving on the Board after full disclosure.
12. Further Assurances. Each party shall, without further consideration,
execute such additional documents as may be reasonably required in order to
carry out the purpose and intent of this Agreement.
13. Arbitration.
(a) The parties will, to the greatest extent possible, endeavor to
resolve any disputes relating to the Agreement through amicable
negotiations. Failing an amicable settlement, any controversy, claim or
dispute arising under or relating to this Agreement, including the
existence, validity, interpretation, performance, termination or breach of
this Agreement, will finally be settled by binding arbitration before a
single arbitrator (the "Arbitration Tribunal") which will be jointly
appointed by the parties. The Arbitration Tribunal shall self-administer
the arbitration proceedings utilizing the Commercial Rules of the American
Arbitration Association ("AAA"); provided, however, the AAA shall not be
involved in administration of the arbitration. The arbitrator must be a
retired judge of a state or federal court of the United States or a
licensed lawyer with at least five years of corporate or commercial law
experience and have at least an AV
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rating by Martindale Xxxxxxx. If the parties cannot agree on an arbitrator,
either party may request the AAA to appoint an arbitrator which appointment
will be final.
(b) The arbitration will be held in that particular State and
municipal location in which the Company's headquarters, at the time of any
such arbitration's institution, is located. Each party will have discovery
rights as provided by the Federal Rules of Civil Procedure within the
limits imposed by the arbitrator; provided, however, that all such
discovery will be commenced and concluded within 60 days of the selection
of the arbitrator. It is the intent of the parties that any arbitration
will be concluded as quickly as reasonably practicable. Once commenced, the
hearing on the disputed matters will be held four days a week until
concluded, with each hearing date to begin at 9:00 a.m. and to conclude at
5:00 p.m. The arbitrator will use all reasonable efforts to issue the final
written report containing award or awards within a period of five business
days after closure of the proceedings. Failure of the arbitrator to meet
the time limits of this Section 13 will not be a basis for challenging the
award. The Arbitration Tribunal will not have the authority to award
punitive damages to either party. Each party will bear its own expenses,
but the parties will share equally the expenses of the Arbitration
Tribunal. The Arbitration Tribunal shall award attorneys' fees and other
related costs payable by the losing party to the successful party as it
deems equitable. This Agreement will be enforceable, and any arbitration
award will be final and non-appealable, and judgment thereon may be entered
in any court of competent jurisdiction. Notwithstanding the foregoing,
claims for injunctive relief, may be brought in a state or federal court in
the state court in Las Vegas, Nevada.
14. General Provisions. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Nevada without regard to its
conflicts-of-law provisions. The venue for any action hereunder shall be in Las
Vegas, Nevada. If any provision of this Agreement shall be held by any court of
competent jurisdiction to be illegal, invalid or unenforceable, such provision
shall be construed and enforced as if it had been more narrowly drawn so as not
to be illegal, invalid or unenforceable, and such illegality, invalidity or
unenforceability shall have no effect upon and shall not impair the
enforceability of any other provision of this Agreement. This Agreement contains
the entire understanding of the parties with regard to all matters contained
herein. There are no other agreements, conditions or representations, oral or
written, expressed or implied, with regard to the matters contained in this
Agreement other than those referenced in this paragraph. This Agreement
supersedes all prior agreements relating to the matters contained herein. This
Agreement is and shall be binding upon the heirs, personal representatives,
legal representatives, successors and assigns of the parties hereto; provided,
however, that Employee may not assign this Agreement because the services to be
rendered hereunder are unique and personal in nature. This Agreement may be
amended only in writing, signed by both parties. Any waiver by either party of
compliance with any provision of this Agreement by the other party shall not
operate or be construed as a waiver of any other provision of this Agreement, or
of any subsequent breach by such party of a provision of this Agreement. Any
notice to be given under this Agreement by either Employee or the Company shall
be in writing and shall be effective upon personal delivery or delivery by mail,
registered or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the party at the address set forth at the
beginning of this Agreement, but each party may change its or his address by
written notice in accordance with this paragraph. Notice delivered personally
shall be deemed given as of actual receipt and mailed notices shall be deemed
given as of three business days after mailing. The parties hereby mutually
represent and warrant that they are authorized to execute and deliver this
Agreement, that this Agreement will be valid and enforceable against each party
upon their execution and delivery of the same, and that there are no restrictive
agreements binding them which may affect their ability to perform their
respective obligations hereunder. If any party is made or shall become a party
to any litigation (including arbitration) commenced by or against the other
party involving the enforcement of any of the rights or remedies of such party,
or arising on account of a default of the other party in its performance of any
of the other party's obligations hereunder, then the parties
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shall bear their own expenses and attorneys' fees. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement.
Signatures delivered by facsimile and other means of electronic communication
shall be valid and binding to the same extent as original signatures.
Signature Page Follows
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement
on this 18th day of November, 2005.
COMPANY:
GLOBAL TRAFFIC NETWORK, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxx III
-----------------------------------
Xxxxxxx X. Xxx III, Chief Executive
Officer
EMPLOYEE:
/s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx
Signature Page -- Employment Agreement
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EXHIBIT A
Duties of Employee:
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