EXHIBIT 10.13
MANAGEMENT EMPLOYMENT AGREEMENT
THIS AGREEMENT made to have effect the 1st day of February, 2000.
BETWEEN:
MDU COMMUNICATIONS INC., a body corporate duly incorporated under the laws of
Canada and having its offices at Xxxxx 000, 00000 Xxxxxxxxxxx Xxx, Xxxxxxxx,
Xxxxxxx Xxxxxxxx X0X 0X0;
(the "Company")
AND:
XXXX XXXXXXXX, an individual having his residence at 000 Xxxxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxx 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. The Company hereby engages the Executive to be the President of the Company
and the Executive hereby agrees to accept employment as President of the
Company. The Executive shall perform all duties incident to such position of
President and other duties as may reasonably be required from time to time by
the Board of Directors of the Company.
2. The Executive will perform the employment duties 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 to any other company that is not in competition with the Company so
long as his association with such company does not interfere with his attention
to the Company's business.
SALARY AND EXPENSES
4.1 In consideration of the 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 $13,250.00 per month (the
"Base Salary"). The Company may pay to the Executive, bonuses as and when
declared by the Company's Board of Directors. The Company shall provide directly
to the Executive, at no cost, vehicle parking at the office site, the Company's
standard health benefits plan and professional association membership fees. 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 AND ADDITIONAL OFFICES
5.1 In addition to the compensation provided for in Section 4 and all other
amounts payable to 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 period of five years
from the date of grant 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.
5.2 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 the Company and
its associated companies.
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, or as required in the normal course of
business 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 he may acquire with respect to the
Company's affairs. The Executive further agrees to execute such further and
other agreements concerning the secrecy of the affairs of the Company or of any
companies with which the Company is affiliated or associated, 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;
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(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, he 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 BY COMPANY
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 fees 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) being guilty of any dishonesty or gross neglect in the
provision of the services hereunder; or
(b) being convicted of any criminal offense, other than an offense
which in the reasonable opinion of the Company does not affect his
position as a representative of the Company; or
(c) becoming bankrupt or making any arrangement or composition
with his 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.
TERMINATION
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
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amounts owing up to the date of termination and a termination payment in an
amount equal to 24 months Base Salary due under Section 4 above 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 or its controlling
shareholder 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 or its controlling shareholder.
For a period of 12 months following the change in control of the Company or its
controlling shareholder, 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 or its controlling shareholder.
RESIGNATION AND INDEMNITY
12.1 Upon the termination of this Agreement, the Executive will tender to the
Company, and its associated companies, his resignation as an officer and or
director.
12.2 Subject to the CANADA BUSINESS CORPORATIONS ACT, as amended from time to
time (the "Act"), the Company hereby indemnifies the Executive, his heirs,
executors administrators and personal representatives (collectively, the
"Indemnitees") 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 a
director or officer of the Company or its affiliated or associated companies,
including any action brought by the Company or companies, if:
(a) the Executive acted honestly and in good faith with a view to
the best interests of the Company or 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, its
officers, directors and agents (individually and collectively, the "Group") 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 Company or 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, the
Company 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
(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 Company and the Executive will indemnify
each other include:
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(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.
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 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.
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
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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 agrees 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 Inc.
Xxxxx 000, 00000 Xxxxxxxxxxx Xxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
ATTENTION: CEO
TO: Xxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 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.
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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 both 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.
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
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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written:
MDU COMMUNICATIONS INC.
---------------------------------
Authorized Signatory
In the presence of: EXECUTIVE
/s/ Xxxx Xxxxxxxx
--------------------------------- ---------------------------------
Witness Xxxx Xxxxxxxx
---------------------------------
Name
---------------------------------
Address
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