EXHIBIT 10.11
THIS EMPLOYMENT AGREEMENT IS ENTERED INTO AS OF THE 25TH DAY OF NOVEMBER 2002.
BETWEEN: TOUCHTUNES DIGITAL JUKEBOX INC., incorporated under the Canada
Business Corporations Act and with its head office at Three
Commerce Place, 4th floor, Nuns' Island, Verdun, Province xx
Xxxxxx, Xxxxxx X0X 0X0;
(hereinafter referred to as the "CORPORATION")
AND: XX. XXX XXXXXX, 00 XXXXXXX XXX., XXX 0000, VERDUN, P.Q.
H3E 1N9
(hereinafter referred to as the "EXECUTIVE")
IT IS AGREED AS FOLLOWS:
WHEREAS the Corporation wishes to retain the services of Executive to
provide the services hereinafter described during the term hereinafter set out;
NOW THEREFORE THIS AGREEMENT WITNESS that in consideration of the
mutual covenants and agreements here contained and for other good and valuable
consideration, the parties agree as follows;
1 TERM
1.1 The Corporation shall employ Executive for an indefinite term, such
employment shall commence on January 1, 2003.
2 DUTIES
2.1 The Corporation hereby confirms having agreed to engage Executive as
Executive Vice President, Technology. In such capacity, Executive shall
perform such duties and exercise such powers pertaining to such role
for the Corporation and its affiliates.
2.2 By his acceptance hereof, Executive agrees to devote substantially all
of his working time, attention and skill to the Corporation and to make
every effort
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necessary to promote the success of the Corporation's business and
perform adequately the duties that are assigned to him.
3 REPORTING PROCEDURES
3.1 Executive shall report directly to the President and Chief Executive
Officer of the Corporation or such other person as designated by the
Corporation from time to time.
4 REMUNERATION
4.1 The annual base salary payable to Executive for his services hereunder
shall be CDN $170,000, exclusive of bonuses, benefits and other
compensation. The annual base salary payable to Executive pursuant to
the provisions of this Section 4 shall be payable in equal bi-weekly
installments in accordance with the Corporation's normal practices
less, in any case, any deductions or withholdings required by law.
4.2 The Corporation shall provide Executive with employee benefits
comparable to those provided by the Corporation from time to time to
other senior executives of the Corporation.
5 STOCK OPTIONS
5.1 Subject to the approval of the Board of Directors, Executive shall be
granted, within 120 days from the commencement of his employment, an
option to purchase shares of the common stock of TouchTunes Music
Corporation (hereinafter "TTMC") in conformity with the TouchTunes
Music Corporation 2000 Long-Term Incentive Plan. The number of options
to be granted will be determined within the 120 day period and will be
comparable to those provided to other senior executives of the
Corporation.
5.2 Options shall vest over a four-year period in equal annual
installments.
6 BONUS
6.1 Executive is entitled to an annual bonus. Said bonus shall be payable
on an annual basis and within the following guidelines set by the
compensation committee. Such bonus will be based upon the achievement
of the budget plan ("BP") of the Corporation, as approved by the
Corporation's Board of Directors and will be capped at 35% of base
salary. The bonus will be based upon a prorated percentage of the
Corporation's achievement versus BP as set out in Exhibit 1 to this
agreement. In addition, Executive is entitled to an additional bonus at
the discretion of the compensation committee up to an additional 10% of
his annual base salary as set out in Exhibit 1.
6.2 Executive will be paid on signing a one-time signing bonus of
CDN$10,000.
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7 VACATION
7.1 Executive shall be entitled to four (4) weeks of paid vacation per
fiscal year of the Corporation. Should Executive decide not to take all
the vacation to which he is entitled in any fiscal year, Executive
shall be entitled to take up to one (1) week of such vacation in the
next following fiscal year. Upon termination under Section 9, Executive
is entitled to payment for a maximum of one (1) week of unused
vacation.
8 EXPENSES
8.1 Executive shall be reimbursed for all reasonable travel and other
out-of-pocket expenses incurred by Executive from time to time in
connection with carrying out his duties hereunder. For all such
expenses Executive shall furnish to the Corporation supporting evidence
for expenses in respect of which Executive seeks reimbursement.
8.2 Executive acknowledges that the Corporation leases a vehicle which it
provides to Executive. For the duration of this lease, Executive agrees
to reimburse the Corporation for the amount paid by the company for the
lease and any other payments made by the Corporation in connection with
the vehicle on behalf of the Executive. Upon expiration of the lease,
the Corporation will not enter into any other vehicle leasing agreement
on the Executive's behalf.
8.3 The Corporation shall also reimburse Executive for reasonable cost
of training and professional development.
8.4 The Corporation shall provide Executive with adequate support and
equipment to perform his duties.
9 TERMINATION
9.1 This agreement may be terminated, except for continuing obligations
hereunder as at any such termination, in any of the following
eventualities and with the following consequences:
9.1.1 at any time, for Cause, on simple notice from the Corporation to
Executive the whole without any other notice or any pay in lieu of
notice or any indemnity whatsoever from the Corporation to Executive,
and any further claims or recourse by Executive against the Corporation
or its affiliates in respect of such termination; or
"CAUSE" shall mean cause for dismissal without either notice or payment
in lieu of notice for reasons of fraud, embezzlement, gross negligence,
willful and careless disregard or gross dereliction of duty, incapacity
or refusal to perform employment functions due to drug use or alcohol
addiction, conviction of a felony, serious breach of
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duty not corrected within thirty (30) days of notice to that effect
and discriminatory practices governed by statute.
9.1.2 Upon three (3) months notice in writing from Executive to the
Corporation, specifying his intention to resign, in which event the
Corporation shall only be obliged to pay Executive his annual base
salary hereunder for such remaining part of the period specified in the
notice from Executive, and the Corporation shall have no further
obligations.
9.1.3 Upon written notice from the Corporation to Executive in the event of
termination of his employment without Cause, in which event the
Corporation shall pay Executive an indemnity in lieu of notice equal to
twelve (12) months of Executive's base salary at the time of
termination, and the Corporation shall have no further obligations
hereunder in the event of such termination. Such indemnity shall be
paid to Executive over the twelve (12) month period following the
effective date of termination, in accordance with normal and then
current payroll practices of the Corporation. Executive shall have no
further claims or recourse against the Corporation or any of its
affiliates in respect of such termination; or
9.2 For Disability/Death
9.2.1 The Corporation may immediately terminate this agreement by
notice to Executive if Executive becomes permanently
disabled. Executive shall be deemed to have become
permanently disabled in the event of any mental incapacity
or physical disability of such severity that Executive shall
have been unable to attend to any normal duties with the
Corporation for more than nine (9) consecutive months in any
year or for twelve (12) months out of any period of
twenty-four (24) consecutive months during the employment
period.
9.2.2 This agreement shall terminate without notice upon the death
of Executive.
10 SEVERANCE PAYMENTS
10.1 Upon termination of Executive's employment for cause or by the
voluntary termination of employment of Executive as set forth in
Section 9.1.1 and 9.1.2, Executive shall not be entitled to any
severance payment.
10.2 If Executive's employment is terminated for any reason other than the
reasons set forth in Section 9.1.1 and 9.1.2, Executive shall be
entitled to receive, an indemnity in lieu of notice equal to twelve
(12) months of Executive's base salary at the time of termination, such
indemnity shall be paid to Executive over the twelve (12) month period
following the effective date of termination, in accordance with normal
and then current payroll practices of the Corporation and, all unvested
options that would have
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vested during the three (3) month period following the date of such
termination shall become vested at the date of such termination.
10.3 Upon termination of Executive's employment for disability or death
as set forth in Section 9.2, all options to purchase common shares
in the share capital of TTMC granted to Executive shall become
vested immediately.
11 CONFIDENTIALITY
11.1 Executive shall not, directly or indirectly, without the specific prior
written consent of the Corporation, at any time after the date hereof,
divulge to any business, enterprise, person, firm, corporation,
partnership, association or other entity, or use for Executive's own
benefit, (i) any confidential information concerning the businesses,
affairs, customers, suppliers or clients of the Corporation or its
affiliates, including, without limitation, any trade secret (process,
plan, form, marketing strategy, etc.), all computer programs in any
form (diskette, hard disk, tape, printed circuit, etc.), all access
codes to computer programs together with any plan, sketch, diagram,
card, contract, bid, price list and client list relative to the
Corporation's business, or (ii) any non-public data or statistical
information of the Corporation or its affiliates, whether created or
developed by the Corporation or its affiliates or on their behalf or
with respect to which Executive may have knowledge or access
(including, without limitation, any of the foregoing created or
developed by Executive), it being the intent of the Corporation and
Executive to restrict Executive from disseminating or using any data or
information that is at the time of such use or dissemination
unpublished and not readily available or generally known to persons
involved or engaged in businesses of the type engaged in from time to
time by the Corporation (the "Confidential Information"). For purposes
of this Employment Agreement, Confidential Information shall not be
deemed to include:
11.1.1 Information that, at the time of disclosure under this
Employment Agreement or during Executive's employment, is in
the public domain or that, after disclosure under this
Employment Agreement or in connection with Executive's
employment, becomes part of the public domain by publication
or otherwise through no action or fault of Executive or any
other party subject to an obligation of confidentiality;
11.1.2 Information that the Corporation authorizes Executive to
disclose in writing; or
11.1.3 Information that Executive is required to disclose pursuant to
a final court order that the Corporation has had an
opportunity to contest prior to any such disclosure.
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11.2 This undertaking to respect the confidentiality of the Confidential
Information and to not make use of or disclose or discuss it to or with
any person shall continue to have full effect notwithstanding the
termination of Executive's employment with the Corporation for a period
of two (2) years following the date of such termination.
12 NON-SOLICITATION
12.1 Executive agrees that he shall not, during his employment and for a
period of twelve (12) months following the termination of his
employment, on his own behalf or on behalf of any person, whether
directly or indirectly, in any capacity whatsoever, alone, through or
in connection with any person, employ, offer employment to or solicit
the employment or the engagement of or otherwise entice away from the
employment of the Corporation or its subsidiaries, any individual who
is employed by the Corporation or its subsidiaries at the time of the
termination of Executive's employment or who was employed by the
Corporation or its subsidiaries in the six (6) month period preceding
the termination of Executive's employment.
13 NON-COMPETITION
13.1 Executive agrees that during the Employment Term and for a period of
twelve (12) months after Executive ceases to be employed by the
Corporation, Executive shall not, directly or indirectly, for
Executive's own account or as an employee, officer, director, partner,
joint venture, shareholder, investor, consultant or otherwise (except
as an investor in a corporation whose stock is publicly traded and in
which Executive holds less than 5% of the outstanding shares) engage in
any business or enterprise, in the United States of America, that
directly or indirectly competes with the business of the Corporation,
as it exists now or in the future during the Employment Term.
14 INTELLECTUAL PROPERTY
14.1 For the purposes of this Agreement, the term "Inventions" means
ideas, designs, concepts, techniques, inventions and discoveries,
whether or not patentable or protectable by copyright and whether or
not reduced to practice, including but not limited to devices,
processes, drawings, works of authorship, computer programs, methods
and formulas together with any improvement thereon or thereto,
derivative works therefrom and know-how related thereto made, developed
or conceived by Executive while at the employment of the Corporation
during working hours using the Corporation's data or facilities and
which relates to the Corporation's areas of business.
14.2 Executive shall assign and hereby does assign all Inventions to the
Corporation. Executive shall disclose all Inventions in writing to the
Corporation, shall assist the
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Corporation in preparing patent or copyright applications for
Inventions, and execute said applications and all other documents
required to obtain patents or copyrights for those Inventions and/or
to vest title thereto in the Corporation, at the Corporation's
expense, but for no additional consideration to Executive. In the
event that the Corporation requires assistance under this Section
after termination of employment, Executive shall provide such
assistance at the cost and expense of the Corporation.
14.3 During the term of this Agreement or after termination, on request of
the Corporation and at the cost and expense of the Corporation,
Executive shall execute specific assignments in favor of the
Corporation or nominees of any of the Inventions covered by this
Section, as well as execute all papers and perform all lawful acts that
the Corporation considers reasonably necessary or advisable for the
preparation, prosecution, issuance, procurement and maintenance of
patent or copyright applications and patents and copyrights for the
Inventions, and for transfer of any interest Executive may have, and
shall execute any and all papers and lawful documents required or
necessary to vest title in the Corporation or its nominee in the
Inventions.
15 ENFORCEABILITY
15.1 Executive hereby confirms and agrees that the covenants and
restrictions pertaining to Executive contained in this agreement,
including, without limitation those contained in Sections 11 to 15
hereof, are reasonable and valid.
15.2 Without limiting the remedies available to the Corporation, Executive
hereby expressly acknowledges and agrees that a breach of the covenants
contained in Sections 11 to 15 may result in materially irreparable
harm to the Corporation for which there is no adequate remedy at law;
that it will not be possible to measure damages for such injuries
precisely, and that, in the event of such a breach, the Corporation
shall be entitled to obtain any or all of a temporary restraining order
and a preliminary or permanent injunction restraining Executive from
engaging in activities prohibited by the provisions of Sections 11 to
15 or such other relief as may be required to enforce specifically any
of the covenants of Sections 11 to 15. Such proceedings shall not
preclude the Corporation from claiming for damages that it has
suffered.
16 RETURN OF MATERIALS
16.1 All files, forms, brochures, books, materials, written correspondence,
memoranda, documents, manuals, computer disks, software products and
lists (including lists of customers, suppliers, products and prices)
pertaining to the business of the Corporation or any of its affiliates
and associates that may come into the possession or control of
Executive shall at all times remain the property of the Corporation or
such subsidiary or associate, as the case may be. On termination of
Executive's
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employment for any reason, Executive agrees to deliver promptly to
the Corporation all such property of the Corporation in the
possession of Executive or directly or indirectly under the control
of Executive. Executive agrees not to make for his personal or
business use or that of any other party, reproductions or copies of
any such property or other property of the Corporation.
17 GOVERNING LAW
17.1 This agreement shall be governed by and construed in accordance with
the laws of the province of Quebec.
18 SEVERABILITY
18.1 If any provision of this agreement, including the breadth or scope of
such provision, shall be held by any court of competent jurisdiction to
be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remaining provisions, or part thereof, of this agreement and such
remaining provisions, or part thereof, shall remain enforceable and
binding.
19 NO ASSIGNMENT
19.1 Executive may not assign, pledge or encumber Executive's interest in
this agreement nor assign any of the rights or duties of Executive
under this agreement without the prior written consent of the
Corporation.
20 SUCCESSORS
20.1 This agreement shall be binding on and inure to the benefit of the
successors and assigns of the Corporation and the heirs, executors,
personal legal representatives and permitted assigns of Executive.
21 SURVIVAL OF COVENANTS
21.1 Insofar as any of the obligations contained in this agreement are
capable of surviving termination of this agreement they shall so
survive and continue to bind Executive notwithstanding the termination
of the agreement for whatsoever reason.
22 COMPLETE UNDERSTANDING
22.1 Once signed, this agreement replaces all prior written and/or oral
agreements between Executive and the Corporation with regard to
Executive's terms of employment with the Corporation including the
consulting agreement entered into between the parties on May 16, 2002.
This agreement may not be changed orally, but only in an agreement in
writing signed by both parties.
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23. LEGAL ADVICE
23.1 Executive hereby represents and warrants to the Corporation and
acknowledges and agrees that he had the opportunity to seek and was not
prevented nor discouraged by the Corporation from seeking independent
legal advice prior to the execution and delivery of this agreement and
that, in the event that he did not avail himself of that opportunity
prior to signing this agreement, he did so voluntarily without any
undue pressure and agrees that his failure to obtain independent legal
advice shall not be used by him as a defense to the enforcement of his
obligations under this agreement.
24. LANGUAGE
24.1 The parties hereto specifically requested that the present agreement be
drawn up in English. Les parties aux presentes ont specifquement requis
que cette convention soit redigee en anglais.
(SIGNATURES ON PAGE 10.)
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IN WITNESS WHEREOF the parties hereto have executed this agreement as of the
date first above written.
TOUCHTUNES DIGITAL JUKEBOX INC.
/s/ Xxxxxxx Xxxxxx
-----------------------------------
per: Xxxxxxx Xxxxxx,
Vice President Finance and CFO
EXECUTIVE
/s/ Xxx Xxxxxx
-----------------------------------
Xxx Xxxxxx
BONUS PLAN
Exhibit I
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Xxx Xxxxxx Base: $170.00
(C$ 000's)
Prorated Prorated
---------------------- -------------------------------------------------------
Company Results Less than 90% 90% 95% 100% 110% 120% 130% 140% 150%
Based Bonus
Results % 0.00% 5.00% 11.50% 18.00% 21.40% 24.80% 28.20% 31.60% 35.00%
Bonus $ $0.00 $8.50 $18.55 $30.60 $36.38 $42.16 $47.94 $53.72 $59.50
Prorated Prorated
---------------------- -------------------------------------------------------
Discretionary Less than 90% 90% 95% 100% 110% 120% 130% 140% 150%
Bonus
Results % 0.00% 5.00% 6.25% 7.50% 6.00% 8.50% 9.00% 9.50% 10.00%
Bonus $ $0.00 $8.50 $10.63 $12.75 $13.60 $14.45 $15.30 $16.15 $17.00
Prorated Prorated
---------------------- -------------------------------------------------------
Total Bonus Less than 90% 90% 95% 100% 110% 120% 130% 140% 150%
Results % 0.00% 5.00% 5.00% 7.50% 8.00% 8.50% 9.00% 9.50% 10.00%
Bonus $ $0.00 $17.00 $30.18 $43.35 $49.98 $56.61 $63.24 $69.87 $76.50
Bonus $/Base 0.00% 10.00% 17.75% 25.50% 29.40% 33.30% 37.20% 41.10% 45.00%
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Xxxx Xxxxxxxxxxx
(C$ 000's)
More than Inc. % point Inc. % point
Company Results 150% under 100% BP over 100% BP
Based Bonus
Results % 35.00% 1.30% 0.34%
Bonus $ $59.50
More than Inc. % point Inc. % point
Discretionary 150% under 100% BP over 100% BP
Bonus
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Results % 10.00% 0.25% 0.05%
Bonus $ $17.00
More than
150%
Total Bonus
---------
Results % 10.00%
Bonus $ $76.50
Bonus $/Base 45.00%
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/s/ Xxx Xxxxxx
--------------------------
Xxx Xxxxxx
11
AMENDMENT TO
CONSULTING AGREEMENT
DATED MAY 15, 2002
BETWEEN
TOUCHTUNES DIGITAL JUKEBOX INC.
AND
XXX XXXXXX
WHEREAS, TouchTunes Digital Jukebox Inc. ("TouchTunes") and Xxx Xxxxxx
("Xxxxxx") have entered into an employment agreement dated November 25, 2002 and
effective January 1, 2003;
WHEREAS, TouchTunes and Xxxxxx desire to extend the term of the Consulting
Agreement dated May 15, 2002 until December 31, 2002;
NOW, therefore, the parties hereby agree as follows:
Section 3.1: The parties hereby agree to extend the Term until December 31,
2002
Section 3.7: The parties hereby agree that the employment agreement dated
November 25, 2002 satisfies this clause and accordingly Xxxxxx will not be
entitled to any severance payment under any section of the Consulting Agreement.
All other terms and conditions not specifically modified herein, shall remain in
full force and effect.
IN WITNESS WHEREOF, TouchTunes and Xxxxxx have hereby agreed to this Amendment
as of the first date written above.
TouchTunes Digital Jukebox Inc.
BY: /s/ Xxxxxxx Xxxxxx /s/ Xxx Xxxxxx
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Xxxxxxx Xxxxxx Xxx Xxxxxx
Vice President Finance, CFO
November 25, 2002 November 25, 2002
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DATE DATE
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