EX. 10.2
Schedule 1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is effective as of April 1,
2003 by and between Telecommunication Products Inc., a Colorado corporation with
offices at 0000 Xxxxxxxx Xxxx., Xxxxx X, Xxxxxxx Xxxxx, XX 00000 (the
"Company"), and Xxxx X X Xx Xxxxx, an individual with offices at 0000 X. Xxxx
Xxxxx, Xxxx, Xxxxxxx 00000 (the "Executive") and is made with reference to the
following facts and circumstances:
A. Company is engaged in the telecommunications business and has entered
into a letter of intent dated as of October 30, 2002 to acquire the assets,
property, and business of Coast Communications Inc. relating to pay-per-view and
cable services to hotel/lodging rooms, including the corporation known as Hotel
Movie Networks, Inc. ("HMN") a Nevada corporation;
B. Company desires to retain the services of Executive, and Executive is
willing to provide such services to the Company;
C. Company and Executive desire to enter into this Agreement to provide for
Executive's employment by the Company upon the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the foregoing facts and mutual
agreements set forth below, the parties, intending to be legally bound, agree as
follows:
1. Employment. The Company hereby agrees to employ Executive, and Executive
hereby accepts such employment and agrees to perform
Executive's duties and responsibilities in accordance with the terms and
conditions hereinafter set forth.
1.1 Employment Term. The term of Executive's employment under this
Agreement shall commence as of the date hereof (the "Effective Date")
and shall continue for three (3) years, subject to the Company entering
into a definitive agreement to acquire HMN on or before January 31,
2003, unless terminated in accordance with Section 5 hereof. The terms
of this Agreement automatically shall be extended for an additional
two-year term unless either party gives written notice to the other at
least six months prior to the expiration of the then-current term, that
he or it does not wish to renew this Agreement. The initial term and
any extended term of this agreement is hereinafter referred to as the
"Employment Term."
1.2 Duties and Responsibilities. During the Employment Term, Executive
shall serve as President of HMN and Vice President Hospitality services
for the Company and to perform all duties and accept all
responsibilities incident to such position or other appropriate duties
as may be reasonably assigned to Executive by the Company's Board of
Directors (the "Board") from time to time consistent with Executive's
status as a senior executive.
Executive's initial duties shall include the following:
a. Establishing and carrying out plans of Hotel Movie Network's operation,
sales and marketing, and the expansion and upgrading of its facilities and
equipment;
b. Formulating annual operating and capital budget for Hotel Movie Network;
c. Purchasing supplies, equipment, facilities and services for Hotel Movie
Network;
d. Hiring, training and terminating employees of Hotel Movie Network and
determining their remuneration and duties;
e. Negotiating binding contracts with suppliers and customers of Hotel Movie
Network;
f. Arranging for accounting and legal services for Hotel Movie Network; and
g. Otherwise administering, supervising and carrying out the business of Hotel
Movie Network also to include remaining as Chairman of The Board for the
corporation of Hotel Movie Network Inc.;
1.3 Base Salary. For all the services rendered by Executive hereunder for
the Company, the Company shall pay Executive a base salary (the "Base
Salary") at the minimum annual rate of $125,000 per annum (payable in
accordance with the Company's then applicable payroll policies) as
compensation for all services rendered by Executive hereunder. The Base
Salary shall be subject to all state, federal, and local payroll tax
withholding and any other withholdings required by law. Following each
year after the Effective Date, Executive shall be reviewed by the
Company's Board to determine whether a raise in the Base Salary and
other additional compensation and benefits is appropriate, in the sole
and absolute discretion of the Board; provided, however, that at no
time shall Executive's Base Salary be less than $125,000per annum.
1.4 Benefit Coverage. During the Employment Term, Executive shall be
entitled to participate in all employee pension and welfare benefit
plans and programs made available to the Company's senior level
executives as a group or to its employees generally, as such plans or
programs may be in effect from time to time (the "Benefit Coverage"),
including, without limitation, pension, profit sharing, savings and
other retirement plans or programs, medical, dental, hospitalization,
short-term and long-term disability and life insurance plans,
accidental death and dismemberment protection and travel accident
insurance.
1.5 Performance Bonuses. Within ninety (90) days after the end of each
fiscal year of the Company, which is currently March 31st, during the
Employment Term, the Executive will be eligible to receive a bonus (the
"Performance Bonus") in an amount as determined at the discretion of the
Board of the Company.
To the extent that, for any given year of the Employment Term,
Executive has been employed for less than the full year, the
Performance Bonus shall be reduced on a pro rata basis for the amount
of time actually worked during such year. All bonus payments shall be
subject to customary withholdings required by law. The Performance
Bonus will be based upon ten (10) percent of HMN's net pre tax earnings
but in no event shall such amount exceed the Executive's Base Salary on
an annualized basis.
1.6 Expenses. During the Employment Term, Executive shall be reimbursed for
all reasonable business expenses incurred and paid by Executive in
providing services on behalf of the Company. An expense report
detailing such expenses with such supporting documentation as the
Company may reasonably require (the "Expense Report") must be submitted
to the Company prior to the Company's reimbursement of such expense.
1.7 Vacations, Holidays, and Sick Leave. Each year, the Executive shall be
entitled to a minimum of twenty days of paid vacation with full pay. In
addition, Executive shall be entitled to take the following holidays
with full pay: New Years Day, Xxxxxx Xxxxxx Xxxx Day, Presidents Day,
Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving
Day, and Christmas Day. Employee shall also be entitled to be absent
from employment due to illness for ten days per year with full pay.
Employee's vacation and sick leave shall be taken in accordance with
the Company's policies, as amended from time to time, for senior
executive officers.
2. Confidential Information.
2.1 Executive recognizes and acknowledges that by reason of Executive's
employment by and service to the Company before, during and, if
applicable, after the Employment Term, Executive will have access to
certain confidential and proprietary information relating to the
Company's business, as well as the businesses, which may include, but
is not limited to, trade secrets, trade "know-how," product development
techniques and plans, formulas, customer lists and addresses, cost and
pricing information, marketing and sales techniques, strategy and
programs, computer programs and software and financial information
(collectively referred to as "Confidential Information"). Executive
acknowledges that such Confidential Information is a valuable and
unique asset of the Company, and Executive covenants that he will not,
unless expressly authorized in writing by the Company, as the case may
be, at any time during the course of Executive's employment use any
Confidential Information or divulge or disclose any Confidential
Information to any person, firm or corporation except in connection
with the performance of Executive's duties for the Company and in a
manner consistent with the Company's policies regarding Confidential
Information. Executive also covenants that at any time after the
termination of such employment, directly or indirectly, he will not use
any Confidential Information or divulge or disclose any Confidential
Information to any person, firm or corporation, unless such information
is in the public domain through no fault of Executive or except when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof) with
apparent jurisdiction to order Executive to divulge, disclose or make
accessible such information.
All written Confidential Information (including, without limitation, in
any computer or other electronic format), which comes into Executive's
possession during the course of Executive's employment, shall remain
the property of the Company as the case may be. Except as required in
the performance of Executive's duties for the Company, or unless
expressly authorized in writing by the Company, Executive shall not
remove any written Confidential Information from the Company's
premises, or the premises of the other, as the case may be, except in
connection with the performance of Executive's duties for the Company,
as the case may be, and in a manner consistent with the Company's
policies regarding Confidential Information. Upon termination of
Executive's employment, the Executive agrees to return immediately to
the Company, as the case may be, all written Confidential Information
(including, without limitation, in any computer or other electronic
format) in Executive's possession. Nothing in this paragraph 2 or any
of its subparts applies to any Confidential Information acquired as a
result of Executive's ownership, management, operations, control, or
participation in Coast Communications, Inc.
3. Non-Competition; Non-Solicitation.
---------------------------------
3.1 During Executive's employment by the Company, Executive will not,
except with the prior written consent of the Board, directly or
indirectly, own, manage, operate, join, control, finance or participate
in the ownership, management, operation, control or financing of, or be
connected as an officer, director, Executive, partner, principal,
agent, representative, consultant or otherwise or use or permit
Executive's name to be used in connection with, any business or
enterprise (a "Competitor") which competes with the Company or
generates, directly or indirectly, for itself or others revenues from
the type of product and services provided by the Company or its
affiliates during Executive's employment by the Company. Nothing in
this paragraph 3 or any of its subparts applies to Executive's
ownership, management, operations, control, or participation in Coast
Communications, Inc.
3.2 The foregoing restrictions shall not be construed to prohibit the
ownership by Executive of less than five percent (5%) of any class of
securities of any corporation which is a Competitor having a class of
securities registered pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), provided that such ownership
represents a passive investment and that neither Executive nor any
group of persons including Executive in any way, either directly or
indirectly, manages or exercises control of any such corporation,
guarantees any of its financial obligations, otherwise takes any part
in its business, other than exercising Executive's rights as a
shareholder, or seeks to do any of the foregoing.
3.3 Executive further covenants and agrees that during Executive's
employment by the Company and for the period of twenty-four (24) months
thereafter, Executive will not, directly or indirectly, (i) solicit,
divert, take away, or attempt to solicit, divert or take away, any of
the Company's customers or (ii) encourage any customer to reduce its
patronage of the Company.
3.4 Without limiting the generality of the foregoing, Executive agrees that
during Executive's employment by the Company and for the period of
twenty-four (24) months thereafter, he will not, directly or
indirectly, solicit any customer to retain from any other person, firm
or entity any services of a type generally similar to or competitive
with the product and/or services of the Company during the period of
Executive's employment by the Company.
3.5 Executive further covenants and agrees that during Executive's
employment by the Company and for the period of twenty-four (24) months
thereafter, Executive will not, directly or indirectly, solicit or
hire, or encourage the solicitation or hiring of any person who was an
Executive of the Company at any time during the term of Executive's
employment by the Company by any employer other than the Company for
any position as an Executive, independent contractor, consultant or
otherwise
4. Equitable Relief.
----------------
4.1. Executive acknowledges and agrees that the restrictions contained in
Sections 2 and 3 are reasonable and necessary to protect and preserve
the legitimate interests, properties, goodwill and business of the
Company, that the Company would not have entered into this Agreement in
the absence of such restrictions and that irreparable injury will be
suffered by the Company should Executive breach any of the provisions
of those sections. Executive represents and acknowledges that (i) he
has been advised by the Company to consult Executive's own legal
counsel in respect to this Agreement and (ii) that he has had full
opportunity, prior to execution of this Agreement, to review this
Agreement thoroughly with Executive's legal counsel.
4.2. Executive further acknowledges and agrees that a breach of any of the
restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages. Executive agrees that the Company shall be entitled
to preliminary and permanent injunctive relief, without the necessity
of proving actual damages, as well as an equitable accounting of all
earnings, profits and other benefits arising from any violation of
Sections 2 or 3 hereof, which rights shall be cumulative and in
addition to any other rights or remedies to which the Company may be
entitled. The parties specifically acknowledge that nothing in this
paragraph 4 or any of its subparts applies to Executive's ownership,
management, operations, control, or participation in Coast
Communications, Inc. 4.3 Executive irrevocably and unconditionally (i)
agrees that any suit, action or other legal proceeding arising out of
Sections 2 or 3 hereof, including, without limitation, any action
commenced by the Company for preliminary and permanent injunctive
relief and other equitable relief, may be brought in Maricopa County
Superior Court; (ii) consents to the exclusive jurisdiction of any such
court in any such suit, action or proceeding (iii) or in arbitration in
Mesa Arizona r; and (iiii) waives any objection which Executive may
have to the laying of venue of any such suit, action or proceeding in
any such court.
4.4 Executive agrees that for a period of five (5) years following the
termination of Executive's employment by the Company, Executive will
provide, and that at all times after the date hereof the Company may
similarly provide, a copy of Sections 2 and 3 hereof to any business or
enterprise (i) which Executive may directly or indirectly own, manage,
operate, finance, join, control or participate in the ownership,
management, operation, financing or control of, or (ii) with which
Executive may be connected as an officer, director, employee, partner,
principal, agent, representative, consultant or otherwise, or in
connection with which Executive may use or permit Executive's name to
be used; provided, however, that this provision shall not apply in
respect of Section 3 hereof after expiration of the time period set
forth therein. The parties specifically acknowledge that nothing in
this subparagraph applies to Executive's ownership, management,
operations, control, or participation in Coast Communications, Inc.
5. Termination. The Employment Term shall terminate upon the occurrence of any
one of the following events:
5.1 Disability. The Company may terminate the Employment Term if Executive
is unable substantially to perform Executive's duties and
responsibilities hereunder to the full extent required by the Board by
reason of illness, injury or incapacity (a "Disability") for three (3)
consecutive months, or for more than six (6) months in the aggregate
during any period of twelve (12) calendar months. If the Company
terminates Executive's Employment Term for any reason authorized under
this subparagraph, Executive shall be entitled to the following:(i)
immediate delivery of twelve (12) months' salary to Employee; (ii) all
expenses as submitted and verifiable by Employee; (iii) a pro rata
bonus, if any, for the year of termination; (iv) any other amounts
earned, accrued or owing but not yet paid under Section 1 above; (v)
the continued right to exercise any vested stock option, if any, for a
period of one (1) year following the date of Executive's termination;
(vi) continued participation for the
Remaining Employment Term in that Benefit Coverage's in which Executive
was participating on the date of termination, which, by their terms,
permit a former employee to participate; and (vii) any other benefits
in accordance with applicable plans and programs of the Company.
Company shall make all payments owed under this subparagraph within 10
business days of terminating Executive's Employment Term for any
disability. Upon making all payments and providing all benefits
required under this subparagraph, the Company shall have no further
liability or obligation to Executive for compensation under this
Agreement except as otherwise specifically provided in this Agreement.
Executive agrees, in the event of a dispute under this Section 5.1, to
submit to a physical examination by a licensed physician selected by
the Board, provided that Executive's own physician may be present at
Executive's request and sole expense.
5.2 Death. The Employment Term shall terminate in the event of Executive's
death. In such event, the Company shall pay to Executive's executors,
legal representatives or administrators, as applicable, an amount equal
to the installment of Executive's Base Salary set forth in Section 1.3
hereof for the year in which Executive dies and a pro rata share of any
annual bonus to which Executive would otherwise be entitled for the
year in which such death occurs. In addition, Executive's estate shall
be entitled to (i) any other amounts earned, accrued or owing but not
yet paid under Section 1 above; (ii) the continued right to exercise
any vested stock option for a period of one (1) year following the date
of death; and (iii) any other benefits in accordance with applicable
plans and programs of the Company. The Company shall have no further
liability or obligation under this Agreement to Executive's executors,
legal representatives, administrators, heirs or assigns or any other
person claiming under or through Executive except as otherwise
specifically provided in this Agreement.
5.3 Cause. The Company may terminate the Employment Term, at any time, for
"cause" upon thirty (30) days' written notice, in which event all
payments under this Agreement shall cease, except for Base Salary to
the extent already accrued. In addition, Company shall pay Executive
twelve (12) months' additional salary within 10 business days of any
termination for cause. For purposes of this Agreement, Executive's
employment may be terminated for "cause" (i) if Executive is convicted
of a felony; (ii) any material neglect or breach of duty by Executive,
or any failure by Executive to perform such duties as may be delegated
to Executive from time to time; (iii) any willful breach of duty by
Executive in the course of his employment; (iv) any material breach of
any provision of this Agreement; or (v) Executive commits theft,
larceny, embezzlement, or fraud, any acts of dishonesty, illegality,
moral turpitude or gross mismanagement as determined in good faith by
the Board.
5.4 Termination Without Cause. The Company may remove Executive, at any
time prior to the end of the Employment Term, without cause from the
position in which Executive is employed hereunder (in which case the
Employment Term shall be deemed to have ended) upon not less than sixty
(60) days' prior written notice to Executive; provided, however, that
in the event that such notice is given, Executive shall be under no
obligation to render any additional services to the Company and,
subject to the provisions of Section 3 hereof, shall be allowed to seek
other employment. Upon any such removal, Executive shall be entitled to
receive as liquidated damages for the failure of the
Company to continue to employ Executive, (a) the prorated payment of
Employee's salary through the date of termination to the extent not yet
paid; plus twelve (12) months' additional salary to Employee. (b) The
payment of any bonus or incentive compensation earned in accordance
with this Agreement through the date of termination to the extent not
yet paid; (c) the payment of accrued and unused vacation and sick time
through the date of termination; (d) the payment of any unpaid
reimbursable business expenses incurred and documented by Employee in
accordance with this Agreement; and any amount due to Executive under
the Company's then-current severance pay plan for employees. No other
payments or benefits shall be due under this Agreement to Executive.
6. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of the Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.
7. Notices. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given when
delivered personally, by facsimile transmission, or when mailed, by United
States certified or registered mail, prepaid, to the parties or their
assignees at the following addresses or facsimile numbers (or at such other
address as shall be given in writing by any party):
If to the Company:
TCPD
Attn: Board of Directors
c/o Xxxxxx X. Xxxxxxxx, Esq.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx X
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to Executive:
Xxxx X X XxXxxxx
0000 X. Xxxx Xxxxx
Xxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000 or to such other names or addresses as the Company or
Executive, as the case may be, shall designate by notice to each other person
entitled to receive notices in the manner specified in this section.
8. Arbitration; Expenses. In the event of any dispute under the provisions of
this Agreement other than a dispute in which the sole relief is an
equitable remedy such as an injunction, the parties shall be required to
have the dispute, controversy or claim settled by arbitration in the City
of Mesa, Arizona in accordance with the rules then in effect of the
American Arbitration Association. The fees and costs of arbitration shall
be borne equally by Employee and the Company, except that the Company shall
advance all costs of the arbitration subject to later allocation by the
arbitrator, and Employee and the Company shall each pay their own attorney
fees or costs of representation, subject to later allocation by the
arbitrator.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Arizona as if this Agreement was
to be performed entirely within the State of Arizona by residents of such
State, and without reference to principles of conflicts of laws.
10. Further Assurances. Each of the parties agrees that from time to time, at
the request of any other party and without further consideration or
consent, they will execute and deliver such additional instruments as any
other party may reasonably request as are necessary to effectuate the
purposes of this Agreement.
11. Attorneys' Fees. In the event any litigation, arbitration, mediation or
other proceeding ("Proceeding") is initiated by any party (ies) against any
other party (ies) to enforce, interpret or otherwise obtain judicial or
quasi-judicial relief in connection with this Agreement, the prevailing
party (ies) in such Proceeding shall be entitled to recover from the
unsuccessful party (ies) (a) all costs, expenses, actual attorneys' and
expert witness fees, relating to or arising out of such Proceeding (whether
or not such Proceeding proceeds to judgment), and (b) any post-judgment or
post-award proceeding, including, without limitation, one to enforce any
judgment or award resulting from any such Proceeding. Any such judgment or
award shall contain a specific provision for the recovery of all such
subsequently incurred costs, expenses, actual attorneys' and expert witness
fees. The arbitrator(s) or court shall determine who is the prevailing
party, whether or not the dispute or controversy proceeds to final
judgment. Company and Executive expressly acknowledge that this section is
not intended to in any way alter the parties' agreement that arbitration
shall be the exclusive method of resolving any dispute related to this
Agreement or Executive's employment with the Company as set forth in
Section 7. Company and Executive agree that the reference to litigation in
this section is included so that the prevailing party can recover its
attorneys' fees and costs if (a) either party files a lawsuit in violation
of Section 7 (e.g., fees and costs incurred obtaining a court order
compelling arbitration); or (b) a court rules that the arbitration
provision in Section 7 is unenforceable for any reason.
12. Entire Agreement. All prior agreements, representations and understandings
between the parties are incorporated in this Agreement and schedules and
exhibit hereto, which together constitute the entire contract between the
parties. The terms of this Agreement are intended by the parties as a final
expression of their agreement with respect to such terms as are included
herein and may not be contradicted by evidence of any prior or
contemporaneous written or oral representations, agreements or
understandings, whether express or implied. The parties further intend that
this Agreement constitutes the complete and exclusive statement of its
terms and that no extrinsic evidence whatsoever may be introduced in any
judicial proceeding, if any, involving this Agreement. No amendment or
variation of the terms of this Agreement shall be valid unless made in
writing and signed by each of the parties.
13. Venues and Jurisdiction. For purposes of venue and jurisdiction, this
Agreement shall be deemed made and to be performed in the
City of Mesa, in the county of Maricopa, in the state of Arizona.
14. Counterparts; Facsimile. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may
be executed by facsimile (with originals to follow by United States mail),
and such facsimile shall be conclusive evidence of the consent and
ratification of the signatories hereto.
15. Headings. The headings of the various Sections of this Agreement have been
inserted only for convenience and shall not be deemed in any manner to
modify or limit any of the provisions of this Agreement or be used in any
manner in the interpretation of this Agreement.
16. Interpretation. Whenever the context so requires, all words used in the
singular shall be construed to have been used in the plural (and vice
versa), each gender shall be construed to include any other genders, and
the word "person" shall be construed to include a natural person, a
corporation, a firm, a partnership, a joint venture, a trust, an estate or
other entity.
17. Severability. If any provision of this Agreement shall be declared invalid,
illegal or unenforceable, such provision shall be severed and all remaining
provisions shall continue in full force and effect.
18. Successors-in-Interest and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the successors-in-interest and assigns of
each party to this Agreement, except that the duties and responsibilities
of Executive hereunder are of a personal nature and shall not be assignable
or delegable in whole or in part by Executive. Nothing in this Section
shall create any rights enforceable by any other persons not a party to
this Agreement, unless such rights are expressly granted in this Agreement
to other specifically identified persons.
19. Amendments and Waiver. This Agreement may not be amended and the observance
of any term of this Agreement may not be waived (either generally or in a
particular instance and neither retroactively or prospectively), without
the written consent of the parties hereto.
20. Beneficiaries; References. Executive shall be entitled, to the extent
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable
hereunder-following Executive's death by giving the Company written notice
thereof. In the event of Executive's death or a judicial determination of
Executive's incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive's beneficiary, estate or
other legal representative.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
Telecommunication Products, Inc.,
a Colorado corporation
By: ______________________________
Xxxxxx Xxxxxxx
Director and Chief Executive Officer
Executive, an individual
By: ______________________________
Xxxx X X XxXxxxx, President of HMN
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is effective as of April 1,
2003 by and between Telecommunication Products Inc., a Colorado corporation with
offices at 0000 Xxxxxxxx Xxxx., Xxxxx X, Xxxxxxx Xxxxx, XX 00000 (the
"Company"), and Xxxxxx X. XxXxx, an individual with offices at 0000 X. Xxxx
Xxxxx, Xxxx, Xxxxxxx 00000 (the "Executive") and is made with reference to the
following facts and circumstances:
A. Company is engaged in the telecommunications business and has entered
into a letter of intent dated as of October 30, 2002 to acquire the assets,
property, and business of Coast Communications Inc. relating to pay-per-view and
cable services to hotel/lodging rooms, including the corporation known as Hotel
Movie Networks, Inc. ("HMN") a Nevada corporation;
B. Company desires to retain the services of Executive, and Executive is
willing to provide such services to the Company;
C. Company and Executive desire to enter into this Agreement to provide for
Executive's employment by the Company upon the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the foregoing facts and mutual
agreements set forth below, the parties, intending to be legally bound, agree as
follows:
1. Employment. The Company hereby agrees to employ Executive, and Executive
hereby accepts such employment and agrees to perform Executive's duties and
responsibilities in accordance with the terms and conditions hereinafter
set forth.
1.1 Employment Term. The term of Executive's employment under this
Agreement shall commence as of the date hereof (the "Effective Date")
and shall continue for three (3) years, subject to the Company entering
into a definitive agreement to acquire HMN on or before January 31,
2003, unless terminated in accordance with Section 5 hereof. The terms
of this Agreement automatically shall be extended for an additional
two-year term unless either party gives written notice to the other at
least six months prior to the expiration of the then-current term, that
he or it does not wish to renew this Agreement. The initial term and
any extended term of this agreement is hereinafter referred to as the
"Employment Term."
1.2 Duties and Responsibilities. During the Employment Term, Executive
shall serve as Vice President of HMN and Director of Hospitality
Information systems for the Company and to perform all duties and
accept all responsibilities incident to such position or other
appropriate duties as may be reasonably assigned to Executive by the
Company's Board of Directors (the "Board") from time to time consistent
with Executive's status as a senior executive.
Executive's initial duties shall include the following:
a. Establishing and carrying out plans of Hotel Movie Network's operation,
sales and marketing, and the expansion and upgrading of its facilities and
equipment;
b. Formulating annual operating and capital budget for Hotel Movie Network;
c. Purchasing supplies, equipment, facilities and services for Hotel Movie
Network;
d. Hiring, training and terminating employees of Hotel Movie Network and
determining their remuneration and duties;
e. Negotiating binding contracts with suppliers and customers of Hotel Movie
Network;
f. Arranging for accounting and legal services for Hotel Movie Network; and
g. Otherwise administering, supervising and carrying out the business of Hotel
Movie Network also to include remaining as Chairman of The Board for the
corporation of Hotel Movie Network Inc.;
1.3 Base Salary. For all the services rendered by Executive hereunder for
the Company, the Company shall pay Executive a base salary (the "Base
Salary") at the minimum annual rate of $125,000 per annum (payable in
accordance with the Company's then applicable payroll policies) as
compensation for all services rendered by Executive hereunder. The Base
Salary shall be subject to all state, federal, and local payroll tax
withholding and any other withholdings required by law. Following each
year after the Effective Date, Executive shall be reviewed by the
Company's Board to determine whether a raise in the Base Salary and
other additional compensation and benefits is appropriate, in the sole
and absolute discretion of the Board; provided, however, that at no
time shall Executive's Base Salary be less than $125,000per annum.
1.4 Benefit Coverage. During the Employment Term, Executive shall be
entitled to participate in all employee pension and welfare benefit
plans and programs made available to the Company's senior level
executives as a group or to its employees generally, as such plans or
programs may be in effect from time to time (the "Benefit Coverage"),
including, without limitation, pension, profit sharing, savings and
other retirement plans or programs, medical, dental, hospitalization,
short-term and long-term disability and life insurance plans,
accidental death and dismemberment protection and travel accident
insurance.
1.5 Performance Bonuses. Within ninety (90) days after the end of each
fiscal year of the Company, which is currently March 31st, during the
Employment Term, the Executive will be eligible to receive a bonus (the
"Performance Bonus") in an amount as determined at the discretion of the
Board of the Company.
To the extent that, for any given year of the Employment Term,
Executive has been employed for less than the full year, the
Performance Bonus shall be reduced on a pro rata basis for the amount
of time actually worked during such year. All bonus payments shall be
subject to customary withholdings required by law. The Performance
Bonus will be based upon ten (10) percent of HMN's net pre tax earnings
but in no event shall such amount exceed the Executive's Base Salary on
an annualized basis.
1.6 Expenses. During the Employment Term, Executive shall be reimbursed for
all reasonable business expenses incurred and paid by Executive in
providing services on behalf of the Company. An expense report
detailing such expenses with such supporting documentation as the
Company may reasonably require (the "Expense Report") must be submitted
to the Company prior to the Company's reimbursement of such expense.
1.7 Vacations, Holidays, and Sick Leave. Each year, the Executive shall be
entitled to a minimum of twenty days of paid vacation with full pay. In
addition, Executive shall be entitled to take the following holidays
with full pay: New Years Day, Xxxxxx Xxxxxx Xxxx Day, Presidents Day,
Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving
Day, and Christmas Day. Employee shall also be entitled to be absent
from employment due to illness for ten days per year with full pay.
Employee's vacation and sick leave shall be taken in accordance with
the Company's policies, as amended from time to time, for senior
executive officers.
2. Confidential Information.
------------------------
2.1 Executive recognizes and acknowledges that by reason of Executive's
employment by and service to the Company before, during and, if
applicable, after the Employment Term, Executive will have access to
certain confidential and proprietary information relating to the
Company's business, as well as the businesses, which may include, but
is not limited to, trade secrets, trade "know-how," product development
techniques and plans, formulas, customer lists and addresses, cost and
pricing information, marketing and sales techniques, strategy and
programs, computer programs and software and financial information
(collectively referred to as "Confidential Information"). Executive
acknowledges that such Confidential Information is a valuable and
unique asset of the Company, and Executive covenants that he will not,
unless expressly authorized in writing by the Company, as the case may
be, at any time during the course of Executive's employment use any
Confidential Information or divulge or disclose any Confidential
Information to any person, firm or corporation except in connection
with the performance of Executive's duties for the Company and in a
manner consistent with the Company's policies regarding Confidential
Information. Executive also covenants that at any time after the
termination of such employment, directly or indirectly, he will not use
any Confidential Information or divulge or disclose any Confidential
Information to any person, firm or corporation, unless such information
is in the public domain through no fault of Executive or except when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof) with
apparent jurisdiction to order Executive to divulge, disclose or make
accessible such information.
All written Confidential Information (including, without limitation, in
any computer or other electronic format), which comes into Executive's
possession during the course of Executive's employment, shall remain
the property of the Company as the case may be. Except as required in
the performance of Executive's duties for the Company, or unless
expressly authorized in writing by the Company, Executive shall not
remove any written Confidential Information from the Company's
premises, or the premises of the other, as the case may be, except in
connection with the performance of Executive's duties for the Company,
as the case may be, and in a manner consistent with the Company's
policies regarding Confidential Information. Upon termination of
Executive's employment, the Executive agrees to return immediately to
the Company, as the case may be, all written Confidential Information
(including, without limitation, in any computer or other electronic
format) in Executive's possession. Nothing in this paragraph 2 or any
of its subparts applies to any Confidential Information acquired as a
result of Executive's ownership, management, operations, control, or
participation in Coast Communications, Inc.
3. Non-Competition; Non-Solicitation.
---------------------------------
3.1 During Executive's employment by the Company, Executive will not,
except with the prior written consent of the Board, directly or
indirectly, own, manage, operate, join, control, finance or participate
in the ownership, management, operation, control or financing of, or be
connected as an officer, director, Executive, partner, principal,
agent, representative, consultant or otherwise or use or permit
Executive's name to be used in connection with, any business or
enterprise (a "Competitor") which competes with the Company or
generates, directly or indirectly, for itself or others revenues from
the type of product and services provided by the Company or its
affiliates during Executive's employment by the Company. Nothing in
this paragraph 3 or any of its subparts applies to Executive's
ownership, management, operations, control, or participation in Coast
Communications, Inc.
3.2 The foregoing restrictions shall not be construed to prohibit the
ownership by Executive of less than five percent (5%) of any class of
securities of any corporation which is a Competitor having a class of
securities registered pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), provided that such ownership
represents a passive investment and that neither Executive nor any
group of persons including Executive in any way, either directly or
indirectly, manages or exercises control of any such corporation,
guarantees any of its financial obligations, otherwise takes any part
in its business, other than exercising Executive's rights as a
shareholder, or seeks to do any of the foregoing.
3.3 Executive further covenants and agrees that during Executive's
employment by the Company and for the period of twenty-four (24) months
thereafter, Executive will not, directly or indirectly, (i) solicit,
divert, take away, or attempt to solicit, divert or take away, any of
the Company's customers or (ii) encourage any customer to reduce its
patronage of the Company.
3.4 Without limiting the generality of the foregoing, Executive agrees that
during Executive's employment by the Company and for the period of
twenty-four (24) months thereafter, he will not, directly or
indirectly, solicit any customer to retain from any other person, firm
or entity any services of a type generally similar to or competitive
with the product and/or services of the Company during the period of
Executive's employment by the Company.
3.5 Executive further covenants and agrees that during Executive's
employment by the Company and for the period of twenty-four (24) months
thereafter, Executive will not, directly or indirectly, solicit or
hire, or encourage the solicitation or hiring of any person who was an
Executive of the Company at any time during the term of Executive's
employment by the Company by any employer other than the Company for
any position as an Executive, independent contractor, consultant or
otherwise
4. Equitable Relief.
----------------
4.1. Executive acknowledges and agrees that the restrictions contained in
Sections 2 and 3 are reasonable and necessary to protect and preserve
the legitimate interests, properties, goodwill and business of the
Company, that the Company would not have entered into this Agreement in
the absence of such restrictions and that irreparable injury will be
suffered by the Company should Executive breach any of the provisions
of those sections. Executive represents and acknowledges that (i) he
has been advised by the Company to consult Executive's own legal
counsel in respect to this Agreement and (ii) that he has had full
opportunity, prior to execution of this Agreement, to review this
Agreement thoroughly with Executive's legal counsel.
4.2. Executive further acknowledges and agrees that a breach of any of the
restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages. Executive agrees that the Company shall be entitled
to preliminary and permanent injunctive relief, without the necessity
of proving actual damages, as well as an equitable accounting of all
earnings, profits and other benefits arising from any violation of
Sections 2 or 3 hereof, which rights shall be cumulative and in
addition to any other rights or remedies to which the Company may be
entitled. The parties specifically acknowledge that nothing in this
paragraph 4 or any of its subparts applies to Executive's ownership,
management, operations, control, or participation in Coast
Communications, Inc. 4.3 Executive irrevocably and unconditionally (i)
agrees that any suit, action or other legal proceeding arising out of
Sections 2 or 3 hereof, including, without limitation, any action
commenced by the Company for preliminary and permanent injunctive
relief and other equitable relief, may be brought in Maricopa County
Superior Court; (ii) consents to the exclusive jurisdiction of any such
court in any such suit, action or proceeding (iii) or in arbitration in
Mesa Arizona r; and (iiii) waives any objection which Executive may
have to the laying of venue of any such suit, action or proceeding in
any such court.
4.4 Executive agrees that for a period of five (5) years following the
termination of Executive's employment by the Company, Executive will
provide, and that at all times after the date hereof the Company may
similarly provide, a copy of Sections 2 and 3 hereof to any business or
enterprise (i) which Executive may directly or indirectly own, manage,
operate, finance, join, control or participate in the ownership,
management, operation, financing or control of, or (ii) with which
Executive may be connected as an officer, director, employee, partner,
principal, agent, representative, consultant or otherwise, or in
connection with which Executive may use or permit Executive's name to
be used; provided, however, that this provision shall not apply in
respect of Section 3 hereof after expiration of the time period set
forth therein. The parties specifically acknowledge that nothing in
this subparagraph applies to Executive's ownership, management,
operations, control, or participation in Coast Communications, Inc.
5. Termination. The Employment Term shall terminate upon the occurrence of any
one of the following events:
5.1 Disability. The Company may terminate the Employment Term if Executive
is unable substantially to perform Executive's duties and
responsibilities hereunder to the full extent required by the Board by
reason of illness, injury or incapacity (a "Disability") for three (3)
consecutive months, or for more than six (6) months in the aggregate
during any period of twelve (12) calendar months. If the Company
terminates Executive's Employment Term for any reason authorized under
this subparagraph, Executive shall be entitled to the following:(i)
immediate delivery of twelve (12) months' salary to Employee; (ii) all
expenses as submitted and verifiable by Employee; (iii) a pro rata
bonus, if any, for the year of termination; (iv) any other amounts
earned, accrued or owing but not yet paid under Section 1 above; (v)
the continued right to exercise any vested stock option, if any, for a
period of one (1) year following the date of Executive's termination;
(vi) continued participation for the
Remaining Employment Term in that Benefit Coverage's in which Executive
was participating on the date of termination, which, by their terms,
permit a former employee to participate; and (vii) any other benefits
in accordance with applicable plans and programs of the Company.
Company shall make all payments owed under this subparagraph within 10
business days of terminating Executive's Employment Term for any
disability. Upon making all payments and providing all benefits
required under this subparagraph, the Company shall have no further
liability or obligation to Executive for compensation under this
Agreement except as otherwise specifically provided in this Agreement.
Executive agrees, in the event of a dispute under this Section 5.1, to
submit to a physical examination by a licensed physician selected by
the Board, provided that Executive's own physician may be present at
Executive's request and sole expense.
5.2 Death. The Employment Term shall terminate in the event of Executive's
death. In such event, the Company shall pay to Executive's executors,
legal representatives or administrators, as applicable, an amount equal
to the installment of Executive's Base Salary set forth in Section 1.3
hereof for the year in which Executive dies and a pro rata share of any
annual bonus to which Executive would otherwise be entitled for the
year in which such death occurs. In addition, Executive's estate shall
be entitled to (i) any other amounts earned, accrued or owing but not
yet paid under Section 1 above; (ii) the continued right to exercise
any vested stock option for a period of one (1) year following the date
of death; and (iii) any other benefits in accordance with applicable
plans and programs of the Company. The Company shall have no further
liability or obligation under this Agreement to Executive's executors,
legal representatives, administrators, heirs or assigns or any other
person claiming under or through Executive except as otherwise
specifically provided in this Agreement.
5.3 Cause. The Company may terminate the Employment Term, at any time, for
"cause" upon thirty (30) days' written notice, in which event all
payments under this Agreement shall cease, except for Base Salary to
the extent already accrued. In addition, Company shall pay Executive
twelve (12) months' additional salary within 10 business days of any
termination for cause. For purposes of this Agreement, Executive's
employment may be terminated for "cause" (i) if Executive is convicted
of a felony; (ii) any material neglect or breach of duty by Executive,
or any failure by Executive to perform such duties as may be delegated
to Executive from time to time; (iii) any willful breach of duty by
Executive in the course of his employment; (iv) any material breach of
any provision of this Agreement; or (v) Executive commits theft,
larceny, embezzlement, or fraud, any acts of dishonesty, illegality,
moral turpitude or gross mismanagement as determined in good faith by
the Board.
5.4 Termination Without Cause. The Company may remove Executive, at any
time prior to the end of the Employment Term, without cause from the
position in which Executive is employed hereunder (in which case the
Employment Term shall be deemed to have ended) upon not less than sixty
(60) days' prior written notice to Executive; provided, however, that
in the event that such notice is given, Executive shall be under no
obligation to render any additional services to the Company and,
subject to the provisions of Section 3 hereof, shall be allowed to seek
other employment. Upon any such removal, Executive shall be entitled to
receive as liquidated damages for the failure of the
Company to continue to employ Executive, (a) the prorated payment of
Employee's salary through the date of termination to the extent not yet
paid; plus twelve (12) months' additional salary to Employee. (b) The
payment of any bonus or incentive compensation earned in accordance
with this Agreement through the date of termination to the extent not
yet paid; (c) the payment of accrued and unused vacation and sick time
through the date of termination; (d) the payment of any unpaid
reimbursable business expenses incurred and documented by Employee in
accordance with this Agreement; and any amount due to Executive under
the Company's then-current severance pay plan for employees. No other
payments or benefits shall be due under this Agreement to Executive.
6. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of the Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.
7. Notices. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given when
delivered personally, by facsimile transmission, or when mailed, by United
States certified or registered mail, prepaid, to the parties or their
assignees at the following addresses or facsimile numbers (or at such other
address as shall be given in writing by any party):
If to the Company:
TCPD
Attn: Board of Directors
c/o Xxxxxx X. Xxxxxxxx, Esq.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx X
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to Executive:
Xxxxxx X. XxXxx
0000 X. Xxxx Xxxxx
Xxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000 or to such other names or addresses as the Company or
Executive, as the case may be, shall designate by notice to each other person
entitled to receive notices in the manner specified in this section.
8. Arbitration; Expenses. In the event of any dispute under the provisions of
this Agreement other than a dispute in which the sole relief is an
equitable remedy such as an injunction, the parties shall be required to
have the dispute, controversy or claim settled by arbitration in the City
of Mesa, Arizona in accordance with the rules then in effect of the
American Arbitration Association. The fees and costs of arbitration shall
be borne equally by Employee and the Company, except that the Company shall
advance all costs of the arbitration subject to later allocation by the
arbitrator, and Employee and the Company shall each pay their own attorney
fees or costs of representation, subject to later allocation by the
arbitrator.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Arizona as if this Agreement was
to be performed entirely within the State of Arizona by residents of such
State, and without reference to principles of conflicts of laws.
10. Further Assurances. Each of the parties agrees that from time to time, at
the request of any other party and without further consideration or
consent, they will execute and deliver such additional instruments as any
other party may reasonably request as are necessary to effectuate the
purposes of this Agreement.
11. Attorneys' Fees. In the event any litigation, arbitration, mediation or
other proceeding ("Proceeding") is initiated by any party (ies) against any
other party (ies) to enforce, interpret or otherwise obtain judicial or
quasi-judicial relief in connection with this Agreement, the prevailing
party (ies) in such Proceeding shall be entitled to recover from the
unsuccessful party (ies) (a) all costs, expenses, actual attorneys' and
expert witness fees, relating to or arising out of such Proceeding (whether
or not such Proceeding proceeds to judgment), and (b) any post-judgment or
post-award proceeding, including, without limitation, one to enforce any
judgment or award resulting from any such Proceeding. Any such judgment or
award shall contain a specific provision for the recovery of all such
subsequently incurred costs, expenses, actual attorneys' and expert witness
fees. The arbitrator(s) or court shall determine who is the prevailing
party, whether or not the dispute or controversy proceeds to final
judgment. Company and Executive expressly acknowledge that this section is
not intended to in any way alter the parties' agreement that arbitration
shall be the exclusive method of resolving any dispute related to this
Agreement or Executive's employment with the Company as set forth in
Section 7. Company and Executive agree that the reference to litigation in
this section is included so that the prevailing party can recover its
attorneys' fees and costs if (a) either party files a lawsuit in violation
of Section 7 (e.g., fees and costs incurred obtaining a court order
compelling arbitration); or (b) a court rules that the arbitration
provision in Section 7 is unenforceable for any reason.
12. Entire Agreement. All prior agreements, representations and understandings
between the parties are incorporated in this Agreement and schedules and
exhibit hereto, which together constitute the entire contract between the
parties. The terms of this Agreement are intended by the parties as a final
expression of their agreement with respect to such terms as are included
herein and may not be contradicted by evidence of any prior or
contemporaneous written or oral representations, agreements or
understandings, whether express or implied. The parties further intend that
this Agreement constitutes the complete and exclusive statement of its
terms and that no extrinsic evidence whatsoever may be introduced in any
judicial proceeding, if any, involving this Agreement. No amendment or
variation of the terms of this Agreement shall be valid unless made in
writing and signed by each of the parties.
13. Venues and Jurisdiction. For purposes of venue and jurisdiction, this
Agreement shall be deemed made and to be performed in the City of Mesa, in
the county of Maricopa, in the state of Arizona.
14. Counterparts; Facsimile. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may
be executed by facsimile (with originals to follow by United States mail),
and such facsimile shall be conclusive evidence of the consent and
ratification of the signatories hereto.
15. Headings. The headings of the various Sections of this Agreement have been
inserted only for convenience and shall not be deemed in any manner to
modify or limit any of the provisions of this Agreement or be used in any
manner in the interpretation of this Agreement.
16. Interpretation. Whenever the context so requires, all words used in the
singular shall be construed to have been used in the plural (and vice
versa), each gender shall be construed to include any other genders, and
the word "person" shall be construed to include a natural person, a
corporation, a firm, a partnership, a joint venture, a trust, an estate or
other entity.
17. Severability. If any provision of this Agreement shall be declared invalid,
illegal or unenforceable, such provision shall be severed and all remaining
provisions shall continue in full force and effect.
18. Successors-in-Interest and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the successors-in-interest and assigns of
each party to this Agreement, except that the duties and responsibilities
of Executive hereunder are of a personal nature and shall not be assignable
or delegable in whole or in part by Executive. Nothing in this Section
shall create any rights enforceable by any other persons not a party to
this Agreement, unless such rights are expressly granted in this Agreement
to other specifically identified persons.
19. Amendments and Waiver. This Agreement may not be amended and the observance
of any term of this Agreement may not be waived (either generally or in a
particular instance and neither retroactively or prospectively), without
the written consent of the parties hereto.
20. Beneficiaries; References. Executive shall be entitled, to the extent
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable
hereunder-following Executive's death by giving the Company written notice
thereof. In the event of Executive's death or a judicial determination of
Executive's incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive's beneficiary, estate or
other legal representative.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
Telecommunication Products, Inc.,
a Colorado corporation
By: ______________________________
Xxxxxx Xxxxxxx
Director and Chief Executive Officer
Executive, an individual
By: ______________________________
Xxxxxx X. XxXxx, Vice President of HMN
