THE NETWORK CONNECTION INCORPORATED (1)
AND
XXXXXXX XXXXXX XXXXXX (2)
SERVICE AGREEMENT
(1) "The Company" The Network Connection Incorporated of 000 X. 00xx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000, Xxxxxx Xxxxxx of America.
(2) "The Executive" Xxxxxxx Xxxxxx Xxxxxx of Westfield House 0 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxx Xxxxxxx, XX00 0XX.
1. EMPLOYMENT AND DURATION
1.1 The Company employs the Executive as Managing Director.
1.2 The employment of the Executive will commence on 20 September
1999 and will continue (subject to earlier termination in
accordance with the Agreement) until terminated by either party
giving to the other not less than 6 months prior notice in
writing.
2. HOURS OF WORK
2.1 The Executive's normal hours of work at 8:30 am. to 5:00 pm. Monday to
Thursday with a 45 minute break for lunch and 8:30 am. to 2:00 pm.
Friday with a 30 minute break for lunch.
2.2 The Executive will also work such additional hours as may be
reasonably necessary for the proper performance of his duties.
3. PLACE OF WORK AND RESIDENCE
3.1 The Executive will perform his duties a the Company's office in Derby
ad/or such other place as the Company reasonably requires whether
inside or outside the United Kingdom by the Company will not without
his prior consent require him to go to or reside anywhere outside the
Untied Kingdom except for visits in the ordinary course of his duties.
4. PAY
4.1 During his employment the Company will pay to the Executive:
4.1.1 a basic salary at the rate of $120,000 per year payable to a UK
Bank account nominated by the Executive by equal monthly
instalments in arrears on or before the last working day of each
month.
4.1.2 An annual bonus to be based on achieving agreed objectives
(determined in the light of the performance by the Executive of
his duties) up to a maximum of the Executive's basic salary
from time to time.
4.2 The Executive's basic salary will be reviewed by the Company in April
each year and may be increased by the Company with effect from that
date by such amount if any as it thinks fit.
5. SHARE OPTION SCHEME
5.1 The Company shall establish a share option scheme under which the
Executive shall be granted options for 120,000 Company shares or the
equivalent with an exercise price per option equal to the last sale
price of a Company share as reported by The Nasdaq Stock Market on
September 20, 1999. Options for 40,000 Company shares shall vest on
September 20, 2000. Options for the remaining 80,000 Company shares
will vest in 24 monthly instalments, each as nearly equal in number as
possible to all others. The first such monthly instalment shall vest
on October 31, 1000, and each subsequent monthly instalment shall vest
on the last day of the month following the month in which the
preceding monthly instalment vested, for each of the following
twenty-three calendar months. Each option will have a six-year term
from the date on which it vests to be exercised. The options will best
subject to Executive's continued employment with the Company. The
options shall be evidenced by one or more written option agreements,
each of which shall contain the foregoing provisions or the terms of
the share option scheme, as the board of directors of the Company may
determine in its sole discretion.
6. PENSION
6.1 The Company has no Pension Scheme applicable to the Executive's
employment but the Company will make contributions on a monthly basis
to a Pension Scheme nominated by the Executive at a rate of 3% of the
Executive's monthly basic salary.
7. INSURANCE BENEFITS
7.1 The Company will bear the costs of the Executive being a member of a
reputable permanent health insurance scheme for himself, his spouse
and dependant children and a reputable private medical expenses
insurance scheme subject always to the rules of such schemes.
8. CAR
8.1 The Company will provide the Executive with a car of a make, model and
specification selected by the Executive (equivalent to a BMW 535I) for
business and private use by him and his family.
8.2 The Company will bear all expenses of the car.
8.3 The Executive will:
8.3.1 comply with all the Company's regulations with respect to
company cars;
8.3.2 notify the Company of any accidents involving his company car,
8.3.3 on the termination of his employment return his company car and
keys to the Company
8.3.4 keep the vehicle in good running order and in a clean and tidy
condition;
8.3.5 keep such records relating to its use as are necessary to
satisfy any Inland Revenue regulations.
9. EXPENSES
9.1 The Company will reimburse to the Executive all travelling, hotel,
entertainment and other expenses reasonably incurred by him in the
proper performance of his duties subject to the production to the
Company of such vouchers or other evidence of actual payment of the
expenses as the Company may reasonably require. The Executive will be
entitled to travel in Business or equivalent class.
9.2 The Company will pay the cost of the telephone rental in respect of
the Executive's home telephone and the cost of a mobile phone together
with the cost of all calls made in performing his duties under this
Agreement.
10. HOLIDAY
10.1 In addition to English statutory holidays the Executive is entitled to
25 working days paid holiday in each holiday year which runs from the
1st January to 31st December.
10.2 For the holiday year during which his employment commences or
terminates, the Executive is entitled to 2 working days holiday for
each complete calendar month of his employment during that holiday
year.
10.3 On the termination of his employment the Executive will be entitled to
pay in lieu of outstanding holiday entitlement or will be required to
repay to the Company any salary received for holiday taken in excess
of his actual entitlement.
10.4 For the purpose of calculating any holiday pay the days pay will be
the Executive's basic annual salary divided by 260.
11. CONFLICT OF INTEREST
11.1 During this Agreement the Executive will not (except with the prior
written consent of the Company) be directly or indirectly engaged
concerned or interested in any other business which is wholly or
partly in competition with the business carried on by the Company
provided that the Executive may hold any units of any authorised unit
trust and up to three per cent of the issued shares, debentures or
other securities of any class of any company whose shares are listed
on a Recognised Investment Exchange.
11.2 The Executive will not directly or indirectly receive or obtain any
gift discount rebate commission or other inducement (whether in cash
or kind) in respect of any sale or purchase of any goods or services
effected or other business transacted (whether or not by him) by or on
behalf of the Company. The Executive will immediately account to the
Company for any amount or inducement actually received by him.
12. SHARE DEALINGS
12.1 The Executive will comply with every rule of law, and of the Company
in relation to dealings in shares, debentures or other securities and
unpublished price sensitive information affecting the shares,
debentures or other securities of the Company. In relation to overseas
dealings the Executive will also comply with all laws of the state and
all regulations of the stock exchange, market or dealing system in
which such dealings take place.
13. CONFIDENTIALITY
13.1 The Executive will not either during his employment or at any time
after its termination:
13.1.1 Disclose any Confidential Business Information to any person or
persons (except in the proper performance of his duties or
as required by law);
13.1.2 Use any Confidential Business Information for his own purposes
or for any purposes other than those of the Company;
13.1.3 Through any failure to exercise all due care and diligence
cause any unauthorised disclosure of Confidential Business
Information.
14. INCAPACITY
14.1 If the Executive is absent because of illness injury or other
incapacity he will notify the Company forthwith.
14.2 Immediately following his return to work the Executive will complete a
Self-Certification form detailing the reason for his absence.
14.3 If the Executive is so absent for seven or more consecutive days he
will provide a medical practitioner's statement on the eighth day and
weekly thereafter so that the whole period of absence is certified by
such statements.
14.4 If the Executive is absent from his duties hereunder due to illness
injury or other incapacity duly certified in accordance with the
provisions of sub-clause 14.1 hereof he will be paid:
14.4.1 His full remuneration hereunder (including bonus) for up to 130
working days absence in any period of 12 months;
14.4.2 one half his remuneration hereunder (including bonus) for up to
a further 65 working days absence in any period of 12 months;
14.4.3 thereafter such remuneration if any as the Company may in its
discretion from time to time determines. Provided such
remuneration will not be less than the proceeds received by the
Company in respect of the Executive under the Company's
permanent health insurance scheme (after paying pension
contributions) such remuneration shall be inclusive of any
Statutory Sick Pay or other benefits recoverable by the
Executive (whether or not recovered).
14.5 For Statutory Sick Pay purposes the Executive's qualifying days will
be his normal working days.
14.6 If the Executive shall receive any payment(s) from a third party
(including his own Insurance company) in respect of damages for
absence from employment due to incapacity, then any sum(s) paid by the
Company to him in respect of the same period of absence shall be
recoverable by the Company out of such damages as money due to the
Company.
15. OTHER EMPLOYMENT
15.1 The Executive will devote the whole of his time, attention and
abilities during his hours of work for the Company to his duties for
the Company. The Executive will not, whether directly or indirectly,
undertake any other duties, of whatever kind, during his hours of work
for the Company.
15.2 The Executive will not without the prior written consent of the
Company (which will not be unreasonably withheld) engage, whether
directly or indirectly, in any business or employment which is similar
to or in any way connected to or competitive with the business of the
Company in which the Executive works or which could or might
reasonably be considered by others to impair the ability of the
Executive to act at all times in the best interests of the Company.
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16. TERMINATION OF AGREEMENT
16.1 IMMEDIATE DISMISSAL
The Company may terminate this Agreement with immediate effect if the
Executive:
16.1.1 commits any act of gross misconduct or repeats or continues
(after written warning) any other serious breach of his
obligations under this Agreement; or
16.1.2 is convicted of any criminal offence punishable with 6 months
or more imprisonment (excluding an offence under road traffic
legislation in the United Kingdom or elsewhere for which he is
not sentenced to any term of imprisonment whether immediate or
suspended); or
16.1.3 becomes bankrupt or makes any arrangement or composition with
his creditors generally.
16.2 TERMINATION PAYMENT
On the termination of this Agreement, other than by way of immediate
dismissal under clause 16.1 above, the Company will make a payment to the
Executive of a sum equivalent to the Executive's then basic annual salary
in addition to any other rights, statutory or otherwise, which the
Executive may have as a result of the termination of this Agreement.
17. NON SOLICITATION
17.1 After the termination of the Executive's employment for any reason the
Executive will not for a period of 3 months from such termination
either directly or indirectly on his own account or on behalf of any
other person, firm or company solicit custom from any person, firm or
corporation who or which was a customer of the Company and with whom
the Executive had dealings on behalf of the Company during the final
six months of the Executive's employment by the Company.
17.2 The Executive will not for a period of 3 months immediately following
the termination of his employment either directly or indirectly on his
own account or on behalf of any other person, firm or Company solicit
any person who is a senior employee of the Company on the date of the
termination of the Executive's employment to leave their employment
with the Company.
18. GENERAL
18.1 STATUTORY PARTICULARS
The further particulars of terms of employment not contained in the
body of this Agreement which must be given to the Executive in
compliance with Part 1 of the Employment Rights Act 1996 are given in
Schedule 1.
18.2 PRIOR AGREEMENTS
This Agreement sets out the entire agreement and understanding of the
parties.
18.3 PROPER LAW
The validity construction and performance of this Agreement will be
governed by English law.
18.4 ACCEPTANCE OF JURISDICTION
All disputes, claims or proceedings between the parties relating to
the validity, construction or performance of this Agreement will be
subject to the non-exclusive jurisdiction of the High Court of Justice
in England and Wales ("the High Court") to which the parties
irrevocably submit. Each party irrevocably consents to the award or
grant of any relief in any such proceedings before the High Court.
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19. ACCRUED RIGHTS
The expiration or termination of this Agreement however arising will not
operate to affect such of the provisions of this Agreement as are expressed
to operate or have effect after then and will be without prejudice to any
accrued rights or remedies of the parties.
20. INTERPRETATION AND DEFINITIONS
20.1 In this Agreement:
20.1.1 the headings to the clauses and the index are for convenience
only and have no legal effect; 20.1.2 the singular includes the
plural and vice versa;
20.1.3 the masculine includes the feminine and vice versa; 20.1.4
reference to any Act or statutory provision includes any
enactment modifying or replacing it.
20.2 "Confidential Business Information" means all and any Corporate
Information, Marketing Information, Technical Information and other
information (whether or not recorded in documentary form or on
computer disk or tape) to which the Company attaches level of
confidentiality commensurate to those forms of information or in
respect of which it owes an obligation of confidentiality to any Third
Party:
20.2.1 which the Executive will acquire at any time during his
employment by the Company but which does not form part of the
Executive's own stock in trade; and
20.2.2 which is not readily ascertainable to persons not connected
with the Company either at all or without significant
expenditure of labour, skill or money.
20.3 "Marketing Information" means all and any information (whether or not
recorded in documentary form or on computer disk or tape) relating to
the marketing or sales of any past, present or future product or
service of the Company including that limitation sales, targets and
statistics, market share and pricing statistics, marketing surveys and
plans, market research reports, sales technics, price lists, discount
structures, advertising and promotional material, the names,
addresses, telephone numbers, contact names and identities of
customers and prospective customers of and suppliers and potential
supplies to the Company, the nature of their business operations,
their requirements for any product or service sold to or purchased by
the Company and all confidential aspects of their business
relationship with the Company.
20.4 "Technical Information" means all and any trade secrets, secret
formulae, processes, inventions, designs, know how discoveries,
technical specifications and other technical information (whether or
not recorded in documentary form or on computer disk or tape) relating
to the creation, production or supply of any past, present or future
product or service of the Company.
21. NOTICES
Any notice to be given by a party under this Agreement must be in writing
and must be given by delivery at or sending by first class post or
facsimile transmission or other means of telecommunication in permanent
written form to the last know postal address or relevant telecommunications
number of the other party. Where notice is given by sending in a prescribed
manner it will be deemed to have been received when in the ordinary course
of the means of transmission it would be received by the addressee. To
prove the giving of a notice it will be sufficient to show it was
despatched. A notice will have effect from the sooner of its actual or
deemed receipt by the addressee.
SCHEDULE 1
PART 1 EMPLOYMENT RIGHTS ACT 1996
The following information is given to supplement the information given in the
body of the Agreement in order to comply with the requirements of Part 1 of the
Act
1. The Executive's employment by the Company commenced on 20th September 1999.
2. No employment of the Executive with a previous employer counts as part of
the Executive's continuous employment with the company.
3. No Contracting Out Certificate pursuant to the provisions of the Xxxxxxxx
Xxxxxxx Xxx 0000 is held by the Company in respect of the Executive's
employment.
4. The Executive is subject to the Company's Disciplinary Rules and
Disciplinary Procedures copies of which have been given to the Executive.
5. If the Executive has any grievance relating to his employment (other than
one relating to a disciplinary decision) he should refer such grievance to
the Board of the Company.
SIGNED by /s/ XXXXXXX X. XXXXXX
the said Xxxxxxx Xxxxxx Xxxxxx
In the presence of:
WITNESS: Signature:
Name (block capitals):
Address:
Occupation:
SIGNED by /s/ XXXXX X. XXXXX
duly authorised on behalf of The
Network Connection Incorporated
In the presence of
WITNESS: Signature: /s/ XXXXX X. XXXXXXX
Name (block capitals):
Address:
Occupation:
