EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into, as of this 11th day
of November 1999 ("Effective Date"), by and between Xxxxxx Xxxxxx an individual
resident of the Province of Ontario ("Employee"), and Internet Cable
Corporation, a Nevada corporation ("Employer") with its principal place of
business at 000 Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000.
W I T N E S S E T H:
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WHEREAS, Employer desires to employ Employee, and Employee desires to be
employed by Employer, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
and agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
Section 1. Employment.
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Subject to the terms hereof, Employer hereby employs Employee, and
Employee hereby accepts such employment. Employee will serve in the capacity of
Executive Vice President - Cable Systems Technical Services Inc. ("CSTSI"), a
subsidiary of Employer and will have duties and responsibilities customarily
assigned to a person with such title. Employee hereby agrees that, throughout
his period of employment, he shall devote his business time, attention,
knowledge and skills, diligently in the furtherance of the business of the
Employer and of its subsidiaries and affiliates, shall perform his duties
consistent with his position with Employer and shall observe and carry out such
rules and regulations, policies and directions as Employer may from lime to time
establish to the extent consistent herewith. During the term of this Agreement,
Employee shall do such traveling as may be reasonably required of him in the
performance of his duties on behalf of Employer. Employee shall report directly
to the President - CSTSI.
Section 2. Term of Employment.
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2.1 The term of Employee's employment hereunder (the ("Initial Term")
shall be from the Effective Date and expire at the earlier of (a) the third
anniversary of the date of this Agreement or (b) the occurrence of any of the
following events:
(i) The death or total disability of Employee (total
disability meaning the failure to substantially perform
his normal required services hereunder for a period of
six (6) consecutive months during any consecutive
twelve (12) month period during the term hereof, as
determined by an independent medical doctor jointly
chosen by the Employee and the Employer, by reason of
mental or physical disability; or
(ii) The termination by Employer of Employee's employment
hereunder, upon seven (7) days prior written notice to
Employee, which termination shall be for "Cause", as
determined by the Board of Directors of Employer in
accordance with the terms hereof. For purposes of this
Agreement, "Cause" for termination of Employee's
employment shall exist (V) if Employee is convicted of,
pleads guilty to any felony or any act of fraud,
misappropriation or embezzlement, (W) if Employee
engages in a dishonest act to the material damage or
prejudice of Employer or an affiliate of Employer, or
in conduct or activities materially damaging to the
property, business, or reputation of Employer or an
affiliate of Employer, (X) if Employee violates any of
the provisions contained in Section 4 of this
Agreement, after receiving thirty (30) days written
notice from Employer specifically outlining the alleged
violations by the Employee of Section 4 hereof and
Employee has not cured the alleged violations within
thirty (30) days of receipt of written notice by the
Employer; (Y) Employee willfully breaches or habitually
neglects the duties he is required to perform
hereunder, or performs such duties in a negligent
manner, after receiving thirty (30) days written notice
from Employer specifically outlining the violations of
this Section and Employee has not cured the alleged
violations of this Section within thirty (30) days of
receipt of written notice by Employer.
(iii) Termination by Employee of Employee's employment
hereunder, upon thirty (30) days' written notice to the
Employer given within ninety (90) days following the
occurrence of any of the following events:
(1) Employer acts to materially reduce Employee's
duties and responsibilities hereunder;
(2) A reduction in Employee's rate of compensation or
material reduction in Employee's other benefits;
or
(3) A material breach of this Agreement by the
Employer, which is not cured within thirty (30)
days of written notice of such breach by Employer.
2.2 Successive Terms. After the Initial Term, this Agreement shall
continue upon a year-to-year basis (the "Successive Terms"; together with the
Initial Term, the "Term") unless terminated by either the Employer or the
Employee upon ninety (90) days written notice to the other prior to the end of
the Initial Term or the then Successive Term. The same terms and conditions
shall apply, except for compensation which shall be agreed upon by the parties
prior to any renewal becoming effective.
Section 3. Compensation.
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3.1 Term of Employment. Employer will provide Employee with the following
salary, expense reimbursement and additional employee benefits during the term
of employment hereunder:
(a) Salary. During the Initial Term, Employee will be paid a salary
(the "Salary"), that shall be no less than
one-hundred-seventy-four-thousand Canadian dollars
(CDN$174,000.00) per annum, less deductions and withholdings
required by applicable law. Thereafter, and during the
Successive Terms, Employee will be paid a salary of not less
than one-hundred-seventy-four-thousand Canadian dollars
(CDN$174,000.00) per annum (the "Successive Terms Salary")
determined in good faith negotiations between Employer and
Employee. The Salary and Successive Terms Salary shall be paid
to Employee in equal monthly installments (or on such more
frequent basis as other executives of Employer are compensated).
(b) Performance Bonus.
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(i) Employee shall be entitled to receive a monetary
performance bonus as follows:
(1) In the event Employer's subsidiary, CSTSI's, pre-tax
earnings (which shall be calculated as follows:
gross revenues - cost of sales - salary, general and
administrative expenses) in each year of employment
meet or exceed the mutually agreed upon target,
Employer shall pay to Employee a bonus in an amount
to be mutually agreed upon.
(ii) The determination of whether Employer's subsidiary,
CSTSI, has achieved the certain level of pre-tax earnings
in any year for the purposes of this section shall be
made by the certified public accountant regularly
retained or employed by Employer within ninety (90) days
after the end of each calendar year, and shall be
conclusive on Employer and Employee.
(iii) The parties' good faith and fair dealing is a material
term of this Agreement, particularly with regard to
future negotiations to define the performance bonuses
identified in this section.
(iv) The performance target and bonus referred to in
sub-paragraph 3.1(b)(i)(l) shall be agreed upon by the
parties no later than the last day of February in each
year. These performance targets shall be reduced into
writing and shall be appended to this Agreement, and
shall form part of it.
(c) Vacation. Employee shall be entitled to receive five (5) weeks
paid vacation during each year of employment upon dates agreed
upon by
Employer. Any unused vacation time may be carried forward into
the next calendar year.
(d) Expenses. Employer shall reimburse Employee within thirty (30)
days of its receipt of a reimbursement report with supporting
receipts from the Employee, for all reasonable and necessary
expenses incurred by Employee at the request of and on behalf of
Employer.
(e) Benefit Plans. Employee shall have the right of participating in
such medical, dental, disability, hospitalization, life
insurance, stock option and other benefit plans (such as pension
and profit sharing plans) as Employer maintains from time to
time for the benefit of other full-time employees of Employer,
on the terms and subject to the conditions set forth in such
plans. Employee shall have the right to continue as a member of
CSTSI's existing benefit plan until the Employer makes its
benefit plan available to employees of CSTSI and Employee opts
to change benefit plan.
(f) Stock Compensation. Upon the Effective Date, Employer shall
issue to Employee an option to purchase fifty-five-thousand
(55,000) shares of Employer's common stock at an exercise price
of six United States dollars and twelve and one-half cents
(US$6.125) per share. The term of such option shall be for a
period of five (5) years from the Effective Date. The option
shall vest according to the following schedule: (1) thirteen-
thousand-seven-hundred-fifty (13,750) shares on November 11,
2000; (ii) thirteen-thousand-seven-hundred-fifty (13,750) shares
on November 11, 2001; and (iii)
twenty-seven-thousand-five-hundred (27,500) shares on November
11,2002.
However, vesting shall be accelerated in full in the event of
death, disability, termination of employment by Employer without
Cause; the termination of employment by Employee with Employer's
consent; the filing of a voluntary or involuntary bankruptcy by
the Employer; or upon the sale, pledge or distribution of
Employer's assets defined as follows: (W) the sale of forty-five
percent (45%) or more of Employer's assets; (X) the entry into
an agreement covering over fifteen (15%) of the voting common
stock to a related party, as defined in Section 12 of the
Securities Act of 1933, as amended, without Employee's written
consent, which will not be unreasonably withheld; or (Y) a
recapitalization of Employer after six (6) months from the date
of execution of this Agreement; or (Z) a split of any manner in
Employer's voting common stock.
(g) Automobile Allowance. During the Term, Employer shall pay
Employee six-hundred-fifty Canadian dollars (CDN$650.00) per
month as an allowance for the use of Employee's automobile. In
lieu of such allowance, Employer may furnish, or lease, an
automobile mutually acceptable to both Employer and Employee for
Employee's use.
3.2 Effect of Termination. Upon the termination of the employment of
Employee hereunder for Cause, Employee shall be entitled to all compensation and
benefits earned or accrued under Section 3.1 as of the effective date of
termination. Upon the termination of this Agreement for any reason other than
for Cause, or if Employee shall terminate this Agreement under Section 2.1(iii)
Employee shall be entitled to receive all compensation and benefits provided in
Section 3.1 through the end of the Initial Term or the then Successive Term, as
the case may be.
Section 4. Nonsolicitation.
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4.1 Definitions. For the purposes of this Section 4, the following
definitions shall apply.
(a) "Confidential Information" means any confidential, proprietary
business information or data belonging to or pertaining to
Employer that does not constitute a "Trade Secret" (as
hereinafter defined) and that is not generally known by or
available through legal means to the public, including, but not
limited to, information regarding the Employer's customers or
actively sought prospective customers, acquisition targets,
suppliers, manufacturers and distributors gained by Employee as
a result of his employment with Employer.
(b) "Customer" means actual customers or actively sought prospective
customers of Employer.
(c) "Trade Secrets" means information or data of or about Employer,
including but not limited to technical or non-technical data,
formulas, patterns, compilations, programs, devices, methods,
techniques, drawings, processes, financial data, financial
plans, products plans, or lists of actual or potential
customers, clients, distributees or licensees, information
concerning or Employer's finances, services, staff, contemplated
acquisitions, marketing investigations and surveys, that are not
generally known to, and/or are not readily ascertainable by
proper means by, other persons.
(d) "Work Product" means any and all work product property, data
documentation or information of any kind prepared, conceived,
discovered, developed or created by Employee for Employer or its
affiliates' clients or customers for utilization in Employer's
business, not generally known by or not readily ascertainable by
proper means by other persons who can obtain economic value from
their disclosure or use.
4.2 Trade Name and Confidential Information.
(a) Employee hereby agrees that at all times during the Term and
thereafter:
(i) Employee shall not, directly or by assisting others own,
manage, operate, join, control or participate in the
ownership, management
operation or control of, or be connected in any manner
with, any business conducted under any corporate or
trade name of Employer or name confusingly similar
thereto, without the prior written consent of Employer;
(ii) Employee shall hold in confidence all Trade Secrets and
all Confidential Information and will not, either
directly or indirectly, use, sell, lend, lease,
distribute, license, give, transfer, assign, show,
disclose, disseminate, reproduce, copy, appropriate or
otherwise communicate any Trade Secrets or Confidential
Information, without the prior written consent of
Employer; and
(iii) Employee shall immediately notify Employer of any
unauthorized disclosure or use of any Trade Secrets or
Confidential Information of which Employee becomes
aware, Employee shall assist Employer, to the extent
necessary, in the procurement or any protection of
Employer's rights to or in any of the Trade Secrets or
Confidential Information.
(b) Upon the request of Employer, Employee shall deliver to Employer
all memoranda, notes, records, manuals and other documents,
including all copies of such materials and all documentation
prepared or produced in connection therewith, pertaining to the
performance of Employee's services hereunder or Employer's
business or containing Trade Secrets or Confidential
Information, whether made or complied by Employee or furnished
to Employee from another source by virtue of Employee's
employment with Employer.
(c) To the greatest extent possible, all Work Product shall be
deemed to be "work made for hire" (as defined in the Copyright
Act, 17 U.S.C.A. Section 101 et seq. as amended) and owned
exclusively by Employer. Employee hereby unconditionally
and irrevocably transfers and assigns to Employer all rights,
title and interest Employee may have in or to any and all Work
Product, including, without limitation, all patents, copyrights,
trademarks, service marks and other intellectual property
rights. Employee agrees to execute and deliver to Employer any
transfers, assignments, documents or other instruments which
Employer may deem necessary or appropriate to vest complete
title and ownership of any and all such Work Product, and all
rights therein, exclusively in Employer.
4.3 Nonsolicitation and Noncompete. Employee hereby agrees that Employee
will not, during the Term and for a period of six (6) months following the Term,
either directly or indirectly, alone or in conjunction with any other party, on
the North American continent:
(a) solicit, divert or appropriate or attempt to solicit, divert or
appropriate, any Customer for the purpose of providing the
Customer with services or products competitive with those
offered by Employer during the Term; or
(b) solicit or attempt to solicit any officer, director, employee,
consultant, contractor, agent, lessor, lessee, licensor,
licensee, supplier or any shareholder of Employer or other
personnel of Employer or any of its affiliates or subsidiaries
to terminate, alter or lessen that party's affiliation with
Employer or such affiliate or subsidiary or to violate the terms
of any agreement or understanding between such employee,
consultant, contractor or other person and Employer; or
(c) engage in, as owner, stockholder, employee, partner, agent,
representative or otherwise, or have an interest in (except for
ownership of publicly trade securities representing not more
than five percent (5%) of the outstanding voting shares), any
business, firm, corporation or other entity in direct
competition with Employer, without written permission of
Employer.
Nothing contained in this Section 4 shall prohibit Employee from acquiring not
more than five percent (5%) of any competitor of Employer whose common stock is
publicly traded on a national securities exchange or in the over-the-counter
market or from acquiring any percentage of any company which is non-competitive
with Employer. This Section 4 shall not apply if Employee is terminated by
Employer without Cause or if Employee terminates this Agreement in accordance
with the provision of section 2.l (iii) herein.
Section 5. Miscellaneous.
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5.1 Severability. The covenants in this Agreement shall be construed as
covenants independent of one another and as obligations distinct from any other
contract between Employee and Employer. Any claim that Employee may have against
Employer shall not constitute a defense to enforcement by Employer of this
Agreement
5.2 Survival of Obligations. The covenants in Section 4 of this Agreement
shall survive termination of Employee's employment for the period set forth
therein.
5.3 Notices. Any notice or other document to be given hereunder by any
party hereto to any other party hereto shall be in writing and delivered in
person or by courier, by telecopy transmission or sent by any express mall
service, postage or fees prepaid at the following addresses:
Employer: Internet Cable Corporation
000 Xxxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Secretary
Employee: Xxxxxx Xxxxxx
0000 Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
or at such other address or number for a party as shall be specified by like
notice. Any notice which is delivered in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or its agent.
5.4 Binding Effect. This Agreement inures to the benefit of, and is
binding upon, Employer and their respective successors and assigns, and
Employee, together with Employee's executor, administrator, personal
representative, heirs, and legatees.
5.5 Entire Agreement. This Agreement is intended by the parties hereto to
be the final expression of their agreement with respect to the subject matter
hereof and is the complete and exclusive statement of the terms thereof,
notwithstanding any representations, statements or agreements to the contrary
heretofore made. This Agreement supersedes and terminates all prior employment
and compensation agreements, arrangements and understandings between or among
Employer and Employee. This Agreement may be modified only by a written
instrument signed by all of the parties hereto.
5.6 Arbitration. Any claim or controversy arising out of or relating to
the formation, interpretation and enforcement of this Agreement or any breach
thereof, shall be settled by arbitration, in accordance with the then current
rules of the American Arbitration before a panel of three (3) arbitrators. Any
such arbitration shall take place in Xxxxxxx County, Pennsylvania. Judgement
upon the written award rendered by a majority of the arbitrators may be entered
in the court having jurisdiction thereof. The written decision of the majority
of the arbitrators shall be valid, binding and final, and shall be an absolute
bar to any legal action that any party may contemplate against the other, except
to compel arbitration pursuant hereto.
5.7 Governing Law. This Agreement shall be deemed to be made in, and in
all respects shall be interpreted, construed, and governed by and in accordance
with, the laws of the State of Pennsylvania. No provision of this Agreement
shall be construed against or interpreted to the disadvantage of any party
hereto by any court or other governmental or judicial authority or by any board
of arbitrators by reason of such party or its counsel having or being deemed to
have structured or drafted such provision. Should any action required by this
Agreement cause Employee to appear before a court or arbitrator in the state of
Pennsylvania, Employer shall reimburse Employee for his personal travel expenses
incurred as a result of that appearance.
5.8 Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
5.9 Specific Performance. Subject to paragraph 5.6 herein, each party
hereto hereby agrees that any remedy at law for any breach of the provisions
contained in this Agreement shall be inadequate and that the other parties
hereto shall be entitled to specific performance and any other appropriate
injunctive relief in addition to any other remedy such party might have under
this Agreement or at law or in equity.
5.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
___ day of January, 2000.
INTERNET CABLE CORPORATION
By:
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
By:
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Xxxxxx Xxxxxx
