THIS AGREEMENT DATED FOR REFERENCE THIS 17th DAY OF JUNE, 1999 BETWEEN:
XXXX X. XXXXX, of the City of Vancouver, in the Province of British
Columbia.(the "Executive") AND: DIGITAL COMMERCE INTERNATIONAL, INC., a
corporation incorporated under the laws of the State of Delaware; ("DCII")
WHEREAS DCII is in the business of banking, transaction
processing, trust and investment services, with delivery of such services
principally through the Internet; and
WHEREAS DCII desires to obtain the services of an executive to
provide the services described in this Agreement; and
WHEREAS the Executive agrees to provide such services; and
WHEREAS DCII wishes to retain the Executive to provide such
services to DCII, and the Executive wishes to provide such services to DCII, in
accordance with and subject to the terms of this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants and agreements herein contained and for other good and valuable
consideration, the parties agree as follows:
1. TERM
This Agreement has a term of five years beginning as of the date
hereof, unless terminated earlier as hereinafter provided.
2. DUTIES
The Executive agrees that the Executive will provide the services under
this Agreement. The Executive shall serve DCII and any subsidiaries of DCII in
such capacity or capacities and shall perform such duties and exercise such
powers pertaining to the management and operation of DCII and any subsidiaries
and associates of DCII as may be determined from time to time by the Board of
Directors of DCII, provided that same are consistent with the position of a
senior executive of DCII. Provided further and without limiting the foregoing,
the Executive shall:
a. occupy the office of Chief Executive Officer (CEO) of DCII;
b. devote his best efforts to the business and affairs of DCII;
c. perform those duties that may reasonably be assigned to the
Executive diligently and faithfully to the best of the Executive's abilities and
in the best interest of DCII; and
d. use his best efforts to promote the interests and goodwill of
DCII.
3. REPORTING PROCEDURES
The Executive shall report to the Board of Directors of DCII. The Executive
shall report fully on the management, operations and business affairs of DCII
and advise to the best of his ability and in accordance with reasonable business
standards on business matters that may arise from time to time during the term
of this Agreement.
4. REMUNERATION
a. The annual fee payable to the Executive for the performance of
its services shall be as follows:
Year 1: USD $250,000.00
Year 2: USD $300,000.00
Year 3: USD $350,000.00
Year 4: USD $400,000.00
Year 5: USD $450,000.00
exclusive of bonuses, benefits and other compensation. The annual fee
payable to the Executive pursuant to the provisions of this Section 4 shall
be payable in equal monthly installments in arrears on the 1st day of each
month or in such other manner as may be mutually agreed upon, less, in any
case, any deductions or withholdings required by law.
Payment may be modified, at the option of the Executive, as follows:
a. until such time as an underwriting (secondary offering) for the
company in the gross amount of US $20,000,000 has been completed and funds
received by the Company; or
b. until such time as the company achieves a market capitalization
of US $150,000,000;
whichever first occurs, the Executive, at the Executive's option, may agree
to a modification of the payment schedule for compensation. Specifically,
the Executive would, firstly, agree to accept the cash payment in the amount
of US $10,000 per month and accept a deferral of the balance outstanding
until such time as the underwriting or capitalization levels as detailed
above have been achieved.
Once said underwriting has been successfully completed or once the company
achieves the market capitalization as above the Executive shall immediately
be paid the outstanding accrued balance in a lump sum cash payment.
b. DCII shall provide the Executive with benefits comparable to
those provided by DCII from time to time to other senior executives of DCII and
shall permit the Executive to participate in any share option plan, share
purchase plan, retirement plan or similar plan offering by DCII from time to
time to its senior executives in the manner and to the extent authorized by the
board of directors of DCII. In addition to the annual remuneration of the
Executive, DCII may contribute to the retirement savings plan of the Executive
or similar plan offering by DCII from time to time to its senior executives for
each year of the term of this Agreement in an amount to be determined by the
Board of Directors of DCII.
5. PERFORMANCE BONUS
Once said underwriting for the gross amount of US $20,000,000 has been
successfully completed and/or once the company achieves the market
capitalization of US $ 150,000,000 the Executive shall be entitled to a bonus of
US $ 150,000 which the Company shall pay to the Executive in a lump sum cash
payment in accordance with the Executive's instruction.
In addition to annual fee payable to the Executive, the Executive shall
participate in DCII's share option plan and executive bonus plan (the "Plan") or
similar plan offering by DCII from time to time to its senior executives as
determined by the board of directors of DCII.
6. FURTHER FEE ADJUSTMENTS
DCII and the Executive shall review, on a yearly basis, the Executive's annual
fee, and yearly bonus entitlement, if any, provided that there shall be no
change in the Executive's annual fee unless agreed to in writing by the parties.
7. VACATION
The Executive shall be entitled to eight weeks' vacation per fiscal
year of DCII at a time approved in advance by the Executive Committee, which
approval shall not be unreasonably withheld but shall take into account the
staffing requirements of DCII and the need for the timely performance of the
Executive's responsibilities. For greater certainty, such vacation will not
reduce the fees payable to the Executive pursuant to Section 4.
8. AUTOMOBILE
The Executive shall receive from DCII a car allowance of $1,500 per
month. In addition, DCII shall pay or reimburse the Executive for all reasonable
operating costs of its vehicle, insurance, maintenance, gas and oil, properly
incurred or to be incurred in connection with the Executive's carrying out its
duties hereunder. The Executive shall supply DCII with the originals of all
invoices or statements in respect of which the Executive seeks reimbursement.
9. DISABILITY, LIFE, KEY-MAN INSURANCE
DCII shall obtain and maintain a disability, life, key-man insurance
policy in respect of any disability of the Executive during the term of this
Agreement, which provides for benefits payable to the Executive in the amount of
75% of the Executive's annual fee, to be paid if possible without deductions for
tax, until the Executive reaches the age 65. This insurance policy shall
constitute a taxable benefit to the Executive.
10. EXPENSES
In addition to the automobile allowances contemplated by Paragraph 8
above, the Executive shall be reimbursed for all travel and other out-of-pocket
expenses incurred by it from time to time in connection with carrying out its
duties hereunder. For all such expenses the Executive shall furnish to DCII
originals of all invoices or statements in respect of which the Executive seeks
reimbursement.
11. TERMINATION
a. For Cause
DCII may terminate this Agreement before the end of its term, without
notice or any payment in lieu of notice, if:
the Executive disobeys reasonable instructions given by the Board of
Directors of DCII that are consistent with this Agreement, as follows:
at the request of the Board of Directors, the Executive shall attend at
the next meeting of the Board of Directors. At that time, the Executive
shall give reason for the failure to perform the instructions of the
Board of Directors. The Executive may then be directed to carry out the
instructions of the Board of Directors within no less than 15 days;
such term may be extended by the Board of Directors to whatever
reasonable term the Board of Directors decide (the "Period"). If at the
end of the Period, the Executive has failed to perform the instructions
of the Board of Directors, a Board of Directors meeting will be called,
and the Board of Directors will be deemed to have sufficient grounds to
terminate this Agreement for cause.
b. For Disability/Death
The Agreement may be immediately terminated by DCII if the Executive
becomes permanently disabled, or because of ill health, physical or
mental disability, or for other causes beyond the control of the
Executive, the Executive has been continuously unable, as determined by
two independent physicians of at least ten years' experience who are
members in good standing of the Royal College of Physicians and
Surgeons of Canada, to perform his duties for 180 consecutive days, or
if, during any 12 month period during the term of this Agreement, the
Executive has been unable, determined as set out above, to perform his
duties for a total of 270 days.
This Agreement shall terminate without notice or payment in lieu
thereof upon the death of the Executive.
12. SEVERANCE PAYMENTS
a. Upon termination of this Agreement:
i. for cause pursuant to Paragraph 11(a);
ii. by the voluntary termination of this Agreement by the
Executive; or
iii. by the non-renewal of this Agreement
The Executive shall not be entitled to any severance payment other than
compensation earned by the Executive before the date of termination,
calculated pro rata up to and including the date of termination.
b. If this Agreement is terminated for any reason other than the
reasons set forth in subsection 12(a), the Executive shall be entitled to
receive the greater of:
i. the total of:
A. 3 years' annual fees at the then applicable annual fee rate;
B. the present value, as determined by DCII's auditors, acting
reasonably, of the benefits described in Section 4(b) that would be enjoyed by
the Executive during the next 36 months assuming this Agreement was not
terminated and assuming the then current level of benefits were continued for
those 36 months; and
C. the present value, as determined by DCII's auditors, acting
reasonably, of the amount that DCII's auditors estimate would be the amount
payable to the Executive out of the Executive Bonus Pool assuming that this
Agreement was not terminated until the end of the current fiscal year and all
other participants of the Executive Bonus Pool continued their participation for
the full then current fiscal year, and
ii. the annual fees otherwise payable to the Executive for the
unexpired term of this Agreement.
c. If this Agreement is terminated as a result of the permanent
disability of the Executive or the Executive is thereafter in receipt of
disability insurance benefits, the Executive shall be entitled to receive,
within 30 days of the date of such cessation of such disability, the payment set
out in Subsection 12(b) hereof. In the event that the Executive is disentitled
from disability insurance benefits, the Executive shall be entitled to receive,
within 30 days of the notice of disentitlement, the payment set out in
Subsection 12(b) hereof. The Executive agrees to reasonably comply with all
requirements necessary for DCII to obtain disability insurance for the term of
this Agreement.
13. CHANGE OF CONTROL
In the event that more than 50% of the total shares of DCII
outstanding, other than those owned or controlled by the Executive, are
purchased by a third party, and DCII then breaches this Agreement in any way
including, without limiting the generality of the foregoing, reducing the
Executive's compensation or benefits under this Agreement or assigning duties to
the Executive which are not consistent with the position of a senior executive
at DCII, this Agreement shall be deemed to have been terminated by DCII pursuant
to Paragraph 12(b) of this Agreement and the payment set out therein shall be
provided to the Executive.
14. CONFIDENTIALITY
The Executive acknowledges and agrees that:
a. in the course of performing its duties and responsibilities
under this Agreement, it has had and will continue in the future to have access
to and has been and will be entrusted with detailed confidential information and
trade secrets (printed or otherwise) concerning past, present, future and
contemplated products, services, operations and marketing techniques and
procedures of DCII and its subsidiaries, including, without limitation,
information relating to clients, customers, suppliers and employees of DCII and
its subsidiaries (collectively, "Trade Secrets"), the disclosure of any of which
to competitors of DCII or to the general public, or the use of same by the
Executive or any competitor of DCII or any of its subsidiaries, would be highly
detrimental to the interests of DCII;
b. in the course of performing duties and responsibilities for
DCI, the Executive has been and will continue in the future to have significant
responsibility for maintaining and enhancing the goodwill of DCII with such
customers, clients and suppliers and would not have, except by virtue of his
employment with DCII, developed a close and direct relationship with the
customers, clients and suppliers of DCII;
c. the Executive, as an officer of DCII, owes fiduciary duties to
DCII, including the duty to act in the best interest of DCII; and
d. the right to maintain the confidentiality of the Trade Secrets,
the right to preserve the goodwill of DCII and the right to the benefit of any
relationships that have developed between the Executive and the customers,
clients, and suppliers of DCII by virtue of carrying out its obligations under
this Agreement with DCII constitute proprietary rights of DCII, which DCII is
entitled to protect.
In acknowledgment of the matters described above and in consideration
of the payments and benefits to be received by the Executive pursuant to this
Agreement, the Executive hereby agrees that it will not, during the term of this
Agreement or after its termination for any reason whatsoever, directly or
indirectly disclose to any person or in any way make use of (other than for the
benefit of DCII) in any manner any of the Trade Secrets, provided that such
Trade Secrets shall be deemed not to include information that is or becomes
generally available to the public other than as a result of disclosure by the
Executive.
15. NON-SOLICITATION
The Executive hereby agrees that he will not, either during his
employment by DCI or for two years following termination of his employment by
DCII for whatever reason, be a party to or abet any solicitation of existing
customers, clients or suppliers of DCII or any of its subsidiaries, to transfer
business from DCII or any of its subsidiaries to any other person, or seek in
any way to persuade or entice any employee of DCII or any of its subsidiaries to
leave that employment or to be a party to or abet any such action.
16. NON-COMPETITION
The Executive hereby agrees that it will not, either during the term of
this Agreement, or for 12 months following its termination for whatever reason,
directly or indirectly carry on, be engaged in or employed by or have an
interest in, a business in U.S.A. or the Canada which offers services or sells
products that compete with the services and products then offered by DCII.
17. CONFLICT OF INTEREST
During the term of this Agreement, the Executive shall promptly
disclose to the Executive Committee full information concerning any interest,
direct or indirect, of the Executive (as owner, shareholder, partner, lender or
other investor, director, officer, employee, consultant or otherwise) or any
affiliate or member of its family in any business that is reasonably known to
the Executive to purchase or otherwise obtain services or products from, or to
sell or otherwise provide services or products to DCII or to any of its
suppliers or customers.
18. RETURN OF MATERIALS
All files, forms, brochures, books, materials, written correspondence,
memoranda, documents, manuals, computers and related hardware, computer disks,
software products and lists (including lists of customers, suppliers, products
and prices) pertaining to the business of DCII or any of its subsidiaries and
associates that may come into the possession or control of the Executive shall
at all times remain the property of DCII or such subsidiary or associate, as the
case may be. On termination of this Agreement for any reason, the Executive
agrees to deliver promptly to DCII all such property of DCII in their possession
or directly or indirectly under their control. The Executive agrees not to make
for its personal or business use or that of any other party, reproductions or
copies of any such property or other property of DCII.
19. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Delaware, USA and the parties hereto do hereby attorn
to the jurisdiction of the courts of the said State.
20. SEVERABILITY
a. Subject to subsection (b), any provision of this Agreement which is
determined to be void and unenforceable shall be severable from all other
provisions hereof and shall not be deemed to affect or impair the enforceability
of any such other provisions.
b. If any restriction as to capacity, responsibility, activity, period
or geographic area imposed on a Party by this Agreement is finally determined by
a court of competent jurisdiction to be unenforceable (the "Unenforceable
Restriction"), and so often as the same shall occur, such Party agrees that upon
written notice from the other specifying for inclusion in this Agreement of
fewer capacities or responsibilities, or any activity of lesser scope or of a
lesser time or geographic area than now contained herein (the "Lesser
Restriction"), that this Agreement shall be deemed to be amended by the
substitution of the Lesser Restriction for the Unenforceable Restriction, with
retroactive effect to the date of this Agreement.
21. ENFORCEABILITY
The Executive hereby confirm and agree that the covenants and
restrictions pertaining to it contained in this Agreement, including, without
limitation, those contained in Sections 14, 15 and 16 hereof, are reasonable and
valid and hereby further acknowledge and agree that DCII would suffer
irreparable injury in the event of any breach by the Executive of its obligation
under any such covenant or restriction. Accordingly, the Executive hereby
acknowledges and agrees that damages would be an inadequate remedy at law in
connection with any such breach and that DCII shall therefore be entitled to
temporary and permanent injunctive relief enjoining and restraining the
Executive from any such breach, in addition to any other remedies available to
DCII at law.
22. NO ASSIGNMENT
The Executive may not assign, pledge or encumber its interests in this
Agreement nor assign any of its rights or duties under this Agreement without
the prior written consent of DCII.
23. SUCCESSORS
This Agreement shall be binding on and inure to the benefit of the
successors and assigns of DCII and the heirs, executors, personal legal
representative and permitted assigns of the Executive.
24. NOTICES
Any notice or other communications required or permitted to be given
hereunder shall be in writing and either delivered by hand or mailed by prepaid
registered mail. At any time other than during a general discontinuance of
postal service due to strike, lock-out or otherwise, a notice so mailed shall be
deemed to have been received three business days after it is so delivered. If
there is a general discontinuance of postal service due to strike, lock-out or
otherwise, a notice sent by prepaid registered mail shall be deemed to have been
received five business days after the resumption of postal service. Notices
shall be addressed as follows:
a. If to DCII:
b. If to the Executive:
25. EXECUTIVE COMMITTEE
During the term of this Agreement, if the Executive is also a director
of DCII, then he shall be required to be a member of the Executive Committee of
DCII. If at any time the Executive ceases to be a director of DCII or this
Agreement terminates, the Executive shall not be entitled to be a member of the
Executive Committee of DCII.
26. CURRENCY
All reference to monetary amounts in this Agreement are referred
to/stated in legal currency of the United States of America.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date first above written.
XXXX X. XXXXX
DIGITAL COMMERCE INTERNATIONAL, INC.
by its authorized signatories
Per:
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Per:
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