Exhibit 6.4
EMPLOYMENT AGREEMENT
BETWEEN
INNOVACOM, INC.
AND
F. XXXXX XXXXXXXX
THIS AGREEMENT is entered into as of the 15th day of May, 1997, by and
between InnovaCom, Inc., a Nevada corporation (hereafter referred to as
"Employer") and F. Xxxxx Xxxxxxxx, an individual (hereafter referred to as
"Employee"), in consideration of the mutual promises made herein, (the
"Agreement"):
TERM OF EMPLOYMENT
SECTION 1.01.EMPLOYMENT AND TERM. Employer hereby employs Employee and
Employee hereby accepts employment with Employer, upon the terms and
conditions hereinafter set forth, from May 15, 1997 until May 15, 2002 or
until the employment relationship is sooner terminated by either party in
accordance with the terms of this Agreement.
SECTION 1.02."EMPLOYMENT TERM" DEFINED. As used in this Agreement, the
phrase "Employment Term" refers to the entire period of employment of
Employee by Employer hereunder.
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DUTIES OF EMPLOYEE AS DIRECTOR OF STRATEGIC PLANNING AND PRESIDENT OF
EMPLOYER'S ENTERTAINMENT DIVISION
SECTION 2.01.GENERAL DUTIES. Employee shall serve as the Director of
Strategic Planning and President of Employer's Entertainment Division with
supervision over the Employer's Sierra Vista Entertainment, Inc., wholly
owned subsidiary. In his capacity as Director of Strategic Planning of
Employer, Employee shall do and perform all services, acts, or things
necessary or advisable to manage and conduct the strategic planning of the
business of Employer, including, but not limited to, the supervision,
direction and control of the business and financial planning activities of
Employer and the supervision of the Employer's Chief Financial Officer,
subject at all times to the policies and directions set by Employer's Board
of Directors (the "Board"). As the President of the Employer's
Entertainment Division, Employee shall do and perform all services, acts,
or things necessary or advisable to manage and conduct the business of the
Employer's wholly owned subsidiary, Sierra Vista Entertainment, Inc.
Employee shall also have such other powers, duties and responsibilities as
may be prescribed by the Board and the Employer's corporate articles and
bylaws. Finally, Employee shall serve as a director of the Employer and a
director and Chairman of the board of directors of Employer's wholly owned
subsidiary, Sierra Vista Entertainment, Inc., and serve on the Executive
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Committee of the Board, if one exists now or in the future, and shall be
nominated as a director as one of the Boards' slate of directors from year
to year and subject only to the continued approval of the stockholders of
Employer as required by law.
SECTION 2.02.DEVOTION TO EMPLOYER'S BUSINESS. During the Employment Term,
Employee shall devote his full time, efforts and attention to the
performance of the duties specified in Section 2.01 above and to such other
services as may be reasonably requested by the Board. Employee shall not
engage in any other business duties or pursuits or directly render any
services of a business, commercial, or professional nature to any other
person or organization, other than passive investments and endeavors
provided hereinbelow, without obtaining the prior consent of the Board.
Notwithstanding the foregoing, activities by Employee which do not
materially interfere with the services required of Employee under this
Agreement shall not be deemed a breach of this Section 2.02 and shall not
require the prior consent of the Board.
SECTION 2.03.PASSIVE INVESTMENTS AND ENDEAVORS. This Agreement shall not
be interpreted to prohibit Employee from making passive personal
investments or conducting private business affairs if those activities do
not materially interfere with the services required of Employee under this
Agreement. However, Employee shall not directly or indirectly acquire,
during the Employment Term, a controlling interest in any business
competing with the business of Employer without the prior consent of the
Board.
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OBLIGATIONS OF EMPLOYER
SECTION 3.01.GENERAL OBLIGATIONS. Employer shall provide Employee with the
compensation, incentives, benefits, and business expense reimbursements
specified elsewhere in this Agreement. Employer shall also provide
Employee with an office located in Santa Clara, California, stenographic
help, office equipment, a cellular phone, supplies, and other facilities
and services, suitable to Employee's position and adequate for the
performance of his duties. Employer may not change the domicile of
Employee's office without Employee's prior consent.
SECTION 3.02.INDEMNIFICATION. Employer shall indemnify and hold Employee
harmless for any actions taken or decisions made by him in good faith while
performing services in his capacity as Director of Strategic Planning and
President of Employer's Entertainment Division of Employer during the
Employment Term. To the extent permitted by law, Employer shall pay,
indemnify and hold Employee harmless from any liability, cost or expense
(including, without limitation, reasonable attorneys' fees) incurred by him
in the defense of any claim, proceeding or action arising out of his
performance of services for Employer or out of his status as an officer and
director of Employer. Employer will use its best efforts to obtain
coverage for Employee under any insurance now in force or hereafter
obtained during the term of this Agreement covering any employee, officer
or director of Employer. Notwithstanding the foregoing, Employer does not
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intend to and shall not indemnify Employee against any act or omission by
him constituting fraud, willful misconduct or gross negligence.
COMPENSATION OF EMPLOYEE
SECTION 4.01.ANNUAL SALARY. As compensation for the services to be
performed hereunder, Employee shall receive a salary at the rate of one
hundred eighty thousand dollars ($180,000) per annum, payable not less
frequently than the regular payroll schedule of Employer during the
Employment Term.
SECTION 4.02. ANNUAL INCREASES. Employee shall receive such annual
increases in salary as may be determined by the Board in its sole
discretion. Notwithstanding the foregoing, Employee shall be entitled to a
seven percent (7%) cost of living increase annually for the period through
May 15, 2000, at which time the Board, in its sole discretion, may change
the amount of the annual cost of living increase.
SECTION 0.00.XXX WITHHOLDING. Employer shall have the right to deduct or
withhold from the compensation due to Employee hereunder any and all sums
required for federal income and Social Security taxes and all state or
local taxes now applicable or that may be enacted and become applicable in
the future.
SECTION 4.04. HOUSING AND VEHICLE ALLOWANCE. As additional compensation
to the Employee, Employer shall pay to Employee a housing allowance equal
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to three thousand five hundred dollars ($3,500) per month for the first
twelve months of the Employment Term. In addition, as additional
compensation, Employer shall pay to employee a vehicle allowance of one
thousand five hundred dollars ($1,500) per month during the Employment
Term.
EMPLOYEE BENEFITS
SECTION 5.01.ANNUAL VACATION. Employee shall be entitled to thirty (30)
days vacation time each year without loss of compensation. Accrued unused
vacation shall accumulate from year to year up to a maximum of sixty (60)
days.
SECTION 5.02.ILLNESS. Employee shall be entitled to thirty (30) days per
year as sick leave with full pay. Sick leave may be accumulated from year
to year up to a maximum of one hundred eighty (180) days and may be used
only during periods of bona fide illness.
SECTION 5.03.EMPLOYEE BENEFITS GENERALLY. During the Employment Term,
Employee shall be entitled to participate in and to receive benefits from
all present and future accident, disability, medical, dental and similar
plans, pension plans, savings plans, profit sharing plans, stock option
plans or other similar employee benefit plans available generally to all
other officers or employees of Employer. The amount and extent of these
benefits, including employee-paid premiums, co-payments and deductibles,
shall be governed by the specific benefit plan, as it may be amended from
time to time.
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SECTION 5.04. LIFE INSURANCE. Employer shall provide Employee a one
million dollar ($1,000,000) life insurance policy, and Employer's expense,
insuring the life of Employee during the Employment Term, with a
beneficiary designated by the Employee.
BUSINESS EXPENSES
SECTION 6.REIMBURSEMENT OF BUSINESS EXPENSES. Employer shall promptly
reimburse Employee for all reasonable business expenses incurred by
Employee in connection with the business of Employer. Employee shall
furnish to Employer adequate records and other documentary evidence
required by federal and state tax statutes and regulations for the
substantiation of each such expenditure prior to reimbursement.
TERMINATION OF EMPLOYMENT
SECTION 7.01.TERMINATION FOR CAUSE. Employer reserves the right to
terminate this Agreement upon: (a) Employee's willful and continued
failure to substantially perform his duties with Employer (other than such
failure resulting from his incapacity due to physical or mental illness)
after there is delivered to Employee by the Board of Directors, a written
demand for substantial performance which sets forth in detail the specific
respects in which the Board believes Employee has not substantially
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performed his duties, and giving Employee not less than thirty (30) days to
correct the deficiencies specified in the written demand, (b) Employee's
willful engagement in gross misconduct as determined by the Board which is
materially and demonstrably injurious to Employer, or (c) Employee's
commission of a felony or an act of fraud against Employer or its
affiliates. No act, or failure to act, by Employee shall be considered
"willful" if done, or omitted to be done, by Employee in good faith and
with the reasonable belief that the act or omission was in the best
interest of Employer and/or required by applicable law. Anything contained
in this Section 7.01 to the contrary notwithstanding, Employee shall not be
deemed to have been terminated for cause for purposes of Sections (a) or
(b) of this Section 7.01 unless and until there shall have been delivered
to Employee a copy of a resolution duly adopted by the affirmative vote of
not less than a majority of the entire membership of the Board at a meeting
of the Board called and held for that purpose (after reasonable notice to
and an opportunity for Employee, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of the Board,
Employee was guilty of conduct set forth in Sections (a) or (b) of this
Section 7.01 and specifying the particulars thereof in detail. Termination
under this Section 7.01 shall be considered "for cause" for the purposes of
this Agreement.
SECTION 7.02.TERMINATION WITHOUT CAUSE. This Agreement shall terminate
upon the death of Employee. Employer reserves the right to terminate this
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Agreement after three (3) continuous months of physical or mental
disability suffered by Employee that would prevent the performance of
Employee's duties under this Agreement. Such a termination shall be
effected by giving thirty (30) days written notice of termination to
Employee. Notwithstanding anything else to the contrary, physical or
mental disability shall not include periods of bona fide illness for which
Employee is entitled to sick leave pursuant to Section 5.02 of this
Agreement. Other than on death or upon the physical or mental disability
of Employee, Employer reserves the right at any time to terminate this
Agreement upon sixty (60) days written notice to Employee and, in such an
event, Employee shall be paid his severance benefit hereinafter provided.
SECTION 7.03.TERMINATION BY EMPLOYEE. Employee may terminate this
Agreement at any time upon sixty (60) days written notice to Employer.
Other than upon Employee's termination of this Agreement pursuant to
Section 7.05, Employer shall not be obligated to pay any severance benefit
if Employee terminates this Agreement pursuant to this Section 7.03.
SECTION 7.04.SEVERANCE BENEFIT UPON TERMINATION WITHOUT CAUSE.
Notwithstanding any other provision of this Agreement, if Employer
terminates this Agreement other than for cause as defined in Section 7.01,
Employer shall pay Employee a lump sum cash payment equal to one years
annual salary as provided for in this Agreement, or Employee's then current
rate of compensation, whichever is greater.
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SECTION 7.05. SEVERANCE BENEFIT UPON CHANGE IN CONTROL. Notwithstanding
any other provision of this Agreement, if Employer terminates this
Agreement for any reason, other than "for cause" pursuant to Section 7.01,
within six months of a "change of control" as hereinafter defined, Employer
shall pay Employee a lump sum cash payment equal to three years annual
salary as provided for in this Agreement, or Employee's then current rate
of compensation, whichever is greater. Notwithstanding any other provision
of this Agreement, if Employee terminates this Agreement within six months
following a "change of control," as hereinafter defined, as a result of
Employee's determination, in his sole and complete discretion, that the
policies and procedures of the Board of Directors of Employer are
unacceptable to Employee, Employer shall pay Employee a lump sum cash
payment equal to twelve months of Employees annual salary as provided for
in this Agreement, or Employee's then current rate of compensation,
whichever is greater. For the purposes of this Section 7.04, a "change of
control" shall mean an event involving one transaction or a related series
of transactions, in which (i) the Employer issues securities equal to 51%
or more of the issued and outstanding capital stock of Employer to any
individual, firm, partnership or other entity, including a "group" within
the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934,
(ii) the Employer issues securities equal to 51% or more of the issued and
outstanding capital stock of Employer in connection with a merger,
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consolidation or other business combination, (iii) the Employer is acquired
in a merger or other business combination transaction in which the Employer
is not the surviving corporation, or (iv) 51% or more of the Employers'
consolidated assets or earning power are sold or transferred.
GENERAL PROVISIONS
SECTION 8.01.NOTICES. Any notice to be given hereunder by either party to
the other shall be in writing and may be transmitted by personal delivery,
facsimile transmission, overnight courier or by mail, registered or
certified, postage prepaid with return receipt requested. Mailed notices
shall be addressed to the parties at the following addresses:
EMPLOYER
InnovaCom, Inc.
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
EMPLOYEE
00000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Any party may change the address at which notice is to be provided by
providing a written notice to the other party specifying a new address.
Notices delivered personally or by facsimile transmission shall be deemed
communicated as of the date of actual receipt; notices mailed shall be
deemed communicated as of the third day after mailing.
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SECTION 8.02.ARBITRATION. Any controversy between Employer and Employee
involving the construction or application of any of the terms, provisions,
or conditions of this Agreement shall on the written request of either
party which is served on the other be submitted to arbitration.
Arbitration shall comply with and be governed by the provisions of the
American Arbitration Association. Employer and Employee shall each appoint
one person who shall then choose a third person, all three of which shall
hear and determine the dispute. The decision of the arbitrators shall be
final and conclusive upon both parties.
SECTION 8.03.ATTORNEYS' FEES AND COSTS. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which that party
may be entitled.
SECTION 8.04.ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with
respect to the employment of Employee by Employer and contains all of the
covenants and agreements between the parties with respect thereto. Each
party to this Agreement acknowledges that no representation, inducements,
promises, or agreements, orally or otherwise, have been made by any party,
or anyone acting on behalf of any party, which are not embodied herein, and
that no other agreement shall be valid or binding on either party.
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SECTION 8.05.MODIFICATION. Any modification of this Agreement will be
effective only if it is in writing and signed by the party to be charged.
SECTION 8.06.EFFECT OF WAIVER. The failure of either party to insist on
strict compliance with any of the terms, covenants, or conditions, of this
Agreement by the other party shall not be deemed a waiver of that term,
covenant, or condition, nor shall any waiver or relinquishment of any right
or power at any one time or times be deemed a waiver or relinquishment of
that right or power for all or any other time.
SECTION 8.07.PARTIAL INVALIDITY. If any provision in this Agreement is
held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless continue in full
force without being impaired or invalidated in any way.
SECTION 0.00.XXX GOVERNING AGREEMENT. This Agreement shall be governed by
and construed in accordance with the laws of the State of California.
SECTION 8.09. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the Employer and Employee have duly executed this
Employment Agreement as of the day and year first above written.
EMPLOYER
InnovaCom, Inc.
By:Xxxx X. Xxx
Its:President
EMPLOYEE
F. Xxxxx Xxxxxxxx, an individual
