Exhibit 6.3
EMPLOYMENT AGREEMENT
BETWEEN
INNOVACOM, INC.
AND
XXXX X. XXX
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 Xxxx X. Xxx, 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 PRESIDENT AND
CHIEF EXECUTIVE OFFICER
SECTION 2.01. GENERAL DUTIES. Employee shall serve as the President and
Chief Executive Officer of InnovaCom, Inc., a Nevada Corporation. In his
capacity as President and Chief Executive Officer 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 employees of Employer, subject at all times to the
policies and directions set by Employer's Board of Directors (the "Board").
To the extent not inconsistent with Employer's articles and bylaws,
Employee shall preside at all meetings of Employer's stockholders and, in
the absence of the Chairman of the Board, or if there be none, at all
meetings of the Board. 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 on the Executive 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.
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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.
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 Employer's President and Chief
Executive Officer during the Employment Term. To the extent permitted by
law, Employer shall pay, indemnify and hold Employee harmless from any
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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 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 two
hundred forty thousand dollars ($240,000) 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.
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SECTION 4.03. TAX 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. VEHICLE ALLOWANCE. As additional compensation to the
Employee, Employer shall pay to Employee a vehicle allowance of one
thousand five hundred dollars ($1,500) per month during the Employment
Term.
SECTION 4.05 WHOLE LIFE POLICY. The Company shall purchase and provide
Employee with a $2,000,000.00 Whole Life Insurance policy on the life of
Employee, payable to Employee's designated beneficiaries. Upon expiration
or termination of this Agreement, said policy, together with any
accumulated cash value shall become the sole and exclusive property of
Employee.
SECTION 4.06. INTELLECTUAL PROPERTY. Compensation to be paid by Employer
to Employee for intellectual property created by Employee shall be governed
by a separate agreement between the Employee and Employer.
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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.
BUSINESS EXPENSES
SECTION 6. REIMBURSEMENT OF BUSINESS EXPENSES. Employer shall promptly
reimburse Employee for all reasonable business expenses incurred by
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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
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
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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
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
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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.
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
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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 one year of Employee's 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,
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.
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SECTION 7.06. NONCOMPETITION. If the Employee services with the Company
are terminated pursuant to paragraph 7(a), in further consideration for
this Agreement, the Employee agrees that for a period of two years
following termination, Employee will not engage, directly or indirectly,
either personally or as an employee, associate, partner, manager, agent or
otherwise, or by means of any corporation or other entity which is in
competition with the Company at the date of such termination, in any
territory within a radius of 50 miles of any city in which the Company does
business or has customers.
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 Xxxx Xxx
000 Xxx Xx. #0000
Xxxxxxxxx, XX 00000
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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.
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
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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.
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.
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SECTION 8.08. LAW 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.
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: F. Xxxxx Xxxxxxxx
Its: Director of Strategic Planning
EMPLOYEE
Xxxx X. Xxx, an individual
