EMPLOYMENT AGREEMENT, AS AMENDED
THIS EMPLOYMENT AGREEMENT (the "Agreement"), entered into on January 20,
2000, made by and between TEK DIGITEL CORPORATION, a Wyoming corporation with
its principal offices located at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxx 00000 (the "Company"), and Enghe Chimood (the "Executive"), effective
as of January 20, 2000.
WHEREAS, the Company merged with ATC Group L.L.C. effective as of July 6,
1998, and the Executive has been employed by the Company and by ATC Group Inc.,
a Maryland corporation (the "Subsidiary") as Chief Executive Office and
Co-Chairman since December 1, 1999;
WHEREAS, the Company desires to set forth in this Agreement the terms and
conditions applicable to Executive's employment as Chief Executive Officer and
Co-Chairman since the Agreement Effective Date;
WHEREAS, the Executive is willing to accept the terms and conditions herein
set forth;
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Company and Executive hereby agree as follows:
1 Employment. The Company agrees to employ Executive, and the Executive
agrees to be employed by the Company, upon the terms and conditions herein
provided, for the period commencing as of January 20, 2000 (the "Agreement
Effective Date") and ending on June 30, 2002.
2 Position and Duties. During the Term, the Company agree to employ the
Executive to serve as Chief Executive Officer and Co-Chairman of the Company and
the Executive shall also serve as Chief Executive and Co-Chairman of the
Subsidiary. The Executive will have such powers and duties as are commensurate
with such positions and as may be conferred upon him by the Company's Board of
Directors, and shall report to the Board of Directors. In such capacity, the
Executive's duties shall include responsibilities:
- key interface between the Board and the President
- responsible for promoting company to investment community
- responsible for promoting company to Press
- responsible for approving business plan/budget
- responsible for establishing key strategic corporate alliances
- responsible for 10SB status for reporting status
- promote company at public forums
- responsible for financing activities
- responsible legal requirement
- co-ordinates the activities necessary to move the Company from the OTC-BB to
- manages the Advisory Board activities
- Chairs and Answers investors questions at Yearly Investors meetings
- interface with major investors
During the Term, and except for illness or incapacity and reasonable
vacation periods consistent with the discharge of the Executive's duties and
responsibilities hereunder, the Executive shall devote substantially all of his
business time, attention, skill and efforts exclusively to the business and
affairs of the Company and its subsidiaries and affiliates, provided, however,
that the Executive may devote such time as is reasonably required for charitable
and personal activities, in accordance with the Company's practices and
policies, and serve on other boards as a director or trustee if such service
does not interfere with his ability to discharge his duties and responsibilities
to the Company.
3 Board Membership. Subject to shareholder approval, the Executive shall
serve on the Company's Board of Directors and on the Subsidiary's Board of
Directors. The Executive has served on each Board since
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July 6, 1998, and shall continue to serve at least through July 6, 2001,
pursuant to Section 1.5 of the Merger Agreement among the Company, ATC Group,
Inc. and ATC Group L.L.C., dated June 10, 1998.
4 Location of Duties. The Executive's base of operations shall initially be
at the Company's Germantown, Maryland location. The Company may relocate to
another location in the Washington, D.C. metropolitan area without affecting the
Executive's obligations hereunder.
5 Compensation and Related Items. For all services rendered by the
Executive in any capacity required hereunder during the Term, including, without
limitation, services as an executive, officer, director, or member of any
committee of the Company, or any subsidiary, affiliate or division thereof, the
Executive shall be compensated as follows:
a Base Salary. The Company shall pay the Executive a fixed salary as
follows:
i. $70,000 per annum, on a prorated basis, for the period beginning
on January 20, 2000, and ending on June 30, 2000;
ii. $150,000 per annum for the period beginning on July 1, 2000, and
ending on June 30, 2001; and
iii. $170,000 per annum for the period beginning on July 1, 2001, and
ending on June 30, 2002.
Such fixed salary, together with all adjustments, is referred to
herein as the "Base Salary." Except as otherwise provided in this
Agreement, the Executive shall not be entitled to overtime or other
additional compensation.
Deferred Salary Payment. The Company shall have the right to negotiate
with the Executive to defer a portion of the salary payment in case of
the hardship of the company. The deferred salary shall be repaid at a
mutually agreed date during the negotiation.
b Executive Incentive Plan. The Company shall promptly establish and
maintain a new incentive compensation plan (the "Executive Incentive
Plan") in which the Executive and other senior executives of the
Company not directly involved in sales activity shall participate. The
Executive Incentive Plan shall be reviewed and, if found appropriate,
approved by the Board.
c Promptly after the execution of this Amendment, the Company and the
Executive shall take all necessary action to cancel the non-qualified
stock option to purchase 200,000 shares of common stock at an
exercise price of $3.00 per share, granted by the Company on
August 24, 1998, and with a term of four years. The Executive
represents that he has not exercised said stock option in any amount
and agrees not to exercise the August 24, 1998, stock option, and
voluntarily waives all rights under said stock option and shall hold
the Company harmless from any and all claims which the Executive may
have or which arise out of said August 24, 1998, stock option.
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d Additional Benefits. Except as modified by this Agreement, the
Executive (and the Executive's family, if applicable) shall be
entitled to participate in all compensation or employee benefit plans
or programs and to receive all benefits, perquisites and emoluments,
for which the Board determines the Executive to be eligible. The
Company shall provide the Executive, at the Company's expense, with
life insurance, major medical, hospitalization and surgical coverage,
dental coverage, short and long term disability coverage; in
particular, throughout the Term, the Executive shall be covered at no
out-of-pocket cost to the Executive by the Company's disability
insurance plan insured by CNA Insurance Company (or by any successor
plan adopted by the Company) which shall provide disability benefits
to the Executive in the event he becomes disabled (within the
applicable definition of disability under the Plan).
e Office. During the Term, the Executive shall be entitled to a private
office, and such secretarial services as have been previously provided
to the Executive, and such other assistance and accommodations as
shall be suitable to the character of the Executive's position with
the Company and adequate for the performance of the Executive's duties
hereunder.
f Vacation and Holidays. The Executive shall be entitled to 20 business
days vacation during each calender year (prorated for the calendar
year ending December 31, 2000, and for the final six months of the
Term ending June 30, 2002) in addition to any holidays which the
Company observes. No cash settlement or carryover to any subsequent
year shall be applicable to any work performed on a holiday. In the
event that the Executive does not use his full vacation time for any
relevant calendar year, the unused amount shall carry forward to the
following calendar year and may be used in that year. To the extent
that unused carryover vacation remains at the end of the Term, the
Executive shall be paid the equivalent value of such unused vacation
time determined with respect to his Base Salary at the end of the
Term.
g Sick Days. The Executive shall be entitled to 10 business days paid
sick leave during each calendar year, which shall be used only in the
event of the Executive's illness. No cash settlement or carryover to
any subsequent year shall be applicable to any unused sick time.
h Business Expenses. The Company shall pay or reimburse the Executive
for all reasonable travel or other expenses incurred by the Executive
(and his spouse where there is a legitimate business reason for his
spouse to accompany him) in connection with the performance of his
duties and obligations under this Agreement, including, without
limitation, expenses for entertainment, travel (including automobile
operating expenses), meals, hotel accommodations and the like, in
accordance with such rules and policies relating thereto as the
Company may from time to time adopt. Reimbursement shall be subject to
the Executive's presentation of appropriate vouchers in accordance
with such procedures as the Company may from time to time establish
for senior officers and to preserve any deductions for Federal income
taxation purposes to which the Company may
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be entitled; provided, however, that (a) the Executive shall not incur
any unusual or major expenditures without the Company's prior written
consent; and (b) without limiting any provisions of this Section 5(i),
the Executive shall not incur any travel expenses (including the costs
of transportation, meals and lodging) in excess of $3,000 per trip
without the Company's prior written consent.
i Automobile. The Company shall provide the Executive with a leased
automobile of a type consistent with the Executive's position with the
Company provided that the total lease cost (including applicable
taxes, fees and other charges) to the Company does not exceed $450 per
month. The Company shall also pay for the regular maintenance cost and
gasoline cost.
6 Termination of Employment
a Company Discretion. The Company retains the right to terminate the
Executive's employment under this Agreement for Cause or for Serious
Cause.
b Payment in the Event of Termination. In the event that the Executive's
employment hereunder terminates due to Disability, a termination for
Cause or for Serious Cause, or the Executive's death, or the Executive
voluntarily terminates employment with the Company for reasons other
than Disability (with voluntary retirement or termination following
Executive's delivery of a Notice of Nonrenewal being a voluntary
termination for purposes of this Agreement), earned but unpaid Base
Salary and any earned but unpaid Incentive Compensation as of the Date
of Termination shall be payable in full. However, no other payments
(and, in particular, no severance shall be payable) shall be made, or
benefits provided, by the Company under this Agreement except for
compensatory rights to the extent already earned, vested benefits
payable under the terms of Company's plans, and any other benefits
which the Executive is entitled to receive under the terms of any
other employee benefit programs maintained by the Company or its
affiliates for its employees.
c Notice of Termination. A Notice of Termination shall be the sole means
by which the Company or the Executive may terminate the Executive's
employment during the Term. Any purported termination of the
Executive's employment (other than by reason of death) shall be
communicated by a written Notice of Termination from one party hereto
to the other party hereto in accordance with Section 14 hereof.
7 Effect of Termination of Employment in Connection with a Change in
Control Event.
a Termination upon a Change in Control Event. For purposes of this
Section 7, the following event shall be deemed to be a Termination
upon a Change in Control Event: the Executive's employment is
terminated without Serious Cause and such termination was at the
request or direction of, or pursuant to negotiations with, a Person
who has entered into an agreement with the Company the consummation of
which will constitute a Change in Control Event.
b Payments for Termination upon a Change in Control Event. In the event
of the termination of Executive's employment in circumstances
constituting a Termination upon a Change in Control Event, the Company
shall pay to the Executive (without any discount or reductions, except
as otherwise specifically provided herein, for the time value of
money) and/or provide to the Executive, as applicable, the following:
i) the Executive's earned but unpaid Base Salary as of the Date of
Termination;
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ii) the Executive's earned but unpaid Incentive Compensation as of
the Date of Termination;
iii) the benefits, if any, to which the Executive is entitled as a
former employee under the employee benefit programs and
compensation plans and programs maintained for the benefit of the
Company's officers and employees;
iv) all shares of the Company's Series A Preferred Stock held by the
Executive as of the Date of Termination shall immediately convert
into common shares of the Company's stock; and
v) with respect to the Non-Qualified Stock Options, notwithstanding
the otherwise applicable terms and conditions of such Options,
the Executive's Options shall become fully vested and exercisable
as of the Date of Termination. The Option Shares resulting from
application of this Section 7(b)(v) shall be subject to the
remaining terms and conditions of the Non-Qualified Stock
Options, including, if applicable, restrictions on registration
and transfer of the Options Shares. In addition, the Executive's
rights to exercise the Non-Qualified Stock Options pursuant to
the above schedule shall be conditioned upon the Executive's
meeting his obligations under Section 8 of this Agreement; breach
of such obligations by the Executive shall result in
nonapplicability of the above provisions, and shall also permit
the Company to exercise all other remedies available to it under
this Agreement.
c Limitation Applicable to Excess Parachute Payments. It is the
intention of the Company and the Executive that any and all amounts
payable to the Company to the Executive (the "Payments") under the
terms of this Agreement, together with any other payments due
Executive from Company ("Other Payments"), shall not constitute
"excess parachute payments" within the meaning of Section 280G of the
Code and regulations promulgated by the Internal Revenue Service
thereunder. In the event that the independent accountants acting as
auditors for the Company immediately prior to the Change in Control
(or another accounting firm designated by Company and Executive)
determine that the Payments would, either by themselves or together
with Other Payments, constitute "excess parachute payments," the
Payments shall be reduced to the maximum amount which may be paid
without constituting the Payments and the Other Payments as "excess
parachute payments." The determination of the appropriate method of
reduction shall be made by the Company in its sole discretion.
8 Other Duties of the Executive During and After Term; Results of
Executive's Services.
a Confidential Information. The Executive acknowledges that by reason of
his employment with the Company he has and will hereafter, from time
to time during the Term, become exposed to and/or become knowledgeable
about proposals, plans inventions, practices, systems, programs,
formulas, processes, methods, techniques, research, records, supplier
sources, customer lists, and other forms of business information which
are not known to the Company's competitors and which are not
recognized as being encompassed within standard business or management
practices and which are kept secret and confidential by the Company
(the "Confidential Information"). The Executive therefore agrees that
at no time during or after the period of his employment by the Company
will he disclose or use the Confidential Information except to the
extent such information becomes public through no fault of the
Executive, as required by law, as authorized by the Board, or as may
be required in the prudent course of business for the benefit of the
Company. In addition, as of the date of the Executive's first
performance of service for the Company
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hereunder, Executive shall execute the Confidentiality Agreement
attached as Exhibit B to the Agreement and acknowledges that no
compensation or benefits (other than as provided under this Agreement)
shall be payable to the Executive in consideration of his execution of
the Confidentiality Agreement.
b Non-Compete. In consideration of the mutual terms and agreements set
forth in this Agreement and the grant of Non-Qualified Stock Options
under Section 5(c) hereof, the Executive hereby agrees that (i) while
the Executive is employed during the Term, (ii) during such time after
the Term as the Executive is employed by the Company and (iii) for a
period of two years after the Executive's Date of Termination, he will
not, unless authorized in writing to do so by the Company, directly or
indirectly own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be employed or
otherwise connected in any substantial manner with any business which
directly or indirectly competes to a material extent with any line of
business of the Company or its subsidiaries which was operated by the
Company or its subsidiaries at the Date of Termination; provided, that
nothing in this paragraph shall prohibit the Executive from acquiring
up to 5% of any class of outstanding equity securities of any
corporation whose equity securities are regularly traded on a national
securities exchange or in the "over-the-counter market." The Executive
agrees that for a period ending two years after the Date of
Termination hereunder, the Executive will not (y) recruit any employee
of the Company or solicit or induce, or attempt to solicit or induce,
any employee of the Company to terminate his or her employment with,
or otherwise cease his or her relationship with, the Company, or (z)
solicit, divert or take away, or attempt to solicit, divert or take
away, the business or patronage of any of the clients, customers or
accounts, or prospective clients, customers or accounts, of the
Company that were contacted, solicited or served by the Executive
while employed by the Company.
c Non-Disparagement. The Executive shall not disparage the Company, the
Subsidiary or any of its affiliates, its officers, directors or
employees in connection with the Executive's employment with the
Company, his termination of employment with the Company, if
applicable, or otherwise.
d Rights to Executive's Work Product and Related Matters.
i) Ownership of Work Product. The Company will be entitled to and
will own all the results and proceeds of the Executive services
under this Agreement, including, without limitation, all rights
throughout the world to any copyright, patent, trademark or other
right and to all ideas, inventions, products, programs,
procedures, formats and other materials of any kind created or
developed or worked on by the Executive during his employment by
the Company; the same shall be the sole and exclusive property of
the Company; and the Executive will not have any right, title or
interest of any nature or kind therein. Without limiting the
foregoing, it will be presumed that any copyright, patent,
trademark or other right and any idea, invention, product,
program, procedure, format or material created, developed or
worked on by the Executive at any time during the term of his
employment will be a result of proceed of the Executive's
services under this Agreement. The Executive will take such
action and execute such documents as the Company may request to
warrant and confirm the Company's title to and ownership of all
such results and proceeds and to transfer and assign to the
Company any rights which the Executive may have therein. The
Executive's right to any compensation or other amounts under this
Agreement will not constitute a lien on any results or proceeds
of the Executive's services under this Agreement. The Company
will also own, and promptly on receipt thereof the
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Executive will pay to the Company, any monies and other proceeds
to which the Executive is entitled on account of rights
pertaining to any of the Company's products which the Executive
acquired before the date of this Agreement.
ii) Use of Executive's Name. The Company is hereby granted the sole
and exclusive right during the term of his employment to make use
of and to permit others to make use of the Executive's name,
pictures, photographs, and other likenesses, and voice, in
connection with the advertising, publicity and exploitation of
any products, or in connection with the use of implementation of
any of the Executive's services hereunder or the proceeds
thereof. This right shall continue in perpetuity as a
non-exclusive and non-compensable right after termination of
employment for any reason whatsoever including, without
limitation, termination by either party for cause or wrongful
termination by either party. No additional compensation shall be
due the Executive for any such use by the Company or a
subsidiary. In no event, however, shall the Executive, directly
or indirectly, be represented as endorsing any product or
commodity without the Executive's written consent.
iii) Insurance. If the Company desires at any time or from time to
time to apply for, in its own name or otherwise, but at its
expense, life, health, accident or other insurance covering the
Executive, the Company may do so and may take out such insurance
for any sum that it deems desirable. The Executive will have no
right, title or interest in or to such insurance or the proceeds
thereof. The Executive nevertheless will assist the Company in
procuring the same by submitting from time to time to the
customary medical, physical and other examinations, and by
signing such applications, statements and other instruments as
any reputable insurer may require.
iv) Uniqueness of Services. The Executive acknowledges that his
services hereunder are of a special, unique, unusual,
extraordinary and intellectual character, the loss of which
cannot be reasonably or adequately compensated by damages in an
action at law. Accordingly, the Company will be entitled to
injunctive and other equitable relief to prevent or cure any
breach or threatened breach of this Agreement by the Executive
but no action for any such relief shall be deemed to waive the
right of the Company to an action for damages.
e Remedies. The Company and the Executive confirm that the restrictions
contained in Section 8 hereof are, in view of the nature of the
business of the Company, reasonable and necessary to protect the
legitimate interests of the Company and that any violation of any
provision of Section 8 will result in irreparable injury to the
Company. The Executive hereby agrees that, in the event of any breach
or threatened breach of the terms or conditions of this Agreement by
the Executive, the Company's remedies at law will be inadequate and,
in any such event, the Company shall be entitled to commence an action
for preliminary and permanent injunctive relief and other equitable
relief in any court of competent jurisdiction. The Executive further
irrevocable consents to the jurisdiction of any Maryland state court
or federal court located in the State of Maryland over any suit,
action or proceeding arising out of or relating to this Section 8(d)
and hereby waives, to the fullest extent permitted by law, any
objection that he may now or hereafter have to such jurisdiction or to
the laying of venue of any such suit, action or proceeding brought in
such a court and any claim that such suit, action or proceeding has
been brought in an inconvenient forum. In addition, if the Executive
at any time engages in conduct violative of his obligations under
Section 8(b), the Company shall be entitled to discontinue the
payments and benefits provided under Sections 6 or 7 (as the case may
be), including the benefits made available with respect to the
Non-Qualified Stock Options pursuant to
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Section 7(b) above, and may seek repayment from the Executive of any
payments already made, or reimbursement for the economic value of any
Non-Qualified Stock Options which have been exercised by the
Executive. The Executive's Agreement as set forth in this Section 8
shall: (x) survive the termination of this Agreement, and continue
throughout the duration of the Executive's employment with the
Company, except as amended or modified by written agreement of the
parties; and (y) survive the Executive's termination of employment
with the Company for the periods specified in Section 8 hereof.
f Modification of Terms. If any restriction in this Section 8 of the
Agreement is adjudicated to exceed the time, geographic, service or
other limitations permitted by applicable law in any jurisdiction, the
Executive agrees that such may be modified and narrowed, either by a
court or the Company, to the maximum time, geographic, service or
other limitations permitted by applicable law so as to preserve and
protect the Company's legitimate business interest, without negating
or impairing any other restrictions or undertaking set forth in the
Agreement.
9 Withholding Taxes. The Company may directly or indirectly withhold from
any payments made under this Agreement all Federal, state, city or other taxes
as shall be required pursuant to any law or governmental regulation or ruling,
and shall report income to the Executive (or his beneficiaries) resulting from
the Executive's employment with the Company under this Agreement in such manner
as comports with applicable tax laws, in the Company's reasonable judgment.
10 Consolidation, Merger, or Sale of Assets. Nothing in this Agreement
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation
which assumes this Agreement and all obligations and undertakings of the Company
hereunder. Upon such a consolidation, merger or transfer of assets and
assumption, the term "Company" as used herein shall mean such other corporation
and this Agreement shall continue in full force and effect.
11 Indemnity. To the extent permitted by law, the Company will indemnify
the Executive against any claim or liability and will hold the Executive
harmless from and pay any expenses (including, without limitation, legal fees
and court costs), judgments, fines, penalties, settlements and other amounts
arising out of or in connection with any act or omission of the Executive
performed or made in good faith on behalf of the Company pursuant to this
Agreement, regardless of negligence. The Company will not be obligated to pay
the Executive's legal fees and related charges of counsel during any period that
the Company furnishes, at its expense, counsel to defend the Executive; but any
counsel furnished by the Company must be reasonably satisfactory to the
Executive. The foregoing provisions will survive termination of the Executive's
employment with the Company for any reason whatsoever and regardless of fault.
12 D&O Insurance. The Company will, to the extent provided to other
directors and executive officers of the Company, provide the Executive with
officers' and directors' liability insurance covering acts or omissions by the
Executive in the performance of his duties to the Company under this Agreement
as an officer and, if he serves as such, as a director of the Company.
13 Other Contract in Force. Pursuant to Section 3.1 of the Merger Agreement
between ATC Group L.L.C. and the Company, the Executive has granted to the
Company that certain Option to Redeem Merger Shares dated June 22, 1998 (the
"Option"). The respective provisions of the Merger Agreement and Option are
fully incorporated by reference into this Agreement. Sections 3.1, 3.2, 3.3, 3.4
and 3.5 of the Merger Agreement are set forth as Exhibit C to this Agreement.
The Executive acknowledges and agrees that the provisions of the Merger
Agreement and Option remain in effect and are valid and enforceable by the
Company. No covenant or agreement contained in this Agreement relating to
compensation of the Employee or the terms of his employment may exceed what is
permitted in the Merger Agreement.
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14 Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be given in writing and shall be deemed to
have been duly given if delivered or mailed, postage prepaid, by same day or
overnight mail as follows:
a To Company:
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile number: (000) 000-0000
b To the Executive:
Enghe Chimood
Facsimile number:
or to such other address as either party shall have previously specified in
writing to the other.
15 Source of Payment. All payments provided for under this Agreement shall
be paid in cash from the general funds of the Company. The Company shall not be
required to establish a special or separate fund or other segregation of assets
to assure such payments, and, if the Company shall make any investments to aid
it in meeting its obligations hereunder, the Executive shall have no right,
title or interest whatever in or to any such investments except as may otherwise
be expressly provided in a separate written instrument relating to such
investments. Nothing contained in this Agreement, and no action taken pursuant
to its provisions, shall create or be construed to create a trust of any kind,
or a fiduciary relationship, between the Company and the Executive or any other
person. To the extent that any person acquires a right to receive payments from
the Company hereunder, such right, without prejudice to rights which employees
may have, shall be no greater than the right of an unsecured creditor of the
Company.
16 Severability. If any provision of this Agreement or application thereof
to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application and shall not invalidate or render
unenforceable such provision or application in any other jurisdiction.
17 Contents of Agreement. This Agreement supersedes all prior agreements
and sets forth the entire understanding between the parties hereto with respect
to the subject matter hereof and cannot be changed, modified, extended or
terminated except upon written amendment approved by the parties hereto. Unless
otherwise required by law, in the event of a conflict between this Agreement and
any plan, program, or Company policy, the terms of this Agreement shall be
controlling.
18 Governing Law. The validity, interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the State of
Maryland (and Federal laws to the extent applicable), and Executive consents to
the jurisdiction of the state and federal courts of Maryland in any dispute
arising under this Agreement.
19 Miscellaneous. All section headings are for convenience only. This
Agreement may be executed in any number of counterparts, each of which when
executed shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument. It shall not be necessary in marking
proof of this Agreement or any counterpart hereof to produce or account for any
of the other counterparts.
20 Settlement of Disputes; Arbitration. Except with respect to actions for
preliminary and permanent injunctive relief and other equitable relief under
Section 8, any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, shall be settled by arbitration in accordance
with the terms of this Section 20. All claims by the Executive for benefits
under this Agreement shall be directed to and determined by the Board and shall
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be in writing. Any denial by the Board of a claim for benefits under this
Agreement shall be delivered to the Executive in writing within thirty (30) days
and shall set forth the specific reasons for the denial and the specific
provisions of this Agreement relied upon. The Board shall afford a reasonable
opportunity to the Executive for a review of the decision denying a claim and
shall further allow the Executive to appeal to the Board a decision of the Board
within thirty (30) days after notification by the Board that the Executive's
claim has been denied. If agreed to in writing by the Company and the Executive
after a determination has been reached on such appeal, any further dispute,
controversy or claim arising out of or relating to this Agreement, or the
interpretation or alleged breach thereof shall be settled by arbitration in
accordance with the Center for Public Resources, Inc. Non-Administered
Arbitration Rules, by three arbitrators, none of whom shall be appointed by
either party. The arbitration shall be governed by United States Arbitration
Act, 9 U.S.C. ss.1-16, except that discovery shall be permitted under rules
substantially in conformance with the Federal Rules of Civil Procedure, and
judgment upon the award rendered by the arbitrators may be entered by any court
having jurisdiction thereof. The place of the arbitration shall be Washington,
D.C. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
21 Definitions. For purposes of this Agreement, the following terms have
the following meanings:
a "Beneficial Owner" shall have the meaning set forth in Rule 1 3d-3
under the Exchange Act.
b "Cause," shall mean with respect to termination by the Company of the
Executive's employment: (i) as determined by the Company's Board of
Directors, the failure by the Executive to substantially perform the
Executive's duties with the Company (other than any such failure
resulting from the Executive's incapacity due to physical or mental
illness), after quarterly review meetings between the Executive and
the Board of Directors at which the Board of Directors provides the
Executive with specific details of the claimed failure to perform
(including failure to attain required performance benchmarks) and
which review process provides Executive with at least a 30-day period
to correct such failure, or (ii) the willful engaging by the Executive
in conduct which is demonstrably and materially injurious to the
Company or its subsidiaries, monetarily or otherwise, including, but
not limited to, a breach of fiduciary duty or a duty of loyalty to the
Company, a breach of the Executive's duties under Section 8 of this
Agreement, conviction of a felony offense committed against the
Company or on Company property, or conviction of or admission of any
act of moral turpitude committed against the Company (such as fraud,
embezzlement or other similar acts).
c "Change in Control Event" shall mean any of the following events:
i) any Person, together with its affiliates and associates (as such
terms are used in Rule 12b-2 of the Exchange Act), is or becomes
the Beneficial Owner, directly or indirectly, of 50% or more of
the then outstanding shares of common stock of the Company; or
ii) the Company consolidates with, or merges with or into, any other
Person (other than a subsidiary of the Company), or any other
person consolidates with, or merges with or into, the Company,
and, in connection therewith, all or part of the outstanding
shares of common stock shall be changed in any way or converted
into or exchanged for stock or other securities or cash or any
other property and the shareholders of the Company immediately
prior to the transaction do not immediately following such
transaction hold, directly or indirectly, 50% or more of the
outstanding shares of the surviving entity (i.e., the Person with
which the Company has consolidated or with which or into which it
has merged); or
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iii) a transaction or series of transactions in which, directly or
indirectly, the Company shall sell or otherwise transfer (or one
or more of its subsidiaries shall sell or otherwise transfer)
assets (A) aggregating more than 90% of the assets (measured by
either book value or fair market value) or (B) generating more
than 90% of the operating income or cash flow of the Company and
its subsidiaries (taken as a whole) to any other Person or group
of Persons.
Notwithstanding the foregoing, no "Change in Control Event" shall
be deemed to have occurred if there is consummated any
transaction or series of integrated transactions immediately
following which the record holders of the common stock of the
Company immediately prior to such transaction or series of
transactions own a majority of the outstanding voting shares and
in substantially the same proportion in an entity which owns all
or substantially all of the assets of the Company immediately
following such transaction or series of transactions.
d "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time. Reference to any section or subsection of the Code
includes references to any comparable or succeeding provision of any
legislation which amends, supplements, or replaces such section or
subsection.
e "Date of Termination," with respect to any purported termination of
the Executive's employment, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days after Notice
of Termination is given (provided that the Executive shall not have
returned to the full-time performance of the Executive's duties during
such thirty (30) day period); and (ii) if the Executive's employment
is terminated for any other reason, the date specified in the Notice
of Termination (which, in the case of a termination by the Company,
shall not be less than thirty (30) days (except in the case of a
termination for Cause) and, in the case of a termination by the
Executive, shall not be less than thirty (30) days nor more than sixty
(60) days, respectively, from the date such Notice of Termination is
given).
f "Disability" shall mean termination by the Company of the Executive's
employment upon or following Executive's commencement of benefits
under the Company's long-term disability plan.
g "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
h "Notice of Termination" shall mean a notice indicating the specific
termination provision in this Agreement relied upon and setting forth
in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision so indicated.
i "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (i) the Company or
any of its affiliates (as defined in Rule 12b-2 promulgated under the
Exchange Act), (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its
affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the
Company.
j "Serious Cause" shall mean "Cause" limited to the definition set forth
in Section 21(b)(ii).
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k "Term" shall mean the period commencing as of January 20, 2000, and
ending on June 30, 2002.
l "Termination upon a Change in Control Event" shall have the meaning
set forth in Section 7(a). A termination due to death, Disability, or
for Serious Cause shall not constitute a Termination upon a Change in
Control Event, and payments in the event of such a termination shall
be determined under Section 6 hereof
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
TEK DIGITEL CORPORATION
By: /s/ Xxxxxx Xxxx
-------------------
Title: Co-Chairman 1/18/2000
----------------
THE EXECUTIVE
/s/ Enghe Chimood
-------------------
Enghe Chimood
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