EMPLOYMENT AGREEMENT EXECUTED IN MONTREAL, QUEBEC, ON JUNE 1, 2001.
BETWEEN: TOUCHTUNES DIGITAL JUKEBOX INC.,
a corporation incorporated under
the CANADA BUSINESS CORPORATIONS
ACT, having its head office at
Three Commerce Place, 4th floor,
Nuns' Island, Verdun, Province of
▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
(hereinafter referred to as the "Corporation")
AND: MR. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇
# ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(hereinafter referred to as the "Executive")
IT IS AGREED AS FOLLOWS:
WHEREAS the Corporation wishes to retain the services of Executive to
provide the services hereinafter described during the term hereinafter set out;
NOW THEREFORE THIS AGREEMENT WITNESS that in consideration of the mutual
covenants and agreements here contained and for other good and valuable
consideration, the parties agree as follows;
1 TERM
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1.1 The Corporation shall employ Executive for an
indefinite term, such employment having commenced on March 1, 2001 and
Executive having assuming the full scope of his responsibilities on
June 1, 2001.
2 DUTIES
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2.1 The Corporation hereby confirms having agreed to
engage Executive as Chief Financial Officer, effective June 1, 2001. In
such capacity, Executive shall perform such duties and exercise such
powers pertaining to the role of Chief Financial Officer for the
Corporation and its affiliates.
2.2 By his acceptance hereof, Executive agrees to devote substantially
all of his working time, attention and skill to the Corporation and to
make every effort
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CORPORATION EXECUTIVE
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necessary to promote the success of the Corporation's
business and perform adequately the duties that are assigned to him.
3 REPORTING PROCEDURES
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3.1 Executive shall report directly to the President and Chief
Operating Officer of the Corporation or such other person as designated
by the Corporation from time to time.
4 REMUNERATION
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4.1 The annual base salary payable to Executive for his services
hereunder shall be $175,000.00 CAD, exclusive of bonuses, benefits and
other compensation. The annual base salary payable to Executive
pursuant to the provisions of this Section 4 shall be payable in equal
weekly installments in accordance with the Corporation's normal
practices less, in any case, any deductions or withholdings required by
law.
4.2 The Corporation shall provide Executive with employee benefits
comparable to those provided by the Corporation from time to time to
other senior executives of the Corporation. Notwithstanding, the
benefits provided to Executive shall include at a minimum disability
and dental coverage, annual complete physical evaluation and medical
examination, indoor parking (when available and offered to Executives).
The annual base salary shall be reviewed periodically in accordance
with the Corporation policies and practices, as set forth by the
Compensation Committee of the Board of Directors.
5 STOCK OPTIONS
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5.1 Subject to the approval of the Board of Directors, Executive shall
be granted, within 60 days from the commencement of his employment, an
option to purchase 175,000 shares of the common stock of TouchTunes
Music Corporation (hereinafter "TTMC") in conformity with the
TouchTunes Music Corporation 2000 Long-Term Incentive Plan.
5.2 Options shall vest over a four-year period in equal annual
installments, the first vesting being June 1st, 2002.
5.3 In the event of a Change of Control of TTMC or of the Corporation
or upon the disability or the death of Executive, all options to
purchase common shares in the share capital of TTMC granted to
Executive shall become immediately vested. In the event that the Change
of Control results from an amalgamation, a merger or the consolidation
of TTMC or the Corporation with another corporation, then Executive
shall receive in substitution for all of his outstanding options to
purchase common shares of TTMC, whether vested or not, securities
(excluding options) of TTMC or of any amalgamated, merged, consolidated
or otherwise reorganized corporation, all of which securities shall be
of equivalent value and liquidity.
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CORPORATION EXECUTIVE
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For the purpose of this agreement, Change of Control shall mean that
TTMC or the Corporation is amalgamated, merged or consolidated with
another corporation, or that all or substantially all of the assets or
more than 50% of the outstanding voting shares of TTMC.
6 BONUS
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6.1 Executive is entitled to an annual bonus up to 50% of his annual
base salary. Said bonus shall be payable on an annual basis at the
discretion and within the guideline set forth by the compensation
committee and based on the achievement of the operational budget of the
Corporation.
7 VACATION
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7.1 Executive shall be entitled to four (4) weeks of paid vacation per
fiscal year of the Corporation. Should Executive decide not to take all
the vacation to which he is entitled in any fiscal year, Executive
shall be entitled to take up to two (2) of such vacation in the next
following fiscal year.
8 EXPENSES
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8.1 Executive shall be reimbursed for all reasonable travel and other
out-of-pocket expenses incurred by Executive from time to time in
connection with carrying out his duties hereunder. For all such
expenses Executive shall furnish to the Corporation supporting evidence
for expenses in respect of which Executive seeks reimbursement.
8.2 The Corporation shall also reimburse Executive for reasonable cost
of training and professional development.
8.3 The Corporation shall provide Executive with adequate support and
equipment to perform his duties.
9 TERMINATION
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9.1 This agreement may be terminated, except for continuing obligations
hereunder as at any such termination, in any of the following
eventualities and with the following consequences:
9.1.1 at any time, for Cause, on simple notice from the Corporation to
Executive the whole without any other notice or any pay in lieu of
notice or any indemnity whatsoever from the Corporation to Executive,
and any further claims or recourse by Executive against the Corporation
or its affiliates in respect of such termination; or
"CAUSE" shall mean cause for dismissal without either notice or payment
in lieu of
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notice for reasons of fraud, embezzlement, gross negligence,
willful and careless disregard or gross dereliction of duty, incapacity
or refusal to perform employment functions due to drug use or alcohol
addiction, conviction of a felony, serious breach of duty not corrected
within thirty (30) days of notice to that effect and discriminatory
practices governed by statute.
9.1.2 Upon three- (3) months notice in writing from Executive to the
Corporation, specifying his intention to resign, in which event the
Corporation shall only be obliged to pay Executive its annual base
salary hereunder for such remaining part of the period specified in the
notice from Executive, and the Corporation shall have no further
obligations.
9.1.3 Upon written notice from the Corporation to Executive in the
event of termination of his employment without Cause, in which event
the Corporation shall pay Executive an indemnity in lieu of notice
equal to nine- (9) months of Executive's base salary at the time of
termination, and the Corporation shall have no further obligations
hereunder in the event of such termination. Such indemnity shall be
paid to Executive over the nine- (9) month period following the
effective date of termination, in accordance with normal and then
current payroll practices of the Corporation. Executive shall have no
further claims or recourse against the Corporation or any of its
affiliates in respect of such termination, except for the acceleration
of the vesting on certain options as set forth in paragraph 10.2; or
9.2 For Disability/Death
9.2.1 The Corporation may immediately terminate this agreement by
notice to Executive if Executive becomes permanently
disabled. Executive shall be deemed to have become
permanently disabled in the event of any mental incapacity
or physical disability of such severity that Executive shall
have been unable to attend to any normal duties with the
Corporation for more than nine (9) consecutive months in any
year or for twelve (12) months out of any period of
twenty-four (24) consecutive months during the employment
period.
9.2.2 This agreement shall terminate without notice upon the
death of Executive.
10 SEVERANCE PAYMENTS
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10.1 Upon termination of Executive's employment for cause or by the
voluntary termination of employment of Executive as set forth in
Section 9.1.1 and 9.1.2, Executive shall not be entitled to any
severance payment.
10.2 If Executive's employment is terminated for any reason other than
the reasons set forth in Section 9.1.1 and 9.1.2, Executive shall be
entitled to receive, an indemnity in lieu of notice equal to nine- (9)
months of Executive's base salary at the time of
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termination, such indemnity shall be paid to Executive over the nine-
(9) month period following the effective date of termination, in
accordance with normal and then current payroll practices of the
Corporation and, all unvested options that would have vested during the
twelve (12) month period following the date of such termination shall
become vested at the date of such termination.
10.2 Upon termination of Executive's employment for disability or death
as set forth in Section 9.2, all options to purchase common shares in
the share capital of TTMC granted to Executive shall become vested
immediately.
11 CONFIDENTIALITY
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11.1 Executive shall not, directly or indirectly, without the specific
prior written consent of the Corporation, at any time after the date
hereof, divulge to any business, enterprise, person, firm, corporation,
partnership, association or other entity, or use for Executive's own
benefit, (i) any confidential information concerning the businesses,
affairs, customers, suppliers or clients of the Corporation or its
affiliates, including, without limitation, any trade secret (process,
plan, form, marketing strategy, etc.), all computer programs in any
form (diskette, hard disk, tape, printed circuit, etc.), all access
codes to computer programs together with any plan, sketch, diagram,
card, contract, bid, price list and client list relative to the
Corporation's business, or (ii) any non-public data or statistical
information of the Corporation or its affiliates, whether created or
developed by the Corporation or its affiliates or on their behalf or
with respect to which Executive may have knowledge or access
(including, without limitation, any of the foregoing created or
developed by Executive), it being the intent of the Corporation and
Executive to restrict Executive from disseminating or using any data or
information that is at the time of such use or dissemination
unpublished and not readily available or generally known to persons
involved or engaged in businesses of the type engaged in from time to
time by the Corporation (the "Confidential Information"). For purposes
of this Employment Agreement, Confidential Information shall not be
deemed to include:
11.1.1 Information that, at the time of disclosure under this
Employment Agreement or during Executive's employment, is
in the public domain or that, after disclosure under this
Employment Agreement or in connection with Executive's
employment, becomes part of the public domain by
publication or otherwise through no action or fault of
Executive or any other party subject to an obligation of
confidentiality;
11.1.2 Information that the Corporation authorizes Executive to
disclose in writing; or
11.1.3 Information that Executive is required to disclose
pursuant to a final
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court order that the Corporation has had an opportunity
to contest prior to any such disclosure.
11.2 This undertaking to respect the confidentiality of the Confidential
Information and to not make use of or disclose or discuss it to or with
any person shall continue to have full effect notwithstanding the
termination of Executive's employment with the Corporation for a period
of two (2) years following the date of such termination.
12 NON-SOLICITATION
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12.1 Executive agrees that he shall not, during his employment and for a
period of twelve (12) months following the termination of his
employment, on his own behalf or on behalf of any person, whether
directly or indirectly, in any capacity whatsoever, alone, through or
in connection with any person, employ, offer employment to or solicit
the employment or the engagement of or otherwise entice away from the
employment of the Corporation or its subsidiaries, any individual who
is employed by the Corporation or its subsidiaries at the time of the
termination of Executive's employment or who was employed by the
Corporation or its subsidiaries in the six (6) month period preceding
the termination of Executive's employment.
13 NON-COMPETITION
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13.1 Executive agrees that during the Employment Term and for a period of
twelve (12) months after Executive ceases to be employed by the
Corporation, Executive shall not, directly or indirectly, for
Executive's own account or as an employee, officer, director, partner,
joint venture, shareholder, investor, consultant or otherwise (except
as an investor in a corporation whose stock is publicly traded and in
which Executive holds less than 5% of the outstanding shares) engage in
any business or enterprise, in the United States of America, that
directly or indirectly competes with the business of the Corporation,
as it exists now or in the future during the Employment Term.
14 INTELLECTUAL PROPERTY
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14.1 For the purposes of this Agreement, the term "Inventions" means
ideas, designs, concepts, techniques, inventions and discoveries,
whether or not patentable or protectable by copyright and whether or
not reduced to practice, including but not limited to devices,
processes, drawings, works of authorship, computer programs, methods
and formulas together with any improvement thereon or thereto,
derivative works therefrom and know-how related thereto made, developed
or conceived by Executive while at the employment of the Corporation
during working hours using the Corporation's data or facilities and
which relates to the Corporation's areas of business.
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14.2 Executive shall assign and hereby does assign all Inventions to the
Corporation. Executive shall disclose all Inventions in writing to the
Corporation, shall assist the Corporation in preparing patent or
copyright applications for Inventions, and execute said applications
and all other documents required to obtain patents or copyrights for
those Inventions and/or to vest title thereto in the Corporation, at
the Corporation's expense, but for no additional consideration to
Executive. In the event that the Corporation requires assistance under
this Section after termination of employment, Executive shall provide
such assistance at the cost and expense of the Corporation.
14.3 During the term of this Agreement or after termination, on request of
the Corporation and at the cost and expense of the Corporation,
Executive shall execute specific assignments in favor of the
Corporation or nominees of any of the Inventions covered by this
Section, as well as execute all papers and perform all lawful acts that
the Corporation considers reasonably necessary or advisable for the
preparation, prosecution, issuance, procurement and maintenance of
patent or copyright applications and patents and copyrights for the
Inventions, and for transfer of any interest Executive may have, and
shall execute any and all papers and lawful documents required or
necessary to vest title in the Corporation or its nominee in the
Inventions.
15 ENFORCEABILITY
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15.1 Executive agrees that, for the purposes of Sections 11 to 15, all
covenants and restrictions in favor of the Corporation are also made in
favor of TouchTunes Music Corporation and that the remedies provided
for in this Section 15 also apply to TouchTunes Music Corporation.
15.2 Executive hereby confirms and agrees that the covenants and
restrictions pertaining to Executive contained in this agreement,
including, without limitation those contained in Sections 11 to 15
hereof, are reasonable and valid.
15.3 Without limiting the remedies available to the Corporation, Executive
hereby expressly acknowledges and agrees that a breach of the covenants
contained in Sections 11 to 15 may result in materially irreparable
harm to the Corporation for which there is no adequate remedy at law;
that it will not be possible to measure damages for such injuries
precisely, and that, in the event of such a breach, the Corporation
shall be entitled to obtain any or all of a temporary restraining order
and a preliminary or permanent injunction restraining Executive from
engaging in activities prohibited by the provisions of Sections 11 to
15 or such other relief as may be required to enforce specifically any
of the covenants of Sections 11 to 15. Such proceedings shall not
preclude the Corporation from claiming for damages that it has
suffered.
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16 RETURN OF MATERIALS
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16.1 All files, forms, brochures, books, materials, written correspondence,
memoranda, documents, manuals, computer disks, software products and
lists (including lists of customers, suppliers, products and prices)
pertaining to the business of the Corporation or any of its affiliates
and associates that may come into the possession or control of
Executive shall at all times remain the property of the Corporation or
such subsidiary or associate, as the case may be. On termination of
Executive's employment for any reason, Executive agrees to deliver
promptly to the Corporation all such property of the Corporation in the
possession of Executive or directly or indirectly under the control of
Executive. Executive agrees not to make for his personal or business
use or that of any other party, reproductions or copies of any such
property or other property of the Corporation.
17 GOVERNING LAW
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17.1 This agreement shall be governed by and construed in accordance with
the laws of the Province of Quebec.
18 SEVERABILITY
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18.1 If any provision of this agreement, including the breadth or scope of
such provision, shall be held by any court of competent jurisdiction to
be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remaining provisions, or part thereof, of this agreement and such
remaining provisions, or part thereof, shall remain enforceable and
binding.
19 NO ASSIGNMENT
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19.1 Executive may not assign, pledge or encumber Executive's interest in
this agreement nor assign any of the rights or duties of Executive
under this agreement without the prior written consent of the
Corporation.
20 SUCCESSORS
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20.1 This agreement shall be binding on and inure to the benefit of the
successors and assigns of the Corporation and the heirs, executors,
personal legal representatives and permitted assigns of Executive.
21 SURVIVAL OF COVENANTS
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21.1 Insofar as any of the obligations contained in this agreement are
capable of surviving termination of this agreement they shall so
survive and continue to bind Executive notwithstanding the termination
of the agreement for whatsoever reason.
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22 COMPLETE UNDERSTANDING
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22.1 Once signed, this agreement replaces all prior written and/or oral
agreements between Executive and the Corporation with regard to
Executive's terms of employment with the Corporation. This agreement
may not be changed orally, but only in an agreement in writing signed
by both parties.
23 LEGAL ADVICE
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23.1 Executive hereby represents and warrants to the Corporation and
acknowledges and agrees that he had the opportunity to seek and was not
prevented nor discouraged by the Corporation from seeking independent
legal advice prior to the execution and delivery of this agreement and
that, in the event that he did not avail himself of that opportunity
prior to signing this agreement, he did so voluntarily without any
undue pressure and agrees that his failure to obtain independent legal
advice shall not be used by him as a defense to the enforcement of his
obligations under this agreement.
24 LANGUAGE
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24.1 The parties hereto specifically requested that the present agreement be
drawn up in English. Les parties aux presentes ont specifiquement
requis que cette convention soit redigee en anglais.
(SIGNATURES ON PAGE 10.)
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IN WITNESS WHEREOF the parties hereto have executed this agreement as of the
date first above written.
TOUCHTUNES DIGITAL JUKEBOX INC.
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per: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President & COO
EXECUTIVE
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
INTERVENTION
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By its intervention to this agreement, TouchTunes Music Corporation hereby
agrees, after having read this agreement, to be bound by the provisions of
section 5 hereof.
Signed this first day of June 2001.
TOUCHTUNES MUSIC CORPORATION
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Per: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President & COO
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