EMPLOYMENT AGREEMENT EXECUTED IN MONTREAL, QUEBEC, ON FEBRUARY 2, 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")
ET : ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ #▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇;
(hereinafter referred to as the
"Executive")
IT IS AGREED AS FOLLOWS:
WHEREAS the Corporation wishes to retain the services of the 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
1.1 The Corporation shall employ the Executive for an indefinite term, such
employment having commenced on December 15, 1999 and the Executive
having assumed the full scope of his responsibilities on January 4,
2000.
2 DUTIES
2.1 The Executive shall serve, effective January 4, 2000, the Corporation
and any affiliates of the Corporation in such capacity or capacities
and shall perform such duties and exercise such powers pertaining to
the management and operation of the Corporation and any affiliates of
the Corporation as may be determined from time to time by the Board of
directors of the Corporation consistent with the office of the
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Executive. Without limitation of the foregoing, the Executive shall
occupy the office of Executive Vice-President, Chief Operating Officer
and Chief Financial Officer, Secretary and Treasurer of the
Corporation. The Executive shall:
2.1.1 perform those duties that may reasonably be assigned to the
Executive and devote substantially his full time and
attention and his reasonable best efforts during normal
business hours to the business and affairs of the
Corporation;
2.1.2 use his reasonable best efforts to promote the interests and
goodwill of the Corporation.
2.2 The Corporation hereby recognizes that the Executive is and may, from
time to time, become a member of the Board of Directors of certain
companies, which will require a small amount of his working time and
attention. The Executive represents that this shall not interfere with
his duties as Executive Vice-President, Chief Operating Officer and
Chief Financial Officer, Secretary and Treasurer of the Corporation.
3 REPORTING PROCEDURES
3.1 The Executive shall report to the Chief Executive Officer.
4 REMUNERATION
4.1 The annual base salary payable to the Executive for his services
hereunder shall be $225,000.00 CAN, exclusive of bonuses, benefits and
other compensation. The annual base salary payable to the 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 the 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 the Executive shall include at a minimum
disability and dental coverage, annual complete physical evaluation and
medical examination, indoor parking and club membership. The annual
base salary shall be reviewed on an annual basis starting January 1st,
2001.
5 STOCK OPTIONS
5.1 By TouchTunes Music Corporation's (herein after "TTMC") intervention to
this agreement, it is confirmed that Executive has been granted, on
April 19,2000, an
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option to purchase 745,000 shares of the common stock of TTMC at a
price per share of $2.0625 USD, in conformity with the TouchTunes Music
Corporation 2000 Long-Term Incentive Plan.
5.2 The term of the aforesaid options described in Section 5.2 is of 10
years, as of January 1, 2000.
5.3 Options shall vest over a three-year basis in an equal, monthly and
consecutive manner starting on January 1, 2000.
5.4 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.
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 or the
Corporation is acquired by any other corporation or person or group of
person, or ▇▇ ▇▇▇▇▇▇ and Innovatech together cease to control more than
50% of the outstanding voting shares of TTMC or the Corporation. ▇▇
▇▇▇▇▇▇ shall mean ▇▇ ▇▇▇▇▇▇ de depot et placement du Quebec and its
subsidiaries and Innovatech shall mean Societe Innovatech du Grand
Montreal.
5.5 Twenty per cent (20%) of all unvested options granted to Executive
shall become vested upon filing of a prospectus or registration
statement for an offering of shares of common stock of TouchTunes Music
Corporation, the Corporation or any subsidiaries.
6 BONUS
6.1 The Executive is entitled to an annual bonus equal to 50% of his annual
base salary. Said bonus shall be payable on a quarterly basis. The
Board of Directors of the Corporation shall approve such bonus.
7 VACATION
7.1 The Executive shall be entitled to six (6) weeks paid vacation per
fiscal year of the Corporation. Should the Executive decide not to take
all the vacation to which he is
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entitled in any fiscal year, the Executive shall be entitled to take up
to three (3) of such vacation in the next following fiscal year.
8 EXPENSES
8.1 The Executive shall be reimbursed for all travel and other
out-of-pocket expenses incurred by the Executive from time to time in
connection with carrying out his duties hereunder.
8.2 The Corporation shall reimburse the Executive for all dues and fees
necessary to maintain the membership of the Executive with the CICA and
the "Ordre des comptables agrees du Quebec". The Corporation shall also
reimburse the Executive for cost of training and professional
development.
8.3 The Corporation shall provide the Executive with adequate support and
equipment to perform his duties such as cellular phone and laptop
computer and other.
9 TERMINATION
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 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, not corrected within thirty (30) days
of notice to that effect and discriminatory practices governed
by statute.
9.1.2 upon three-(3) month 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 remuneration hereunder for such remaining part of the
period specified in the notice from Executive, including
bonuses, and the Corporation shall have no further obligations
hereunder in the event of such resignation other than the fact
that options that would have vested during this three-(3)
month notice period shall continue vesting up to and including
the last day of the notice period; or
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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 in a lump sum equal to eighteen- (18) month 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. Executive shall have no further
claims or recourse against the Corporation or any of its
affiliates in respect of such termination, except with respect
to the acceleration of the vesting of all unvested options
granted to Executive that would have vested during the
twelve-(12) month period following the effective date of such
termination, 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.
9 SEVERANCE PAYMENTS
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 other than the compensation, including bonuses,
earned by Executive before the date of termination calculated pro rata
up to and including the date of termination.
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, as a lump sum payment, an amount equivalent to
eighteen (18) months of his salary at the then applicable base salary
rate and, all unvested options granted to Executive that would have
vested during the twelve (12) month period following the effective date
of such termination shall become vested at the date of such
termination.
In the event that the Executive's employment is terminated within a
twelve- (12) month period following a change of control, a merger, an
amalgamation or a reorganization, such indemnity shall be equal to an
amount equivalent to twenty-four (24) months of his salary at the then
applicable base salary rate. In addition, all unvested options granted
to Executive that would have vested during the twelve-
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(12) month period following the effective date of such termination
shall become vested at the date of such termination.
10.3 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
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 court order that the Corporation
has had an opportunity to contest prior to any such
disclosure.
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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
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, 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
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
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.
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
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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
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.
16 RETURN OF MATERIALS
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
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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
17.1 This agreement shall be governed by and construed in accordance with
the laws of the Province of Quebec.
18 SEVERABILITY
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
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
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
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.
22 COMPLETE UNDERSTANDING
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.
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23 LEGAL ADVICE
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
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 11.)
1.
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: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, CEO
EXECUTIVE
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
INTERVENTION
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 2nd day of February 2001.
TOUCHTUNES MUSIC CORPORATION
---------------------------------
PER: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, CEO
