THIS AGREEMENT made 1st of July 2002
BETWEEN:
(1) Hugo International Telecom, Inc. whose registered office is at 0000 Xxxxxx
Xxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of Xxxxxxxxx, Xxxxxxxx 00000-0000 ("the
Company") and
(2) Xxxxx Xxxxxxx Xxxxx ("the Director")
NOW IT IS AGREED that the Company will employ the Director and the Director will
serve the Company as Chief Executive Officer of the Company on the following
terms and conditions:
1. Definitions and Interpretation
In this agreement:
1.1 "the Board" means the board of directors for the time being of the
Company;
1.2 "Business" means the development, marketing, sale or other supply by the
Company or any Subsidiary and the provision by the Company or by any
Subsidiary throughout the Territory of:
1.3 "Confidential Information" means information relating to the Business
(including but without limitation details of customers or potential
customers products services product suppliers services suppliers and
prices and also including but without limitation details of actual or
potential trading partners) affairs and finances of the Company or any
Subsidiary for the time being confidential to it (or to them) and trade
secrets (including without limitation technical data source code object
code designs software designs product specifications software
specifications and know-how) relating to the Business or to any of the
suppliers clients or customers of the Company or any Subsidiary;
1.4 "Incapacity" means any illness or other like cause incapacitating the
Director from attending to his duties;
1.5 "Intellectual Property" includes letters patent trade marks whether
registered or unregistered registered or unregistered designs utility
models copyrights including design copyrights applications for any of the
foregoing and the right to apply for them in any part of the world
discoveries creations inventions or improvements upon or additions to an
invention confidential information know-how and any research effort
relating to any of the above mentioned business names whether register
able or not moral rights and any similar rights in any country;
1.6 Network services," means any wireless network or service offered over a
wireless network.
Hugo International Telecom, Inc.
Service Agreement
01/05/02
1.7 Software" means all formats (including (but without limitation) the
electronic and paper formats) of the object code and source code versions
(including but without limitation all drafts of them)
1.8 "Subsidiary" means a subsidiary (as defined by the Companies Xxx 0000
Section 736) for the time being of the Company;
1.9 "Territory" means the World;
1.10 Unless the context otherwise requires words importing one gender include
all other genders and words importing the singular include the plural and
vice versa;
1.11 Any reference to a statutory provision shall be deemed to include a
reference to any statutory modification or re-enactment of it;
1.12 The clause headings do not form part of this agreement and shall not be
taken into account in its construction or interpretation;
1.13 Any reference to the Director shall if appropriate include his personal
representatives; and
1.14 references in this agreement to any clause sub-clause schedule or
paragraph without further designation shall be construed as references to
the clause sub-clause schedule or paragraph of this agreement so numbered.
2. Appointment and Term of Employment
2.1 The Company appoints the Director and the Director agrees to act as Chief
Executive Officer of the Company or in such other capacity as the Company
from time to time reasonably directs on the terms of this agreement.
2.2 The employment of the Director shall be deemed to have commenced on 1st
July 2002 for the purposes of this agreement. The company recognises that
the directors employment with the Hugo International Ltd commenced on the
22nd October 1992 and that all rights to continuation of service should
accrue to this agreement and survive this agreement This agreement shall
continue for the period of at least 36 months following the date of this
agreement and thereafter on 6 monthly rolling basis and is subject to
termination by either party giving to the other 6 (six) months' notice in
writing and as provided below.
2.3 The company shall have the discretion to terminate the Director's
employment lawfully without any notice or on notice not less than that
required by clause 2.2 by paying the Director a lump sum equal to
US$6,000,000 (six million dollars) plus salary for that part of the period
of notice in clause 2.2 which the Company has not given to the Director
less any appropriate tax and other statutory deductions. Should the
Company exercise its discretion to terminate in this way the lump sum of
US$6,000,000 (six million dollars) will be payable immediately on notice
of termination. All of the Director's post termination obligations
Hugo International Telecom, Inc.
Service Agreement
01/05/02
contained in this agreement in particular the confidentiality provisions
and restrictive covenants in clauses 12 shall remain in full force and
effect.
3. Duties
3.1 The Director shall during his employment under this agreement:
3.1.1 perform the duties and exercise the powers which the Board may from
time to time properly assign or delegate to him in connection with
the business of the Company and the business of any one or more of
its Subsidiaries (including performing duties as requested by the
Board from time to time by serving on the board of such
Subsidiaries or by any other Director body or any committee of such
a company);
3.1.2 subject to directions from the Board and subject to the duties and
powers from time to time assigned or delegated to him by the Board
and subject always to the memorandum and articles of association of
the Company have the general control and responsibility for the
management of the business of the Company; and
3.1.3 do all in his power to promote develop and extend the business of
the Company and of its Subsidiaries and at all times and in all
respects conform to and comply with the proper and reasonable
direction and regulations of the Board.
3.2 At any time during any period of notice of termination (whether given by
the Company or the Director) the Company shall have the right in its
absolute discretion to assign reduced or alternative duties or no duties
at all to the Director and shall be entitled to require the Director to
act at the direction of the Company including the right to exclude the
Director from its premises and/or remove him from any or all offices held
by him in the Company or any Subsidiary and/or prevent the Director from
discussing its affairs with the Company's employees agents clients or
customers. If the Company exercises its rights under this clause the
Director's entitlement to salary and other contractual benefits shall
continue subject always to the relevant scheme or policy relating to such
benefits. For the avoidance of doubt at all times during such period the
Director shall continue to be bound by the same obligations to the Company
as were owed prior to the commencement of the notice period.
3.3 The Director shall carry out his duties and exercise his powers jointly
with any other managing or executive director appointed by the Board to
act jointly with him.
4. Place of Work
The Director's normal place of work shall be 0 Xxxxxxxxx Xxxxx Xxxxxxx Xxxxxxxx
Xxxx Xxxxxxx Xxxxxx XX0 0XX but the Director shall work in any place within a
radius of 60 miles of such address which the Board may require for the proper
performance and exercise of his duties and powers and he may be required to
travel on the business of the Company or any of its Subsidiaries anywhere within
the Territory.
Hugo International Telecom, Inc.
Service Agreement
01/05/02
5. Salary
The Director shall be paid a salary (which shall accrue from day to day) at the
rate of (pound)132,000.00 per year (or such other rate as the parties may from
time to time agree) including (pound)12,000 per year for the purchase and
maintenance of a vehicle and of any directors' fees payable to him under the
articles of association of the Company and of any Subsidiaries of which he is
from time to time a director payable in arrears by equal monthly instalments on
or about the 25th day of every month. The director will be entitled to a profit
related bonus equivalent to 15% of the audited gross profit figure paid
annually. For the avoidance of doubt the gross profit will be calculated before
finance charges, tax, insurances, goodwill, depreciation and any exceptional
items that are not performance related are taken into account.
6. Pensions Scheme
The Director shall be entitled to join the Company's stakeholder pension scheme
from time to time in force.
7. Expenses
The Company shall reimburse the Director:
7.1 all reasonable travelling hotel and other expenses wholly exclusively and
necessarily incurred by him in or about the performance of his duties
under this agreement; and
7.2 expenses for the use by the Director of his own motor vehicle in or about
the performance of his duties under this agreement, including at a rate
per mile for each mile the Director so uses his own motor vehicle which is
specified from time to time in the Fixed Profit Car Scheme (or other such
scheme or arrangement as may replace the same) for the type of motor
vehicle used by the Director
PROVIDED that the Director if so required by the Company provides reasonable
evidence of the expenditure in respect of which he claims reimbursement.
8. Holidays
The Director shall (in addition to the usual public and bank holidays) be
entitled to not less than 30 days' holiday in each year to be taken at a time or
times convenient to the Company.
9. Illness
9.1 The Director shall continue to be paid during any period or periods of
absence due to Incapacity (such payment to be inclusive of any statutory
sick pay or social security benefits to which he may be entitled) for a
total of up to 17 weeks in any 52 consecutive week periods.
Hugo International Telecom, Inc.
Service Agreement
01/05/02
9.2 Thereafter the Director shall continue to be paid salary only at the
discretion of the Company and if such absence shall aggregate in all 26
weeks in any 52 consecutive weeks the Company may terminate the employment
of the Director forthwith by notice under clause 14.1.9 below given on a
date not more than 28 days after the end of the 26th week.
10. Time and Attention
During the continuance of his employment under this agreement the Director shall
unless prevented by Incapacity devote his whole time and attention to the
business of the Company and shall not engage in any other business unless with
the prior consent of the Board. PROVIDED that nothing in this clause shall
preclude the Director from holding or being otherwise interested in any shares
in any company provided that the business of each such company shall not be of a
similar nature to or competitive with the Business.
11. Intellectual Property
11.1 The parties foresee that the Director may make discover or create
Intellectual Property in the course of his duties under this agreement and
agree that in this respect the Director has a special obligation to
further the interests of the Company.
11.2 Subject to the provisions of the Patents Xxx 0000 and the Copyright,
Designs and Patents Xxx 0000 if at any time during his employment under
this agreement the Director makes or discovers or participates in the
making or discovery of any Intellectual Property relating to or capable of
being used in the business for the time being carried on by the Company or
any of its Subsidiaries full details of the Intellectual Property shall
immediately be communicated by him to the Company and shall be the
absolute property of the Company. At the request and expense of the
Company the Director shall give and supply all such information data
drawings and assistance as may be requisite to enable the Company to
exploit the Intellectual Property to the best advantage and shall execute
all documents and do all things which may be necessary or desirable for
obtaining patent or other protection for the Intellectual Property in such
parts of the world as may be specified by the Company and for vesting the
same in the Company or as it may direct.
11.3 The Director irrevocably appoints the Company to be his attorney in his
name and on his behalf to sign execute or do any such instrument or thing
and generally to use his name for the purpose of giving to the Company (or
its nominee) the full benefit of the provisions of this clause and in
favour of any third party a certificate in writing signed by any director
or the secretary of the Company that any instrument or act falls within
the authority conferred by this clause shall be conclusive evidence that
such is the case.
11.4 If the Intellectual Property is not the property of the Company the
Company shall subject to the provisions of the Patents Xxx 0000 have the
right to acquire for itself or its nominee the
Hugo International Telecom, Inc.
Service Agreement
01/05/02
Director's rights in the Intellectual Property within 3 months after
disclosure pursuant to clause 11.2 above on fair and reasonable terms to
be agreed or settled by a single arbitrator.
11.5 Rights and obligations under this clause shall continue in force after
termination of this agreement in respect of Intellectual Property made
during the Director's employment under this agreement and shall be binding
upon his representatives.
12. Confidentiality
12.1 The Director is aware that in the course of employment under this
agreement he will have access to and be entrusted with Confidential
Information all of which information is or may be confidential
12.2 The Director shall not save as authorised by the Board (and save as he may
be required by law) during or at any time after the period of his
employment under this agreement divulge to any person whatever or
otherwise make use of (and shall use his best endeavours to prevent the
publication or disclosure of) any Confidential Information.
12.3 All notes memoranda documents or other thing (whether or not the same
shall be in an electronic format) concerning the business of the Company
and its Subsidiaries or any of its or their suppliers agents distributors
or customers which shall be acquired received or made by the Director
during the course of his employment shall be the property of the Company
and shall be surrendered by the Director to the Company at the termination
of his employment or at the request of the Board at any time during the
course of his employment.
12.4 The Director shall comply with the terms of any agreement or other
arrangement relating to confidentiality or secrecy, which the Company or
any Subsidiary shall reach or enter in to with any other third party.
13. Termination of Directorship
The employment of the Director under this agreement shall terminate
automatically in the event of his ceasing to be a director of the Company and in
that event the Director shall have a claim for removal as expressed in clause
2.3 for the following:
13.1 By reason of his not being re-elected as a director of the Company at the
annual general meeting of the Company held next after the commencement of
his employment; or
13.2 By reason of his not being re-elected as a director of the Company at any
annual general meeting of the Company at which he is to retire by
rotation; or
13.3 By virtue of a resolution passed by the members of the Company in
general meeting to remove him as a director
and at the time of such failure to re-elect or of such removal the Company shall
not be otherwise entitled to determine his employment under this agreement.
Hugo International Telecom, Inc.
Service Agreement
01/05/02
14. Summary Termination of Employment
14.1 The employment of the Director may be terminated summary provided clause
2.3 is invoked for any of :
14.1.1 if the Director is guilty of any gross default or misconduct in
connection with or affecting the business of the Company or any
Subsidiary to which he is required by this agreement to render
services; or
14.1.2 if the Director becomes bankrupt or makes any composition or
enters into any arrangement with his creditors; or
14.1.5 if the Director is convicted of any arrest able criminal offence
(other than an offence under road traffic legislation in the
United Kingdom or elsewhere for which a fine or non-custodial
penalty is imposed); or
14.1.6 if the Director is guilty of any fraud dishonesty or conduct
tending to bring himself the Company or any Associated Company
into disrepute; or
14.1.7 if the Director is disqualified from holding office in another
company in which he is concerned or interested because of wrongful
trading under the Insolvency Xxx 0000; or
14.1.8 if the Director is convicted of an offence under the Criminal
Justice Xxx 0000 Pt V or under any other present or future
statutory enactment or regulations relating to insider dealings;
or
14.1.9 if the Director shall be unable by reason of Incapacity to perform
his duties under this agreement for an aggregate period of or
exceeding 26 weeks in any 52 consecutive weeks notwithstanding the
existence of any private or permanent health insurance scheme
operated by the Company for the benefit of the Director.
14.2 If the Company believes that it may be entitled to terminate the
Director's employment whether pursuant to clause 14.1 or otherwise it
shall be entitled (but without prejudice to its right subsequently to
terminate the employment on the same or any other ground) to suspend the
Director on full pay or without pay for so long as it sees fit provided
that such period of suspension does not exceed one month.
15. Resignation from Directorship
The director may give notice as per clause 2.2. In this case the Director will
be entitled to a lump sum of US$6,000,000 (six million dollars) payable by the
company 15 working days from the day the director submitted his notice by
whatever means. In this case the company may determine
15.1 That the Director shall immediately resign from office as a director of
the Company and from such offices held by him in any Subsidiaries as may
be so requested providing the lump sum referred to in clause 15 is placed
into an acceptable escrow account and irrevocably payable to the director
as per clause 15, in the event of his failure to do so and provided the
Company
Hugo International Telecom, Inc.
Service Agreement
01/05/02
has complied with clause 15 it is hereby irrevocably authorised to appoint
some person in his name and on his behalf to sign and deliver such
resignation or resignations to the Company and to each of the Subsidiaries
of which the Director is at the material time a director or other officer
on the day of appointment.
15.2 The Director shall not without the consent of the Company at any time
thereafter represent himself still to be connected with the Company or any
of the Subsidiaries.
16. Reconstruction or Amalgamation
If the employment of the Director under this agreement is terminated by reason
of the liquidation of the Company for the purpose of reconstruction or
amalgamation and the Director is offered employment with any concern or
undertaking resulting from the reconstruction or amalgamation on terms and
conditions not less favourable than the terms of this agreement then the
Director shall have no claim against the Company in respect of the termination
of his employment under this agreement.
17. Non-solicitation
The Director covenants with the Company that he will not for the period of 1
year immediately following the termination of his employment under this
agreement in connection with the carrying on of any business in competition with
the Business on his own behalf or on behalf of any person firm or company
directly or indirectly:
17.1 seek to procure orders from or do business with any person firm or company
who has at any time during the year immediately preceding such termination
and to the knowledge of the Director been a customer or client of the
Company or any Subsidiary; or
17.2 endeavour to entice away from the Company any employee who has at any time
during the 1 year immediately preceding such termination been employed or
engaged by the Company or any Subsidiary; or
PROVIDED that nothing in this clause shall prohibit the seeking or procuring of
orders or the doing of business not relating or similar to the business or
businesses described above.
18. Non-competition
The Director covenants with the Company that he will not within the Territory
and for the period of 1 year immediately following the termination of his
employment under this agreement either alone or jointly with or as manager agent
consultant or employee of any person firm or company directly or indirectly
carry on or be engaged in any activity or business which shall be in competition
with the Business.
Hugo International Telecom, Inc.
Service Agreement
01/05/02
19. Notices
Notices may be given by either party by letter addressed to the other party at
(in the case of the Company) its registered office for the time being and (in
the case of the Director) his last known address and any notice given by letter
shall be deemed to have been given at any time at which the letter would be
delivered in the ordinary course of post or if delivered by hand upon delivery
and in proving service by post it shall be sufficient to prove that the notice
was properly addressed and posted.
20. Particulars of employment
The schedule to this agreement sets out such of the particulars of the
Director's employment with the Company in accordance with the requirements of
the Employment Rights Xxx 0000.
21. Miscellaneous
21.1 This agreement is governed by and shall be construed in accordance with
the laws of England
21.2 The parties to this agreement submit to the non-exclusive jurisdiction of
the English courts
21.3 This agreement contains the entire understanding between the parties and
supersedes all previous agreements and arrangements (if any) relating to
the employment of the Director by the Company (which shall be deemed to
have been terminated by mutual consent)
21.4 On termination of this agreement the Company may deduct from any sums then
owing from it to the Director by way of salary or otherwise any sums owing
from him to it.
AS WITNESS signed on behalf of the Company and signed by the Director the day
and year first above written
Hugo International Telecom, Inc.
Service Agreement
01/05/02
SCHEDULE
1. Commencement of continuous employment The Director's period of continuous,
employment began on 22 October 1992
2. Collective agreements There are no collective agreements, which directly
affect the terms and conditions of the Director's employment
3. Hours of work
The Director shall work such hours as are reasonably necessary for the full and
proper performance of his duties under this agreement. There are no normal hours
of work.
4. Required information
The following information is supplied pursuant to the Employment Right Xxx 0000
and reflects the Company's current practice:
4.1 Disciplinary rules and procedure: as a small company the Company has no
formal disciplinary rules or procedure. The Company in any event will deal
with any disciplinary or grievance matter fairly. As part of your duties
you will oversee the creation of disciplinary rules and a grievance
procedure for the Company.
4.2 Grievance procedure: see under 4.1 above
4.3 Appeals procedure: see under 4.1 above
4.4 A contracting-out certificate is not in force in respect of this
employment
SIGNED by........................ Name:...................... Position: Director
For and on behalf Hugo International, Inc. Date:
SIGNED by........................ Name:...................... Position: Director
For and on behalf Hugo International, Inc. Date:
SIGNED by........................ Name:....................... Date:
Hugo International Telecom, Inc.
Service Agreement
01/05/02
