Exhibit 10.12
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 1/st/ day of May, 2000.
BETWEEN :
Cable Tec
------------------------------------
a corporation incorporated under the laws of Ontario
(hereinafter referred to as the "Corporation ")
OF THE FIRST PART,
-and-
▇▇▇▇▇▇▇ Tanunagara
of the Town of Whitchurch-Stoufville in
the Regional Municipality of York
(hereinafter referred to as the "Employee"),
OF THE SECOND PART.
WHEREAS the Corporation wishes to retain the services of the Employee to
provide the services hereinafter described during the term hereinafter set out;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the parties agree as follows:
1. TERM
The Corporation shall employ the Employee for a period of five years, from
May 1, 2000 to and including May 1, 2005, unless such employment shall be
terminated earlier as hereinafter provided. Upon the expiry of the term of this
agreement on May 1, 2005, the term of this agreement may be extended on the same
terms and conditions as contained herein upon mutual agreement between the
Corporation and the Employee. For the purposes of clarity, the base pay for any
renewal period shall be the Employee's base pay for the year immediately
preceding the renewal period, and the provisions for increase of the Employee's
pay as provided in paragraph 4 shall apply to the renewal period, unless
otherwise agreed in writing.
2. DUTIES
The Employee shall serve the Corporation and any associates or 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 associates or affiliates of the Corporation (as those terms
are defined in the Canada Business Corporations
2
Act) as may be determined from time to time by the board of directors of the
Corporation consistent with the office of the Employee.
Without limitation of the foregoing, the Employee shall occupy the office
of Operations Manager of the Corporation. The Employee shall:
(a) devote his full time (which shall not be less than 40 hours per week)
and attention and his best efforts during normal business hours to the
business and affairs of the Corporation;
(b) perform those duties that may reasonably be assigned to the Employee
diligently and faithfully to the best of the Employee's abilities and
in the best interests of the Corporation; and
(c) use his best efforts to promote the interests and goodwill of the
Corporation.
The nature of the Employee's duties hereunder may also require reasonable
amounts of domestic and international travel. The Employee agrees that he will
not be required to travel where a particular request to travel is unreasonable
given the nature of the Employee's duties hereunder. It is understood, however,
that the Executive will not be required to relocate without his consent.
3. REPORTING PROCEDURES
The Employee shall report to the Board of Directors. The Employee shall
report fully on the management, operations and business affairs of the
Corporation and advise to the best of his ability and in accordance with
reasonable business standards on business matters that may arise from time to
time during the term of this agreement.
4. REMUNERATION
The annual base salary payable to the Employee for his services hereunder
for the first year of the term of this agreement shall be $100,000, exclusive of
bonuses, benefits and other compensation. The annual base salary payable to the
Employee for his services hereunder for each successive year of the term of this
agreement, exclusive of bonuses, benefits and other compensation, shall increase
based on the performance of the Employee and the Corporation in the preceding
fiscal year of the Corporation. The amount of any such increase shall be
determined by the Board of Directors of the Corporation in their sole and
absolute discretion. The annual base salary payable to the Employee pursuant to
the provisions of this section 4 shall be payable in equal semi-monthly
installments in arrears on the 1st and 15th day of each month or in such other
manner as may be mutually agreed upon.
During the term of this agreement, the Employee shall be entitled to
participate in the benefits program offered by the Corporation to members of its
senior management.
5. PERFORMANCE BONUS
In addition to the Employee's annual base salary, the Employee shall be
entitled to annually to a bonus calculated as follows:
3
(a) The Employee shall be paid a bonus by the Corporation on the following
basis for revenue generated from currently existing customers of the
Corporation and new customers that are secured for the Corporation through
the efforts of the Employee (collectively, the "Bonus Customers") :
(i) an amount equal to 7% of the first $1.5 million of annual gross
revenues generated by the Corporation from the Bonus Customers;
(ii) an amount equal to 6% of the annual gross revenues greater than $1.5
million and less than $3 million generated by the Corporation from
the Bonus Customers; and
(iii) an amount equal to 5% of the annual gross revenues in excess of $3
million generated by the Corporation from the Bonus Customers.
The Bonus Customers shall not include customers of the Corporation that are
not customers of the Corporation as of the date hereof and become customers
of the Corporation during the term of this agreement through the efforts of
someone other than the Employee.
The Corporation shall only be obligated to pay a bonus to the Employee
pursuant to this section 5(a) for revenues that are actually billed and
collected by the Corporation. Revenues shall be deemed to have been
generated for the purposes of this section 5(a) when the customer is
billed.
The Corporation shall have the right in its sole and absolute discretion to
accept or reject proposed business from any new customer.
The amounts payable to the Employee pursuant to this section 5(a) shall be
paid by the Corporation within 60 days of the end of each fiscal quarter
year of the Corporation. The amount payable for any particular quarter
will be reduced by an amount equal to the bonus paid for a previous quarter
on account of a billing that was subsequently written off as a bad debt of
the Corporation.
6. NO FURTHER SALARY OR BONUS ADJUSTMENTS
Other than as herein provided, there shall be no cost-of-living increase or
merit increase in the annual base salary or the Employee bonus unless agreed to
in writing by the Board of Directors of the Corporation.
7. VACATION
The Employee shall be entitled to six weeks' paid vacation per fiscal year
of the Corporation at a time approved in advance by the Board of Directors of
the Corporation, which approval shall not be unreasonably withheld but shall
take into account the staffing requirements of the Corporation and the need for
the timely performance of the Employee's responsibilities.
4
8. AUTOMOBILE
The Employee shall be supplied with a leased car selected by the
Corporation (which car shall be comparable to the car provided to the Employee
by the Corporation as of the date hereof) to be used by him for the
Corporation's business. The Corporation shall pay or reimburse the Employee for
all reasonable operating costs of this vehicle, including leasing costs,
insurance, maintenance, gas and oil, properly incurred or to be incurred in
connection with the Employee carrying our his duties hereunder. The Employee
shall supply the Corporation with the originals of all invoices or statements in
respect of which the Employee seeks reimbursement.
9. EXPENSES
The Employee shall be reimbursed for all reasonable travel and other out-
of-pocket expenses actually and properly incurred by the Employee from time to
time in connection with carrying out his duties hereunder. For all such expenses
the Employee shall furnish to the Corporation originals of all invoices or
statements in respect of which the Employee seeks reimbursement.
10. TERMINATION
(a) For Cause
The Corporation may terminate the employment of the Employee without notice
or any payment in lieu of notice for cause which, without limiting the
generality of the foregoing, shall include:
(i) if there is a repeated and demonstrated failure on the part of the
Employee to perform the material duties of the Employee's position in
a competent manner and where the Employee fails to substantially
remedy the failure within a reasonable period of time after receiving
written notice of such failure from the Corporation;
(ii) if the Employee is convicted of a criminal offence involving fraud or
dishonesty;
(iii) if the Employee or any member of his family makes any personal profit
arising out of or in connection with a transaction to which the
Corporation is a party or with which it is associated without making
disclosure to and obtaining the prior written consent of the
Corporation; or
(iv) if the Employee disobeys reasonable instructions given in the course
of employment by the Board of Directors of the Corporation that are
not inconsistent with the Employee's management position and not
remedied by the Employee within a reasonable period of time after
receiving written notice of such disobedience.
(b) For Disability/Death
This agreement may be immediately terminated by the Corporation by notice
to the Employee if the Employee becomes subject to a disability. As used
herein, "disability" shall mean that the Employee shall fail or be unable
to perform his duties hereunder as the result of any physical or mental
disability, with reasonable accommodation as required by law, for a period
of 60 days whether or not consecutive in any 180 day period.
5
This agreement shall terminate without notice upon the death of the
Employee.
11. SEVERANCE PAYMENTS
Upon termination of the Employee's employment: (i) for cause; (ii) by the
voluntary termination of employment of the Employee (resignation); (iii) as a
result of disability; (iv) as a result of death; or (v) by the non-renewal of
this Agreement, the Employee shall not be entitled to any severance payments
other than compensation earned by the Employee before the date of termination
calculated pro rata up to and including the date of termination and
reimbursement for business expenses as provided in paragraph 9 that were
incurred prior to the termination of the Employee's employment. The Corporation
shall not be obligated to pay any other amounts under this agreement after the
date of such termination, including any liabilities pursuant to the Employment
Standards Act (Ontario ).
12. CONFIDENTIALITY
The Employee acknowledges and agrees that:
(a) in the course of performing his duties and responsibilities as an
employee of the Corporation, he has had and will continue in the
future to have access to and has been and will be entrusted with
detailed confidential information and trade secrets (printed or
otherwise) concerning past, present, future and contemplated products,
services, operations and marketing techniques and procedures of the
Corporation and its subsidiaries, including, without limitation,
information relating to addresses, preferences, needs and requirements
of past, present and prospective clients, customers, suppliers and
employees of the Corporation and its subsidiaries (collectively,
"Trade Secrets"), the disclosure of any of which to competitors of the
Corporation or to the general public, or the use of same by the
Employee or any competitor of the Corporation or any of its
subsidiaries, would be highly detrimental to the interests of the
Corporation;
(b) in the course of performing his duties and responsibilities for the
Corporation, the Employee has been and will continue in the future to
be a representative of the Corporation to its customers, clients and
suppliers and as such has had and will continue in the future to have
significant responsibility for maintaining and enhancing the goodwill
of the Corporation with such customers, clients and suppliers and
would not have, except by virtue of his employment with the
Corporation, developed a close and direct re)ationship with the
customers, clients and suppliers of the Corporation; and
(c) the right to maintain the confidentiality of the Trade Secrets, the
right to preserve the goodwill of the Corporation and the right to the
benefit of any relationships that have developed between the Employee
and the customers, clients and suppliers of the Corporation by virtue
of the Employee's employment with the Corporation constitute
proprietary rights of the Corporation, which the Corporation is
entitled to protect.
In acknowledgement of the matters described above and in consideration of
the payments to
6
be received by the Employee pursuant to this agreement, the Employee hereby
agrees that he will not, during the period commencing on the date hereof and
ending ten years following the termination of the term of this agreement,
directly or indirectly disclose to any person or in any way make use of (other
that for the benefit of the Corporation), in any manner, any of the Trade
Secrets, provided that such Trade Secrets shall be deemed not to include
information that is or becomes generally available to the public other than as a
result of disclosure by the Employee.
13. NON-SOLICITATION
The Employee hereby agrees that he will not, during the period commencing
on the date hereof and ending two years following the termination of the term of
this agreement, be a party to or abet any solicitation of customers, clients or
suppliers of the Corporation or any of its associates or affiliates (as those
terms are defined in the Canada Business Corporations Act) to transfer business
from the Corporation or any of its associates or affiliates to any other person,
or seek in any way to persuade or entice any employee of the Corporation or any
of its associates or affiliates to leave that employment or to be a party to or
abet any such action.
14. NON-COMPETITION
The Employee covenants and agrees that he will not, either during the term
of this agreement and his employment, or at any time within a period of one year
following the date of termination of his employment for any reason whatsoever,
without the prior written consent of the Board of Directors of the Corporation,
whether individually or in partnership or jointly or in conjunction with any
person or persons, firms, partnership, corporation, or other legal entity,
whether as principal, agent, shareholder or in any other capacity whatsoever,
carry on, be engaged in, employed by, or have any interest in any business
similar to the business now or at any time during the employment of the Employee
hereunder was carried on by the Corporation or any of its associates or
affiliates (a "Competitive Business"). This will not prohibit, however, the
Employee from acquiring or holding not more than 5% of any class of equity
securities of any publicly traded corporation engaged in a Competitive Business.
15. DISCLOSURE
During the employment period the Employee shall promptly disclose to the
Board of Directors full information concerning any interest, direct or indirect,
of the Employee ( as owner , shareholder, partner, lender or other investor,
director, officer, employee, consultant or otherwise) or any member of his
family in any business that is reasonably known to the Employee to purchase or
otherwise obtain services or products from, or to sell or otherwise provide
services or products to the Corporation of to any of its suppliers or customers.
16. RETURN OF MATERIALS
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 associates or affiliates (as those
terms are defined in the Canada Business Corporations Act) that may come into
the possession or control of the Employee shall at all times remain the property
of the Corporation or such associates or affiliates, as the case may be. On
termination of the Employee's employment for any reason, the Employee agrees to
immediately deliver to the Corporation all such property of the
7
Corporation in the possession of the Employee or directly or indirectly under
the control of the Employee. The Employee 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
This agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario.
18. SEVERABILITY
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. LIFE INSURANCE
It is agreed that the Corporation or any of its associates or affiliates
(as those terms are defined in the Canada Business Corporations Act) shall have
the right to obtain life insurance on the Employee's life, at the Corporation's
sole expense and with the Corporation or such associate or affiliate as the sole
beneficiary thereof. The Employee shall: (a) cooperate fully in obtaining such
life insurance; (b ) sign any necessary consents, applications and other related
forms or documents and (c) take any reasonably required medical examinations.
20. ENFORCEABILITY
The Employee hereby confirms and agrees that the covenants and restrictions
pertaining to the Employee contained in this agreement, including, without
limitation, those contained in sections 12, 13, 14, 15 and 16 hereof, are
reasonable and valid and hereby further acknowledges and agrees that the
Corporation would suffer irreparable injury in the event of any breach by the
Employee of his obligations under any such covenant or restriction. Accordingly,
the Employee hereby acknowledges and agrees that damages would be an inadequate
remedy at law in connection with any such breach and that the Corporation shall
therefore be entitled in lieu of any action for damages, temporary and permanent
injunctive relief enjoining and restraining the Employee from any such breach.
21. MODIFICATION
This Agreement may not be orally canceled, changed, modified or amended,
and no cancellation, change, modification or amendment shall be effective or
binding, unless in writing and signed by the parties to this Agreement.
22. NO ASSIGNMENT
The Employee may not assign, pledge or encumber the Employee's interest in
this agreement nor assign any of the rights or duties of the Employee under this
agreement without the prior written
8
consent of the Corporation.
23. SUCCESSORS
This agreement shall be binding on and enure to be benefit of the
successors and assigns of the Corporation and the heirs, executors, personal
legal representatives and permitted assigns of the Employee.
24. NOTICES
Any notice or other communication required or permitted to be given
hereunder shall be in writing and either delivered by hand or mailed by prepaid
registered mail. At any time other than during a general discontinuance of
postal service due to strike, lock-out or otherwise, a notice so mailed shall be
deemed to have been received three (3) business days after the postmarked date
thereof or, if delivered by hand, shall be deemed to have been received at the
time it is delivered. If there is a general discontinuance of postal service
due to strike, lock-out or otherwise, a notice sent by prepaid registered mail
shall be deemed to have been received three (3) business days after the
resumption of postal service. Notices shall be addressed as follows:
a) If to the Corporation:
1348485 Ontario Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
b) If to the Employee:
▇▇▇▇▇▇▇ Tanunagara
c/o ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Tel:
Fax:
26. COUNTERPARTS
This Agreement may be executed simultaneously in several counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same original.
9
27. ENTIRE AGREEMENT
This Agreement represents the entire agreement between the Company and the
Employee with respect to the subject matter hereof and all prior agreements
relating to the Employee's employment or compensation, written or oral, are
nullified and superseded hereby.
28. LEGAL ADVICE
The Employee hereby represents and warrants to the Corporation and
acknowledges and agrees that he had the opportunity, at the Corporation's
expense 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 defence to the enforcement of his obligations
under this agreement.
IN WITNESS WHEREOF this agreement has been executed by the parties hereto as of
the date first above written.
SIGNED, SEALED & DELIVERED ) Cable Tec
in the presence of: ) -----------------------------
)
) /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
) -----------------------------
) Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
) Title:
)
)
) /s/ ▇▇▇▇▇▇▇ Tananugara
) -----------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ) ▇▇▇▇▇▇▇ Tananugara
-------------------------- )
Witness )