EXHIBIT 10.11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT made as of the 31st day of August,
1994,
B E T W E E N:
NTN INTERACTIVE NETWORK INC., a
corporation amalgamate under the
laws of Canada,
(hereinafter referred to as the
"Employer",
OF THE FIRST PART;
- and -
PETER RONA, of the City of Montreal,
in the Province of Quebec,
(hereinafter referred to as the
"Executive"),
OF THE SECOND PART.
WHEREAS:
1. The Employer is engaged in the marketing and distribution of
interactive television products, programming and services.
2. The Executive has been for the past nine years and is presently
employed by the Employer; and
3. The Employer and the Executive have agreed to enter into a new
employment relationship for their mutual benefit;
NOW THEREFORE THIS AGREEMENT WITNESSETH that, in consideration of the
sum of Ten ($10.00) Dollars now paid by each of the parties hereto to each of
the other parties hereto and other good and valuable consideration (the receipt
and sufficiency whereof by each of the parties hereto is hereby mutually
acknowledged), the parties hereto hereby acknowledge and agree that the terms
and conditions of the aforesaid new employment relationship shall be as follows:
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1. DUTIES
The Employer hereby appoints the Executive to undertake the duties
and exercise the powers as President and Chief Executive Officer of the Employer
as may be requested by the board of directors of the Employer, and the Executive
hereby accepts such appointment upon and subject to the terms and conditions set
forth in this agreement.
2. TERM
Subject to the provisions of Article 8 herein, the appointment of
the Executive hereunder shall be for a three year period commencing on September
1st, 1994 and continuing until August 31st, 1997 (hereinafter referred to as the
"Term").
3. COMPENSATION
(1) The fixed remuneration of the Executive for his services
hereunder shall be at the rate of $150,000.00 per annum for
the first year of the Term. The fixed remuneration shall be
reviewed on each anniversary of employment during the Term in
order to determine the amount by which the fixed remuneration
shall be increased. The review will be undertaken by assessing
the Executive's achievement of the over-all objectives
established by the Employer and by having regard to the market
rates of remuneration paid in Canada for similar duties and
responsibilities. In the event the Employer and the Executive
are unable to agree upon the amount of the fixed remuneration
for the second year of the Term, the fixed remuneration during
paid year shall be the amount obtained by multiplying
$150,000.00 by a fraction, the numerator of which shall be the
Consumer Price Index published by Statistics Canada (or other
similarly recognized Government Index) for the month of July,
1995, and the denominator of which shall be the Consumer Price
Index for the month of September, 1994. In the event the
Employer and the Executive are unable to agree upon the amount
of the fixed remuneration for the third year of the Term, the
fixed remuneration during said year shall be the amount
obtained by multiplying $150,000.00 by a fraction, the
numerator of which shall be the Consumer Price Index published
by Statistics Canada (or other similarly recognized Government
Index) for the month of July, 1996, and the denominator of
which shall be the Consumer Price Index for the month of
September, 1994. The fixed remuneration
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shall be payable in equal installments, no less frequently
than monthly.
(2) In addition to the fixed remuneration, the Employer shall pay
to the Executive a bonus (the "Bonus") at the end of each year
of the Term in the event that during the said year the actual
net income before taxes of the Employer as determined by the
auditors or accountants of the Employer using generally
accepted accounting principles applied on a basis consistent
with those of previous years ("Actual Net Income Before
Taxes'), exceeded the projected net income before taxes of the
Employer as determined by the board of directors of the
employer at the commencement of the said year ("Projected net
Income Before Taxes"). The percentage amount of the excess of
Actual Net Income Before Taxes over Projected net Income
Before Taxes shall hereinafter be referred to as the "Excess".
The amount of The Bonus for each year of the Term shall be
calculated in accordance with the following formula:
(a) In the event the Excess is greater than zero but less than
10%, the amount of the Bonus shall be equal to 10% of the
fixed remuneration payable during the year in question;
(b) In the event the Excess is equal to or greater than 10%
but less than 20%, the amount of the Bonus shall be equal
to 12.5% of the fixed remuneration payable during the year
question;
(c) In the event the Excess is equal to or greater than 20%
but less than 30%, the amount of the Bonus shall be equal
to 17.5% of the fixed remuneration payable during the year
in question;
(d) In the event the Excess is equal to or greater than 30%
but less than 40%, the amount of the Bonus shall be equal
to 25.5% of the fixed remuneration payable during the year
in question;
(e) In the event the Excess is equal to or greater than 40%
but less than 50%, the amount of the Bonus shall be equal
to 35.5% of the fixed remuneration payable during the year
in question; and
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(f) In the event the Excess is equal to or greater than 50%,
the amount of the Bonus shall be equal to 50% of the fixed
remuneration payable during the year in question.
(3) In further addition to the fixed remuneration, the Employer
shall give to the Executive, at no cost to the Executive, such
stock options during each year of the Term, if any, as
determined by the board of directors of the Employer. In the
event the board of directors of the Employer determines to
provide the Executive with such stock options, the said stock
options shall be in the form of options to purchase common
shares in the capital stock of NTN Canada, Inc. ("NTN
Canada"), the parent company of the Employer.
4. BENEFITS
(1) Automobile. The Executive shall be provided with an automobile
mutually satisfactory to the Employer and the Executive. The
Employer shall be responsible for payment of all expenses
generated by the Executive's use of the automobile including
but not limited to gas, insurance, maintenance and repairs.
(2) Expenses. It is understood and agreed that the Executive will
incur expenses in connection with his duties under this
agreement. In respect thereof, the Employer shall provide the
Executive with a company credit card. The Employer will also
reimburse the Executive for any expenses paid for by the
Executive provided that the Executive provides to the Employer
an itemized written account and receipts acceptable to the
Employer within thirty days after they have been incurred.
(3) Benefit Plans. The Executive shall be entitled to participate
in all existing and future benefit plans which the Employer
provides, including medical/hospital and extended health care
benefits and life insurance. In addition, the Executive
consents to the Employer maintaining the existing $500,000.00
key-man insurance policy on the life of the Executive.
(4) Club fees. Recognizing the extra requirement for customer
entertainment by the Executive, the Employer will provide for
initiation and annual dues payments at a private golf and
country club mutually acceptable to the Employer and the
Executive.
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5. AUTHORITY
(1) The Executive shall have, subject always to the general or
specific instructions and directions of the board of directors
of the Employer, full power and authority to manage and direct
the business and affairs of the Employer (except only the
matters and duties as by law must be transacted or performed
by the board of directors of the Employer or by the
shareholders of the Employer in general meetings), including
power and authority to enter into contracts, engagements or
commitments of every nature or kind in the name of and on
behalf of the Employer and to engage and employ and to dismiss
all managers and other employees and agents of the Employer
other than officers of the Employer who have entered into
written contracts of employment with the Employer.
(2) The Executive shall conform to all lawful instructions and
directors given to him by the board of directors of the
Employer, and obey and carry out the by-laws of the Employer.
6. SERVICE
(1) The Executive, throughout the Term, shall devote his full time
and attention to the business and affairs of the Employer and
its subsidiaries and shall not, without the consent in writing
of the board of directors of the Employer undertake any other
business or occupation or become an officer, employee or agent
of any other company, firm or individual. The foregoing shall
not prevent the Executive from being a director of any other
company or firm provided such directorship does not interfere
with the Executive's duties to the Employer under this
agreement, nor shall the foregoing prevent the Executive from
passively investing in any other company or firm.
(2) The Executive shall well and faithfully serve the Employer and
its subsidiaries and use his best efforts to promote the
interests thereof and shall not disclose the private affairs
or trade secrets of the Employer and its subsidiaries to any
person other than the directors of the Employer or for any
purposes other than those of the Employer any information he
may acquire in relation to the Employer's business.
7. VACATION
The Executive shall be entitled during each year of the Term to four weeks'
vacation. The vacation shall be taken at such time or times as shall be mutually
acceptable to the Employer and the
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Executive. The Executive shall be allowed to carry forward up to two weeks of
unused vacation during each year of the Term. If at the end of the Term the
Executive shall have unused vacation time, the Employer shall pay to the
Executive as compensation therefor an amount based on the fixed remuneration
rate in effect during the third year of the Term. In addition to the foregoing,
the Employer and the Executive acknowledge that the Executive has two weeks of
unused vacation for the period ending August 31st, 1994 and agree that the
Executive shall be entitled to utilize the said two weeks of unused vacation at
any time prior to October 31st, 1994.
8. DISABILITY
If the Executive shall at any time by reason of illness or mental or
physical disability be incapacitated from performing his duties and at the
request of the Employer, furnish to the Employer satisfactory evidence of the
incapacity and the cause of it, he shall receive his full remuneration for the
first six months or any shorter period and one-half of his full remuneration for
the subsequent six consecutive months during which the incapacity shall
continue. If the Executive shall continue to be incapacitated for a longer
period than twelve consecutive months or if he shall be incapacitated at
different times for more than twelve months during the Term, then in either case
his employment and appointment shall, at the option of the Employer, immediately
terminate.
9. EXTENSION OF TERM
The Employer and the Executive shall, prior to the end of the second year
of the Term, decide whether they wish to extend the Term for a further three
years and the terms and conditions of the said extension. In the event the Term
is not extended, for whatever reason, the Employer shall pay to the Executive,
at the expiration of the Term, a lump sum payment equal to the fixed
remuneration and Bonus payable to the Executive in respect of the third year of
the Term.
10. STOCK OPTIONS - PAST SERVICES
In consideration of past services rendered by the Executive to the
Employer, the Employer shall give to the Executive, at no cost to the Executive,
stock options to purchase 50,000 common shares in the capital stock of NTN
Canada pursuant to the long term incentive plan of NTN Canada. The said stock
options shall be given to the Executive the day next following the closing of
the proposed transaction whereby Labatt Communications Inc. shall acquire 35% of
the outstanding common shares of NTN Canada, which transaction is scheduled to
close on or before September 30th, 1994. In the event the said transaction with
Labatt Communications Inc. does not close, the aforesaid stock options shall be
given to the Executive the day next following the day on which negotiations with
Labatt Communications Inc. in connection with the said transaction are
terminated.
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11. ASSIGNMENT OF RIGHTS
The rights which accrue to the Employer under this agreement shall pass to
its successors or assigns. The rights of the Executive under this agreement are
not assignable or transferable in any manner.
12. NOTICES
(1) Any notice required or permitted to be given to the Executive shall be
sufficiently given if delivered to the Executive personally or if
mailed by registered mail to the Executive's address last known to the
Employer.
(2) Any notice required or permitted to be given to the Employer shall be
sufficiently given if mailed by registered mail to the Employer's head
office at its address last known to the Executive.
13. SEVERABILITY
In the event that any provision or part of this agreement shall be deemed
void or invalid by a court of competent jurisdiction, the remaining provisions
or parts shall be and remain in full force and effect.
14. ENTIRE AGREEMENT
This agreement constitutes the entire agreement between the parties with
respect to the employment and appointment of the Executive and any and all
previous agreements, written or oral, express or implied, between the parties or
on their behalf, relating to the employment and appointment of the Executive by
the Employer, are terminated and canceled and each of the parties releases and
forever discharges the other of and from all manner of actions, causes of
action, claims and demands whatsoever, under or in respect of any agreement.
15. MODIFICATION OF AGREEMENT
Any modification to this agreement must be in writing and signed by the
parties hereto or it shall have no effect and shall be void.
16. WAIVER
No term or condition of this agreement shall be deemed waived unless such
waiver is expressed in writing and signed by the parties hereto. Failure or
delay on the part of any party to enforce any right hereunder shall not operate
as a waiver hereof.
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17. HEADINGS
The headings used in this agreement are for convenience only and are not to
be construed in any way as additions to or limitations of the covenants and
agreements contained in this agreement.
18. GOVERNING LAW
This agreement shall be construed and enforced in accordance with the laws
of the Province of Ontario. Each of the parties hereto hereby irrevocably
attorns to the jurisdiction of the courts of the Province of Ontario.
IN WITNESS WHEREOF this agreement has been executed by the parties to it,
the day, month and year first written above.
NTN INTERACTIVE NETWORK INC.
Per:
/s/ Peter Rona
---------------------------
President - Peter Rona
Per:
/s/ William Gilsig
---------------------------
Vice President of Finance
and Administration
William Gilsig
SIGNED, SEALED AND DELIVERED )
in the presence of )
)
/s/ William Gilsig ) /s/ Peter Rona 1/s
- ---------------------------- -----------------------------
Witness PETER RONA
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