Employment and Consulting Agreement - On Command Video Corp. and Robert Snyder
EMPLOYMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is made on November 20, 1991, between ON COMMAND VIDEO
CORPORATION, a California corporation ("Company"), and Robert Snyder ("Mr.
Snyder").
RECITALS
A. The Company is in the business of designing, manufacturing, installing,
and operating hotel pay-per-view video selection and distribution systems
allowing hotel guests to select from a large number of programs for viewing at
any time they choose.
B. Mr. Snyder has been employed by the Company on an "at-will" basis for a
number of years in a number of capacities, most recently as President and Chief
Operating Officer.
C. Mr. Snyder desires to obtain increased compensation and the other
covenants of OCV in this written Employment and Consulting Agreement, and to
assure his continued engagement by the Company, first, as an employee of the
Company, and second, as a provider of exclusive consulting services subsequent
to his employment, in order to induce Comsat Video Enterprises, Inc., a
Delaware corporation ("CVE"), to make a substantial equity investment in the
Company pursuant to a Stock Purchase Agreement dated the date of this Agreement.
D. OCV desires to secure the services and the other covenants of Mr.
Snyder in this written Employment and Consulting Agreement, and to induce CVE's
investment in OCV.
NOW, THEREFORE, in consideration of the above premises, and the terms,
covenants, and conditions set forth in this Agreement, the parties agree as
follows:
1. Engagement as Employee and Consultant
1.1 The Company hereby employs Mr. Snyder and Mr. Snyder hereby accepts
employment, upon the terms, covenants, and conditions contained in this
Agreement.
1.2 The Company hereby engages the exclusive consulting services of Mr.
Snyder, and Mr. Snyder hereby accepts an exclusive engagement as a consultant
to the Company, upon the terms, covenants, and conditions contained in this
Agreement.
2. Term
2.1 The term of Mr. Snyder's employment under this Agreement shall extend
for five years from the date of this Agreement, unless Mr. Snyder is terminated
as set forth in Paragraphs 10 or 11 (the "employment period"). On expiration of
this five-year term, any continued employment shall be at will,
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terminable by either party at any time, with or without cause, on notice to the
other.
2.2 Mr. Snyder shall provide the consulting services contemplated by this
Agreement from the date of termination of his employment for any reason
whatsoever other than pursuant to Paragraph 10, until the expiration of seven
years after the date of this Agreement (the "exclusive consulting period"). The
parties agree that their undertakings to enter the exclusive consulting
agreement are independent of the employment agreement except as to duration and
shall be performed regardless of whether the termination of the employment is
made with or without "good cause" as set forth in Paragraph 11.
3. Duties.
3.1 Mr. Snyder is hereby employed initially as President and Chief Operating
Officer. During the employment period, Mr. Snyder's duties and responsibilities
shall remain comparable to those performed by Mr. Snyder prior to this
Agreement and shall include those as may be directed by the Board of Directors
of the Company from time to time. Mr. Snyder will devote the time, energy and
skill as a full-time employee as is necessary to perform the services required
hereunder and to promote the Company's interests.
3.2 During the exclusive consulting period, Mr. Snyder shall serve as a
consultant to the Company on an exclusive basis. During the exclusive
consulting period, Mr. Snyder shall make himself available to the Company on
reasonable notice as needed for up to one hundred hours per year for
consultation on matters within his expertise. During the exclusive consulting
period, Mr. Snyder shall have the status of an independent contractor.
4. Compensation
4.1 During the employment period, the Company shall pay to Mr. Snyder in
installments to be paid monthly, a basic salary at the rate of One Hundred
Thirty Thousand Dollars ($130,000) per year, subject to review by the Company's
Board of Directors for possible increases on January 1 of each year starting
with 1993. During the employment period, Mr. Snyder also shall be eligible to
receive incentive bonus compensation based on Mr. Snyder's and the Company's
performance in accordance with an incentive bonus program to be established by
mutual agreement of Mr. Snyder and the Board of Directors.
4.2 During the exclusive consulting period, the Company shall pay to Mr.
Snyder in installments to be paid monthly, a fixed fee of Twenty Thousand
Dollars ($20,000) per year.
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5. Expenses
5.1 During the employment period, the Company shall reimburse Mr. Snyder
for all authorized traveling and entertainment expenses and other disbursements
reasonably incurred by Mr. Snyder for or on behalf of the Company in the
performance of his employment which are properly substantiated by Mr. Snyder
and are in accordance with the expense policies adopted by the Board of
Directors.
5.2 During the exclusive consulting period, the Company shall reimburse Mr.
Snyder for expenses incurred on behalf of the Company to the extent authorized
in advance in writing by the Company and properly substantiated by him.
6. Vacations
6.1 During the employment period, Mr. Snyder shall be entitled to have
reasonable non-cumulative vacations in accordance with Company policies during
each year which shall be at such times as shall be mutually agreed upon between
Mr. Snyder and the Board of Directors of the Company.
6.2 Mr. Snyder shall not be entitled to vacation benefits during the
exclusive consulting period.
7. Other Benefits
7.1 During the employment period, Mr. Snyder shall be eligible to
participate in such "benefit plans" as may be in force from time to time
throughout the Company, subject to the eligibility requirements applicable to
said plans, including but not limited to savings and deferral plans, profit
sharing plans, pension plans, group health and accident insurance and group
life insurance, if any, as determined by the Company's Board of Directors.
Nothing contained herein shall be construed as requiring the Company to provide
such other benefit plans or any of them, nor does the Company represent that
such shall be provided. If any such benefit plans are provided by the Company,
the Company reserves the right to unilaterally cancel all or any one or more of
them as provided in any document or agreement establishing such plans, and such
cancellation shall in no way be construed as breach of this Agreement by the
Company nor constitute an excuse for the failure of Mr. Snyder to continue to
comply with the requirements hereof.
7.2 Mr. Snyder shall not be entitled to any such benefits during the
exclusive consulting period.
8. Proprietary Information and Inventions; Confidentiality;
Non-Solicitation; Non-Competition
8.1 General. The parties recognize and acknowledge the industry in which
the Company is engaged is highly competitive
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and fast-changing, and that the success and continued viability of the Company
depends primarily on its ability continually to improve and develop its
services and products so that it can offer services and products that are
technologically equal to or superior to, and equally or better suited to the
needs of particular markets, than those offered by the Company's competitors,
many of whom have greater financial resources and larger sales organizations
than it. To gain and maintain this competitive position, the Company intends
that Mr. Snyder will obtain knowledge of trade secrets, developments,
discoveries, inventions, ideas and theories acquired at the expense of the
Company including through Mr. Snyder's own efforts. Mr. Snyder has been a key
person to the Company and has an intimate knowledge and thorough understanding
of this information of the Company, and the parties further recognize and agree
that the Company has a legitimate interest in protecting this information for a
limited period of time. The parties further recognize and agree that the only
practicable way to protect this information is to restrict the activities of
Mr. Snyder during the exclusive consulting period as well as during the
employment period. The parties have, therefore, agreed upon the following
covenants:
8.2 Proprietary Information and Inventions Agreement Remains in Effect. Mr.
Snyder hereby reconfirms, and shall remain bound by, his obligations under the
Proprietary Information and Inventions Agreement between the Company and Mr.
Snyder dated December 31, 1987 a copy of which is attached as Exhibit A to this
Agreement.
8.3 Exclusivity Covenant. Recognizing that the territory in which the
Company conducts business through marketing and provision of its services and
products (including businesses conducted by licensees pursuant to licenses
granted by the Company such as the Exclusive License Agreement with CVE dated
the date of this Agreement) is nationwide and worldwide in scope, and that
competitors of the Company are located in various parts of the United States of
America and in other countries, and compete with the Company in nationwide and
worldwide markets, and that within this territory, the Company (including its
licensees such as CVE) has achieved favorable identification through promotion
and marketing efforts, it is mutually acknowledged that any restriction less
than nationwide and worldwide in scope would be of little, if any, value to the
Company. Mr. Snyder, therefore, agrees that throughout the exclusive consulting
period, as well as the employment period, Mr. Snyder will not, except as
otherwise provided herein, engage or participate, directly or indirectly,
(whether as principal, agent, employee, employer, consultant, stockholder,
partner, investor, lender, or in any other individual or representative
capacity whatever) in the conduct or management of, or as an equity or debt
investor in, any business competitive with that of the Company located anywhere
within the United States or in any foreign country where the Company then
conducts business as described above. Mr. Snyder expressly agrees that these
covenants are reasonable as to
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time, geographical area and otherwise and that they are no greater than is
required for the protection of the Company. The Company will respond to
written inquiry from Mr. Snyder as to whether or not a particular market or
area is considered by the Company to be included within the territory
restricted by this covenant.
8.4 "Competitive" Business Defined. For the purposes of this Agreement, a
business shall be considered to be competitive with the business conducted by
the Company if such business is engaged in designing, manufacturing, installing,
maintaining, or operating services or products similar to: (a) any service or
product currently provided by the Company (alone or through its licensees) as of
the date of execution of this Agreement by all parties; (b) any service or
product which evolves from or results from enhancements in the ordinary course
during the exclusive consulting period, as well as the employment period, to
the services or products currently provided by the Company (alone or through
its licensees) as of the date of execution of this Agreement by all parties; or
(3) any future service or product of the Company (or its licensees) as to which
Mr. Snyder materially and substantially participates in the design,
manufacture, installation, maintenance, or operation; provided, however, that
in no event shall the services, products, or activities described Schedule 8.4
attached hereto and incorporated herein by reference as permitted activities,
if any, be considered to be competitive under this Agreement.
8.5 Non-Solicitation Covenant. During the exclusive consulting period, as
well as the employment period, Mr. Snyder will not solicit any officer,
director, executive or employee of the Company (or of its licensees) to leave
his or her employment nor will he call upon, solicit, divert or attempt to
solicit or divert from the Company any of their customers or suppliers whose
names he was aware of during the term of his employment or consulting with the
Company.
8.6 Permitted Activities. Nothing in this Agreement shall be deemed to
prohibit Mr. Snyder from calling upon or soliciting a customer or supplier of
the Company (or its licensees) during the exclusive consulting period if such
action relates solely to a business which is not competitive with the business
conducted by the Company as described in subparagraph 8.3. Furthermore,
nothing in this Agreement shall be deemed to prohibit Mr. Snyder during the
employment period or during the exclusive consulting period from owning equity
or debt investments in any corporation, partnership, or other business which is
competitive with the Company, provided such investment is described in the
attached Schedule 8.6 prior to execution by the parties, or (for investments
made after the execution of this Agreement) (a) which are passive investments
and constitute one percent (1%) or less of the outstanding equity securities of
such an entity whose equity securities are traded with the general public on a
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national securities exchange or other public market, or (b) which investments
were previously approved in writing by the Company.
9. Restriction on Transfer or Encumbrance of Stock
Mr. Snyder agrees during the term of his employment and consulting with
the Company, not to sell, transfer, encumber, or otherwise relinquish or
diminish his ownership interest in the shares of common stock of the Company
held by him at the date of this Agreement, except for (a) sales of up to twenty
percent (20%) of those shares held by Mr. Snyder at the date of this Agreement
(assuming for the purposes of this Paragraph 9 only that all options to
purchase common stock of the Company outstanding at the date of this Agreement
have been exercised) in any single calendar year for purposes of covering
extraordinary expenses of Mr. Snyder or his family (including but not limited
to educational or medical expenses, or purchasing, remodeling, or furnishing
his residence(s), etc.) which cannot be met readily from other resources
available to him, and (b) sales of such additional shares as may be permitted
by consent of the Board of Directors. Any sales shall be made in compliance
with the Right of First Refusal Agreement among Mr. Snyder, CVE, and the
Company dated the date of this Agreement.
10. Death, Disability
This Agreement shall terminate in the event of the death of Mr. Snyder.
In the event that Mr. Snyder shall become so disabled as to be incapable of
performing his duties with the Company for six (6) consecutive months
(determined as provided below), or is adjudged incompetent by a court of
competent jurisdiction, the Company may terminate this Agreement effective on
thirty (30) days' notice. Mr. Snyder's compensation and any benefits under this
Agreement shall continue until such effective date of termination. The
determination of whether Mr. Snyder has become so disabled as to be incapable
of performing his duties shall be made by the Company's Board of Directors
after seeking the advice of three physicians. The Board's determination shall
be binding on all parties.
11. Termination of Employment for Cause; Constructive Termination
11.1 The five-year employment period provided in Paragraph 2 of this Agreement
may be terminated by the vote of a majority of the Board of Directors of the
Company on notice from the Company, with obligation only for compensation up to
the date of termination, for willful malfeasance, material nonfeasance, gross
neglect having a material, adverse effect on the Company, or material breach of
paragraph 8, any of which shall constitute "good cause" for termination.
11.2 Mr. Snyder will be deemed to have been terminated by the Company other
than for good cause if he resigns from the
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Company upon the occurrence of any of the following ("constructive
termination"): (1) a material reduction in salary or benefits, (2) a material
reduction in responsibilities, or (3) a requirement to relocate, except for
office relocations that would not increase Mr. Snyder's one-way commute
distance by more than 35 miles.
11.3 As Mr. Snyder's sole and exclusive remedy for termination of employment
other than for good cause, Mr. Snyder's consulting compensation for the years
of the consulting term extending through December 31, 1996 shall be increased
to the amount of his annual basic salary in effect at the time of the
termination of his employment.
12. Remedies; Severability; Nonwaiver
12.1 Both parties understand and agree that a breach by Mr. Snyder of any of
the terms, covenants, and conditions of this Agreement will cause irreparable
damage to the Company which may not be adequately remedied solely by an action
for damages, and Mr. Snyder expressly waives the defense that a remedy in
damages will be adequate. Therefore, the Company shall be entitled to seek and
obtain an injunction from any court of competent jurisdiction, restraining any
further violation of this Agreement, in addition to any other available
remedies.
12.2 If any agreement, covenant, or other provision of this Agreement is
invalid, illegal or incapable of being enforced by reason of any rule or public
policy, all other agreements, covenants, and provisions of this Agreement,
shall, nevertheless, remain in full force and effect. If any of the rights and
restrictions contained herein shall be deemed to be unenforceable by reason of
the extent, duration or scope thereof, or otherwise, then the parties
contemplate that the court making such determination shall reduce such extent,
duration, scope, or other provisions hereof, and enforce such rights or
restrictions in their reduced form for all purposes and manner contemplated
hereby.
12.3 A party's election of any one or more remedies shall be cumulative and
shall not constitute a waiver of the party's right to pursue other available
remedies. Each party shall be entitled to offset against payments which it may
owe to the other party amounts which may become due to that party from the
other (including damages arising from breaches of obligations under this
Agreement).
12.4 Any failure by the Company to enforce any provision of this Agreement
shall not be construed as a waiver of such provision, or prevent the
enforcement of each and every other provision of this Agreement.
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13. Notice
Any communication, notice, request, demand or other communication
permitted or required to be given hereunder shall be in writing and shall be
(i) delivered personally, or (ii) by registered or certified mail or courier,
postage prepaid, return receipt requested, and addressed to Mr. Snyder at the
last address reflected in the Company's records and to the Company at its
principal office, in each case with copies to CVE c/o Robert J. Perry,
Communications Satellite Corporation, 950 L'Enfant Plaza, S.W., Washington,
D.C. 20024 and Michael F. McAllister, Comsat Video Enterprises, Inc., 22300
Comsat Drive, Clarksburg, MD 20871.
If delivered personally or by courier, the day after a communication,
notice, request, instruction or document is dispatched shall be the date on
which such delivery is made, and, if delivered by mail, three days after the
date on which such notice, communication, request, instruction or document is
deposited in the mail shall be deemed the date of delivery. A party may change
addresses for communications by prior written notice to the other party.
14. Further Acts
14.1 The parties to this Agreement agree to execute any further instruments
and to perform any further acts reasonably necessary to carry out the
provisions of this Agreement.
14.2 Return of Confidential Information and Company Property
Mr. Snyder will return to the Company upon request or upon termination
of his employment and consulting with the Company all keys, credit cards,
equipment, computer diskettes and other data storage media, documents, and
other tangible items, produced or used by Mr. Snyder or coming into his
possession by or through his contact with the Company, and which are not his
personal property. Mr. Snyder also shall return to Company any tangible
items which contain proprietary or confidential information of the Company,
including, but not limited to, the following types of information and other
information of a similar nature: discoveries; ideas; concepts; software in
various stages of development; designs, drawings; specifications; techniques;
models; data; source code, object code or modules; documentation; diagrams;
flow charts; research; development; processes; procedures; pending patents and
inventions; trade secrets; "know-how"; marketing development plans, techniques,
and materials; books and records and financial data including balance sheets
and profit and loss statements; costs of materials; identities, preferences,
and other information related to suppliers and customers; price lists and
policies.
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15. Binding Effect
All rights and obligations under this Agreement shall inure to the
benefit of and be binding upon the heirs, personal representatives, permitted
assigns, and successors of the parties.
16. Entire Agreement
This document contains the entire agreement of the parties with respect
to its subject matter, and supersedes any and all agreements or understandings,
whether written or oral, that may have been made between the parties prior to
the date of execution. This Agreement may not be changed or terminated orally,
and no change, termination or waiver of any of its provisions shall be valid,
unless in writing and signed by the party against whom such claim, termination
or waiver is sought to be enforced.
17. California Law
This Agreement shall be governed and construed in accordance with the
laws of the State of California.
IN WITNESS WHEREOF, the parties have executed this agreement this 20th
day of November, 1991.
ROBERT SNYDER ON COMMAND VIDEO CORPORATION
/s/ Robert Snyder By: /s/
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[ON COMMAND VIDEO LETTERHEAD]
EMPLOYMENT and CONSULTING AGREEMENT
MODIFICATION
The date of the Employment and Consulting Agreements between On Command Video
Corporation and Robert B. Fenwick and Robert Snyder is hereby changed to
January 31, 1994 from November 20, 1991.
/s/ CHARLES LYONS
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Charles Lyons
for the Board of Directors
On Command Video Corporation
Dated: 3/3/94
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