EMPLOYMENT AGREEMENT
---------------------
This AGREEMENT is made and entered into as of this 30th day of
September, 1998, between Genesis Media Group, Inc. (the "COMPANY") and Ramy
El-Batrawi (the "EXECUTIVE").
WHEREAS, the Company desires to employ the Executive and to enter into
an agreement embodying the terms of such employment (the "AGREEMENT") and the
Executive desires to accept such employment and to enter into the Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the Company and
the Executive (individually a "PARTY" and together the "PARTIES") agree as
follows:
1. DEFINITIONS.
(a) "AFFILIATE" shall mean any corporation, partnership or other
entity in which the Company owns, directly or indirectly, an equity interest of
50% or more or which owns, directly or indirectly, an equity interest of 50% in
the Company.
(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "CAUSE" shall mean (i) the commission of a serious crime by the
Executive, (ii) the Executive, in carrying out his duties under this Agreement,
is guilty of gross neglect or gross misconduct, (iii) the Executive engages in
chronic alcohol or drug abuse or (iv) conduct on the part of the Executive which
causes damage to the reputation of the Company.
(d) "CONFIDENTIAL INFORMATION" shall mean all nonpublic information
respecting the Company's business including, but not limited to, its products,
research and development, processes, customer lists, marketing plans and
strategies. Confidential information does not include information that is, or
becomes, available to the public unless such availability occurs through an
unauthorized act on the part of the Executive.
(e) "DISABILITY" shall mean the Executive's inability to render, for
180 days during any 365 day period, full and effective services hereunder by
reason of permanent physical or mental disability, whether resulting from
illness, accident or otherwise.
(f) "SALARY" shall mean the salary provided for in SECTION 3 of this
Agreement or any adjusted salary granted to the Executive by the Board.
(g) "SALARY CONTINUATION PERIOD" shall mean the period after the
termination of the Executive's employment pursuant to the terms of this
Agreement during which the Executive is entitled to continued payment of the
Salary.
(h) "TERM OF THIS AGREEMENT" shall mean that period of time specified
in SECTION 2(b).
- 1 -
(i) "TERM OF EMPLOYMENT" shall mean the period of the Executive's
employment by the Company.
2. TERM OF AGREEMENT, POSITION AND DUTIES.
(a) The Company hereby employs the Executive and the Executive hereby
accepts employment with the Company for the Term of this Agreement in the
position and with the duties and responsibilities set forth below and upon such
other terms and conditions as are hereinafter stated.
(b) The term of this Agreement shall commence as of September 30,
1998 and shall terminate upon the first to occur of (i) the termination of this
Agreement as provided herein or (ii) September 30, 2003. In the event that the
Executive's Term of Employment continues beyond the Term of this Agreement, such
continued employment shall be at will and no provision or condition of this
Agreement shall govern such extended period of employment except as specifically
noted herein.
(c) During the Term of this Agreement, the Executive shall be
employed as the Chief Executive Officer and a Director of the Company. During
the time as he serves in this position, the Executive shall serve under the
direction of and report directly to the Board. During the Term of Employment,
the Executive agrees to devote his full time and attention to carrying out his
duties and responsibilities hereunder and shall use his best efforts, skills and
abilities to further the interests of the Company. During the Term of
Employment, the Executive may not serve on the board of directors of any other
business entities without the express written permission of the Board and
subject to such limitations as may be imposed by the Board in granting such
permission.
3. SALARY.
During the Term of this Agreement, the Executive shall be paid a
salary by the Company at an annual rate of Two Hundred Fifty Thousand Dollars
($250,000) payable in accordance with the Company's standard payroll practices.
Such salary shall be reviewed at least annually for adjustment. Any adjustment
shall be determined by the Board, in its sole discretion.
4. ANNUAL BONUS.
During the Term of Employment, the Board may grant the Executive an
annual bonus. The amount of such annual bonus, if any, shall be determined by
the Board, in its sole discretion.
5. EMPLOYEE BENEFIT PROGRAMS.
During the Term of this Agreement, the Executive shall be eligible to
participate in employee benefit plans and programs available, from time to time,
to all senior executives of the Company. Specifically, the Executive shall be
entitled to the current annual vacation entitlement as set by the Board, but not
less than 20 business days of vacation for each employment year with the
- 2 -
Company. The Executive shall be entitled to a pro rata share of an annual
accrual for fractional years of employment with the Company.
6. PERQUISITES.
During the Term of this Agreement, the Executive shall be entitled to
such perquisites as are provided, from time to time, to all senior executives of
the Company.
7. TERMINATION OF EMPLOYMENT.
(a) TERMINATION DUE TO DEATH. In the event of the death of the
Executive during the Term of this Agreement, this Agreement shall immediately
terminate and the estate or other legal representative of the Executive shall be
entitled to:
(i) Salary at the rate in effect at the time of the
Executive's death, through the end of the month in which his death occurs;
and
(ii) any other rights and benefits available under employee
benefit programs of the Company in which the Executive was a participant at
the time of his death, determined in accordance with the applicable terms
and provisions of such programs.
(b) TERMINATION DUE TO DISABILITY. The Company may terminate the
Executive's employment due to the Disability of the Executive. In the event of
such a termination of the Executive's employment due to Disability during the
Term of this Agreement, this Agreement shall immediately terminate and the
Executive shall be entitled to:
(i) Salary at the rate in effect at the time the Executive's
Disability is deemed to have commenced, through the date on which he is
terminated due to Disability; and
(ii) any other rights and benefits available under employee
benefit programs of the Company in which the Executive was a participant at
the time of his Termination Due to Disability, determined in accordance
with the applicable terms and provisions of such programs.
(c) TERMINATION FOR CAUSE. The Executive's employment may be
terminated immediately by the Company for Cause. In the event the Executive's
employment is terminated for Cause during the Term of this Agreement, the
Executive shall be entitled to:
(i) Salary at the rate in effect at the time of the
Termination for Cause, through the date on which such Termination for Cause
occurs; and
(ii) any other rights and benefits available under employee
benefit programs of the Company in which the Executive was a participant at
the time of the Termination for Cause, determined in accordance with the
applicable terms and provisions of such programs.
- 3 -
(d) TERMINATION WITHOUT CAUSE. The Executive's employment under this
Agreement may be terminated without Cause, as provided in this subsection.
"TERMINATION WITHOUT CAUSE" shall mean a termination of the Executive's
employment by the Company during the Term of this Agreement other than due to
death, due to Disability or for Cause.
In the event there is a Termination Without Cause of the Executive's
employment, the Executive shall be entitled to:
(i) Salary at the rate in effect immediately prior to the
Termination Without Cause, for a period which shall end upon the earlier of
(x) the end of the twelfth (12th) month following such termination of
employment or (y) the Executive's reemployment in a position comparable to
that which he held with the Company immediately prior to the termination of
his employment ("COMPARABLE REEMPLOYMENT"), PROVIDED, HOWEVER, any Salary
due the Executive under this subsection shall be off-set by any
compensation earned by the Executive in respect of reemployment other than
Comparable Reemployment during the Salary Continuation Period; and
(ii) any other rights and benefits available under employee
benefit programs of the Company in which the Executive was a participant at
the time of his Termination Without Cause, determined in accordance with
the applicable terms and provisions of such programs;
PROVIDED, HOWEVER, that if at any time during the Salary Continuation Period,
the Company becomes aware of any action on the part of the Executive that would
constitute grounds for termination of the Executive's employment by the Company
for Cause, the Company shall be under no obligation to make any payments or
provide any rights or other benefits due under this Agreement.
Any payments received by the Executive under this Agreement that are
attributable to the termination of the Executive's employment shall be in full
and complete satisfaction of any and all claims the Executive may have against
the Company which are, in any way, related to the employment relationship
between the Executive and the Company.
8. INDEMNIFICATION.
(a) The Company agrees that if the Executive is made a party or is
threatened to be made a party to any action, suit or proceeding by reason of the
fact that he is or was a director or officer of the Company (a "PROCEEDING"), he
shall be indemnified by the Company to the fullest extent authorized by Delaware
law, consistent with the Company's certificate of incorporation (or charter) and
by-laws, against expenses, liabilities and losses reasonably incurred or
suffered by the Executive in connection therewith; PROVIDED, HOWEVER:
(i) written notice of such Proceeding is given promptly to the
Company by the Executive;
(ii) the Company is permitted to participate in and assume the
defense of
- 4 -
such Proceeding; and
(iii) such liability results from the final judgment of a court
of competent jurisdiction or, as a result of a settlement entered into with
the prior written consent of the Company or is required (x) by such court
as a bond, payment into escrow or similar payment, or (y) otherwise to
forestall imminent attachment or similar process against any of the
Executive's assets, and,
PROVIDED FURTHER that the Company agrees to indemnify the Executive if he seeks
indemnification in connection with a Proceeding (or part thereof) initiated by
the Executive only if such Proceeding (or part thereof) was authorized by the
Board.
(b) Notwithstanding anything to the contrary in SUBSECTION (a) above,
the Company shall be under no obligation to indemnify the Executive with respect
to any act or acts of the Executive:
(i) in a knowing violation of any written agreement between
the Executive and the Company;
(ii) for which a court, having jurisdiction in the matter,
determines that indemnification is not lawful; or
(iii) which a court, having jurisdiction in the matter,
determines to have been knowingly and fraudulently committed by the
Executive or which is the result of willful misconduct by the Executive.
9. COVENANT NOT TO COMPETE OR ENGAGE IN CERTAIN OTHER ACTS.
(a) During the Term of Employment, and for a period equal to the
greater of (x) 24 months following the end of the Term of Employment or (y) the
Salary Continuation Period, the Executive shall not, except while employed by
the Company, in the business of and for the benefit of the Company, directly or
indirectly, engage in any business whether as an employee, consultant, partner,
principal, agent, representative or stockholder or in any other corporate or
representative capacity, if it involves:
(i) manufacturing, purchasing, marketing or selling any item
or service that is manufactured, purchased, marketed or sold by the Company
or any of its Affiliates in the State of California;
(ii) rendering services or advice pertaining to the
manufacturing, purchasing, marketing or selling of any item or service
manufactured, purchased, marketed or sold by the Company or any Affiliate
to, or on behalf of, any person, firm or corporation in the State of
California; or
(iii) engaging, in, or rendering services or advice pertaining
to any other line of business that the Company, or any Affiliate, was
actively
- 5 -
conducting or actively considering during the Term of Employment with the
Company, in competition with the Company, or any Affiliate, in the State of
California in the same aspect of such line of business as the Company or
any such Affiliate.
(b) The Executive agrees that for the Term of Employment and for the
period described in SUBSECTION (a) above, except when acting on behalf of the
Company or an Affiliate, he shall not:
(i) assist any other entity to enter into any line of business
that the Company, or any Affiliate, was actively conducting or was actively
considering during the Term of Employment in the State of California;
(ii) take any action to divert any business from the Company,
or from any Affiliate, or any business which was under active consideration
by the Company, or by any Affiliate, during the Term of Employment; or
(iii) induce customers, suppliers, agents, franchisees or other
persons under contract or franchise or otherwise doing business with the
Company, to terminate, reduce or alter business with or from the Company or
any Affiliate.
The subsections of this Section are intended by the Parties as separate and
divisible provisions and if, for any reason, any one of them is held to be
invalid or unenforceable, neither the validity nor the enforceability of any
other provision shall thereby be affected. It is the intention of the Parties
that the restrictions on the Executive's future employment imposed by this
Section be reasonable in both duration and geographic scope. If for any reason
any court of competent jurisdiction shall find the provisions of this Section
unreasonable in duration or geographic scope, the Parties hereby agree that the
prohibitions contained herein shall be effective to the fullest extent allowed
under applicable law in such jurisdiction. It is further agreed that any
limitations on the restrictions such court shall impose shall apply only with
respect to the operations of such restrictions in the particular jurisdiction in
which such adjudication is made.
The Executive understands that the provisions of this Section may
limit his ability to earn a livelihood in a business similar to the business of
the Company, but nevertheless believes that he shall receive sufficient
remuneration and other benefits hereunder to justify the restrictions contained
in such provisions which, given his education, skills and abilities, he does not
believe would prevent him from earning a living.
(c) The Executive agrees that for the Term of Employment and for the
period described in SUBSECTION (a) above, except when acting on behalf of the
Company or any Affiliate, he shall not induce any person in the employment of
the Company or any Affiliate to (i) terminate such employment, (ii) accept
employment with anyone other than the Company or any Affiliate or (iii)
interfere with the business of the Company or any Affiliate in any material
manner.
(d) The Executive agrees that the provisions of this Section shall
survive the termination of this Agreement.
- 6 -
10. INVENTIONS.
(a) The Executive shall, during the Term of Employment, disclose to
the Company, immediately after the same is made, discovered or devised, any
improvement, process, development, discovery or invention (including works of
authorship, trade secrets, technology, computer programs, formulas,
compositions, ideas, designs, techniques and data, whether or not patentable or
otherwise capable of being protected and whether or not related to technical or
commercial matters) which he may make, discover or devise (alone or in
conjunction with others) either:
(i) in the course of his normal duties (or of duties
specifically assigned to him);
(ii) as a result of knowledge gained during his employment; or
(iii) as a result of the use by the Executive of materials,
equipment or facilities of the Company.
Subject to SUBSECTIONS (b) AND (c) below, all such items shall become the
absolute property of the Company without further payment and the Executive shall
satisfy his obligation in this regard by presenting the same to the Company.
The Executive hereby assigns any and all rights in such items to the Company.
The Executive shall not at any time during the Term of Employment (except in the
performance of his duties) or thereafter, disclose any such improvement,
process, development, discovery or invention to any third party and, further,
shall, if and whenever required so to do by the Company (at the Company's
expense), do all acts and things as the Company may reasonably require for
obtaining any patent or other protection in respect thereof and vesting the same
and all rights therein in the Company or as the Company may direct; provided
that the above restriction shall not apply to any such improvement, process,
development, discovery or invention which is or becomes generally available to
the public other than as a result of disclosure by the Executive or by any
person to whom he has made such disclosure.
(b) In respect of any particular improvement, process, development,
discovery or invention which is not covered by SUBSECTION (a) above, the
Executive shall (before exploiting or disclosing the same or otherwise
committing himself to a third party) discuss any such item with the Company to
ascertain whether or not it would be in the best interest of the Company for the
Company to take an assignment or license thereof.
(c) The Executive agrees that all inventions which the Executive
makes, conceives, reduces to practice or develops (in whole or in part, either
alone or jointly with others) during his employment shall be the sole property
of the Company to the maximum extent permitted by Section 2870 of the California
Labor Code, a copy of which is attached hereto as Exhibit A, and hereby assigns
such inventions, and all rights therein, to the Company. No assignment in this
Agreement shall extend to inventions, the assignment of which is prohibited by
Labor Code section 2870. The Company shall be the sole owner of all rights in
connection therewith.
(d) The Executive agrees that the provisions of this Section shall
survive the termination of this Agreement, including, without limitation, his
obligation to do all acts and other things that the Company may reasonably
require for obtaining any patent or other protection in
- 7 -
respect of any improvement, process, development, discovery, or invention, and
his obligation to disclose to the Company, immediately after the same is made,
discovered or devised, any improvement, discovery or invention as provided in
SUBSECTION (a) above.
11. COVENANTS TO PROTECT CONFIDENTIAL INFORMATION.
(a) The Executive shall not, during the Term of Employment or
thereafter, without the prior written consent of the Company, use, divulge,
disclose or make accessible to any other person, firm, partnership or
corporation, except while employed by the Company in the business of and for the
benefit of the Company or when required to do so by a lawful order of a court of
competent jurisdiction, any Confidential Information.
(b) Except as may be otherwise consented to in writing by the
Company, the Executive shall proffer to an appropriate officer of the Company,
at the termination of his employment, without retaining any copies, notes or
excerpts thereof, all memoranda, diaries, notes, records, cost information,
customer lists, marketing plans and strategies, and any other documents
containing any Confidential Information made or compiled by, or delivered or
made available to, or otherwise obtained by the Executive in his possession or
subject to his control at such time except that the Executive may proffer a
legible copy, and retain the original, of any personal diary or personal notes.
(c) The Executive agrees that the provisions of this Section shall
survive the termination of this Agreement.
12. REMEDY FOR VIOLATION OF NONCOMPETITION, CONFIDENTIAL INFORMATION OR
INVENTIONS PROVISIONS.
(a) The Executive acknowledges that the Company has no adequate
remedy at law and would be irreparably harmed if the Executive breaches or
threatens to breach the provisions of SECTION 9, 10 OR 11 above, and, therefore,
agrees that the Company shall be entitled to injunctive relief to prevent any
breach or threatened breach of any of those sections, and to specific
performance of the terms of each of such sections in addition to any other legal
or equitable remedy it may have. The Executive further agrees that he shall
not, in any equity proceeding involving him relating to the enforcement of
SECTION 9, 10 OR 11 above, raise the defense that the Company has an adequate
remedy at law. Nothing in this Agreement shall be construed as prohibiting the
Company from pursuing any other remedies at law or in equity that it may have or
any other rights that it may have under any other agreement.
(b) The Executive agrees that the provisions of this Section shall
survive the termination of this Agreement.
Notwithstanding anything herein to the contrary, in no event shall the
Company be obligated to provide payments or benefits pursuant to this Section
if, and to the extent, such payments or benefits would be nondeductible for
Federal income tax purposes as a result of the application of Section 280G of
the Internal Revenue Code of 1986. Any determination to be made with respect to
this clause shall be made by the Company's regular independent certified
accountants.
- 8 -
13. BINDING ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled by arbitration administered by the
American Arbitration Association under its Commercial Arbitration Rules and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof.
14. WITHHOLDING.
Anything in this Agreement to the contrary notwithstanding, all
payments required to be made by the Company hereunder to the Executive shall be
subject to withholding of such amounts relating to taxes as the Company may
reasonably determine it should withhold pursuant to any applicable law or
regulation. In lieu of withholding such amounts, in whole or in part, the
Company may, in its sole discretion, accept other provision for payment of taxes
as required by law, provided it is satisfied that all requirements of law
affecting its responsibilities to withhold such taxes have been satisfied.
15. ASSIGNABILITY; BINDING NATURE.
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs and assigns. No rights or
obligations of the Executive under this Agreement may be assigned or transferred
by the Executive other than his rights to compensation and benefits hereunder,
which may be transferred only by will or operation of law and subject to the
limitations of this Agreement.
16. REPRESENTATION.
The Executive represents and warrants that the performance of the
Executive's duties under this Agreement will not violate any agreement between
the Executive and any other person, firm, partnership, corporation or
organization.
17. MUTUAL INTENT.
The language used in this Agreement is the language chosen by the
Parties to express their mutual intent. The Parties agree that in the event
that any language, section, clause, phrase or word used in this Agreement is
determined to be ambiguous, no presumption shall arise against or in favor of
either Party and that no rule of strict construction shall be applied against
either Party with respect to such ambiguity.
18. ENTIRE AGREEMENT.
This Agreement contains the entire agreement between the Parties
concerning the subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or
oral, between the Parties with respect thereto.
- 9 -
19. AMENDMENT OR WAIVER.
No provision in this Agreement may be amended or waived unless such
amendment or waiver is agreed to in writing, signed by a duly authorized officer
of the Company. No waiver by the Company of any breach by the other Party of
any condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same or any prior or subsequent time.
20. SEVERABILITY.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
21. SURVIVORSHIP.
The respective rights and obligations of the Parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations. The provisions of this
Section are in addition to the survivorship provisions of any other section of
this Agreement.
22. GOVERNING LAW/JURISDICTION.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the state of California without reference to
principles of conflict of laws. The Parties agree to submit exclusively to the
jurisdiction of the courts of the State of California with respect to any
controversy, dispute or claim arising out of this Agreement.
23. NOTICES.
Any notice given to either Party shall be in writing and shall be
deemed to have been given when delivered (whether by telecopy or otherwise) or
two days after being sent by certified or registered mail, postage prepaid,
return receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently give
notice of:
If to the Company:
Genesis Media Group, Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Ramy El-Batrawi
- 10 -
With a copy to:
Nida & Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx, Esq.
If to the Executive:
Ramy El-Batrawi
00000 Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000-0000
24. HEADINGS.
The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
25. COUNTERPARTS.
This Agreement may be executed in two or more counterparts.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
GENESIS MEDIA GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxx
Director
/s/ Ramy El-Batrawi
---------------------------------
Ramy El-Batrawi
- 11 -
EXHIBIT A
---------
Section 2870. Application of provision providing that employee shall assign
or offer to assign rights in invention to employer.
(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities or trade secret information except for those
inventions that either:
(1) relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or
(2) result from any work performed by the employee for his employer.
(b) To the extent that a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.
- 12 -
