Exhibit 10.17
XXXX XXXXXXXXXXX EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of January__,
1998 by and between Universal Magnifier LLC. a California limited liability
company (the "Company") and Xxxx Xxxxxxxxxxx ("Xxxx").
AGREEMENT:
1. Agreement to Employ. Subject to the terms and conditions contained herein,
the Company hereby employs Xxxx and Xxxx hereby accepts employment by the
Company.
2. Term of Employment. The initial term shall be for three (3) years commencing
on January 1, 1997, and ending. unless terminated earlier, January 1, 2000. On
each anniversary date of the Agreement thereafter, a year shall be added
automatically to the term unless a Notice of Nonrenewal has been given at least
fifteen (15) days in advance as provided below. If either the Company or Xxxx
gives a written notice of intent at any time not to renew the Agreement ("Notice
of Nonrenewal"), the existing term shall not be extended and shall terminate on
the anniversary date following the date of said notice.
3. Position and Duties/Authority of Xxxx. During the term of this Agreement,
Xxxx shall serve as a Manager to the Company. Xxxx shall perform such additional
duties and responsibilities, consistent with the foregoing positions as may be
necessary from time to time to achieve and maintain the commercial success of
the Company and the products and services it offers.
4. Place of Employment. Alan's place of employment shall be Los Angeles,
California. While discharging his duties and responsibilities hereunder, Xxxx
xxx be required to travel from time to time and, as a result, be temporarily
absent from his place of employment.
5. Devotion of Time to Business. Xxxx shall devote his reasonable best efforts,
ability and attention to the business and affairs of the Company, to achieve and
maintain the full commercial success of the Company and the products and
services offered by the Company, and to perform the duties and responsibilities
described in Section 3 above. To the extent that they do not interfere with
Alan's performance of his duties and responsibilities described in the previous
sentence in this Section 5, Xxxx xxx devote time to other activities; provided,
however, after the Company has succeeded in a substantial placement of its
magnifying lens credit card on the market in the United States, Alan's salary
will be subject to adjustment as follows: if Xxxx spends less than 20 hours per
week on the business and affairs of the Company for three consecutive months.
his salary under Section 7(a) below shall be reduced by 50%. Nothing herein
shall prohibit Xxxx from investing in real estate, stocks, bonds, commodities or
other securities or forms of passive investments.
6. Confidential Information/Trade Secrets.
a. In performing his duties under this Agreement, Xxxx will have access to and
become acquainted with information concerning the Company's operations,
including financial, personnel, marketing, and other information and customer
lists that are owned by the Company and regularly used in the Company's
business, and such information is confidential and constitutes trade secrets of
the Company.
b. Xxxx will not misuse, misappropriate, or disclose any such trade secrets,
directly or indirectly, to any other person, or use them in any way, except as
required in the course of his employment hereunder.
c. The unauthorized use or disclosure of any of the Company's confidential
information/trade secrets (including without limitation information concerning
current or future proposed work, services, or products, the fact that any such
work, services, or products are planned, under consideration, or in use, and any
descriptions thereof) constitute unfair competition.
d. Any violation by Xxxx of any of the provisions of this paragraph would result
in irreparable injury to the Company. and the Company shall be entitled to
injunctive relief to prevent or terminate such violation.
e. This paragraph shall not apply to any information that becomes generally
known to or available for use by the public other than as a result of Alan's
acts.
f. The covenants set forth in this paragraph shall survive termination of this
Agreement.
7. Obligations of the Company.
a. Salary. Subject to the terms and conditions contained herein, throughout the
term of this Agreement. the Company shall pay to Xxxx as compensation for his
services a salary, payable monthly at the rate of Eight Thousand Three Hundred
and Thirty-Four Dollars ($8.334) per month; provided, however, that if the
Company dissolves or ceases doing business, the Company shall not pay any salary
to Xxxx. The salary shall be paid subject to all federal, state and local rules
for payment, deduction and withholding of taxes; provided that, so long as Xxxx
is a Member of the Company, all salary payments hereunder shall be treated as
guaranteed payments to a partner within the meaning of the Internal Revenue Code
of 1986, as amended.
b. Expense Account. The Company will require Xxxx to incur travel, lodging,
meal, entertainment, and similar expenses. The Company shall advance or promptly
reimburse Xxxx for all expenses reasonably incurred by Xxxx in the performance
of his duties; provided that such expenses shall not exceed expense budgets to
be determined by the Company's Managers on a quarterly basis. Xxxx agrees to
furnish the Company with adequate records and other documentary evidence
required by federal and state laws and regulations.
c. Vacation. Xxxx is eligible for vacation, and can begin to take accrued
vacation after completion of six (6) consecutive months of employment. Xxxx
accrues vacation leave at the rate of 1.667 days per month, and may accumulate
and carry forward a maximum of vacation 40 vacation days. Any balance in excess
of 40 days must be reduced by the anniversary of Alan's hire date. Vacation
leave in excess of 40 days cannot be carried forward into Alan's next
anniversary year. Vacation leave may be taken only after it has been accrued.
Unused vacation leave cannot be taken after Xxxx has submitted his resignation.
Upon termination of employment, Xxxx is paid for unused accrued vacation leave.
d. Accrual. In recognition of the substantial time Xxxx has spent on behalf of
the Company for its benefit prior to formation, Alan's salary shall commence
effective as of January 1; 1997. The Company acknowledges that Xxxx has worked
the number of days sufficient for full payment of Salary from that date to the
date of this Agreement, and such time shall not be considered a part of the Term
of this Agreement. Xxxx shall also be entitled to full reimbursement of such
expenses in the amount of $66,540.63 through September 30, 1997, to be
appropriately documented at the time of reimbursement.
8. Termination.
a. Termination by the Company for Cause. The Company may terminate Alan's
employment at any time with "cause." For the purpose of the Company's
termination of this Agreement, the term "cause" shall include any of the
following:
(i) Final adjudication of Alan's guilt in connection with the commission of a
felony or a misdemeanor involving moral turpitude;
(ii) Alan's, willful theft, conversion, misappropriation, or embezzlement of any
substantial assets of the Company; or
(iii) Alan's willful and persistent failure to discharge his duties adequately,
competently and prudently after written notice and adequate opportunity to cure
any such asserted failure.
b. Termination by Xxxx for Cause. Xxxx xxx terminate his employment at any time
if the Company fails to perform its obligations under Paragraph 7 or Paragraph
10 of this Agreement in a material manner, which failure continues after written
notice and adequate opportunity to cure any such asserted failure.
c. Termination for Death. Alan's employment shall terminate upon Alan's death.
d. Termination for Disability. The Company may terminate Alan's employment upon
the disability of Xxxx. As used herein, the term "disability" shall mean
sickness or physical or mental disability that xxxxxx Xxxx unable to perform his
duties under this Agreement for an aggregate period of more than ninety (90)
days in any twelve (12) month period.
9. Effect of Termination. Upon the termination of this Agreement by either
party, the parties shall comply with the following obligations and duties:
a. Termination for Cause. If the Company terminates Alan's employment for cause:
(i) Salary. The Company xxxXx on the termination date pay Xxxx Alan's salary
through termination date.
(ii) Reimbursement Expenses. The Company shall, on the termination date, pay
Xxxx all reimbursable expenses.
b. Termination for Death. If Alan's employment is terminated as a result of
Alan's death:
(i) The Company shall, within thirty (30) days following the date of Alan's
death, pay Alan's estate Alan's salary through the date the death occurs.
(ii) Reimbursable Expenses. The Company shall, within thirty (30) days following
the date of Alan's death, pay Alan's estate all reimbursable expenses.
c. Termination for Disability.
(i) Salary. The Company shall, within thirty (30) days following the termination
date, pay Xxxx Alan's salary through the termination date.
(ii) Reimbursable Expenses. The Company shall, within thirty (30) days following
the termination date, pay Xxxx all reimbursable expenses.
d. Voluntary Termination by Xxxx Without Cause. If Xxxx terminates this
Agreement voluntarily without cause:
(i) Salary. The Company shall. within thirty (30) days following the termination
date, pay Xxxx Alan's salary through the termination date.
(ii) Reimbursable Expenses. The Company shall, within thirty (30) days following
the termination date, pay Xxxx all reimbursable expenses.
e. Termination by Xxxx for Cause. If Xxxx terminates his employment for cause:
(i) Salary. The Company shall, on the termination date, pay Xxxx in a lump sum
(without any set-off or reduction for any form of compensation for personal
services which Xxxx receives after the termination date) his salary through the
termination date plus $25,000.
(ii) Reimbursable Expenses. The Company shall, on the termination date, pay Xxxx
all reimbursable expenses.
f. Expiration of the Term of the Agreement. If Alan's employment terminates upon
the expiration of the Term of this Agreement:
(i) Annual Base Salary. The Company shall on the termination date pay Xxxx
Alan's salary through the termination date.
,(ii) Reimbursement Expenses. The Company shall, on the termination date, pay
Xxxx all reimbursable expenses.
10. Indemnification of Xxxx.
a. Pre-Execution Actions and Events. The Company shall indemnify, defend at its
expense with attorneys of Alan's choice, and hold Xxxx entirely harmless against
and from any claim, demand, cause of action, judgment, loss, liability, damage,
cost or expense whatsoever, including without limitation reasonable attorneys'
fees, which Xxxx xxx suffer, sustain, incur or otherwise become subject to
either directly or indirectly as a result of any claim, controversy, dispute,
legal action or proceeding whatsoever arising from actions or omissions by the
Company or events relating to the business of the Company occurring prior to the
execution of this Agreement; provided, however, that the Company shall not
indemnify, hold harmless or defend Xxxx with respect to any claim, demand, cause
of action, judgment, loss, liability, damage, cost or expense whatsoever,
including without limitation reasonable attorneys' fees, which Xxxx xxx suffer,
sustain, incur or otherwise become subject to either directly or indirectly as a
result of or related to any breach of any representation, warranty or covenant
Xxxx xxx make in the Agreement of Purchase and Sale of Assets of even date
herewith, by and between the Company as purchaser and Xxxx as one of the
sellers.
b. Post-Execution Actions and Events. The Company shall indemnify, defend at its
expense with attorneys of Alan's choice, and hold Xxxx entirely harmless against
and from any claim, demand, cause of action, judgment, loss, liability, damage,
cost or expense whatsoever, including without limitation reasonable attorneys'
fees, which Xxxx xxx suffer, sustain, incur or otherwise become subject to
either directly or indirectly as a result of any claim, controversy, dispute,
legal action or proceeding whatsoever arising from actions or omissions by the
Company'or events relating to the business of the Company occurring subsequent
to the execution of this Agreement, other than any such claim, demand, cause of
action, judgment, loss, liability, damage, cost or expense whatsoever which is
related to 0) Alan's intentional misconduct or gross negligence, or (ii) Alan's
breach of any of his duties as a Manager or Member under the Operating Agreement
for the Company of even date herewith; provided that this shall not reduce the
obligation of the Company to indemnify Xxxx pursuant to Article XI of said
Operating Agreement.
c. Survival of Indemnification. The obligations of the Company under this
paragraph 10 to indemnify Xxxx shall survive the expiration or termination of
this Agreement.
11. General provisions.
a. Binding on Successors. Subject to any restrictions stated in any other
provision of this Agreement, this Agreement shall be binding on and shall inure
to the benefit of the parties and their respective successors and assigns.
b. Partial Invalidity/Severability. Should any of the provisions of this
Agreement be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability of any other
provision of this Agreement.
c. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter of this Agreement and supersedes all
prior oral or written understandings and agreements.
d. Amendments; waivers. No provision of this Agreement may be changed, waived,
modified, discharged or terminated, except by a written instrument executed by
the parties hereto.
e. Notices. Any notice to be given under this Agreement shall be in writing and
shall be deemed effective only when hand-delivered or when delivered by
overnight courier, or three (3) days after the date postmarked if sent by
certified or registered mail, postage prepaid, return receipt requested,
addressed as follows:
If to the Company:
Universal Magnifier LLC
c/o Bemel & Xxxx
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
With a copy to:
Xx. Xxx Xxxxxxxx Xxxxxxxxxxxxxxx 00
0000 Xxxxxx, Xxxxxxxxxxx
and:
Xxxxxx Xxxxxxxxx, Esq.
Xxxxx & XxXxxxxx
Xxxxxxxxxxxxxxx 000
X.X. Xxx Xx. 00 0000 Xxxxxx, Xxxxxxxxxxx
If to Xxxx:
Xxxx Xxxxxxxxxxx
c/x Xxxxx & Xxxx
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
With a copy to:
X. Xxxxxxxxx Hill, Esq.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000 XXX
f. Attorney's Fees and Costs. Each party shall bear its own costs and expenses,
including attorney's fees, incurred in the negotiation and drafting of this
Agreement.
g. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of California.
h. Title and Headings. Title and headings to paragraphs, subparagraphs and
subsubparagraphs of this Agreement are for the purpose of reference only and
shall not affect the interpretation of this Agreement.
IN WITNESS WHEREOF, the undersigned have hereunto caused this Agreement to be
executed as of the day and year first above written.
UNIVERSAL MAGNIFIER LLC
By: /s/ Xxx Xxxxxxxx
--------------------------------
XXXX XXXXXXXXXXX
