EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT, (the "Agreement") is made and entered into as of
the 1st day of August 1996 between BoxTop Interactive, Inc., a California
corporation (the "Company"), and Xxxxx Xxxx, an individual ("Employee").
WHEREAS, the Company desires to retain the services of Employee and
Employee desires provide such services for the term of this Agreement;
WHEREAS, the Company and the Employee desire that this Agreement supersede
and replace in their entirety any and all employment, consulting or similar
agreements, understandings, or arrangements (whether written or oral) that may
heretofore have been entered into between the Company and Employee (all of such
agreements, understandings, and arrangements being hereinafter collectively
referred to as the "Old Agreement").
WHEREAS, the Company and Employee have determined that it is in their
respective best interests to enter into this Agreement upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the receipt and sufficiency of which
is hereby acknowledged, the parties hereby agree as follows:
1. Employment.
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1.1 Term: Duties.
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(a) The Company hereby employs Employee, and Employee hereby accepts
employment by the Company, upon the terms and conditions set forth in this
Agreement, for the period commencing on the date hereof (the "Effective Date")
and ending on the fourth anniversary of the Effective Date, unless earlier
terminated pursuant to the terms of this Agreement (the "Employment Term");
provided, however, that the Company may engage Employee as a consultant pursuant
to Section 2 below on the terms and conditions stated therein.
(b) During the Employment Term, Employee shall devote (i)
substantially all of his business time, attention and skill, and (ii) all of his
time and efforts in the interactive media field, to the Company; and shall
perform faithfully, loyally and efficiently as the Chairman of the Board and
Chief Executive Officer of the Company. In such capacity, he shall have such
duties and responsibilities consistent therewith and such other duties and
responsibilities as may from time to time be assigned
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to or vested in him by the Board of Directors (as such term is hereinafter
defined).
1.2 Compensation: Benefits
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(a) In consideration of the services rendered to or for the benefit
of the Company hereunder by Employee during the Employment Term, the Company
shall, during the Employment Term, pay Employee a salary (the "Salary") at the
annual rate of $250,000 during the first year of the term, $275,000 during the
second year of the term, $302,500 during the third year of the term and $332,750
during the last year of the term. The Salary shall be payable in approximately
equal installments in accordance with the Company's normal payroll practices for
its employees, but such installments shall be payable not less frequently than
monthly. The Salary, and all other forms of compensation paid to Employee
hereunder shall be subject to all applicable income taxes, payroll taxes and
other amounts required to be withheld by the Company pursuant to applicable law.
Employee shall be solely responsible for all income taxes, payroll taxes and
other amounts imposed on Employee by reasons of any cash or non-cash
compensation and benefits provided to Employee pursuant to this Agreement.
(b) In addition to the Salary, during the Employment Term, Employee
shall be entitled to:
(i) Vacation at the rate of four weeks per annum during the
Employment Term. In addition, Employee shall be entitled to the usual national
holidays with pay and reasonable sick leave, in each case in accordance with and
subject to the Company's normal policies applicable to its senior executives.
Vacation shall be accrued ratably during each year of the Employment Term during
which Employee renders services hereunder, subject to the limitations set forth
in this Section. Any accrued but unused vacation may be carried forward into
subsequent years, provided, however, that accrued but unused vacation available
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to Employee may not, at any time, exceed a total of six weeks. Vacation shall
not be earned during any period in which accrued but unused vacation time totals
six weeks and shall not again be earned until accrued but unused vacation time
again declines below six weeks. Such vacation shall be taken at such time or
times so as not to interfere with Employee's duties hereunder.
(ii) Fully vested options to purchase 250,000 shares of Common
Stock of the Company, exercisable for ten years from the date hereof at an
exercise price of $1.10 per share. With additional stock options to be issued on
the first, second
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and third anniversary of this Agreement, in the amount of 100,000 shares each.
(iii) An automobile allowance of $1,000 per month, plus
automobile insurance for such automobile.
(iv) A cellular telephone and service, an ISDN telephone line
and a home telephone line to be dedicated to business.
(v) While traveling on Company business the Employee shall be
entitled to travel by first class air travel and stay in first class hotels.
(vi) Participate in such employee benefit and incentive
compensation plans or programs as may from time to time be established by the
Company and as are applicable to the Company's senior executives, in each case
(A) to the extent approved by the Board of Directors and (B) subject to
compliance with all applicable laws.
1.3 Termination of Employment
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(a) Death or Disability. The Employment Term shall terminate
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automatically upon Employee's death. If, in the good faith opinion of the Board
of Directors, Employee shall be prevented from performing his duties and
responsibilities hereunder as a result of physical or mental illness, injury or
other incapacity for a period for more than one hundred fifty days in the
aggregate in any twelve-month period, then, to the extent permitted by law, the
Company may, at the election and in the sole discretion of the Board of
Directors, terminate the Employment Term for "Disability," effective upon the
date specified for such termination in written notice thereof delivered to
Employee. In the event that Employee shall dispute the determination of the
Board of Directors as to the Disability of Employee, Employee may appeal the
determination to a panel of three doctors, one to be selected by Employee, one
to be selected by the Board of Directors and one to be selected by the doctors
chosen by Employee and the Board of Directors. The decision of the panel of
doctors shall be final. Any termination for Disability under this Agreement
shall not affect the rights, if any, that Employee may otherwise have under any
disability plan the Company may have in effect at the date of such termination
and in which Employee is then participating.
(b) Cause. The Company may, at the election and in the sole
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discretion of the Board of Directors, terminate the Employment Term for "Cause"
effective upon the date specified for termination in written notice thereof
delivered to Employee. For purposes of this Agreement, "Cause" shall mean that,
in the good faith judgment of the Board of Directors (not including Directors
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affiliated with or appointed by Employee), one or more of the following events
shall have occurred: (i) Employee's habitual or willful neglect of any of his
material duties and responsibilities hereunder provided that such neglect shall
continue for thirty days following written notice to Employee; (ii) Employee's
refusal to follow reasonable and lawful directions of the Board of Directors
provided that such refusal shall continue for thirty days following written
notice to Employee; (iii) Employee's conviction of, or pleading of nolo
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contendere to, any felony of any type or any misdemeanor involving acts of moral
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turpitude or financial wrongdoing, including without limitation, bribery, fraud
or embezzlement; (iv) Employee's habitual or willful violation of any provision
of this Agreement provided that such violation shall continue for thirty days
after written notice to Employee; and (v) Employee's breach of any
confidentiality, nondisclosure, noncompetition, work for hire or other agreement
as may be entered into by Employee from time to time in connection with
Employee's employment by Company or (vi) a breach by Employee of his obligations
under that certain Letter Agreement dated as of June 5, 1996 among Employee, the
Company and certain other persons.
3. Covenants.
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3.1 Unauthorized Disclosure.
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(a) Employee recognizes that his employment with the Company will
involve contact with information of substantial value to the Company, which is
not old and generally known in the trade and which gives the Company an
advantage over its competitors who do not know or use it, including, but not
limited to, techniques, designs, drawings, processes, inventions, developments,
equipment, prototypes, sales and customer information, and business and
financial information, relating to the business, products, practices or
techniques of the Company (hereinafter referred to as "Confidential
Information;" provided that Confidential Information shall not include
information which (i) is or becomes generally available to the public other than
as a result of a disclosure by Employee, or (ii) becomes available to Employee
on a non-confidential basis from a person other than the Company, but only to
the extent Employee has no reason to believe that such person is bound by a
confidentiality agreement with the Company and is not otherwise believed by
Employee to be prohibited from transmitting the information to Employee.
Employee will at all times regard and preserve as confidential such Confidential
Information obtained by Employee from whatever source and will not, either
during Employee's employment or thereafter, publish or disclose any part of such
Confidential
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Information in any manner, or use the same except on behalf of the Company,
without the prior written consent of the Company.
(b) Inventions.
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(i) Employee will promptly disclose in writing to the officials
designated by the Company to receive such disclosures, complete information
concerning each and every invention, discovery, improvement, device, design,
apparatus, practice, process, method or product (hereinafter referred to as
"Inventions"), whether Employee considers them patentable or not, made,
developed, perfected, devised, conceived or reduced to practice by Employee,
either solely or in collaboration with others, during the period of his
employment by the Company, and up to and including a period of twelve (12)
months after the Employment Term, whether or not during regular working hours,
relating either directly or indirectly to the business, products, practices or
techniques of the Company or to the Company's actual or demonstrably anticipated
research or development, or resulting from any work performed by Employee for
the Company.
(ii) Employee understands that any Inventions made, developed,
perfected, devised, conceived or reduced to practice by Employee during the
period of his employment by the Company, and any other Inventions made,
developed, perfected, devised, conceived or reduced to practice by Employee
during said period of twelve (12) months after the Employment Term, if based
upon the Confidential Information of the Company, relating either directly or
indirectly to the business, products, practices or techniques of the Company or
to the Company's actual or demonstrably anticipated research or development, or
resulting from any work performed by Employee for the Company, are the sole
property of the Company, and hereby assign and agree to assign to the Company
its successors and assigns, all of Employee's right, title and interest in and
to said Inventions, and any patent applications or Letters Patent thereon.
NOTIFICATION
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This Agreement does not apply to an invention for which no equipment,
supplies, facility, or trade secret information of the Company was
used and which was developed entirely on Employee's own time, and (a)
which does not relate (1) to the business of the Company or (2) to the
Company's actual or demonstrably anticipated research or development,
or (b) which does not result from any work performed by Employee for
the Company, as defined and provided by Section 2870 of the California
Labor code. A copy of this Section 2870 is attached hereto as
Appendix A.
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(iii) Employee will, at any time during his employment or thereafter,
upon request and without further compensation therefore, but at no expense to
Employee, do all lawful acts, including the execution of papers and oaths and
the giving of testimony, that in the opinion of the Company, its successors or
assigns, may be necessary or desirable for obtaining, sustaining, reissuing or
enforcing Letters Patent in the United States and throughout the world for said
Inventions, and for perfecting, recording or maintaining the title of the
Company, its successors and assigns, to said Inventions and to any patent
applications made and any Letters Patent granted for said Inventions in the
United States and throughout the world. If after the Employment Term the Company
shall require Employee to travel, the Company shall cooperate with Employee to
schedule such travel time at a time reasonably satisfactory to Employee.
(c) Other Intellectual Property
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(i) Employee will also disclose in writing to the officials
designated by the Company to receive such disclosures, complete information
concerning all other intellectual property, including, but not limited to,
original works of authorship, trademarks, service marks, and trade secrets,
(hereinafter sufficient to as "other intellectual property") whether Employee
considers them intellectual property or not, which is made, developed, created,
devised, conceived, perfected, reduced to practice, or discovered by Employee,
either solely or in collaboration with others, during the period of his
employment by the Company, and up to and including a period of twelve (12)
months after the Employment Term, whether or not during regular working hours,
relating either directly or indirectly to the business, products, practices or
techniques of the Company or to the Company's actual or demonstrably anticipated
research or development, or resulting from any work performed by Employee for
the Company.
(ii) All copyrightable works with regard to paragraph 3.1(c)
(i) above, will be deemed "work for hire" as defined in (S)101 of the Federal
Copyright Act and such copyrightable works shall exclusively belong to the
Company. In the event that (S)101 of the Copyright Act is found to be
inapplicable, Employee will assign all right, title and interest in and to such
copyrightable works to the Company. In addition, Employee will, upon request and
without further compensation therefore, but at no expense to Employee, assist
the Company in obtaining all registrations for such copyrights pursuant to
Section 3.1(c) (iii) below.
(iii) Employee will, at any time during his employment, or
thereafter, upon request and without further compensation therefore, but at no
expense to Employee, do all lawful acts, including the execution of papers and
oaths and the
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giving of testimony, that in the opinion of the Company, its successors or
assigns, may be necessary or desirable for obtaining registrations for other
intellectual property, including, but not limited to trademarks, service marks,
and copyrights, in the United States and throughout the world. If after the
Employment Term the Company shall require Employee to travel, the Company shall
cooperate with Employee to schedule such travel time at a time reasonably
satisfactory to Employee.
(d) As to any Inventions or other intellectual property which were
made, developed, perfected, devised, conceived or reduced to practice by
Employee during the period of his employment by the Company, and up to and
including a period of twelve (12) months after the Employment Term, but which
are claimed for any reason to belong to an entity or person other than the
Company, Employee will promptly after receiving notice of such claim disclose
the same in writing to the Company. Within twenty (20) days thereafter, the
Company shall claim ownership of such Inventions or other intellectual property
under the terms of this Agreement. If the Company makes such a claim, Employee
understands that any controversy relating to such claim will be settled and
determined by binding arbitration conducted in Los Angeles County, California,
in accordance with the rules of the American Arbitration Association then
existing.
3.2 Prohibited and Competitive Activities. Employee and the Company
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recognize that due to the nature of Employee's engagement hereunder and the
relationship of Employee to the Company, both prior and subsequent to the date
of this Agreement, Employee has had and will have access to, has and will
acquire, and has assisted and may continue to assist in developing confidential
and proprietary information relating to the business and operations of the
Company and its affiliates, including, but not limited to Confidential
Information. Employee acknowledges that such information has been and will be
of central importance to the business of the Company and its affiliates and that
disclosure of this information to, or its use by others can and will cause
substantial loss to the Company. Employee and the Company also recognize that
an important part of Employee's duties will be to develop good will for the
Company and its affiliates through his personal contact with Clients (as defined
below), employees and others having business relationships with the Company, and
that there is a danger that this good will, a proprietary asset of the Company,
may follow Employee if and when his relationship with the Company is terminated.
Accordingly, Employee will perform as follows:
(a) Prohibited Activities. Employee will not at any time during the
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Employment Term: (i) (other than in the course of his employment) disclose or
furnish to any other person or, directly or indirectly, use for his own account
or the account of
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any other person, any Confidential Information, no matter from where or in
what manner he may have acquired such Confidential Information, and he shall
retain all such Confidential Information in trust for the benefit of the
Company, its affiliates and the successors and assigns of any of them, (ii)
directly or indirectly through one or more intermediaries, solicit for
employment or recommend to any subsequent employer of Employee the solicitation
for employment of, any person who, at the time of such solicitation, is employed
by the Company or any affiliate thereof, or (iii) directly or indirectly,
whether for his own account or for the account of any other person, solicit,
divert, or endeavor to entice away from the Company or any affiliate thereof, or
otherwise engage in any activity intended to terminate, disrupt, or interfere
with, the Company's or any of its affiliate's relationship with, Clients or
other business relationships of the Company or any affiliate thereof (any
activity described in clause (i), (ii), (iii) of this Section 3.2(a) being
herein referred to as a "Prohibited Activity"); provided, however, that if
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Employee is legally compelled to disclose Confidential Information to any
tribunal or else stand liable for contempt or suffer other similar censure or
penalty, then the disclosure to such tribunal of only those Confidential
Information which are legally required to be disclosed shall not constitute a
Prohibited Activity. Employee shall give the Company as much advance notice of
such disclosure as is practicable and reasonable.
The term, "Clients," shall mean those persons who, at any time during
Employee's course of employment with the Company (including; but without
limitation, prior to the date of this Agreement) are or were clients or
customers of the Company or any affiliate thereof or any predecessor of any of
the foregoing.
(b) Non-Competition. By and in consideration of the Company's
---------------
entering into this Agreement and providing the Salary, and benefits (including,
without limitation, stock options pursuant to a Company stock option plan) to
the Employee, and further in consideration of the Employee's continued exposure
to the confidential and proprietary information of the Company (including, but
without limitation, the Company's Confidential Information), the Employee will
not, during the Employment Term engage in any Competitive Activity. The term
"Competitive Activity" means engaging in any of the following activities: (i)
serving as a director of any Competitor (as defined below), (ii) directly or
indirectly through one or more intermediaries, either (X) controlling any
Competitor or (Y) owning any equity or debt interests in any Competitor (other
than equity or debt interests which are publicly traded and, at the time of any
acquisition, do not exceed 5% of the particular class of interests outstanding)
(it being understood that, if interests in any Competitor are owned by an
investment vehicle or other entity in which the
8
Employee owns an equity interest, a portion of the interests in such Competitor
owned by such entity shall be attributed to the Employee, such portion
determined by applying the percentage of the equity interest in such entity
owned by the Employee to the interests in such Competitor owned by such entity),
(iii) employment by (including serving as an officer, employee or partner of),
providing consulting services to (including, without limitation, as an
independent contractor) or, managing or operating the business or affairs of,
any Competitor or (iv) participating in the ownership, management, operation or
control of or being connected in any manner with any Competitor. The term
"Competitor" as used herein means any person (other than the Company or any
affiliate thereof) that directly or indirectly engages in the interactive media
business or any other line of business in which the Company or any subsidiary is
engaged during the Employment Term in the United States or any political
subdivision thereof, or in any other territory or any territory of the world in
which the Company or any subsidiary thereof has established a subsidiary or
sales or representative office or has retained a sales representative or
distributor. Notwithstanding the above, the term Competitor shall exclude the
business conducted by BoxTop Entertainment, Inc. including Television shows and
specials, concerts and one of a kind specials and the related world wide
distribution of any of the above.
(c) Adaption Rights. The Company shall have the express right to
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edit, revise and adapt any Invention and to cause others to edit, revise and
adapt any Invention as the Board of Directors may deem appropriate.
(d) Waiver of Moral Rights. The Employee hereby expressly waives any
----------------------
"artist's rights" or "moral rights" which the Employee might otherwise have in
any Invention.
(e) Insurance. During the Employment Term, the Company shall at its
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expense, to apply for, obtain and maintain insurance on the life of Employee in
the amount of $1,250,000, for the sole benefit of his spouse (which shall be the
sole payee of such insurance). Employee shall cooperate fully in connection with
the Company obtaining such insurance. The Company at its expense, shall obtain
disability insurance in an amount acceptable to the Employee.
4. Power of Attorney.
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Employee will designate and appoint the Company and its duly authorized
officers and agents as its agents and attorneys-in-fact to execute and file any
certificates, applications or documents and to do all lawful acts necessary to
protect the Company's rights in any Invention and other intellectual property.
Employee expressly acknowledges that the foregoing
9
power of attorney is coupled with an interest and is therefore irrevocable and
shall survive the termination of Employee's engagement by the Company for any
reason.
5. Miscellaneous.
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5.1 Binding Effect: Assignment. This Agreement shall inure to the benefit
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of and be binding upon the parties hereto and their respective heirs, executors,
representatives, estates, successors and assigns, including any successor or
assign to all or substantially all of the business and/or assets of the Company,
whether direct or indirect, by purchase, merger, consolidation, acquisition of
stock, or otherwise; provided, however, that neither the Employee nor any
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beneficiary nor any legal representative of the Employee, may assign all or any
portion of the Employee's rights or obligations under this Agreement without the
prior written consent of the Board of Directors.
5.2 Notices. Whenever notice is required to be given under the terms of
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this Agreement, such notice shall be in writing and delivered by hand or by
registered or certified mail, postage prepaid, or transmitted by telecopier,
addressed as follows:
(a) If to the Company, to it at:
BoxTop Interactive, Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Telecopy No: 310.246.9995
(b) If to the Employee, to him at:
Xxxxx Xxxx
0000 Xx. Xxxxxx Xx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
or to such other address as either party shall have specified for itself from
time to time to the other party in writing. All such notices shall be
conclusively deemed to be received and shall be effective, if sent by hand
delivery, upon receipt, or if sent by registered or certified may, upon receipt,
or if transmitted by telecopier.
5.3 Governing Law. This Agreement and the rights and obligations of the
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parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State
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of California without giving effect to the conflicts of law principles thereof.
5.4 Severability. If any term or other provision of this Agreement, or
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any application thereof to any circumstance is invalid, illegal or incapable of
being enforced by any rule of law, or public policy in whole or in part, such
provision or application shall to that extent be severable and shall not affect
any of the other provisions or applications of this Agreement.
5.5 Entire Agreement. This Agreement contains the entire understanding of
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the parties hereto with respect to the subject matter hereof and supersedes and
replaces in its entirety the Old Agreement.
5.6 Existing Agreement. Employee confirms and acknowledges that he has no
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claims against the Company (or its affiliates) under the Old Agreement.
5.7 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to constitute one and the same instrument.
5.8 Plurals; Gender; Headings; Sections. In this Agreement, unless the
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context otherwise requires, words in the singular number or in the plural number
shall each include the singular number and the plural number, and the use of any
gender shall include all genders. The headings in this Agreement are for
reference purpose only and shall not limit or otherwise affect the meaning or
interpretation of this Agreement. All references to sections, subsections and
paragraphs herein shall be deemed to refer to sections, subsections or
paragraphs of this Agreement unless the context otherwise requires.
5.9 Further Assurances. Each party hereto shall do and perform or cause
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to be done and performed all further acts and things and shall execute and
deliver all other agreements, certificates, instruments, and documents as any
other party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
5.10 Amendment and Modification. This Agreement may not be amended, nor
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may any provision hereof be modified, waived or discharged, nor may any breach
hereof be waived, except by an instrument in writing duly signed by the party to
be charged. The written approval of the Board of Directors shall be required
before any material amendment, modification, waiver or discharge
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contemplated by such Sections shall be effective as between the Company and
Employee.
5.11 Waiver. No provision of this Agreement may be waived or discharged
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unless such waiver or discharge is agreed to in writing and signed by the
affected party. No such waiver or discharge by any party hereto at any time, or
any waiver or discharge any breach by any party hereto of any provision of this
Agreement to be performed by such party, shall be deemed to waive or discharge
any other provisions or be a waiver or discharge of any breach of any other
provisions, respectively, at the same or at any prior or subsequent time.
5.12 Withholding. The Company shall have the right to deduct from any
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amounts payable hereunder or otherwise any taxes or other amounts to the extent
required by law to be withheld.
5.13 Certain Definitions.
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For purposes of this agreement:
(a) the term "affiliate" shall mean, with respect to any person, any
other person directly or indirectly controlling, controlled by, or under common
control with such person; and
(b) the term "person" shall mean an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
5.14 Arbitration.
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(a) Except as set forth in this Section 5.14, all questions or disputes
arising out of or relating to this Agreement or any breach thereof shall be
finally settled by binding arbitration under the rules of the American
Arbitration Association and judgment upon such award may be entered in any court
having jurisdiction thereof. Any such arbitration proceeding shall take place
in Los Angeles County, California. THE PARTIES EACH HEREBY WAIVE THE RIGHT TO
TRIAL BY JURY IN CONNECTION WITH ANY DISPUTE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY BREACH THEREOF.
(b) Employee acknowledges that the Company is relying for its protection
upon the existence and validity of, among other things, Sections 3.1, 3.2 and 4
of this Agreement, and that irreparable injury (which would not be adequately
compensated by an award of damages) will result to the Company from any
violation or continuing violation of such provisions. Accordingly, Employee
hereby agrees that in addition to the
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remedies available to the Company by law or under this Agreement, the Company
shall be entitled to seek and obtain, from a court of competent jurisdiction,
such equitable relief (including injunctive relief) as may be permitted by law
for violations of Sections 3.1, 3.2 and 4 of this Agreement. Any such action
shall be brought in the state courts presiding in the County of Los Angeles or
in the Federal Courts in the Central District of California. Each party hereby
consents to personal jurisdiction in such courts and waives any objection to
such venue.
5.15 Attorneys' Fees. In any dispute arising out of this Agreement the
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prevailing party shall be entitled to recover reasonable attorneys' fees and
expenses and other costs in addition to any other relief awarded.
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each
of the parties hereto, all as of the date first above written.
BOXTOP INTERACTIVE, INC., a
California corporation
BY: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Secretary
/s/ Xxxxx Xxxx
---------------------------------
Xxxxx Xxxx, an individual
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Appendix A
NOTIFICATION TO EMPLOYEE
Set forth below is the text of Section 2870, 2871 and 2872 of the
California Labor Code, as published in Xxxx'x Xxx. Cal. Labor Code (1989) and
Xxxx'x Xxx. Cal. Labor Code (1994 Supp.) :
(S) 2870. EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS
(c) 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 the employer.
(d) To the extent 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.
(S) 2871. CONDITIONS OF EMPLOYMENT OR CONTINUED EMPLOYMENT; DISCLOSURE OF
INVENTIONS
No employer shall require a provision made void and unenforceable by
Section 2870 as a condition of employment or continued employment. Nothing in
this article shall be construed to forbid or restrict the right of an employer
to provide in contracts or employment for disclosure, provided that any such
disclosures be received in confidence, of all of the employee's inventions made
solely or jointly with others during the term of his or her employment, a review
process by the employer to determine such issues as may arise, and for full
title to certain patients and inventions to be in the United States, as required
by the contracts between the employer and the United States or any of its
agencies.
(S) 2872. NOTICE TO EMPLOYEE; BURDEN OF PROOF
If an employee agreement entered into after January 1, 1980, contains a
provision requiring the employee to assign or offer to assign any of his or her
rights in any invention to his or her
A-1
employer, the employer must also, at the time the agreement is made, provide a
written notification to the employee that the agreement does not apply to an
invention which qualifies fully under the provisions of Section 2870. In any
suit or action arising thereunder, the burden of proof shall be on the employee
claiming the benefit of its provisions.
A-2
IXL HOLDINGS, INC.
MAY 30, 1997
Mr. Xxxxx Xxxx
BoxTop Interactive, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Re: Merger of BoxTop Interactive, Inc. ("BII") into IXL Merger Corp. III,
Inc. ("Sub") (the "Merger")
Dear Xxxxx:
With regard to the above-referenced transaction, IXL Holding, Inc.
("Parent") hereby agrees as follows:
1. After the consummation of the Merger and thereafter on an on-going
basis, Parent will consult with you in good faith regarding its
international operations.
2. The Employment Agreement dated August 1, 1996 between BoxTop
Interactive, Inc. (a copy of which is attached hereto as Exhibit A)
---------
and you will be assumed by Sub (to be known after the Merger as
"BoxTop Interactive, Inc."), and will continue to govern the terms of
your employment; provided, however, that, notwithstanding anything to
the contrary contained therein, you will report to U. Xxxxxxx Xxxxx,
Xx.
3. Contemporaneously with the consummation of the Merger, Parent will
loan you $50,000, to be repaid by you, together with interest thereon
at the rate of 8% per annum, on the date one year from the date
hereof. All other terms of the loan shall be set forth in a promissory
note, dated of even date herewith, for the benefit of Parent (the
"Note"). Parent hereby agrees that the Note shall be treated as cash
of BII for purposes of calculating the amount of "BII Debt" (as such
term is defined in the Agreement and Plan of Merger, dated of even
date herewith, between Parent, Sub, BII and the BII shareholders),
reducing the amount of BII Debt.
4. The Parties hereby agree and acknowledge that, immediately after the
consummation of the Merger, there will be warrants outstanding to
purchase 2,309 shares of Class B Common Stock of Parent (the "IXL
Warrants"). If, prior to November 30, 1997, you are able to cause a
reduction in the outstanding number of IXL Warrants, the total Merger
consideration shall be adjusted based on the agreement of the parties.
If this letter accurately reflects your understanding of our
agreement, please so indicate by executing this letter on the signature line
below.
SINCERELY,
IXL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Xxxxx X. Xxxxxx
Executive Vice President
Confirmed and agreed this 30th day of May, 1997
/s/ Xxxxx Xxxx
------------------------------
Xxxxx Xxxx
IXL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx, Executive Vice
President
EXHIBIT A
---------
EMPLOYMENT AGREEMENT
--------------------
EXHIBIT A
EMPLOYMENT AGREEMENT
--------------------
This EMPLOYMENT AGREEMENT, (the "Agreement") is made and entered into as of
the 15th day of August 1996 between BoxTop Interactive, Inc., a California
corporation (the "Company"), and Xxxxx Xxxx, an individual ("Employee")
WHEREAS, the Company desires to retain the services of Employee and
Employee desires provide such services for the term of this Agreement;
WHEREAS, the Company and the Employee desire that this Agreement supersede
and replace in their entirety any and all employment, consulting or similar
agreements, understandings, or arrangements (whether written or oral) that may
heretofore have been entered into between the Company and Employee (all of such
agreements, understandings, and arrangements being hereinafter collectively
referred to as the "Old Agreement")
WHEREAS, the Company and Employee have determined that in their respective
best interests to enter into this Agreement upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the receipt and sufficiency of which
is hereby acknowledged, the parties hereby agree as follows:
1. Employment.
----------
1. 1 Term Duties.
------------
(a) The Company hereby employs Employee, and Employee hereby accepts
employment by the Company, upon the terms and conditions set forth in this
Agreement, for the period commencing on the date hereof (the "Effective Date")
and ending on the fourth anniversary of the Effective Date, unless earlier
terminated pursuant to the terms of this Agreement (the " Employment Term");
provided, however, that the Company may engage Employee as a consultant pursuant
to Section 2 below on the terms and conditions stated therein.
(b) During the Employment Term, Employee shall devote (i)
substantially all of his business time, attention and skill, and (ii) all of his
time and efforts in the interactive media field, to the Company; and shall
perform faithfully, loyally and efficiently as the Chairman of the Board and
Chief Executive Officer of the Company. In such capacity, he shall have such
duties and responsibilities consistent therewith and such other duties and
responsibilities as may from time to time be assigned
19
to or vested in him by the Board of Directors (as such term is hereinafter
defined).
1.2 Compensation: Benefits
----------------------
(a) In consideration of the services rendered to or for the benefit
of the Company hereunder by Employee during the Employment Term, the Company
shall, during the Employment Term, pay Employee a salary (the "Salary") at the
annual rate of $250,000 during the first year of the term, $275,000 during the
second year of the term, $302,500 during the third year of the term and $332,750
during the last year of the term. The Salary shall be payable in approximately
equal installments in accordance with the Company's normal payroll practices for
its employees, but such installments shall be payable not less frequently than
monthly. The Salary, and all other forms of compensation paid to Employee
hereunder shall be subject to all applicable income taxes, payroll taxes and
other amounts required to be withheld by the Company pursuant to applicable law.
Employee shall be solely responsible for all income taxes, payroll taxes and
other amounts imposed on Employee by reasons of any cash or non-cash
compensation and benefits provided to Employee pursuant to this Agreement.
(b) In addition to the Salary, during the Employment Term, Employee
shall be entitled to:
(i) Vacation at the rate of four weeks per annum during the
Employment Term. In addition, Employee shall be entitled to the usual national
holidays with pay and reasonable sick leave, in each case in accordance with and
subject to the Company's normal policies applicable to its senior executives.
Vacation shall be accrued ratably during each year of the Employment Term during
which Employee renders services hereunder, subject to the limitations set forth
in this Section. Any accrued but unused vacation may be carried forward into
subsequent years, provided, however, that accrued but unused vacation available
--------- -------
to Employee may not, at any time, exceed a total of six weeks. Vacation shall
not be earned during any period in which accrued but unused vacation time totals
six weeks and shall not again be earned until accrued but unused vacation time
again declines below six weeks. Such vacation shall be taken at such time or
times so as not to interfere with Employee's duties hereunder.
(ii) Fully vested options to purchase 250,000 shares of Common
Stock of the Company, exercisable for ten years from the date hereof at an
exercise price of $1.10 per share. With additional stock options to be issued on
the first, second
2
and third anniversary of this Agreement, in the amount of 100,000 shares each.
(iii) An automobile allowance of $1,000 per month, plus
automobile insurance for such automobile.
(iv) A cellular telephone and service, an ISDN telephone line
and a home telephone line to be dedicated to business.
(v) While traveling on Company business the Employee shall be
entitled to travel by first class air travel and stay in first class hotels.
(vi) Participate in such employee benefit and incentive
compensation plans or programs as may from time to time be established by the
Company and as are applicable to the Company's senior executives, in each case
(A) to the extent approved by the Board of Directors and (B) subject to
compliance with all applicable laws.
1.3 Termination of Employment
-------------------------
(a) Death or Disability. The Employment Term shall terminate
-------------------
automatically upon Employee's death. If, in the good faith opinion of the Board
of Directors, Employee shall be prevented from performing his duties and
responsibilities hereunder as a result of physical or mental illness, injury or
other incapacity for a period for more than one hundred fifty days in the
aggregate in any twelve-month period, then, to the extent permitted by law, the
Company may, at the election and in the sole discretion of the Board of
Directors, terminate the Employment Term for "Disability," effective upon the
date specified for such termination in written notice thereof delivered to
Employee. In the event that Employee shall dispute the determination of the
Board of Directors as to the Disability of Employee, Employee may appeal the
determination to a panel of three doctors, one to be selected by Employee, one
to be selected by the Board of Directors and one to be selected by the doctors
chosen by Employee and the Board of Directors. The decision of the panel of
doctors shall be final. Any termination for Disability under this Agreement
shall not affect the rights, if any, that Employee may otherwise have under any
disability plan the Company may have in effect at the date of such termination
and in which Employee is then participating.
(b) Cause. The Company may, at the election and in the sole
-----
discretion of the Board of Directors, terminate the Employment Term for "Cause"
effective upon the date specified for termination in written notice thereof
delivered to Employee. For purposes of this Agreement, "Cause" shall mean that,
in the good faith judgment of the Board of Directors (not including Directors
3
affiliated with or appointed by Employee), one or more of the following events
shall have occurred: (i) Employee's habitual or willful neglect of any of his
material duties and responsibilities hereunder provided that such neglect shall
continue for thirty days following written notice to Employee; (ii) Employee's
refusal to follow reasonable and lawful directions of the Board of Directors
provided that such refusal shall continue for thirty days following written
notice to Employee; (iii) Employee's conviction of, or pleading of nolo
----
contendere to, any felony of any type or any misdemeanor involving acts of moral
----------
turpitude or financial wrongdoing, including without limitation, bribery, fraud
or embezzlement; (iv) Employee's habitual or willful violation of any provision
of this Agreement provided that such violation shall continue for thirty days
after written notice to Employee; and (v) Employee's breach of any
confidentiality, nondisclosure, noncompetition, work for hire or other agreement
as may be entered into by Employee from time to time in connection with
Employee's employment by Company or (vi) a breach by Employee of his obligations
under that certain Letter Agreement dated as of June 5, 1996 among Employee, the
Company and certain other persons.
3. Covenants.
---------
3.1 Unauthorized Disclosure.
-----------------------
(a) Employee recognizes that his employment with the Company will
involve contact with information of substantial value to the Company, which is
not old and generally known in the trade and which gives the Company an
advantage over its competitors who do not know or use it, including, but not
limited to, techniques, designs, drawings, processes, inventions, developments,
equipment, prototypes, sales and customer information, and business and
financial information, relating to the business, products, practices or
techniques of the Company (hereinafter referred to as "Confidential
Information;" provided that Confidential Information shall not include
information which (i) is or becomes generally available to the public other than
as a result of a disclosure by Employee, or (ii) becomes available to Employee
on a non-confidential basis from a person other than the Company, but only to
the extent Employee has no reason to believe that such person is bound by a
confidentiality agreement with the Company and is not otherwise believed by
Employee to be prohibited from transmitting the information to Employee.
Employee will at all times regard and preserve as confidential such Confidential
Information obtained by Employee from whatever source and will not, either
during Employee's employment or thereafter, publish or disclose any part of such
Confidential
4
Information in any manner, or use the same except on behalf of the Company,
without the prior written consent of the Company.
(b) Inventions.
----------
(i) Employee will promptly disclose in writing to the officials
designated by the Company to receive such disclosures, complete information
concerning each and every invention, discovery, improvement, device, design,
apparatus, practice, process, method or product (hereinafter referred to as
"Inventions"), whether Employee considers them patentable or not, made,
developed, perfected, devised, conceived or reduced to practice by Employee,
either solely or in collaboration with others, during the period of his
employment by the Company, and up to and including a period of twelve (12)
months after the Employment Term, whether or not during regular working hours,
relating either directly or indirectly to the business, products, practices or
techniques of the Company or to the Company's actual or demonstrably anticipated
research or development, or resulting from any work performed by Employee for
the Company.
(ii) Employee understands that any Inventions made, developed,
perfected, devised, conceived or reduced to practice by Employee during the
period of his employment by the Company, and any other Inventions made,
developed, perfected, devised, conceived or reduced to practice by Employee
during said period of twelve (12) months after the Employment Term, if based
upon the Confidential Information of the Company, relating either directly or
indirectly to the business, products, practices or techniques of the Company or
to the Company's actual or demonstrably anticipated research or development, or
resulting from any work performed by Employee for the Company, are the sole
property of the Company, and hereby assign and agree to assign to the Company
its successors and assigns, all of Employee's right, title and interest in and
to said Inventions, and any patent applications or Letters Patent thereon.
NOTIFICATION
------------
This Agreement does not apply to an invention for which no equipment,
supplies, facility, or trade secret information of the Company was
used and which was developed entirely on Employee's own time, and (a)
which does not relate (1) to the business of the Company or (2) to the
Company's actual or demonstrably anticipated research or development,
or (b) which does not result from any work performed by Employee for
the Company, as defined and provided by Section 2870 of the California
Labor code. A copy of this Section 2870 is attached hereto as
Appendix A.
----------
5
(iii) Employee will, at any time during his employment or thereafter,
upon request and without further compensation therefore, but at no expense to
Employee, do all lawful acts, including the execution of papers and oaths and
the giving of testimony, that in the opinion of the Company, its successors or
assigns, may be necessary or desirable for obtaining, sustaining, reissuing or
enforcing Letters Patent in the United States and throughout the world for said
Inventions, and for perfecting, recording or maintaining the title of the
Company, its successors and assigns, to said Inventions and to any patent
applications made and any Letters Patent granted for said Inventions in the
United States and throughout the world. If after the Employment Term the Company
shall require Employee to travel, the Company shall cooperate with Employee to
schedule such travel time at a time reasonably satisfactory to Employee.
(c) Other Intellectual Property
---------------------------
(i) Employee will also disclose in writing to the officials
designated by the Company to receive such disclosures, complete information
concerning all other intellectual property, including, but not limited to,
original works of authorship, trademarks, service marks, and trade secrets,
(hereinafter sufficient to as "other intellectual property") whether Employee
considers them intellectual property or not, which is made, developed, created,
devised, conceived, perfected, reduced to practice, or discovered by Employee,
either solely or in collaboration with others, during the period of his
employment by the Company, and up to and including a period of twelve (12)
months after the Employment Term , whether or not during regular working hours,
relating either directly or indirectly to the business, products, practices or
techniques of the Company or to the Company's actual or demonstrably anticipated
research or development, or resulting from any work performed by Employee for
the Company.
(ii) All copyrightable works with regard to paragraph 3.1(c) (i)
above, will be deemed "work for hire" as defined in (S)101 of the Federal
Copyright Act and such copyrightable works shall exclusively belong to the
Company. In the event that (S)101 of the Copyright Act is found to be
inapplicable, Employee will assign all right, title and interest in and to such
copyrightable works to the Company. In addition, Employee will, upon request and
without further compensation therefore, but at no expense to Employee, assist
the Company in obtaining all registrations for such copyrights pursuant to
Section 3.1(c) (iii) below.
(iii) Employee will, at any time during his employment, or
thereafter, upon request and without further compensation therefore, but at no
expense to Employee, do all lawful acts, including the execution of papers and
oaths and the
6
giving of testimony, that in the opinion of the Company, its successors or
assigns, may be necessary or desirable for obtaining registrations for other
intellectual property, including, but not limited to trademarks, service marks,
and copyrights, in the United States and throughout the world. If after the
Employment Term the Company shall require Employee to travel, the Company shall
cooperate with Employee to schedule such travel time at a time reasonably
satisfactory to Employee.
(d) As to any Inventions or other intellectual property which were
made, developed, perfected, devised, conceived or reduced to practice by
Employee during the period of his employment by the Company, and up to and
including a period of twelve (12) months after the Employment Term , but which
are claimed for any reason to belong to an entity or person other than the
Company, Employee will promptly after receiving notice of such claim disclose
the same in writing to the Company. Within twenty (20) days thereafter, the
Company shall claim ownership of such Inventions or other intellectual property
under the terms of this Agreement. If the Company makes such a claim, Employee
understands that any controversy relating to such claim will be settled and
determined by binding arbitration conducted in Los Angeles County, California,
in accordance with the rules of the American Arbitration Association then
existing.
3.2 Prohibited and Competitive Activities. Employee and the Company
-------------------------------------
recognize that due to the nature of Employee's engagement hereunder and the
relationship of Employee to the Company, both prior and subsequent to the date
of this Agreement, Employee has had and will have access to, has and will
acquire, and has assisted and may continue to assist in developing confidential
and proprietary information relating to the business and operations of the
Company and its affiliates, including, but not limited to Confidential
Information. Employee acknowledges that such information has been and will be
of central importance to the business of the Company and its affiliates and that
disclosure of this information to, or its use by others can and will cause
substantial loss to the Company. Employee and the Company also recognize that
an important part of Employee's duties will be to develop good will for the
Company and its affiliates through his personal contact with Clients (as defined
below), employees and others having business relationships with the Company, and
that there is a danger that this good will, a proprietary asset of the Company,
may follow Employee if and when his relationship with the Company is terminated.
Accordingly, Employee will perform as follows:
(a) Prohibited Activities. Employee will not at any time during the
---------------------
Employment Term: (i) (other than in the course of his employment) disclose or
furnish to any other person or, directly or indirectly, use for his own account
or the account of
7
any other person, any Confidential Information, no matter from where or in
what manner he may have acquired such Confidential Information, and he shall
retain all such Confidential Information in trust for the benefit of the
Company, its affiliates and the successors and assigns of any of them, (ii)
directly or indirectly through one or more intermediaries, solicit for
employment or recommend to any subsequent employer of Employee the solicitation
for employment of, any person who, at the time of such solicitation, is employed
by the Company or any affiliate thereof, or (iii) directly or indirectly,
whether for his own account or for the account of any other person, solicit,
divert, or endeavor to entice away from the Company or any affiliate thereof, or
otherwise engage in any activity intended to terminate, disrupt, or interfere
with, the Company's or any of its affiliate's relationship with, Clients or
other business relationships of the Company or any affiliate thereof (any
activity described in clause (i), (ii), (iii) of this Section 3.2(a) being
herein referred to as a "Prohibited Activity") ; provided, however, that if
--------- -------
Employee is legally compelled to disclose Confidential Information to any
tribunal or else stand liable for contempt or suffer other similar censure or
penalty, then the disclosure to such tribunal of only those Confidential
Information which are legally required to be disclosed shall not constitute a
Prohibited Activity. Employee shall give the Company as much advance notice of
such disclosure as is practicable and reasonable.
The term, "Clients," shall mean those persons who, at any time during
Employee's course of employment with the Company (including; but without
limitation, prior to the date of this Agreement) are or were clients or
customers of the Company or any affiliate thereof or any predecessor of any of
the foregoing.
(b) Non-Competition. By and in consideration of the Company's
---------------
entering into this Agreement and providing the Salary, and benefits (including,
without limitation, stock options pursuant to a Company stock option plan) to
the Employee, and further in consideration of the Employee's continued exposure
to the confidential and proprietary information of the Company (including, but
without limitation, the Company's Confidential Information), the Employee will
not, during the Employment Term engage in any Competitive Activity. The term
"Competitive Activity" means engaging in any of the following activities: (i)
serving as a director of any Competitor (as defined below), (ii) directly or
indirectly through one or more intermediaries, either (X) controlling any
Competitor or (Y) owning any equity or debt interests in any Competitor (other
than equity or debt interests which are publicly traded and, at the time of any
acquisition, do not exceed 5% of the particular class of interests outstanding)
(it being understood that, if interests in any Competitor are owned by an
investment vehicle or other entity in which the
8
Employee owns an equity interest, a portion of the interests in such Competitor
owned by such entity shall be attributed to the Employee, such portion
determined by applying the percentage of the equity interest in such entity
owned by the Employee to the interests in such Competitor owned by such entity),
(iii) employment by (including serving as an officer, employee or partner of),
providing consulting services to (including, without limitation, as an
independent contractor) or, managing or operating the business or affairs of,
any Competitor or (iv) participating in the ownership, management, operation or
control of or being connected in any manner with any Competitor. The term
"Competitor" as used herein means any person (other than the Company or any
affiliate thereof) that directly or indirectly engages in the interactive media
business or any other line of business in which the Company or any subsidiary is
engaged during the Employment Term in the United States or any political
subdivision thereof, or in any other territory or any territory of the world in
which the Company or any subsidiary thereof has established a subsidiary or
sales or representative office or has retained a sales representative or
distributor. Notwithstanding the above, the term Competitor shall exclude the
business conducted by BoxTop Entertainment, Inc. including Television shows and
specials, concerts and one of a kind specials and the related world wide
distribution of any of the above.
(c) Adaption Rights. The Company shall have the express right to edit,
---------------
revise and adapt any Invention and to cause others to edit, revise and adapt any
Invention as the Board of Directors may deem appropriate.
(d) Waiver of Moral Rights. The Employee hereby expressly waives any
----------------------
"artist's rights" or "moral rights" which the Employee might otherwise have in
any Invention.
(e) Insurance. During the Employment Term, the Company shall at its
---------
expense, to apply for, obtain and maintain insurance on the life of Employee in
the amount of $1,250,000, for the sole benefit of his spouse (which shall be the
sole payee of such insurance). Employee shall cooperate fully in connection with
the Company obtaining such insurance. The Company at its expense, shall obtain
disability insurance in an amount acceptable to the Employee.
4. Power of Attorney.
-----------------
Employee will designate and appoint the Company and its duly authorized
officers and agents as its agents and attorneys-in-fact to execute and file any
certificates, applications or documents and to do all lawful acts necessary to
protect the Company's rights in any Invention and other intellectual property.
Employee expressly acknowledges that the foregoing
9
power of attorney is coupled with an interest and is therefore irrevocable and
shall survive the termination of Employee's engagement by the Company for any
reason.
5. Miscellaneous.
-------------
5.1 Binding Effect: Assignment. This Agreement shall inure to the benefit
--------------------------
of and be binding upon the parties hereto and their respective heirs, executors,
representatives, estates, successors and assigns, including any successor or
assign to all or substantially all of the business and/or assets of the Company,
whether direct or indirect, by purchase, merger, consolidation, acquisition of
stock, or otherwise; provided, however, that neither the Employee nor any
-------- -------
beneficiary nor any legal representative of the Employee, may assign all or any
portion of the Employee's rights or obligations under this Agreement without the
prior written consent of the Board of Directors.
5.2 Notices. Whenever notice is required to be given under the terms of
-------
this Agreement, such notice shall be in writing and delivered by hand or by
registered or certified mail, postage prepaid, or transmitted by telecopier,
addressed as follows:
(a) If to the Company, to it at:
BoxTop Interactive, Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Telecopy No: 310.246.9995
(b) If to the Employee, to him at:
Xxxxx Xxxx
0000 Xx. Xxxxxx Xx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
or to such other address as either party shall have specified for itself from
time to time to the other party in writing. All such notices shall be
conclusively deemed to be received and shall be effective, if sent by hand
delivery, upon receipt, or if sent by registered or certified may, upon receipt,
or if transmitted by telecopier.
5.3 Governing Law. This Agreement and the rights and obligations of the
-------------
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State
10
of California without giving effect to the conflicts of law principles thereof.
5.4 Severability. If any term or other provision of this Agreement, or
------------
any application thereof to any circumstance is invalid, illegal or incapable of
being enforced by any rule of law, or public policy in whole or in part, such
provision or application shall to that extent be severable and shall not affect
any of the other provisions or applications of this Agreement.
5.5 Entire Agreement. This Agreement contains the entire understanding of
----------------
the parties hereto with respect to the subject matter hereof and supersedes and
replaces in its entirety the Old Agreement.
5.6 Existing Agreement. Employee confirms and acknowledges that he has no
------------------
claims against the Company (or its affiliates) under the Old Agreement.
5.7 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to constitute one and the same instrument.
5.8 Plurals; Gender; Headings; Sections. In this Agreement, unless the
-----------------------------------
context otherwise requires, words in the singular number or in the plural number
shall each include the singular number and the plural number, and the use of any
gender shall include all genders. The headings in this Agreement are for
reference purpose only and shall not limit or otherwise affect the meaning or
interpretation of this Agreement. All references to sections, subsections and
paragraphs herein shall be deemed to refer to sections, subsections or
paragraphs of this Agreement unless the context otherwise requires.
5.9 Further Assurances. Each party hereto shall do and perform or cause
------------------
to be done and performed all further acts and things and shall execute and
deliver all other agreements, certificates, instruments, and documents as any
other party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
5.10 Amendment and Modification. This Agreement may not be amended, nor
--------------------------
may any provision hereof be modified, waived or discharged, nor may any breach
hereof be waived, except by an instrument in writing duly signed by the party to
be charged. The written approval of the Board of Directors shall be required
before any material amendment, modification, waiver or discharge
11
contemplated by such Sections shall be effective as between the Company and
Employee.
5.11 Waiver. No provision of this Agreement may be waived or discharged
------
unless such waiver or discharge is agreed to in writing and signed by the
affected party. No such waiver or discharge by any party hereto at any time, or
any waiver or discharge any breach by any party hereto of any provision of this
Agreement to be performed by such party, shall be deemed to waive or discharge
any other provisions or be a waiver or discharge of any breach of any other
provisions, respectively, at the same or at any prior or subsequent time.
5.12 Withholding. The Company shall have the right to deduct from any
-----------
amounts payable hereunder or otherwise any taxes or other amounts to the extent
required by law to be withheld.
5.13 Certain Definitions.
-------------------
For purposes of this agreement:
(a) the term "affiliate" shall mean, with respect to any person, any
other person directly or indirectly controlling, controlled by, or under common
control with such person; and
(b) the term "person" shall mean an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
5.14 Arbitration.
-----------
(a) Except as set forth in this Section 5.14, all questions or disputes
arising out of or relating to this Agreement or any breach thereof shall be
finally settled by binding arbitration under the rules of the American
Arbitration Association and judgment upon such award may be entered in any court
having jurisdiction thereof. Any such arbitration proceeding shall take place
in Los Angeles County, California. THE PARTIES EACH HEREBY WAIVE THE RIGHT TO
TRIAL BY JURY IN CONNECTION WITH ANY DISPUTE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY BREACH THEREOF.
(b) Employee acknowledges that the Company is relying for its protection
upon the existence and validity of, among other things, Sections 3.1, 3.2 and 4
of this Agreement, and that irreparable injury (which would not be adequately
compensated by an award of damages) will result to the Company from any
violation or continuing violation of such provisions. Accordingly, Employee
hereby agrees that in addition to the
12
remedies available to the Company by law or under this Agreement, the Company
shall be entitled to seek and obtain, from a court of competent jurisdiction,
such equitable relief (including injunctive relief) as may be permitted by law
for violations of Sections 3.1, 3.2 and 4 of this Agreement. Any such action
shall be brought in the state courts presiding in the County of Los Angeles or
in the Federal Courts in the Central District of California. Each party hereby
consents to personal jurisdiction in such courts and waives any objection to
such venue.
5.15 Attorneys' Fees. In any dispute arising out of this Agreement the
---------------
prevailing party shall be entitled to recover reasonable attorneys' fees and
expenses and other costs in addition to any other relief awarded.
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each
of the parties hereto, all as of the date first above written.
BOXTOP INTERACTIVE, INC., a
California corporation
BY: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Secretary
/s/ Xxxxx Xxxx
----------------------------------
Xxxxx Xxxx, an individual
13
Appendix A
NOTIFICATION TO EMPLOYEE
Set forth below is the text of Section 2870, 2871 and 2872 of the
California Labor Code, as published in Xxxx'x Xxx. Cal. Labor Code (1989) and
Xxxx'x Xxx. Cal. Labor Code (1994 Supp.) :
(S) 2870. EMPLOYMENT AGREEMENTS; ASSIGNMENTS OF RIGHTS
(c) 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 the
employer.
(d) To the extent 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.
(S) 2871. CONDITIONS OF EMPLOYMENT OR CONTINUED EMPLOYMENT; DISCLOSURE OF
INVENTIONS
No employer shall require a provision made void and unenforceable by
Section 2870 as a condition of employment or continued employment. Nothing in
this article shall be construed to forbid or restrict the right of an employer
to provide in contracts or employment for disclosure, provided that any such
disclosures be received in confidence, of all of the employee's inventions made
solely or jointly with others during the term of his or her employment, a review
process by the employer to determine such issues as may arise, and for full
title to certain patients and inventions to be in the United States, as required
by the contracts between the employer and the United States or any of its
agencies.
(S) 2872. NOTICE TO EMPLOYEE; BURDEN OF PROOF
If an employee agreement entered into after January 1, 1980, contains a
provision requiring the employee to assign or offer to assign any of his or her
rights in any invention to his or her
A-1
employer, the employer must also, at the time the agreement is made, provide a
written notification to the employee that the agreement does not apply to an
invention which qualifies fully under the provisions of Section 2870. In any
suit or action arising thereunder, the burden of proof shall be on the employee
claiming the benefit of its provisions.
A-2
Assumption of and First Amendment to Employment Agreement
This Assumption of and First Amendment to Employment Agreement (the "First
Amendment") by and among iXL Enterprises, Inc. ("IXL"), BoxTop Interactive, Inc.
("BoxTop"), and Xxxxx Xxxx references that certain Employment Agreement dated as
of August 1, 1996 by and between BoxTop and Xxxxx Xxxx (the "Employment
Agreement"). Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Employment Agreement.
WHEREAS, pursuant to the Employment Agreement, Xxxxx Xxxx is employed as
the Chairman of the Board and Chief Executive Officer of BoxTop Interactive,
Inc., the wholly-owned subsidiary of IXL.
WHEREAS, the Board of Directors of IXL has proposed to elect and appoint
Xxxxx Xxxx as the Vice Chairman of IXL.
WHEREAS, in connection with the appointment of Xxxxx Xxxx as the Vice
Chairman of IXL, IXL desires to assume the rights and obligations of BoxTop
under the Employment Agreement.
WHEREAS, in connection with the assumption of BoxTop's rights and
obligations under the Employment Agreement, the Employment Agreement must be
amended to accurately reflect Xxxxx Xxxx'x employment by IXL.
NOW THEREFORE, in consideration of the mutual covenants, and obligations
set forth herein and in the Employment Agreement, the parties hereby agree as
follows:
1. Assumption of the Employment Agreement by IXL. IXL hereby assumes the
---------------------------------------------
rights and obligations of BoxTop under the Employment Agreement. Xxxxx Xxxx
hereby consents to such assumption and agrees to be bound by the terms of the
Employment Agreement, as amended hereby, as if IXL were an original party
thereto.
2. Amendments of the Employment Agreement. The Employment Agreement shall
--------------------------------------
be amended as follows:
(a) The term "Company" as it appears in the first paragraph of the preamble
of the Employment Agreement shall be amended to be defined as iXL
Enterprises, Inc.
(b) The second "WHEREAS" clause of the preamble shall be deleted in its
entirety.
(c) Section 1.1(b) of the Employment Agreement shall be amended by deleting
such section in its entirety and substituting in lieu thereof the
following:
(b) During the Employment Term, Employee shall devote (i) substantially
all of his business time, attention and skill, and (ii) all of
-1-
his time and efforts in the interactive media field to the Company;
and shall perform faithfully, loyally and efficiently as the Vice
Chairman of the Company. In such capacity, he shall have such
duties and responsibilities consistent therewith and such other
duties and responsibilities as may from time to time be assigned to
or vested in him by the Board of Directors (as such term is
hereinafter defined). If the Board of Directors requests or
requires that Employee manage or oversee the operations of any
joint venture, division, or subsidiary of the Company or any joint
venture or division of any such subsidiary, Employee's office with
such joint venture, division, or subsidiary (which shall be in
addition to his title as Vice Chairman) shall be no lower than
President.
(d) Section 1.2(b)(ii) of the Employment Agreement shall be amended by
deleting such section in its entirety. Xxxxx Xxxx acknowledges that all
obligations created by deleted Section 1.2(b)(ii) have been satisfied
through prior option grants.
(e) The definition of the term "Competitor" as set forth in Section 3.2(b)
of the Employment Agreement shall be amended by deleting such definition in
its entirety and substituting in lieu thereof the following:
The term "Competitor" as used herein means any person (other than the
Company or an affiliate thereof) that directly or indirectly engages
in the lines of business in which the Company or any of its
subsidiaries is engaged during the Employment Term (other than the
following lines of business: television (including cable television)
and film industries, music or sound recording industries, and talent
management industries). Notwithstanding the above, the term
"Competitor" shall not include BoxTop Entertainment, Inc.
(f) The address for notices to the Company set forth in Section 5.2 shall
be changed to the following:
iXL Enterprises, Inc.
0000 Xxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Attention: U. Xxxxxxx Xxxxx, Xx.
(g) Section 5.5 of the Employment Agreement shall be amended by deleting
such section in its entirety and substituting in lieu thereof the
following:
5.5 Entire Agreement. This Employment Agreement, as amended or modified
----------------
by the Letter dated as of May 30, 1997 (re: Merger of BoxTop
Interactive, Inc. into IXL Merger Corp. III, Inc.) and the Assumption
of and First Amendment to Employment Agreement by and among iXL
Enterprises, Inc. ("IXL"), BoxTop Interactive, Inc. ("BoxTop"), and
Xxxxx Xxxx, contains the entire understanding of the
-2-
parties hereto with respect to the subject matter hereof and
supersedes and replaces in its entirety all prior employment,
consulting or similar agreements, understandings or arrangements,
written or oral.
(h) Section 5.6 of the Employment Agreement shall be amended by deleting
such section in its entirety and substituting in lieu thereof the
following:
5.6 No Claims Under Prior Agreements. Employee confirms and acknowledges
--------------------------------
that he has no claims against the Company or its affiliates under any
employment, consulting or similar agreements, understandings or
arrangements prior to this Employment Agreement, as amended or
modified by the Letter dated as of May 30, 1997 (re: Merger of BoxTop
Interactive, Inc. into IXL Merger Corp. III, Inc.) and the Assumption
of and First Amendment to Employment Agreement by and among IXL,
BoxTop, and Xxxxx Xxxx.
(i) No Further Amendments. Except as otherwise provided in this Section 2,
---------------------
the Employment Agreement shall not be amended or modified.
3. Effect of Sections 3.1(b), (c), and (d). Sections 3.1(b), (c), and (d)
----------------------------------------
of the Employment Agreement shall not apply to Inventions or other intellectual
property made, developed, perfected, devised, conceived or reduced to practice
by Employee during the Employment Term, and up to and including a period of
twelve (12) months after the Employment Term, which relate to the following
lines of business: television (including cable television) and film industries,
music or sound recording industries, or talent management industries.
4. Resignation of BoxTop offices. Xxxxx Xxxx hereby resigns as the
-----------------------------
Chairman of the Board of Directors and Chief Executive Officer of BoxTop.
[Signatures on Following Page]
-3-
IN WITNESS WHEREOF, this Assumption of and First Amendment to Employment
Agreement has been executed by the parties hereto effective as of __________,
1998.
iXL Enterprises, Inc.
By: /s/ U. Xxxxxxx Xxxxx, Xx.
-------------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
-------------------------------
Title: Chairman and CEO
------------------------------
BoxTop Interactive, Inc.
By: /s/ U. Xxxxxxx Xxxxx, Xx.
-------------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
-------------------------------
Title: Chairman and CEO
------------------------------
/s/ Xxxxx Xxxx
-----------------------------------------
Xxxxx Xxxx
-4-
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
This Second Amendment to Employment Agreement (this "Second Amendment") by
and between iXL Enterprises, Inc. ("iXL" or the "Company") and Xxxxx Xxxx
("Wall") references (a) that certain Employment Agreement dated as of August 1,
1996 by and between BoxTop Interactive, Inc.("BoxTop") and Wall and (b) that
certain Assumption of and First Amendment to Employment Agreement dated as of
April 16, 1998 by and among iXL, BoxTop, and Wall (collectively, the "Employment
Agreement").
NOW THEREFORE, in consideration of the mutual covenants, and obligations
set forth herein and in the Employment Agreement, the parties hereby agree as
follows:
1. Amendments of the Employment Agreement. The Employment Agreement shall
--------------------------------------
be amended as follows:
1.1 Sections 1.1(a) and (b) of the Employment Agreement shall be
amended by deleting such sections in their entirety and substituting in lieu
thereof the following:
(a) The Company hereby employs Employee, and Employee hereby
accepts employment by the Company, upon the terms and conditions set forth
in this Agreement, for the period commencing on the date of this Second
Amendment and ending on January 1, 2000, unless earlier terminated pursuant
to the terms of this Agreement (for all purposes herein, other than Section
3, the "Employment Term"). The "Employment Term," for purposes of Section 3
only, shall be the period commencing on August 1, 1996 and ending on August
1, 2000, unless earlier terminated pursuant to the terms of this Agreement.
(b) The Company acknowledges and agrees that Employee shall at
all times during the Employment Term be a part-time employee of the
Company. Employee shall have only those duties and responsibilities as may
from time to time be assigned to or vested in him by the Board of Directors
(as such term is hereinafter defined), but only to the extent such duties
and responsibilities are consistent with those of a part-time employee and
those of a senior executive of the Company.
1.2 Section 1.2(a) of the Employment Agreement shall be amended by
deleting such section in its entirety and substituting in lieu thereof the
following:
(a) In consideration of the services rendered to or for the
benefit of the Company hereunder by Employee during the Employment Term,
the Company shall, during the Employment Term, pay Employee a salary (the
"Salary") at the annual rate of Three Hundred Thirty-Two Thousand Seven
Hundred and Fifty Dollars ($332,750). The Salary shall be payable in
approximately equal installments in accordance with the Company's normal
payroll practices for its employees, but such installments shall be
payable not less frequently than monthly. The Salary, and all other forms
of compensation paid to Employee hereunder shall be subject to all
applicable income taxes, payroll taxes and other amounts required to be
withheld by the Company pursuant to applicable law. Employee shall be
solely responsible for all income taxes, payroll taxes and other amounts
imposed on Employee by reasons of any cash or non-cash compensation and
benefits provided to Employee pursuant to this Agreement. In addition, in
consideration of Employee's execution of this Second Amendment, the Company
agrees to pay to Employee the sum of Fifty Thousand Dollars ($50,000),
subject to all applicable income taxes, payroll taxes and other amounts
required to be withheld by iXL pursuant to applicable law, immediately upon
the execution by Employee of this Second Amendment and pay to Employee
Fifty Thousand Dollars ($50,000), subject to all applicable income taxes,
payroll taxes and other amounts required to be withheld by iXL pursuant to
applicable law, on August 1, 2000.
1.3 Clauses (iv) and (v) of Section 1.2(b) of the Employment Agreement
shall be deleted in their entirety and be of no further force or effect.
1.4 Clause 3.1(a) of the Employment Agreement shall be amended to
include the following clause (iii) at the very end of the first sentence, which
clause shall immediately follow clause (ii) of the proviso within such sentence:
or (iii) of the type specified above, but which was created
developed, perfected, devised, discovered, conceived or reduced to
practice by Employee at any time before, on or after the date of this
Second Amendment (whether or not in collaboration with others or during
or resulting from work performed for the Company or any of its
subsidiaries) that relates to or is used or is intended to be used in
connection with any Permitted Activity (as defined herein).
1.5 (a) Section 3.1(b)(i) of the Employment Agreement shall be
amended so that the clause: "during the period of his employment by the Company,
and up to and including a period of twelve (12) months after the Employment
Term," shall be deleted in its entirety and be of no further force or effect and
the following shall be substituted therefor: "during the Employment Term,".
Section 3.1(b)(i) shall be further amended to add the following at the end of
the one sentence constituting such Section:
; provided, however, notwithstanding anything in the foregoing to the
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contrary, under no circumstances shall the term "Invention" be deemed,
treated or understood to include for any purpose of this Agreement or
for any purported or actual duty or obligation that Employee owes, owed
or is deemed to have owed at any time to the Company or any affiliate
thereof, in his capacity as an employee, director or otherwise, any
invention, discovery, improvement, device, design, apparatus, practice,
process, method or product made, developed, perfected, devised,
conceived or reduced to practice by Employee at any time either before,
on or after the date of this Second Amendment (whether or not in
2
collaboration with others or during or resulting from work performed for
the Company or any of its subsidiaries) that relates to or is used or is
intended to be used in connection with any Permitted Activity (each of the
foregoing described in this proviso, except which may relate to or is used
or is intended to be used in connection with the Studio Concept (as defined
below), that was made, developed, perfected, devised, conceived or reduced
to practice by Employee at any time from the initiation of the Employment
Term through the date immediately prior to this Second Amendment and that
relates either directly or indirectly to the business, products, practices
or techniques of the Company or to the Company's actual or demonstrably
anticipated research or development shall be referred to herein as an
"Employee Invention").
(b) Section 3.1(b)(ii) shall be amended to delete the following
clause in its entirety: "and any other Inventions made, developed, perfected,
devised, conceived or reduced to practice by Employee during said period of
twelve (12) months after the Employment Term," which clause shall be of no
further force or effect.
1.6 (a) Section 3.1(c)(i) of the Employment Agreement shall be
amended so that the clause: "during the period of his employment by the Company,
and up to and including a period of twelve (12) months after the Employment
Term," shall be deleted in its entirety and be of no further force or effect and
the following shall be substituted therefor: "during the Employment Term,".
Section 3.1(c)(i) shall be further amended to add the following at the end of
the sentence constituting such Section:
; provided, however, notwithstanding anything in the foregoing to the
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contrary, under no circumstances shall the phrase "other intellectual
property" be deemed, treated or understood to include for any purpose of
this Agreement or for any purported or actual duty or obligation that
Employee owes, owed or is deemed to have owed at any time to the Company or
any affiliate thereof, in his capacity as an employee, director or
otherwise, any intellectual property, including, but not limited to,
original works of authorship, trademarks, service marks and trade secrets
made, developed, created, devised, conceived, perfected, reduced to
practice or discovered by Employee at any time either before, on or after
the date of this Second Amendment, whether or not in collaboration with
others or during or resulting from work performed for the Company or any of
its subsidiaries, that relates to or is used or is intended to be used in
connection with any Permitted Activity (each of the foregoing described in
this proviso, except which may relate to or is used or is intended to be
used in connection with the Studio Concept, that was made, developed,
created, devised, conceived, perfected, reduced to practice or discovered
by Employee at any time from the initiation of the Employment Term through
the date immediately prior to this Second Amendment and that relates either
directly or indirectly to the business, products, practices or techniques
of the Company or to the Company's actual or demonstrably anticipated
research or development shall be collectively referred to herein as
"Employee Other Intellectual Property").
3
(b) Section 3.1(c)(ii) of the Employment Agreement shall be
amended to add the following at the end of the first sentence of such Section:
; provided, however, under no circumstances shall any copyrightable works
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be deemed, treated or understood to include for any purpose of this
Agreement or for any purported or actual duty or obligation that Employee
owes, owed or is deemed to have owed at any time to the Company or any
affiliate thereof, in his capacity as an employee, director or otherwise,
any copyrightable works made, developed, created, devised, conceived,
perfected, reduced to practice or discovered by Employee at any time either
before, on or after the date of this Second Amendment, whether or not in
collaboration with others or during or resulting from work performed for
the Company or any of its subsidiaries, that relates to or is used or is
intended to be used in connection with any Permitted Activity.
Section 3.1(c)(ii) shall be further amended by deleting the last two sentences
thereof in their entirety and such sentences shall be of no further force or
effect.
1.7 (a) Section 3.1(d) of the Employment Agreement shall be amended
so that the clause: "during the period of his employment by the Company, and up
to and including a period of twelve (12) months after the Employment Term,"
shall be deleted in its entirety and be of no further force or effect and the
following shall be substituted therefor: "during the Employment Term,".
(b) Section 3.1 of the Employment Agreement shall be amended to
add the following Section 3.1(e) immediately after Section 3.1(d):
(e) Employee hereby grants to the Company a perpetual, non-exclusive,
royalty-free license to use, modify, market or display any element of any
Employee Invention or Employee Other Intellectual Property, including the
right to grant to any of the Company's subsidiaries a sub-license in the
same (such license and all such sub-licenses, collectively, the "License").
Nothing in this Agreement, nor any conduct of either of the parties
hereunder, shall affect the ownership of any Employee Invention or Employee
Other Intellectual Property, which at all times shall belong exclusively to
Employee and in which Employee shall retain al proprietary rights. Except
as expressly provided in this Section 3.1(c), the Company agrees and
acknowledges that (i) Employee has no obligation to convey, transfer or
assign to or inform the Company or any of its affiliates of any aspect of
or interest in any Employee Invention or Employee Other Intellectual
Property, (ii) the License is granted on an "as is" basis, without any
express or implied representation or warranty, including, without
limitation, any representation or warranty that any use of the License or
any Employee Invention or Employee Other Intellectual Property does not or
will not infringe upon and/or violate in any way the rights or interests of
any other person or entity and (iii) Employee has no duties or obligations,
express or implied, with respect to the License or any Employee Invention
or
4
Employee Other Intellectual Property, including, without limitation, any
duty or obligation to update, repair, modify or correct.
1.8 (a) Section 3.2 of the Employment Agreement shall be amended so
that the preamble of Section 3.2, which precedes Section 3.2(a), shall be
deleted in its entirety and the following shall be substituted therefor:
Employee and the Company recognize that due to the nature of Employee's
engagement hereunder and the relationship of Employee to the Company, prior
to the date of this Second Amendment, Employee has had access to, may have
acquired, and may have assisted in developing confidential and proprietary
information relating to the business and operations of the Company and its
affiliates, including, but not limited to Confidential Information.
Employee acknowledges that such information has been and will be of central
importance to the business of the Company and its affiliates and that
disclosure of this information to, or its use by others can and will cause
substantial loss to the Company. Accordingly, Employee will perform as
follows:
(b) Clauses (ii) and (iii) of Section 3.2(a) shall be amended by
deleting such clauses in their entirety and substituting in lieu thereof the
following:
(ii) directly or indirectly, for purposes of this clause (ii) only, from
August 1, 1996 through December 31, 2000 (notwithstanding any reference to
the "Employment Term" in this Section 3(a)), through one or more
intermediaries, solicit for employment or recommend to any subsequent
employer of Employee the solicitation for employment of, any person who, at
the time of any such solicitation, is employed by the Company or any
affiliate thereof; provided, however, that (A) under no circumstances shall
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Employee be deemed to have breached this clause (ii) or any other provision
of this Agreement and (B) the Company shall take no action and have no
claim or cause of action against Employee if Employee, or any company or
entity in which Employee has an interest or with which Employee is
otherwise associated, in connection with any Permitted Activity, shall hire
or is deemed to have directly or indirectly hired, two (2) employees who
are at any time during the Employment Term employed by the Company or any
affiliate thereof, or (iii) directly or indirectly, whether for his own
account or for the account of any other person, solicit, divert, or
endeavor to entice away from the Company or any affiliate thereof, or
otherwise engage in any activity intended to terminate the Company's or any
of its affiliate's relationship with, Clients or other business
relationships of the Company or any affiliate thereof (subject to the
exception set forth under clause (ii), any activity described in clause
(i), (ii), (iii) of this Section 3.2(a) being herein referred to as a
"Prohibited Activity");
(c) Section 3.2(b) of the Employment Agreement shall be amended by
deleting such Section in its entirety and substituting in lieu thereof the
following:
5
(b) Non-Competition. By and in consideration of the Company's entering into
---------------
this Agreement and providing the Salary and benefits hereunder (including
stock options granted pursuant to the Company's 1996 Stock Option Plan),
the Employee will not, during the Employment Term, engage in any
Competitive Activity. The term "Competitive Activity" means engaging in any
of the following activities: (i) serving as a director of any Competitor
(as defined below), (ii) directly or indirectly through one or more
intermediaries, either (X) controlling any Competitor or (Y) owning any
equity or debt interests in any Competitor (other than (A) equity or debt
interests which are publicly traded and, at the time of any acquisition, do
not exceed 5% of the total equity interests in such Competitor, or (B) so
long as Employee shall not act as an employee, officer, partner, director,
consultant, advisor or in any other active capacity with, or participate in
the ownership (other than in his capacity as an equity holder), management,
operation of, such Competitor, equity or debt interests which are not
publicly traded and, at the time of any acquisition, do not exceed 20% of
the total equity interests in such Competitor) (it being understood that,
if any interests in any Competitor are owned by an investment vehicle or
other entity in which the Employee owns an equity interest, a portion of
the interests in such Competitor owned by such entity shall be attributed
to the Employee, such portion determined by applying the percentage of the
equity interest in such entity owned by the Employee to the interests in
such Competitor owned by such entity), (iii) employment by (including
serving as an officer, employee or partner of), providing consulting
services to (including, without limitation, as an independent contractor)
or managing or operating the business or affairs of, any Competitor or (iv)
participating in the ownership (except as otherwise provided above),
management, operation or control of or being connected in any similar such
manner with any Competitor; provided, however, notwithstanding anything in
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the foregoing to the contrary, under no circumstances shall the term
"Competitive Activity" be deemed, treated or understood to include any
Permitted Activity or any purported or actual duty or obligation that
Employee owes, owed or is deemed to have owed at any time before, on or
after the date of this Second Amendment, to the Company or any affiliate
thereof, in his capacity as an employee, director or otherwise.
The term "Permitted Activity" as used herein shall mean any activity
taken by Employee or on Employee's behalf in connection with Employee's
capacity as a principal, partner, director, officer, employee, consultant
or advisor of, or direct or indirect investor in (regardless of the
percentage equity or ownership interest held therein by Employee), an
"incubator" or venture capital fund, partnership, corporation, limited
liability company or other entity (any one or more of the foregoing,
collectively referred to as, an "Incubator") engaged in the business of
investing in and/or providing to third parties business planning and other
strategic planning, partnering, development and technical advice and
guidance provided "not for hire" but in connection with the early-stage
development and financing of a business and in exchange for any equity
interest in the business (collectively, "Incubating Services") to any
company, venture, business or other entity that (i) is not a Competitor or
(ii) conducts business related to or using ideas,
6
concepts, inventions or any other intellectual property arising out of the
Studio Concept (a "Studio Concept Business"). The term "Competitor" as used
herein means any person (other than the Company or an affiliate thereof)
that provides one or more of the following service offerings or
substantially similar service offerings to third party businesses primarily
on a "for hire" type consideration basis, but only to the extent any such
service offerings or any component thereof has been sold by the Company or
any subsidiary thereof to one or more third parties in more than a de
minimus amount as of the date of this Second Amendment and only to the
extent all such applicable service offerings generate more than a de
minimus amount of revenue for such Competitor Internet strategy consulting,
the design, development and deployment of e-commerce systems and services,
the design, development and deployment of computer-based business
information management systems, interactive learning environments, digital
media management consulting services, traditional website development,
customized hosting, multimedia sales presentation systems, Web publishing
technology, or other design, development and deployment of Internet
applications and solutions for third parties, but shall not include any
person or entity engaged in the following lines of business: television
(including cable television) and film industries, music or sound recording
industries, and talent management industries), and shall not include BoxTop
Entertainment, Inc. The term "Competitor" shall not be construed to apply
to a Studio Concept Business, an Incubator providing Incubating Services to
a business or other entity that is not a Competitor, or an Incubator that
may provide Incubating Services incidental to an investment of $1,000,000
or more in an established business or entity that is not a Competitor. The
term "Studio Concept" shall mean the creation of any enterprise that
finances, creates, produces, distributes, promotes, syndicates and/or
licenses interactive or broadband content for various forms of distribution
and transmission, whether through the Internet, television, feature films,
video cassettes, digital video disks, satellite transmissions or any other
electronic or other medium. It is Employee's intention that the Studio
Concept is not to materially compete with the activities of the Company,
including the activities of the Company's Digital Media Services Group. The
Company agrees that Employee is and will be free, at any time he is not
actively performing work for the Company, to engage in any Permitted
Activity and in so doing will not be in violation of any provision of this
Agreement.
1.9 Section 5.5 of the Employment Agreement shall be amended by
deleting such section in its entirety and substituting in lieu thereof the
following:
5.5 Entire Agreement. This Agreement, as amended or modified by
----------------
(i) the Letter dated as of May 30, 1997 (re: Merger of BoxTop Interactive,
Inc. into IXL Merger Corp. III, Inc), (ii) the Assumption of and First
Amendment to Employment Agreement by and among iXL Enterprises, Inc.
("IXL"), BoxTop Interactive, Inc. ("BoxTop"), and Xxxxx Xxxx and (iii) the
Second Amendment to Employment Agreement dated as of November __, 1999 by
and between IXL and Xxxxx Xxxx, contains the entire understanding of the
7
parties hereto with respect to the subject matter hereof and supersedes
and replaces in its entirety all prior agreements, written or oral.
1.10 No Further Amendments. Except as otherwise provided in this
---------------------
Section 1, the Employment Agreement shall not be amended or modified.
2. Resignation as Director. Wall hereby resigns as a Director and as Vice
-----------------------
Chairman of iXL effective immediately upon the execution of this Second
Amendment by iXL.
3. Expenses. iXL shall pay Wall $11,000 on the date hereof as reimbursement
--------
in full for all expense reports and receipts Wall has submitted to iXL through
the date hereof, but for which Wall has not yet been fully reimbursed. Schedule
1 hereto sets forth information with respect to such reimbursement requests of
Wall. After the date hereof, Wall shall not be entitled to reimbursement of any
expenses from iXL without iXL's written consent prior to the incurrence of any
such expenses. iXL agrees to reimburse Wall promptly for all expenses Wall
incurs consistent with the immediately preceding sentence.
4. Computer; Assistant; E-Mail and Phone. Wall shall be entitled to remove
-------------------------------------
from iXL's offices located at 00000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, XX 00000,
and iXL relinquishes any claims it may have with respect to, all of Wall's
personal effects, including, but not limited to, (i) all rock posters and
pictures that are hanging in the public areas of such offices, (ii) all
computers currently located in Wall's office, including Wall's IBM laptop with
docking station and monitor and the Gateway Destination, (iii) the furniture
currently located in Wall's office, including the chairs, sofa, tables and desk,
(iv) the leather sofa currently located in Xxxx Xxxxxx'x office, (v) the
coffee table and two matching round tables currently located in the lobby and
(vi) the personal computer currently designated for use by Xxxxxx Xxxx. iXL
shall continue to retain Xxxxxx Xxxx as an employee of iXL to serve as Wall's
assistant until January 1, 2000 and iXL shall continue to pay Xxxx'x salary at
her current rate in accordance with iXL's normal payroll practices. In addition,
iXL agrees to keep Wall's current e-mail address, xxxxx@xxx.xxx, and current
business telephone number, (000) 000-0000, active and continuously available to
Wall for his use at all times during the Employment Term. iXL further agrees
that such address and telephone number shall be reserved for Wall's exclusive
use and iXL agrees to take all reasonable efforts to ensure that such address
and telephone number remain confidential to Wall and the persons calling or
sending e-mail to him at such number and address.
5. Options. iXl agrees that all of Wall's outstanding options to purchase
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shares of iXL's common stock, which were granted pursuant to (i) the
Nonqualified Stock Option Award Agreement dated as of May 30, 1997 by and
between iXL and Wall (the "May Option Agreement") evidencing an option to
purchase 635,900 shares of iXL common stock and (ii) the Incentive Stock Option
Award Agreement dated as of June 16, 1997 by and between iXL and Wall (the "June
Option Agreement") evidencing an option to purchase 170,000 shares of iXL common
stock, that have vested as of the termination of the Employment Term shall not
terminate and shall remain outstanding and fully exercisable by Wall, in the
case of the option
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granted under the May Option Agreement, at any time until the close of business
on July 31, 2006, and in the case of the option granted under the June Option
Agreement, at any time until June 15, 2007, notwithstanding any provision of
iXL's 1996 Stock Option Plan, as amended, the May Option Agreement, the June
Option Agreement or any other agreement or arrangement relating to such options
to the contrary. iXL agrees that the common stock underlying all of Wall's
options shall be and shall remain registered pursuant to an effective
Registration Statement on Form S-8 (or any successor from thereof) of iXL to the
same extent as the common stock underlying any other options outstanding under
iXL's 1996 Stock Option Plan, as amended.
6. Non-Disparagement. Until August 1, 2001 Wall shall not, directly or
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indirectly, make, print, publish, disseminate or otherwise distribute to anyone
any negative or untrue statement with respect to, or any other statement that
otherwise disparages the personal or business reputation of, as applicable, iXL
or any of its subsidiaries or any of iXL's current or future directors or
officers. Until August 1, 2001 iXL shall not, and hereby agrees on behalf of
each of iXL's current and future directors, officers and employees that they
shall not, directly or indirectly, make, print, publish, disseminate or
otherwise distribute to anyone any negative or untrue statement with respect to,
or any other statement that otherwise disparages the personal or business
reputation of, Wall or any company or entity of which he is a principal,
partner, director, officer, employee, consultant, advisor or greater than 5%
owner or with which he is otherwise affiliated.
7. Affirmation of Registration Rights. iXL acknowledges, affirms and
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agrees that, as of the date hereof, Wall is a party to the Registration Rights
Agreement dated as of April 30, 1996 (the "Registration Rights Agreement") among
iXL, Xxxxx Investment Associates V, L.P., Xxxxx Equity Partners V, L.P. and
certain other stockholders of iXL and, as such, is entitled to all of the
benefits thereof, including Wall's incidental registration rights under Sections
1 and 2 thereof. iXL further agrees that on and after the date hereof, Wall
shall be subject to the pro rata reductions of any shares that he intends to
include in any registration statement as set forth in the Registration Rights
Agreement, but that, notwithstanding any provision to the contrary therein, he
will not be subject to exclusion from any offering pursuant to the Registration
Rights Agreement due to his status as an employee stockholder.
8. Mutual Release and Waiver.
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8.1 Release and Waiver by Wall. Except as expressly contemplated by
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this Second Amendment, including Section 8.3 below, and except with respect to
any breach or violation by iXL of this Second Amendment or the Employment
Agreement, as amended hereby, as a material inducement to iXL to enter into this
Second Amendment, Wall hereby irrevocably and unconditionally releases, acquits
and forever discharges iXL and each of iXL's past, present and future
predecessors, successors, assigns, agents, directors, officers, representatives,
subsidiaries, affiliates (and agents, directors, officers and representatives of
such subsidiaries and affiliates) (collectively, "Releases") from any and all
charges, complaints, claims, liabilities,
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obligations, promises, agreements, controversies, expenses (including attorneys'
fees and costs reasonably incurred) of any nature whatsoever, known or unknown,
suspected or unsuspected, including, but not limited to, any rights arising out
of alleged violations of any contracts, express or implied, any covenant of good
faith and fair dealing, express or implied, any obligation for compensation,
lost wages, lost benefits, unused accrued vacation, or any other expectation of
remuneration or benefit on the part of Wall, which Wall now has, owns or holds
or claims to have, own or hold as of the date hereof, or which Wall at any time
heretofore had, owned, or held, or claimed to have, own or hold before the date
hereof, against each of the Releasees.
8.2 Release and Waiver by iXL and Others. Except as expressly
------------------------------------
contemplated by this Second Amendment, including Section 8.3 below, and except
with respect to any breach or violation by Wall of this Second Amendment or the
Employment Agreement, as amended hereby, as a material inducement to Wall to
enter into this Second Amendment, iXL on its behalf and on behalf of its
predecessors, successors, assigns, subsidiaries and controlled affiliates,
hereby irrevocably and unconditionally releases, acquits and forever discharges
Wall from any and all charges, complaints, claims, liabilities, obligations,
promises, agreements, controversies, expenses (including attorneys' fees and
costs reasonably incurred) of any nature whatsoever, known or unknown, suspected
or unsuspected, which iXL or any of its predecessors, assigns, subsidiaries and
controlled affiliates now has, owns or holds or claims to have, own or hold as
of the date hereof, or which iXL or any of its predecessors, assigns,
subsidiaries and controlled affiliates at any time heretofore had, owned, or
held, or claimed to have, own or hold before the date hereof, against Wall.
8.3 Exceptions to Mutual Releases and Waivers. Notwithstanding the
-----------------------------------------
foregoing, Sections 8.1 and 8.2 shall not affect in any way, and no party,
person or entity shall be deemed to have released, acquitted or discharged any
other party, person or entity from or with respect to any charge, complaint,
claim, liability, obligation, promise, agreement, controversy, expense
(including attorneys' fees and costs reasonably incurred) of any nature owned or
held by such party, person or entity with respect to, the following, all of
which shall remain in full force and effect with respect to Wall and iXL after
the date hereof until terminated in accordance with their terms or earlier
terminated by the parties thereto in accordance with the terms thereof:
(a) The Indemnity Agreement dated as of June 8, 1999 by and
between iXL and each person described on the signature pages thereto,
including Wall;
(b) The May Option Agreement, the June Option Agreement, iXL's
1996 Stock Option Plan, as amended, and the Registration Rights Agreement;
and
(c) Each benefit plan and other similar arrangement offered or
sponsored by iXL or any of its predecessors in which Wall has been or
currently is a participant or from which he has been or is entitled to
receive any benefits, including each such plan and arrangement listed on
Schedule 2 hereto.
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8.4 Knowing and Voluntary Waiver. The parties expressly waive and
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relinquish all rights and benefits afforded by Section 1542 of the Civil Code of
the State of California, and do so understanding and acknowledging the
significance of such specific waiver of Section 1542. Section 1542 of the Civil
Code of the State of California states as follows:
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected his settlement with the debtor."
Thus, notwithstanding the provisions of Section 1542, and for the purpose
of implementing a full and complete release and discharge of all those released
by this Second Amendment, Wall and iXL each expressly acknowledge that this
Second Amendment is intended to include in its effect, without limitation, all
claims which such party does not know or suspect to exist in its or his favor at
the time of execution hereof, and that this Second Amendment contemplates the
extinguishment of any such claims.
Wall and iXL acknowledge that they have expressly bargained for the
foregoing waiver of the provisions of Section 1542.
9. Confidentiality; Publicity. Except as required by law, regulation or
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stock exchange requirements, Wall and iXL agree to keep the terms of this Second
Amendment and the transactions contemplated hereby completely confidential. On
and after the date hereof, except as required by law, regulation or stock
exchange requirements, the parties shall not, and shall cause their affiliates
not to, issue or cause the publication of any press release or other
announcement with respect to the transactions contemplated by this Second
Amendment without the consent of the other party, which consent shall not be
unreasonably withheld or delayed.
10. Further Assurances. Wall and iXL each agrees that after the date
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hereof, upon the reasonable request of the other, he or it shall take such
further action as the other may reasonably request to carry out the transactions
contemplated by this Second Amendment.
11. Successor and Assigns. This Second Amendment shall be binding upon and
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inure to the benefit of each of the parties hereto and their respective legal
representatives, successors and permitted assigns. This Second Amendment shall
not be assigned by any party hereto without the prior written consent of the
other party hereto. It is expressly understood that this Second Amendment does
not create any third-party beneficiary rights.
12. Applicable Law. This Second Amendment shall be governed by and
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construed in accordance with the laws of the State of California.
13. Severability. If one or more provisions of this Second Amendment is
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held to be unenforceable under applicable law, such provision shall be excluded
from this Second
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Amendment and the balance of this Second Amendment shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
14. Attorneys' Fees. If either party institutes any legal action to enforce
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his or its rights under or to recover damages for any breach of this Second
Amendment, the prevailing party in such action shall be entitled to recover from
the other party all costs (including costs of mediation, if any) and all
reasonable expenses for attorney's fees and disbursements incurred by him or it.
15. Entire Agreement. This Second Amendment, the schedules hereto and the
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Employment Agreement, as amended hereby, contain the entire agreement among the
parties hereto with respect to the transactions contemplated herein and in the
Employment Agreement.
16. Amendments. This Second Amendment cannot be amended without the written
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consent of both parties hereto.
17. Headings. The headings in this Second Amendment are intended solely for
--------
convenience of reference and shall be given no effect in the construction or
interpretation of this Second Amendment.
18. Execution and Counterparts. This Second Amendment may be executed in
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counterparts, each and all of which shall be deemed for all purposes to be one
agreement.
19. Voluntary Execution. Wall acknowledges that (i) he has freely and
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voluntarily executed this Second Amendment and has elected to do so without any
undue influence from iXL, and (ii) the execution of this Second Amendment and
the actions to be taken pursuant hereto are not in connection with any
disagreement with iXL regarding iXL's operations, policies or practices.
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IN WITNESS WHEREOF, this Second Amendment to Employment Agreement has been
executed by the parties hereto effective as of November 17, 1999.
iXL Enterprises, Inc.
By: /s/ M. Xxxxx Xxxxxxxx
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Name: M. Xxxxx Xxxxxxxx
Title: Executive Vice President
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
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