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EXHIBIT 10.22
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is dated as of May 15, 1997
("Effective Date") by and between Modern Records, Inc., a California corporation
(the "Company"), and Xxxxxx Xxxxxxx Xxxxxxx (the "Employee").
1. Employment. The Company hereby agrees to employ the Employee
and the Employee hereby agrees to serve the Company on the terms and conditions
hereinafter set forth.
(a) Position. The Employees shall serve as President and
Chief Operating Officer, and, as such, the Employee hereby promises to
perform and discharge well and faithfully the duties that may be
assigned to him from time to time by the Board of Directors.
(b) Full Time Employment. The Employee shall devote his
full business time, retention and energies to the business of the
Company as may reasonable be required by the Board.
2. Compensation. As reimbursement to the Employee for his
services hereunder the Company shall compensate the Employee as follows:
(a) Base Salary. The Employee shall receive a base salary
as may be adjusted from time to time. The "Base Salary" is payable in
conformity with the Company's then current payroll practice as modified
from time to time as follows:
(i) Commencing on the Effective Date and ending on
December 31, 1997, the amount of $16,667.67 per month.
(ii) Commencing on July 1, 1998, and ending on
December 31, 1998, the amount of $16,667.67 per month.
(iii) Commencing on January 1, 1999, and
thereafter, such amount as the Board of Directors shall
determine.
(b) Bonus. The Employee may be eligible to receive a cash
bonus if, when and in the amount determined by the Board of Directors
from time to time.
(c) Expenses. Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses, permitted under the Company's
expense reimbursement policy, that are incurred by him in connection
with his services hereunder. The Employee shall account to the Company
for such expenses in accordance with the Company's reasonable policies.
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(d) Employee Benefit Programs. Company shall use its best
efforts to obtain group health, life and dental benefits for its
employees, provided, however, that until such time as Employee is
covered under a group health plan maintained by the Company, the Company
shall reimburse Employee for premiums paid by him to maintain individual
health insurance which was in effect with respect to Employee on the
Effective Date hereof or to maintain continuation coverage under the
group health plan of a prior
(i) any Base Salary installments due for the
calendar month in which the Date of Termination occurs;
(ii) any Bonus declared by the Board prior to the
Date of Termination but unpaid; and
(iii) payments accrued under any benefit plans
through the Date of Termination.
(c) Termination by the Company. Notwithstanding the
provisions of Section 4 and as a mutually exclusive alternative to the
provisions of Section 5(a), 5(b), 5(d) and 5(e), the Company may
terminate the Employee's employment hereunder at any time, for any
reason, including but not limited to, as a result of Company's
determination to cease the active conduct of its business prior to the
Expiration Date of this Agreement by delivering to the Employee a Notice
of Termination, as provided in Section 5(f). For a period which
commences on its Date of Termination and ends six (6) months later, the
Employee's exclusive termination remuneration at the event of
Termination under this Section 5(e) shall be continuation of coverage
under the medical, dental and life insurance programs maintained by the
Company to the extent such continuation thereunder is permitted under
the terms of the insurance contracts governing such programs, or, in the
alternative reimbursement of Employee for premiums paid to maintain
medical coverage under the continuation coverage provisions of the
Consolidated Omnibus Budge Reconciliation Act of 1986.
(d) Termination for Cause. Notwithstanding the provisions
of Section 5(e) and in the alternative thereto, if the Employee's
employment with the Company is terminated for Cause (as specified
below), the Employee's exclusive termination remuneration shall be the
amounts provided under Sections 2(b), (c), and (d), accrued to the Date
of Termination. The determination of "Cause" shall be made in accordance
with the normal personnel practices of the Company, and as approved by
the Board of Directors of the Company within ten (10) business days of
written notice to the Employee and an opportunity for the Employee to
meet with the Board to discuss the basis for such determination. For
purposes of this Agreement, the Company shall have "Cause" to terminate
the Employee's employment hereunder upon (1) the Employee having been
convicted of any felony or other crime involving moral turpitude; (2)
the continued and habitual use of narcotics or alcohol to an extent
which materially impairs the Employee's performance of his duties
hereunder; (3) malfeasance or gross negligence by the Employee in the
performance of his duties hereunder; (4) the knowing, continued
violation to a material extent by the Employee of any material provision
of this
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Agreement; or (5) willful and gross misconduct by the Employee
materially injurious to the Company.
(e) Voluntary Termination. Notwithstanding Sections 5(a),
5(b), 5(c) and 5(d), the Employee may terminate his employment with the
Company at any time, by giving the Company a Notice of Termination, as
provided in Section 5(f). If the Employee voluntarily terminates his
employment with the Company under this Agreement, the Employee's
exclusive termination remuneration shall be the amounts determined under
Sections 2(a), (c), and (d), accrued through the Date of Termination.
(i) Notice of Termination. For purposes of this
Agreement, the term "Notice of Termination" shall mean a written
document delivered to the Employee, which shall specify the
section of this Agreement under which termination is made.
Termination shall be effective thirty (30) calendar days after
the Notice of Termination is given. Notwithstanding the
foregoing, the Notice of Termination shall be effective
immediately in the event the Employee is terminated for Cause.
(f) Date of Termination. For purposes of this Agreement,
the term "Date of Termination" shall mean the effective date of a Notice
of Termination, as provided in Section 5(f) or the date of the
Employee's death.
6. Restriction of Employee's Activities. During the period of his
employment and during the period of the Company is making payments to the
Employee pursuant to Section 5(c) of this Agreement, even though the Employee is
not then employed by the Company, the Employee agrees that unless the Company
shall prior thereto consent in writing, he shall not engage in any activity for
or have any interest in any person, firm, corporation, partnership or business
(whether as an advisor, principal, consultant, independent contractor, agent,
partner, officer, director, stockholder, employee, member of any association or
otherwise that engages in any activity within the State of California or any
counties in the State of California, except for investments as a passive
investor in companies, partnerships or limited liability companies that do not
involve any commitment of time (other than reasonable time for managing
Employee's personal investment(s) and do not involve Employee taking a position
as an officer, director, employee, advisor or consultant to such entity, unless
approved by the Board of Directors from time to time.
7. Confidential Information. Employee shall not during the period
of his employment by Company or at any time thereafter divulge, furnish or make
accessible to anyone or use in any way (other than in the ordinary course of
business of the Company or its subsidiaries and affiliates) the Company's
Confidential information. As used herein, the term Company's "Confidential
Information" shall mean (1) any knowledge or information which Employee has
acquired or become acquainted with or will acquire or become acquainted with
prior to the termination of his employment by Company, whether developed by
himself or by others and whether developed or acquired by Company, or its
subsidiaries or affiliates, from others, concerning any trade secrets,
including, but not limited to trade secrets as defined in Section 3416.1 of the
California Civil Code, confidential or secret designs, processes, formulas,
plans, devices or material (whether or not copyrighted or copyrightable or
patented as patentable)
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directly or indirectly materially useful in any aspect of the business of the
Company, or its subsidiaries or affiliates; (2) the names and locations and
requirements of any customers, prospective customers, vendors, suppliers of, or
any other persons having a business relationship during the term of this
Agreement with Company or its subsidiaries or affiliates; (3) any confidential
or secret development or research work of Company, or its subsidiaries or
affiliates, whether developed by Employee individually, jointly or by others,
(4) all accounting, cost, revenue and other financial records and documents of
the Company, as well as the contents thereof; (5) documents, agreements,
correspondence and other similar business records of the Company; and (6) any
other confidential or secret aspect of the business of Company, or its
subsidiaries and affiliates. Employee acknowledges that the Company's
Confidential Information constitutes a unique and valuable asset of Company
acquired at great time and expense by Company which is secret and confidential
and which will only be available to or communicated to Employee in confidence in
the course of his professional duties, and that any disclosure or other use of
Company's Confidential Information other than for the sole benefit of Company
would be wrongful and could cause irreparable and incalculable harm to Company
and to its subsidiaries and affiliates. Both during and after his employment
with Company. Employee will refrain from any knowing acts or omissions that
would materially reduce the value to the Company, of the Confidential
Information of Company or its subsidiaries and affiliates. Anything herein to
the contrary notwithstanding, no knowledge or information described herein that
is part of the public domain or otherwise acquired by Employee outside the
course of his employment with the Company shall be deemed Confidential
Information hereunder.
8. Property Rights. Employee shall promptly and fully inform
Company of, and disclose to Company, any and all ideas, concepts, themes,
inventions, designs, creations, improvements and discoveries that he makes
during the term of this Agreement, whether individually or jointly in
collaboration with others, which relate, at the time any such item is conceived
or reduced to practice, to Company's business or to actual or anticipated
research or development of the Company, or which result from any work performed
by Employee for Company. Employee agrees that any and all intellectual
properties, including, but not limited to all ideas, concepts, themes,
inventories, designs, creations, improvements or discoveries conceived,
developed or written by Employee, either individually or jointly in
collaboration with others, pursuant to this Agreement, whether patentable or
unpatentable or copyrightable or uncopyrightable, shall belong to and be the
sole and exclusive property of Company. Employee shall assist Company in
obtaining patents or copyright registration on such intellectual properties and
exercise all documents and do all things necessary to enable Company to obtain
and enforce full and exclusive title to such properties.
9. Successors Binding Agreement. This Agreement is fully
assignable by the Company to any successor, provided, however, that said
successor shall be obligated to perform this Agreement in accordance with its
terms. As to the Employee, this is a personal service contract and the Employee
may not assign this Agreement or any part hereof without the prior written
consent of the Company, which consent may be withheld by the Company for any
reason it deems appropriate.
10. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have
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been duly given when delivered in person or when placed in the United States
mail, by certified mail, return receipt requested, postage prepaid, addressed as
follows:
By the Company:
Modern Records, Inc.
_________________________________
_________________________________
_________________________________
If to the Employees:
_________________________________
_________________________________
_________________________________
With a copy to:
Xxxxx Xxxx Xxxxxxx, Esq.
Law Offices of Xxxxx Xxxx Peteler
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
11. Remedies.
(a) Injunctive Relief. Company and Employee agree that it
would be difficult to calculate the extent of damages caused and to
compensate Company duly for such damages for any violation of the
provisions of the Agreement by the Employee. Accordingly, Company and
Employee agree that Company shall be entitled to temporary and permanent
injunctive relief, without necessity of posting bond, to enforce the
provisions of this Agreement and that such relief may be granted without
the necessity of proving actual damages. This provision with respect to
injunctive relief shall not, however, diminish the right of Company to
claim and recover damages from the Employee in addition to injunctive
relief;
(b) Offset. In the event that Employee breaches this
Agreement, Company shall have the right to offset any damages it meets
with regard to such breach, against any sums that remain thereafter due
to Employee hereunder, provided, however, that the exercise of such
right of offset shall in no way diminish Company's rights to seek any
other remedies it may be entitled to hereunder at or in equity;
(c) Uniform Trade Secrets Act. In the event Employee
breaches Section 8 of this Agreement, Company shall have the right to
invoke any and all remedies provided under the California Uniform Trade
Secrets Act (California Civil Code Sections 3426, et seq.) or other
statutes or common law remedies of similar effect.
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12. Publicity. Employee shall not make any public announcements,
press releases, or similar public communications without the prior approval of
the Company's Board of Directors.
13. Prior Agreements; Modifications; Waiver. This Agreement
constitutes the entire agreement between the parties hereto regarding the
subject matter hereof, and supersedes any prior or contemporaneous agreements,
letters of intent, or other understandings between the parties. No provision of
this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by this Employee and a
non-interested majority of the Board of Directors. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of any similar or dissimilar provision or
condition at the same or any prior or subsequent time.
14. Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California.
15. Severability. To the extent any provision or any portion of
any provisions of this Agreement shall be invalid or unenforceable, it shall be
considered deleted herefrom and the remainder of such provision and of this
Agreement shall be unaffected and shall continue in full force and effect. In
furtherance and not in limitation of the foregoing, should the duration or
geographical extent of, or business activities covered by, any provision of this
Agreement be in excess of that which is valid and enforceable under applicable
law, then such provision shall be construed to cover only that duration, extent
or activities which may validly and enforceably be covered.
16. Withholding. Anything in this Agreement to the contrary
notwithstanding, all payments required to be made by the Company hereunder to
the Employee or his estate or beneficiaries shall be subject to the withholding
of such amounts relating to taxes as the Company may reasonably determine it
should withhold pursuant to any applicable law or regulation.
17. Tax Consequences. The Company shall have no obligation to any
person entitled to the benefits of this Agreement with respect to any tax
obligation any such person incurs as a result of or attributable to this
Agreement, including all supplemental agreements and employee benefit plans
incorporated by reference therein, or arising from any payments made or to be
made hereunder or thereunder.
18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, even though the parties
do not sign the same counterpart.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date and year first above written.
MODERN RECORDS, INC.
By:
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Title:
EMPLOYEE
/s/ Xxxxxx Xxxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx Xxxxxxx
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