EXHIBIT 10.21
EMPLOYMENT AGREEMENT
This Agreement is made and entered into effective February 8, 2001, by and
between Valley Media, Inc. (the "Company") and Xxx Xxxx ("Employee").
1. Employment.
1.1 The Company agrees to employ Employee on the terms and conditions of
this Agreement commencing on the above date and continuing until terminated as
provided in Sections 6 or 7 below.
1.2 The Company and Employee acknowledge that Employee's job title, duties
and compensation may be changed by the Company from time to time as determined
by the Company in its sole discretion. The Company and Employee acknowledge
that neither this Agreement, nor the Company's Employee Handbook ("Handbook"),
nor any of the Company's other policies, procedures or practices, nor any
statement or representation by any other employee of the Company shall be
construed as a contract of employment for a specified position or specified
term.
2. Duties of Employee.
2.1 Employee agrees to accept employment on the terms set forth in this
Agreement. Employee will be the Vice President, Finance, and will perform all
services customarily required for such a position.
2.2 Employee will consult with and secure the approval of the Company's
President prior to the hiring or termination of employment of any personnel.
Employee agrees to keep the Company informed of the activities of Employee's
department and the status of all research, business efforts and other
activities being developed, conducted or monitored by that department.
Employee acknowledges and agrees that performance of Employee's duties will
require travel at such times and for such periods as may be necessary or
appropriate.
2.3 Employee agrees to devote Employee's full time, attention, skill, and
efforts to the performance of duties for the Company, its parent,
subsidiaries, and affiliates. Employee shall perform such additional duties as
the Company may assign during the term of this Agreement, including services
for any subsidiary or affiliated entities.
2.4 Employment during the term of this Agreement shall be on a full-time
basis. Employee will not enter into any employment or independent contractor
relationship with any other person or entity without the advance written
consent of the Company's President.
3. Compensation.
3.1 Salary. Company shall pay to Employee, in full consideration of all
services to be rendered by Employee, compensation at the rate of Four
Thousand, Six Hundred Fifteen Dollars and Thirty-Eight Cents ($4,615.38),
commencing as of the date of this Agreement, payable biweekly, in accordance
with the Company's normal pay practices, and subject to such withholding as
may be required by law, prorated for any partial employment period.
3.2 Bonus. A guaranteed bonus of Fifteen Thousand Dollars ($15,000.00) will
be paid on April 1st, 2001. For fiscal year 2002 (April 2001 through March
2002) Employee will be eligible for a bonus to be determined at the discretion
of the Compensation Committee and the Board of Directors.
3.3 Stock Options. Upon execution of this Agreement, and under the
Company's Amended and Restated 1997 Stock Option Plan (the "Plan"), Employee
shall be granted an option to purchase 15,000 shares of the Company's Common
Stock at $0.875 per share.
4. Unfair Competitive Practices.
4.1 Employee shall not, directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, stockholder, corporate
officer, director, or in any other individual or representative capacity,
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engage in or participate in any business that is in competition in any manner
whatsoever with the business of the Company, its parent, subsidiaries, or
affiliates.
4.2 Employee will not at any time during or after Employee's employment,
solicit or take away, directly or indirectly, any person, entity or business
that is a customer or prospective customer of the Company or any of its
affiliates or subsidiaries.
4.3 During the term of this Agreement and after termination of this
Agreement, Employee agrees that Employee will not, directly or indirectly,
solicit, induce or influence any person employed or engaged by the Company to
terminate such employment or engagement.
4.4 During the term of this Agreement, Employee will not undertake planning
for, or the organization of, any business activity competitive with the
Company's business or combine or conspire with other employees or
representatives of the Company's business with the purpose of organizing any
such competitive activity.
4.5 During the term of this Agreement and after termination of this
Agreement, Employee will not make any disparaging or defamatory comments to
any third party regarding the Company, its parent, subsidiaries or affiliates
concerning its or their officers, directors, employees or agents, or
concerning its or their services or methods of doing business. Further,
Employee will not at any time during or after Employee's employment do
anything that could affect to the Company's detriment any relationship of the
Company with any current, future, or prospective customer, supplier, or
Company employee, or which could cause any current, future, or prospective
client or customer to refrain from entrusting business or additional business
to the Company.
4.6 Employee agrees that, where applicable, the provisions of this section
shall survive the termination of Employee's employment.
5. Trade Secrets.
5.1 Employee acknowledges that during the term of this Agreement, Employee
will have access to, and become acquainted with, proprietary trade secret
information belonging to the Company, its parent, subsidiaries, affiliates,
clients, and customers, including, without limitation, information concerning
their organization, business and affairs, their client lists, supplier lists,
pricing information, profit margins, referral source lists, client
presentations (actual and proposed), sales and financing projections, budget
information and procedures, computer software, techniques of operation,
employee compensation and financial structure, future promotion plans and
strategies of any kind or nature, (hereinafter referred to as "Confidential
Information"). Employee acknowledges that information may be Confidential
Information even though not expressly stamped or identified as such, and that
Employee will treat all information in the general categories identified above
as Confidential Information. Employee further acknowledges that Confidential
Information is highly confidential, a valuable trade secret, and the sole
property of the Company and its parent, subsidiaries, affiliates, clients, and
customers, as the case may be, and that the protection and preservation of
Confidential Information by Employee is absolutely vital to the continued
success of the promotion and marketing business of the Company, and the
preservation of the trust of its clients. Accordingly, Employee shall not
disclose, reveal, or divulge to any person any Confidential Information or
other trade secrets, directly or indirectly, or use them in any way, except as
required in the course of Employee's employment under this Agreement.
5.2 Upon termination of employment with the Company for any reason, or at
any other time the Company demands, Employee shall deliver promptly to the
Company all material and documentation relating to the Company, including
without limitation, all memoranda, notes, records, reports, manuals, drawings,
blueprints, employee lists, customer lists, referral source lists, vendor
service lists, software programs, and any other documents, whether or not of a
confidential nature, belonging to the Company, including all copies of such
materials which Employee may then possess or have under Employee's control.
Employee further agrees that upon termination of employment, Employee shall
not retain any document, data, or other materials containing or pertaining to
the Confidential Information.
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5.3 Employee agrees and acknowledges that a breach of the provisions of
paragraphs 4 or 5 will result in damage or loss to the Company which cannot be
reasonably or adequately compensated in damages and will cause the Company
irreparable injury. Employee expressly agrees that the Company shall be
entitled to injunctive and other equitable relief to prevent a breach of
paragraphs 5 or 6 of this Agreement, without the need for the posting of any
bond or other security. Resort to such equitable relief shall not be construed
to be a waiver of any other rights or remedies the Company may have for
damages or otherwise.
5.4 Employee agrees that the provisions of this section shall survive
termination of Employee's employment.
6. Termination. This Agreement may be terminated prior to the expiration of
the Term as follows:
6.1 Upon Disability or Death. If during the Term, the Employee shall become
physically or mentally disabled, whether totally or partially, either
permanently or so that the Employee, in the good faith judgment of the
Company, is unable substantially and competently to perform his duties
hereunder for a period of Ninety (90) consecutive days or for Ninety (90) days
during any six (6) month period during the Term (a "Disability"), the Company
may terminate the Employee's employment hereunder. In order to assist the
Company in making that determination, the Employee shall, as reasonably
requested by the Company,
(i) make himself available for medical examinations by one or more
physicians chosen by the Company, and
(ii) grant to the Company and any such physicians access to all relevant
medical information concerning him, arrange to furnish copies of his
medical records to the Company and use his best efforts to cause his own
physicians to be available to discuss his health with the Company.
If the Employee dies during the Term, this Agreement shall automatically
terminate as of the close of business on the date of his death. Upon
termination for Disability or death, the Company shall not be obligated to
make any salary or other payments or provide any benefits under this Agreement
(other than salary payments for services already rendered, bonus payments for
fiscal years that have ended, and reimbursements for expenses incurred,
through the date of termination).
6.2 For Cause. This Agreement may be terminated at any time by the Company,
effective immediately upon written notice to the Employee for Cause and all of
the Employee's rights to payments (other than salary payment for services
already rendered, bonus payments for fiscal years that have ended, and
reimbursements for expenses incurred, through the date of such termination)
and any other benefits otherwise due hereunder shall cease immediately. The
Company shall have "Cause" for termination of the Employee if any of the
following has occurred:
(a) Employee continues to fail to perform substantially his duties
hereunder (other than as a result of a Disability) following a written
demand therefore by the Company not less than thirty (30) days prior to the
effective date of termination, provided that a policy disagreement that
does not involve a failure to substantially perform requested duties shall
not constitute "Cause" hereunder;
(b) Employee is engaged in dishonesty or gross negligence in the
performance of Executive's duties hereunder;
(c) Employee commits an act or acts constituting a felony under the laws
of the United States or any state thereof;
(d) Employee commits a willful act or omission (other than a lawful
business decision, or an act or omission in furtherance thereof, that is
within the scope of Employee's authority hereunder) which is materially
injurious to the financial condition or business reputation of the Company
or any of its subsidiaries; or
(e) Employee breaches any provision or covenant contained in this
Agreement, including, without limitation, the covenants contained in
Sections 5 and 6, or any other part of this Agreement.
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7. Change in Control.
For the purposes of this Agreement "Change in Control" means the occurrence
of one or more of the following events without the approval of the Board:
(a) The Company sells substantially all of its assets to a single
purchaser or a group of associated purchasers;
(b) At least fifty percent (50%) of the outstanding corporate shares of
the Company are sold, exchanged or otherwise disposed of in one
transaction; or
(c) There is a merger or consolidation of the Company in a transaction
in which the Company's shareholders receive less than fifty percent (50%)
of the outstanding voting shares of the new or continuing corporation.
7.1 In the event of a "Change in Control" as defined above where the
Employee's employment is terminated without cause, the Company shall continue
to pay Employee's salary for six (6) months from the date of termination.
Employee will not continue to accrue vacation or sick leave. For a period of
six (6) months, Employee will continue to receive medical and dental benefits.
7.2 If Employee elects to terminate his employment with the Company or its
successor within six (6) months of a "Change in Control" (as defined above),
Company or its successor shall continue to pay Employee's salary and medical
and dental benefits for six (6) months.
8. Assignment.
Employee may not, without the prior written consent of the Company, assign
this Agreement or any rights or obligations hereunder. The Company may assign
this Agreement and delegate any of its rights and duties, without the consent
of Employee, to any of its subsidiaries or affiliates or to any person or
entity who purchases the assets or stock of the Company.
9. Ownership of Materials.
All memoranda, reports, drawings, designs, programs, promotions, software
and other materials or documents, whether or not confidential, created or
developed by Employee pursuant to Employee's employment (whether alone or in
conjunction with any other person), or which Employee may disclose to the
Company during the term hereof shall be the sole and absolute property of the
Company for any and all purposes whatsoever, and Employee agrees that Employee
does not have, and will not claim to have, any right, title or interest of any
kind or nature whatsoever in or to such materials. Employee further agrees to
execute any and all documents reasonably required by Company in order to
evidence or perfect Company's ownership of such materials.
Employee agrees that the provisions of this section shall survive
termination of Employee's employment.
10. Miscellaneous.
10.1 This Agreement supersedes any and all other agreements, either oral or
in writing, between the parties hereto with respect to the employment of
Employee by the Company, and contains all of the covenants and agreements
between the parties with respect to such employment in any manner whatsoever.
Each party to this Agreement acknowledges that no representations,
inducements, promises or agreements, oral or otherwise, have been made by any
party or anyone acting on behalf of any party which are not expressly
contained herein.
10.2 This Agreement may not be amended, supplemented, or modified or
extended except by a written agreement which expressly refers to this
Agreement and which is signed by each of the parties hereto.
10.3 This Agreement is made in and shall be governed by the laws of
California.
10.4 In the event that any provision of this Agreement is determined to be
illegal, invalid, or void for any reason, the remaining provisions hereof
shall continue in full force and effect.
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10.5 To the extent that any portion of this Agreement is deemed
unenforceable by virtue of its scope in terms of area, business activity
prohibited and/or length of time, but could be enforceable by reducing the
scope of area, business activity prohibited and/or length of time, Employee
and the Company agree that same shall be enforced to the fullest extent
permissible under the laws and public policies applied in the jurisdiction in
which enforcement is sought, and that the Company shall have the right, in its
sole discretion, to modify such invalid or unenforceable provision to the
extent required to be valid and enforceable. Employee agrees to be bound by
any promise or covenant imposing the maximum duty permitted by law which is
subsumed within the terms of any provision hereof, as though it were
separately articulated in and made a part of this Agreement, that may result
from striking or modifying any of the provisions hereof.
10.6 Employee agrees to abide by the terms of the Handbook and any other
Company policies, procedures and directives. Employee understands and
acknowledges that the terms of the Handbook, and other Company policies,
procedures and directives may be amended, supplemented or modified from time
to time by the Company, with or without prior notice to the Employee. In the
event of any conflict between the terms of the Handbook, or any other
policies, procedures or directives, and the provisions of this Agreement, the
provisions of this Agreement shall govern.
10.7 Employee represents and warrants to the Company that there is no
restriction or limitation, by reason of any agreement or otherwise, upon
Employee's right or ability to enter into this Agreement and fulfill the
obligations under this Agreement.
10.8 Employee acknowledges, represents and agrees that Employee is not
relying on any inducement, representation, promise, or other statement not
expressly set forth herein in entering into this Agreement and accepting
employment with the Company, including without limitation any representation
regarding the term of employment or any right to continued employment, other
than what is described in this Agreement.
10.9 The Company and Employee agree that claims or controversies arising
between them concerning this Agreement, Employee's employment or the
termination of such employment shall be resolved by binding arbitration in
accordance with the provisions of Exhibit A, except as otherwise provided
therein.
/s/ Xxxxxx X. Xxxx
____________________________________
Xxx Xxxx, EMPLOYEE
DATED: March 30, 2001
VALLEY MEDIA, INC.
/s/ Xxxxx X. Xxxxxx
By: ________________________________
Xxxxx X. Xxxxxx, PRESIDENT and COO
DATED: April 2, 2001
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