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EX-10.(d)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated the 1st day of September, 1995 (the
"Employment Agreement") is between AP OFFICE EQUIPMENT, INC., a Colorado
corporation, formerly AP Office Equipment, Inc. (the "Corporation" or
"Employer"), with its executive offices at 601 ONEOK Plaza, 000 Xxxx Xxxxx
Xxxxxx, Xxxxx, Xxxxxxxx 00000, and XXX XXXXXXXXX, of 00 Xxxxxxx Xxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxx 00000 ("Employee").
In consideration of the premises and the mutual promises contained
herein, and of the provisions of a certain Stock Purchase Agreement of even date
herewith among the Corporation, Entertainment Digital Network ("EDnet") and
certain of the shareholders of EDnet, the Corporation and the Employee hereby
agree as follows:
1. TERM OF EMPLOYMENT. This Agreement shall remain in force from the
date hereof until the 31st day of December, 2000 (the "Expiration Date") unless
sooner terminated in accordance with Section 5 (the "Term"). In consideration
for Employee's provision of services specified in Section 2 hereof for the Term,
it is understood and agreed that Employer shall pay the monthly compensation
specified in Section 3 hereof for the Term.
2. EMPLOYMENT DUTIES. Employee shall serve as President and Chief
Executive Officer of the Corporation for the term of employment of Employee
under this Employment Agreement. In his capacity as an officer, Employee shall
have such authority as is delegated to him by the Board of Directors of the
Corporation. During the Term, Employee shall faithfully perform the duties
assigned to him and shall devote his full time and attention to, and use his
best efforts in the furtherance of, the business of the Corporation. The
foregoing authority and duties shall be consistent with Employee's authority and
duties as an officer of EDnet.
3. COMPENSATION. In consideration of the services to be rendered by
Employee under this Employment Agreement, the Corporation agrees to pay, and
Employee agrees to accept, the following compensation:
(a) BASE SALARY. The Corporation shall pay Employee a
base salary at the annual rate of One Hundred Twenty-Five Thousand Dollars
($125,000) for the first six months of employment, to increase to market rate
thereafter and for each succeeding year of this Employment Agreement for the
Term. The base salary shall be payable in equal bi-weekly installments, subject
only to applicable withholding requirements. No overtime pay will be paid to
Employee by the Corporation.
(b) STOCK OPTIONS. In addition to Employee's base salary
hereunder, as additional compensation, the Corporation shall grant to Employee
an option to purchase a total of 250,000 shares of the Corporation's Common
Stock, par value $.10 per share, at the price
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of $1.25 per share under Employer's incentive stock option plan, within 60 days
of the execution of this Agreement, on the following terms and conditions:
(1) On January 1, 1997, the option shall become
exercisable for a total of 100,000 shares of the Corporation's Common Stock,
exercisable for a five year period, if for any prior rolling 12 month period
during the period September 1, 1995 through December 31, 1996, the Corporation
has sales of at least $5,000,000 or pre-tax net income of $500,000.
(2) On January 1, 1998, the option shall become
exercisable for a total of 100,000 shares of the Corporation's Common Stock,
exercisable for a five year period, if for any prior rolling 12 month period
during the period September 1, 1995 through December 31, 1997, the Corporation
has sales of at least $8,500,000 or pre-tax net income of at least $1,500,000.
(3) On January 1, 1999, the option shall become
exercisable for a total of 50,000 shares of the Corporation's Common Stock,
exercisable for a five year period, if for any prior rolling 12 month period
during the period September 1, 1995 through December 31, 1998, the Corporation
has sales of at least $15,000,000 or pre-tax net income of at least $3,000,000.
Each of the above installments may be exercised by the delivery by Employee to
the Corporation of a three-year promissory note payable to the Corporation, with
interest only payable annually at the minimum rate necessary to avoid the
imputing of interest by the Internal Revenue Service.
(c) REIMBURSEMENT OF EXPENSES. The Corporation shall
promptly reimburse Employee for reasonable out-of-pocket expenses that the
Employee may incur in connection with his services for the Corporation. Employee
shall provide to the Corporation supporting documentation sufficient to satisfy
reporting requirements of the Internal Revenue Service and in such form as is
reasonably satisfactory to the Corporation.
(d) EMPLOYEE BENEFITS. Employee shall be entitled to
participate in such employee benefit plans, including group pension, life and
health insurance and other medical benefits, and shall receive all other fringe
benefits, as the Corporation may make available to employees during the term of
employment of Employee. In addition, the Corporation shall continue to maintain
and provide disability insurance at the levels currently in effect.
4. VACATION. Employee shall be entitled to accrue vacation leave equal
to one and one-quarter (1 1/4) days at full pay for each one (1) month period of
completed service during the Term (with unused days being carried forward
indefinitely), and may take such accrued vacation days at such times as he may
wish, subject to Employee's arranging such vacations so as not materially to
affect adversely the ability of the Corporation to transact its necessary
business and provided, further, that Employee shall not take vacations totalling
more than twenty-five (25) business days during any calendar year and shall take
no single vacation of more than fifteen (15) consecutive business days.
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5. TERMINATION. The employment of Employee under this Employment
Agreement shall terminate on the first to occur of the following:
(a) On the Expiration Date as provided in Section 1.
(b) Upon the death of Employee or in the event of
permanent disability of Employee, at the option of the Corporation, upon ninety
(90) days written notice by the Corporation. For the purposes of this Employment
Agreement, Employee will be deemed to be permanently disabled in the event that
competent medical authority, acceptable to the Corporation, opines that it is
improbable that Employee will ever be able to resume his usual or ordinary
duties for and on behalf of the Corporation.
(c) This Agreement may be terminated by the Board of
Directors of the Corporation for Employee's willful misconduct, habitual neglect
of duties or breach of a material provision of this Agreement. In the case of
termination for willful misconduct or habitual neglect of duties, Employee shall
be given at least one (1) written notice describing in reasonable detail the
perceived deficiencies in Employee's performance, and Employee shall be given at
least thirty (30) days opportunity to correct such perceived deficiencies prior
to any termination. In the case of termination for breach of this Agreement,
Employee shall be given written notice describing in reasonable detail the
alleged breach, and Employee shall have thirty (30) days in which to cure such
breach.
(d) At the election of Employee, in the event of the sale
or transfer of substantially all of the business or assets of the Corporation,
or control thereof, provided that Employee shall provide 30 days prior written
notice of termination.
(e) At the election of either party upon thirty (30) days
prior written notice to the other. If Employer shall so terminate this
Agreement, Employee shall be entitled to compensation for an additional twelve
(12) months after the expiration of the thirty (30) day notice to Employee, as
provided in Section 6(b).
6. PAYMENT UPON TERMINATION.
(a) If the employment of Employee is terminated by death,
or because of disability, pursuant to Section 5(b) hereof, the Corporation shall
pay to the estate of Employee or to Employee, as the case may be, the
compensation which would otherwise be payable to Employee at the end of the
month in which his death or the termination of his employment because of
disability occurs, compensation for accrued vacation days and reimbursement for
unreimbursed expenses. The Estate or Employee shall not be entitled to severance
pay or future Employer insurance contributions for Employee benefits.
(b) In the event that the employment of Employee is
terminated at the election of the Corporation pursuant to Sections 5(c) or 5(e)
hereof, or at the election of Employee pursuant to Section 5(d) hereof, Employee
shall be entitled to continuation of his base salary then in effect and Employer
insurance contributions for Employee benefits for twelve (12)
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months from the last day of actual employment or the date of termination,
whichever is earlier. Employee shall also be entitled to compensation for
accrued vacation days and reimbursement for unreimbursed expenses.
(c) If the employment of Employee is terminated on the
Expiration Date pursuant to Section 5(a), or in the event Employee elects to
terminate his employment pursuant to the provisions of Section 5(e) hereof,
Employee shall be entitled to compensation for accrued vacation days and
reimbursement for unreimbursed expenses.
7. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Employee agrees both
during and after employment by the Corporation, not to use (except in the course
of employment) or disclose to others, except with the Corporation's prior
written consent to, any Confidential Information. Confidential Information shall
include, but not be limited to, trade secrets, technical data including computer
programs, financial data, future plans, business strategy and information
received from third parties under disclosure restrictions, which Employee has
acquired by reason of his employment by the Corporation, or which Employee had
developed in the course of such employment. Confidential Information does not
include: (i) information that at the time of disclosure is in the public domain
through no fault of Employee; (ii) information received from a third party
outside of the Corporation that was disclosed without a breach of any
confidentiality obligation; (iii) information approved for release by written
authorization of the Corporation; or (iv) information that may be required by
law or by order of any court, agency or proceeding to be disclosed.
8. POSSESSION AND SURRENDER OF CONFIDENTIAL INFORMATION AND DOCUMENTS.
Employee hereby acknowledges the Corporation's right to possession and title in
and to all Confidential Information and all papers, documents, tapes, drawings,
computer programs, or other records prepared by Employee during his employment,
or provided by the Corporation, or which otherwise come into Employee's
possession by reason of his employment by the Corporation, or which Employee may
have written or created while employed by the Corporation. Employee agrees not
to make or permit to be made, except in pursuance of Employee's duties
hereunder, any copies of such materials. Employee further agrees to deliver to
the Corporation, upon request, all such materials in Employee's possession.
9. INTELLECTUAL PROPERTY RIGHTS. All right, title, and interest of
every kind and nature, whether now known or unknown, in and to any intellectual
property, including, but not limited to, any invention, patents, trademarks,
service marks, copyrights, films, scripts, ideas, creations, and properties
invented, created, written, developed, furnished, produced, or disclosed by
employee, in the course of rendering services to Employer under and pursuant to
this agreement shall, as between Employer and Employee, be and remain the sole
and exclusive property of Employer for any and all purposes and uses, and
Employee shall have no right, title, or interest of any kind or nature in or to
such property, or in or to any results and/or proceeds from such property.
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10. NON-COMPETITION.
(a) For a period of three (3) years following the date of
the execution of this Agreement, Employee agrees that he shall not at any rime,
directly or indirectly, within any county, city or part thereof and other areas
in the United States of America (collectively, the "Locations"), so long as the
Corporation continues to be engaged in the same or similar business or activity
(the "Business") in such Location.
(1) own, manage, operate, control, or be
connected in any manner with the ownership, management, operation or control of
any person or entity that engages in the same or similar type of Business as the
Business or engages in a business competitive with the Business (a "Competitive
Business"), which includes but is not limited to, acting as a director, officer,
agent, employee, consultant, partner or stockholder of a Competitive Business;
(2) engage in any activity which is the same as,
similar to or in competition with the Business;
(3) interfere with, disrupt or attempt to
disrupt the business relationship, contractual, employment or otherwise, between
the Corporation and any customer or prospective customer, supplier, lessee or
employee of the Corporation, including without limitation the customers and
suppliers of the Business prior to the date hereof,
(4) solicit employment for or of employees of
the Corporation or induce any employee to leave the employ of the Corporation,
(5) lend or allow his name or reputation to be
used by or in connection with any Competitive Business; or
(6) otherwise allow his skill, knowledge or
experience to be used in or by any Competitive Business.
(b) Notwithstanding anything in this Agreement to the
contrary, nothing in this Agreement shall limit the right of Employee as an
investor to hold or make investment not in excess of 5% of the outstanding
securities of any corporation, the securities of which are listed on a
nationally recognized securities exchange or traded in a nationally recognized
over-the-counter market.
(c) The parties hereto intend that the covenants set
forth in Sections 10(a) shall be construed as a series of separate covenants,
each consisting of the covenants set forth in Section 10(a) for each of the
Locations. Except for such Locations, all such separate covenants shall be
deemed identical.
(d) In the event that this Agreement is terminated
pursuant to Section 5 hereof (other than the termination by Employee pursuant to
Section 5(d) or by the Corporation pursuant to Section 5(e), the provisions of
Sections 10 shall survive such termination. Section 10(a) shall
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terminate and be of no force or effect in the event the Corporation breaches
this Agreement and fails to cure such breach within thirty (30) days of receipt
of written notice thereof.
11. REMEDIES. The Corporation and Employee agree that the services of
Employee are of a personal, special, unique, and extraordinary character, and
cannot be replaced by the Corporation without great difficulty, and that the
violation by Employee of any of his agreements under Section 9 would damage the
goodwill of the Corporation and cause the Corporation irreparable harm which
could not reasonably or adequately be compensated in damages in an action at
law, and that the agreement of Employee under Section 9 may be enforced by the
Corporation in equity by an injunction or restraining order in addition to being
enforced by the Corporation at law.
12. NOTICE. All notices under this Employment Agreement shall be in
writing. Notice intended for the Corporation shall be sent by registered or
certified mail, postage prepaid, return receipt requested, to the address of the
Corporation set forth above or such other address as the Corporation may
hereafter designate in writing. Notice intended for Employee shall be delivered
to Employee by hand or sent by registered or certified mail, postage prepaid,
return receipt requested, to the address of Employee set forth above or such
other address as Employee may hereafter designate in writing.
13. ASSIGNMENT. The rights and obligations of the Corporation under
this Employment Agreement shall inure to the benefit of, and shall be binding
upon, the successors and assigns of the Corporation. The rights and obligations
of Employee under this Employment Agreement shall inure to the benefit of, and
shall be binding upon, the heirs, executors, and legal representatives of
Employee.
14. ENTIRE AGREEMENT. This Employment 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 Corporation and contains all of the
covenants and agreement between the parties with respect to such employment.
Each party to this Employment Agreement acknowledges that no representations,
inducements, promises, or agreements, oral or otherwise, have been made by any
party, or any one acting on behalf of any party, which are not embodied herein,
and that no other agreement, statement, or promise not contained in this
Employment Agreement shall be valid and binding. Any modification of this
Employment Agreement will be effective only if it is in writing signed by both
parties to this Employment Agreement.
15. SEVERABILITY. If any provision in this Employment Agreement is held
by a court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect
without being impaired or invalidated in any way.
16. ATTORNEYS' FEES. In the event that any action is filed in relation
to this Agreement, the unsuccessful party in the action shall pay to the
successful party, in addition to all the sums that either party may be called on
to pay, a reasonable sum for the successful party's attorney's fees.
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17. GOVERNING LAW. This Employment Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the day, month and year first above written.
AP OFFICE EQUIPMENT, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
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(Print Name)
President
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Title
EMPLOYEE
/s/Xxx Xxxxxxxxx
__________________________________________
XXX XXXXXXXXX
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