Exhibit 10.15
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into effective as of the 1st day of June, 1998,
between AMERICAN TECHNOLOGY CORPORATION, a Delaware publicly traded corporation
(the "Company"), and Xxxxxx Xxxxxxx ("Employee").
Employee, in consideration of the covenants and agreements hereinafter
contained, agrees as follows with respect to the employment of the Company of
Employee and Employees future business activities.
1. Employment: Term of Employment. The Company hereby employs Employee and
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Employee hereby accepts such employment upon the terms and conditions
hereinafter set forth. Subject to the provisions for termination as hereinafter
provided, Employee's term of employment by the Company shall be from the date of
this agreement until September 30, 2001, and automatically renewed for one year
periods thereafter unless thirty (30) days written notice of termination is sent
prior to the annual renewal date. This Agreement will supersede all prior
written and oral agreements entered into by and between Company and Employee.
2. Services to be Rendered by Employee. Employee shall be subject to the
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direction of the Company's Chief Executive Officer and his duties shall be those
generally vested in the office of Vice President of Licensing and Business
Development for the corporation and he shall have such other powers and duties
as may be reasonably prescribed by the Company's Chief Executive Officer, Board
of Directors, or a duly authorized committee thereof, and shall perform such
duties as from time to time may be decided upon by the Company's Chief Executive
Officer, Board of Directors, or a duly authorized committee thereof, including
but not limited to, speaking for and promoting the sale of the Company's product
lines as public spokesman both in print and television ads.
The Employee agrees that he will serve the Company faithfully and to the best of
his abilities, devoting substantially all his time, energy and skill to the
activities of the Company and the promotion of its interests. Employee shall not
serve as an officer or director or similar capacity with any other entity except
with the consent of the Company.
3. Compensation.
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(a) For the services to be rendered by Employee during his employment by the
Company, the Company shall pay Employee a Base Salary of One Hundred Ten
Thousand Dollars ($110,000) per annum during the term of this agreement,
prorated for any partial period and paid in conformity with the Company's normal
payroll period. Employee's salary shall be reviewed by the Company's Chief
Executive Officer from time to time in his discretion, and Employee will receive
such salary increases, if any, as the Chief Executive Officer in his sole
discretion determines.
(b) Employee shall be entitled to participate in any bonus pool or similar
program established by the Board of Directors.
(c) The Employee's place of employment shall be considered San Diego County,
California (or other mutually agreed upon location).
(d) Employee shall be entitled to participate in and receive benefits under the
Company's executive benefits plans as in effect from time to time, including,
medical insurance, sick leave, and vacation time, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and Company policies. Initial vacation time shall be at least three weeks per
annum.
(e) The Company shall pay or reimburse Employee for all expenses normal
reimbursed by the Company and reasonably incurred by him in furtherance of his
duties hereunder and authorized by the Company, including without limitation,
expenses for entertainment, traveling, meals, hotel accommodations and the like
upon submission by him of vouchers or an itemized list thereof as the Company;
may from time to time adopt and authorize, and as may be required in order to
permit such payments as proper deductions to the Company under the Internal
Revenue Code of 1986 and the rules and regulations adopted pursuant thereto now
or hereafter in effect.
(f) All amounts payable or which become payable under any provision of this
Agreement will be subject to any deductions authorized in writing by you and any
deductions and withholdings required by law.
4. Indemnification.
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(a) If, after the date of the commencement of the Employment Period, the
Employee is made a party or is threatened to be made a party to any action, suit
or proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he is or was an officer of the Company
or is or was serving at the request of the Company as a director, officer,
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member, employee or agent of another corporation or partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether or not the basis of such Proceeding is an alleged act or failure
to act in an official capacity as a director, officer, member, employee or
agent, he shall be indemnified and held harmless by the Company to the fullest
extent authorized by Delaware law, as the same exists or may hereafter be
amended, against all expense, liability and loss (including, without limitation,
attorneys' fees, judgments, fines and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Employee in connection therewith,
including, without limitation, payment of expenses incurred in defending a
Proceeding prior to the final disposition of such Proceeding (subject to receipt
of an undertaking by the Employee to repay such amount if it shall ultimately be
determined that the Employee is not entitled to be indemnified by the Company
under Delaware law), and such indemnification shall continue as to the Employee
even if he has ceased to be an officer, member, employee or agent of the Company
or other enterprise and shall inure to the benefit of his heirs, executors and
administrators.
(b) The right of indemnification and the payment of expenses incurred in
defending a Proceeding in advance of its final disposition conferred in this
Section 4 shall not be exclusive of any other right that the Employee may have
or hereafter may acquire under any statute, provision of the Certificate of
Incorporation or Bylaws of the Company, agreement, vote of shareholders or
disinterested directors or otherwise.
5. Termination of Employment.
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(a) The Company shall have the right at its option to terminate the employment
of Employee hereunder by giving written notice thereof to the Employee in the
event of any of the following:
(1) The Company may terminate this Agreement at any time with good
cause, as determined by the Board of Directors of the Company, or a
duly authorized committee thereof, acting in good faith and upon
reasonable grounds, whereupon all compensation to Executive shall
cease as of the effective date of termination. As used in this
paragraph, the term "good cause" shall mean (i) dishonesty by
Executive detrimental to the best interests of the Company, (ii)
continuing inattention to or neglect of the duties to be performed by
Employee, (iii) willful disloyalty of Employee to Company, (iv) the
death or disability of Employee, (v) conviction by a court of
competent jurisdiction of Employee in any fraud, or (vi) the
imparting of any material confidential information by Employee in
violation of this Agreement.
(2) If the Company gives Employee thirty days advance written notice
of termination of employment.
(3) If this Agreement is terminated by the Company pursuant to
Paragraph 5(a)(2) hereof, then Employee shall be entitled to
severance payments equal to six (6) months of his then monthly Base
Salary and any bonus on an as if perfected basis payable in one lump
sum within thirty (30) days after such effective termination of
Employee's employment by the Company irrespective of the remaining
term of this agreement.
(b) The Employee shall have the right at his sole option to terminate
employment hereunder at any time upon thirty (30) days written notice.
6. Soliciting Customers. The Employee agrees that he will not for a period of
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one (1) year immediately following the termination of his employment with the
Company, either directly or indirectly make known to any competing person, firm,
or corporation the names or addresses of any of the customers of the Company or
any other information pertaining to them that is not in the public domain.
7. Trade Secrets of the Company. The Employee prior to and during the term of
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employment under this Agreement has had and will have access to and become
acquainted with various trade secrets, consisting of devices, secret inventions,
processes, and compilations of information, records, and specifications which
are owned by the Company, and which are regularly used or to be used in the
operation of the business of the Company. The Employee shall not disclose any of
the aforesaid trade secrets, directly or indirectly, or use them in any way,
either during the term of this agreement or for a period of 36 months
thereafter, except as required in the course of his employment. All files,
records, documents, drawings, specifications, equipment, and similar items
relating to the business of the Company, whether prepared by the Employee or
otherwise coming into his possession, shall remain the exclusive property of the
Company and shall not be removed under any circumstances from the premises of
the Company where the work is being carried on without prior written consent of
the Company or consistent with the Company's normal business practices.
8. Inventions and Patents.
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(a) Employee has provided the Company with a list of audio properties developed
by Employee prior to employment. The Company shall separately negotiate for
license(s) for any of these listed properties should the Company desire to use
them in any of its product programs. Other inventions shall be assumed to fall
under the provisions of this Section 8.
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(b) The Employee agrees that as to any inventions made by him during the term
of his employment, solely or jointly with others, which are made with the
equipment, supplies, facilities or trade secret information of the Company, or
which relate at the time of the conception or reduction to purchase of the
invention to the business of the Company or the Company's actual or demonstrably
anticipated research and development, or which result from any work performed by
the Employee for the Company, shall belong to the Company and the Employee
promises to assign such inventions to the Company. The Employee also agrees that
the Company shall have the right to keep such inventions as trade secrets, if
the Company chooses. The Employee agrees to assign to the Company the
Executive's rights in any other inventions where the Company is required to
grant those rights to the United States government or any agency thereof. In
order to permit the Company to claim rights to which it may be entitled, the
Employee agrees to disclose to the Company in confidence all inventions which
the Employee makes arising out of the Employee's employment and all patent
application filed by the Employee within one year after the termination of his
employment.
(c) The Employee shall assist the Company in obtaining patents on all
inventions, designs, improvements, and discoveries patentable by the Company in
the United States and in all foreign countries, and shall execute all documents
and do all things necessary to obtain letters patent, to vest the Company with
full and extensive title thereto, and to protect the same against infringement
by others.
9. Severability. Each paragraph and subparagraph of this Agreement shall be
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construed and considered separate and severable from the validity and
enforceability of any other provision contained in this Agreement.
10. Assignment. The rights of the Company (but not its obligations) under this
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Agreement may, without the consent of the Employee, be assigned by the Company
to any parent, subsidiary, or successor of the Company; provided that such
parent, subsidiary or successor acknowledges in writing that it is also bound by
the terms and obligations of this Agreement. Except as provided in the preceding
sentence, the Company may not assign all or any of its rights, duties or
obligations hereunder without prior written consent of Employee. The Employee
may not assign all or any of his rights, duties or obligations hereunder without
the prior written consent of the Company.
11. Notices. All notices, requests, demands and other communications shall be
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in writing and shall be defined to have been duly given if delivered or if
mailed by registered mail, postage prepaid:
(a) If to Employee, addressed to him at the following address as may be changed
in writing from time to time:
Xxxxxx Xxxxxxx
__________________
__________________
(b) If to the Company, addressed to:
American Technology Corporation
00000 Xxxxxxx Xxxxx Xx. Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
or to such other address as any party hereto may request by notice given as
aforesaid to the other parties hereto.
12. Title and Headings. Titles and headings to paragraphs hereof are for
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purposes of references only and shall in no way limit, define or otherwise
affect the provisions hereof.
13. Governing Law. This Agreement is being executed and delivered and is
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intended to be performed in the State of California, and shall be governed by
and construed in accordance with the laws of the State of California.
14. Counterparts. This Agreement may be executed simultaneously in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. It shall not be necessary
in making proof of this Agreement to produce or account for more than one
original counterpart.
15. Cumulative Rights. Each and all of the various rights, powers and remedies
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of the Company and Employee in this Agreement shall be considered as cumulative,
with and in addition to any other rights, powers or remedies of the Company or
the Employee and no one of them as exclusive of the others or as exclusive of
any other rights, powers and remedies allowed by law. The exercise or partial
exercise of any right, power or remedy shall neither constitute the election
thereof nor the waiver of any other right, power or remedy. Sections 4, 6, 7 and
8 hereof shall continue in full force and effect notwithstanding the Employee's
termination of employment and the termination of this Agreement.
16. Remedies. The Employee and the Company both acknowledge that each may have
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no adequate remedy at law if either violates any of the terms contained in
Sections 6, 7 and 8. In such event, either party shall have the right, in
addition to any
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other rights it may have, to obtain relief to restrain any breach hereof or
otherwise to specifically enforce any of the provisions hereof.
17. Waiver of Breach. The waiver by one party to this Agreement of a breach of
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any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the said party.
18. Entire Agreement. This Agreement contains the entire agreement of the
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parties hereto and may be modified or amended only by a written instrument
executed by parties hereto. Effective on the date hereof, any prior employment
agreements between the Company and the Employee shall terminate.
19. Attorney's Fees. In the event that either party must institute legal action
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to compel the other to comply with the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees and costs.
20. Good Faith. Each of the parties hereto agrees that he or it shall act in
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good faith in all actions taken under this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
/s/ XXXXXX X. XXXXXX July 8, 1998
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American Technology Corporation
Xxxxxx X. Xxxxxx, Director
/s/ XXXXXX XXXXXX July 8, 1998
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Xxxxxx Xxxxxx, Vice President
/s/ XXXXXX XXXXXXX July 8, 1998
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Xxxxxx Xxxxxxx, Employee
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