EMPLOYMENT CONTRACT
THIS AGREEMENT, effective as of June 10, 1996, is made between Nimbus
Manufacturing Inc., a Virginia Corporation, hereinafter "The Company" and
Xxxxx X. Xxxxxx, hereinafter "The Employee".
WHEREAS, the Company desires to employ Employee; and
WHEREAS, Employee desires to accept such employment;
NOW, THEREFORE, in consideration of the foregoing and the material advantages
accruing to the parties and covenants contained herein, the Company and Employee
mutually agree as follows:
1. Employment and Duties
The Company agrees that it will employ Employee as Executive Vice
President and General Manager of North American Operations of the Company
for the Term (as hereafter defined). Employee agrees to devote his full
time and attention during normal working hours to the business of the
Company and to perform those services usually commensurate with the
responsibilities of a General Manager. Employee agrees to undertake full
management responsibility for the North American operations of the
Company, and to perform other further services as may be assigned to him
from time to time by the Board of Directors of the Company and the
President and Chief Executive Officer of Nimbus Manufacturing Inc.
consistent with his position.
2. Term
The Company agrees to employ Employee and Employee agrees to serve the
Company for the following period (the "Term"):
(a) One year beginning June 10, 1996 and continuing through June 9,
1997; and
(b) Thereafter for six-month periods until this Agreement is terminated
by either party in accordance with (Sections 5, 6, 7, or 8 of this
Agreement).
3. Salary
During the Term, the Company shall pay to Employee, in approximately equal
biweekly payments, a salary payable at the rate of not less than $181,000
per year, subject to withholding as required by law or agreed to by the
parties.
The parties agree that Employee=s salary cannot be deceased during the
Term, but can be increased at the sole discretion of the Company. The
Company agrees to a salary review no later than June 10, 1997.
4. Other Benefits
During the Term, Employee shall be entitled to:
(a) participate in such employee benefit programs, including pension
programs and 401(k) programs, as are generally available to other
employees of the Company from time to time subject to any changes or
amendments to such programs made by the Company;
(b) accrue and take vacation and other leave time in the same manner and
fashion as are generally available to other employees of the Company
taking into account length of service and position subject to any
changes or amendments to such leave policies from time to time made
by the Company, but in no event less than three weeks vacation
annually;
(c) The Company agrees to a minimum bonus of 20% of salary for fiscal
1997 if the agreed bonus objectives are achieved. The bonus
objectives for fiscal 1997 will be agreed not later than July 30,
1996;
(d) an automobile allowance of eight hundred dollars ($800.00) per
month;
(e) reimbursement for substantiated, reasonable expenses incurred by
Employee in performing the duties hereunder in accordance with the
policies of the Company.
5. Termination by Death or Disability
(a) Should Employee die during the Term, the Company shall be obligated
to pay to Employee=s personal representative any salary and benefits
to which Employee may be entitled pursuant to Section 7 hereof.
(b) Should Employee become physically or mentally unable to perform
substantially all of the duties of employment, Employee will be
entitled to disability benefits as provided by the benefit programs
of the Company. Employee will not be entitled to collect salary
under this Agreement while receiving such disability benefits.
6. Termination for Cause
(a) The Company may elect to terminate its obligations hereunder for
cause and remove Employee from employment with the Company. The
company is not required to give prior written notice of an intention
to terminate for cause. If the Company does so, all its obligations
to Employee under this Agreement shall cease immediately upon the
termination of employment.
(b) For purposes of this section, "cause" shall mean:
i. continued and deliberate neglect by Employee of employment
duties;
ii. criminal misconduct of Employee in connection with the
performance of any duties, including by way of example but not
limitation, misappropriation of funds or property of the
Company or any of its subsidiaries, attempting to secure
personally any profit in connection with any transaction
entered into on behalf of the Company or any of its
subsidiaries or affiliates;
iii. conduct by Employee that would result in material injury to
the reputation of the Company or any of its subsidiaries or
affiliates if Employee were retained in his position with
the Company, including by way of example but not
limitation, conviction of a felony; or
iv. a lawsuit or other legal action being threatened or brought
against Employee, the Company or both by third parties
alleging that Employee, in executing or performing this
Agreement, has violated other agreements, covenants or duties
owed by Employee to such third party.
7. Termination Not for Cause
If the Company terminates it obligations hereunder and removes Employee
from employment for reasons other than for cause, then the Company shall
be obligated to pay to Employee the greater of:
(a) an amount equal to one year's salary for the first year and an
amount equal to six months salary thereafter;
(b) all salary and benefits specified in this Agreement from the date of
termination to the end of the then current Term, without any further
extensions pursuant to Section 2(b) except that the Company shall
not be obligated to make any contributions to its pension plan on
behalf of Employee beyond those due as of the date of Employee's
removal.
8. Termination by Employee
If Employee resigns or voluntarily terminates employment with the Company,
the Company's obligations to Employee under this Agreement shall terminate
and the Company shall have no further liability to Employee hereunder.
Employee agrees to give at least 90 days notice before resigning or
voluntarily terminating employment.
9. Confidentiality
Any and all agreements between the Company and Employee regarding
confidentiality and/or employee invention remain in full force and effect
of their own accord and by their own terms and are not modified,
superseded or governed by the terms of this Agreement, nor do they
terminate upon the termination of this Agreement.
10. Noncompetition
(a) After termination of Employee=s employment with the Company, for
whatever reason, Employee will not, for a one (1) year period
following such date of termination, without the written permission
of the Company, in the United States of America, directly or
indirectly:
i. enter into the employ or render any services to any person
or entity engaged in any ACompetitive Business@ (as defined
below);
ii. engage in any Competitive Business for his own account;
iii. become interested in any Competitive Business as an
individual, partner, shareholder, creditor, director,
officer, principal, agent, employee, trustee, consultant,
advisor or in any other relationship or capacity; provided,
however, that nothing contained in this paragraph shall
prohibit Employee from acquiring, solely as an investment
through market purchases, securities of any corporation
registered under the Securities Exchange Act of 1934 and
which are publicly traded so long as Employee is not a
party of any control group of such corporation; or
iv. enter into the employ of or render any services to any
person, firm or corporation that was, within two years
prior to the expiration of the term of this Agreement, a
party to an agreement with the Company having a term of one
year or more and under which any goods, property or
services of a substantial value to the Company was to be
sold, leased, licensed or furnished to or by the Company on
an exclusive basis;
v. the phrase "Competitive Business" as used herein shall mean
the manufacture of compact disc products, which shall mean
any optical disc containing digital information or designed
to have recorded thereon digital information, which digital
information is encoded in accordance with the basic EFM
coding scheme and the CIRC error correction scheme as
defined in the standard specification of the sound storage
and reproduction system known as the "Compact Disc Digital
Audio System" developed and defined by N.V. Philips
Gloeilampenfabrieken. For purposes of this Agreement,
compact disc products shall include each of the optical
discs presently or heretofore manufactured by Nimbus
Manufacturing Inc. or its subsidiaries on a commercial
scale, namely CD-A, CD-ROM, CD-XA, CD-I, CD-V, DVD, and
DVD-ROM.
(b) In the event of a breach of any of the provisions of Section 10,
the Company shall have the right to have such provisions
specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any breach or threatened
breach will likely cause irreparable injury to the Company and
that money damages will likely not provide an adequate remedy to
the Company. Any payment which the Company may owe Employee as
of the termination of his employment is contingent upon
Employee's continued compliance with the provisions of this
Agreement.
(c) Upon termination of employment, the Company may notify anyone
thereafter employing Employee of the existence and provisions of
this Agreement.
11. Indemnification
Employee shall be indemnified to the fullest extent permitted by law,
jointly and severally, by the Company and by each subsidiary of the
Company, both during the Term and thereafter with respect to Employee's
conduct while services as a director, officer or employee of the Company
or any of its subsidiaries
12. Stock Options
Nimbus CD International, Inc. has granted to Employee, the following stock
options subject to the terms and conditions of the 1995 Stock Option and
Stock Award Plan: 20,000 shares of common stock to vest ratably over five
years with the first vesting period to be March 31, 1997. The option to
purchase stock will be at $_____.
13. Moving Expenses
The Company agrees to pay on Employee=s behalf and to reimburse Employee
for all reasonable costs relating to Employee's relocation to Virginia
from Connecticut, including the following:
(a) temporary living expenses for six months from starting date to a
maximum of $1,200 per month against agreed costs;
(b) Realtor's commissions for the sale of the Employee's legal
residence in an amount not to exceed 3% of the contracted sales
price;
(c) documented packing, moving and storage expenses;
(d) $3,000 to cover closing costs on Employee=s residence.
(e) general expenses to a maximum of $5,000 for house search to be
agreed.
Based on current tax law, the Company will increase Employee's salary by
the amount of the actual incurred cost and will withhold and pay
applicable tax due on items less the $3,000 exemption permitted under the
code. No gross up for tax purposes is required for item (c) above.
16. Severability
The invalidity or unenforceability of any provision of this Agreement or
the invalidity or unenforceability or any provision of this Agreement as
applied to a particular occurrence or circumstances shall not affect the
validity or enforceability of any of the other provisions of this
Agreement or the other applicability of such provision as the case may be.
The rights and remedies available to the Company under this Agreement
shall be in addition to and not in lieu of any other rights and remedies
available. If any of the provisions of this Agreement are held to be
unenforceable because of the duration of such provision or the area
covered thereby, the parties agree that the court making such
determination shall have the power to reduce the duration and/or area of
such provision and in its reduced form said provisions shall then be
enforceable.
17. Binding Effect
This Agreement shall be binding on the Employee and on the Company, and
any successor, assign, subsidiary, parent or division of the Company.
Should there be a consolidation or merger of the Company with or into
another corporation, or a purchase of all or substantially all of the
assets of the Company by another entity, it is agreed that the surviving
or acquiring corporation will be liable for the performance of all of the
Company=s obligations under this Agreement.
18. Applicable Law
This Agreement shall be construed and enforced under and in accordance
with the laws of the Commonwealth of Virginia.
This Agreement signed this ____________ day of ___________.
NIMBUS MANUFACTURING INC.
By: _________________________________
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
EMPLOYEE
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Xxxxx X. Xxxxxx
