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Exhibit 10.44
EMPLOYMENT AGREEMENT
AGREEMENT dated as of October 8, 1999, between XXXX XXX MEDIA, INC., a
Colorado corporation (the "Company"), and XXXXXXX X. XXXXXX ("Employee").
Company currently is engaged in the business of deploying the global
brand, intellectual property, development capabilities and goodwill of comic
book publisher Xxxx Xxx to the Internet, as well as other new media and
traditional media platforms, and the commercial exploitation of such content
through e-commerce, product and merchandise sales, online publishing, gaming,
distance learning, financial services, sponsorships, co-branding, advertising,
product placement and endorsements. Employee is experienced in general
management, technology, human resources and operational issues affecting
Company.
Company desires to employ the Employee, and Employee is willing to
accept such employment, in each case, subject to the terms and conditions set
forth in this Agreement.
Accordingly, Company and Employee hereby agree as follows:
I. TERM OF EMPLOYMENT
The term of Employee's employment under this Agreement shall be for a
period of five (5) years, commencing as of November 1, 1999, unless earlier
terminated as provided in Article IV hereof (the "Employment Period"). Following
the initial five (5) year term, this Agreement shall be renewed automatically
for successive terms of one (1) year unless either party gives notice to the
other at least ninety (90) days prior to the expiration of any such term of its
or his intention not to renew.
II. EMPLOYMENT; DUTIES AND ACCEPTANCE
SECTION 2.01. Employment. Employee shall devote his full-time services,
skill and time to the affairs of the Company and the promotion of its interests,
and Employee shall not accept other employment during the Employment Period.
Employee shall be the Executive Vice President - Operations of Company and shall
be responsible, subject always to the direction of the Company's Board of
Directors, for working with Company's general management, business development
and marketing teams. Employee shall report to Xxxx Xxx, the Chairman and Chief
Creative Officer of the Company, to Xxxxx X. Xxxx, a Company consultant, and as
otherwise directed by the Company's Board of Directors. Employee's expenditure
of reasonable amounts of time for personal, business, charitable or professional
activities shall not be deemed a breach of his undertaking to provide the
required services hereunder, subject always to the provisions of Section 5.02
hereof, provided that such activities do not interfere materially with
Employee's ability to render such services.
SECTION 2.02. Acceptance of Employment by Employee. Employee accepts
such employment with Company and shall render the services required by this
Agreement to be
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rendered by him, and hereby agrees to execute and deliver the Company's
"Confidentiality and Invention Assignment Agreement," in the form attached
hereto. The terms of that agreement require the Employee to refrain for a period
of time after employment from competing with the Company or using or disclosing
the Company's Confidential Information (as defined in the agreement) or any
confidential information received during your prior employment in any manner
which might be detrimental to or conflict with the business interests of the
Company or its employees.
III. EMPLOYEE'S COMPENSATION
SECTION 3.01. Base Compensation. As compensation for services to be
rendered pursuant to this Agreement, Company shall pay Employee and Employee
shall accept, a base salary (the "Salary") at the annual rate of One Hundred
Thirty-Five Thousand Dollars ($135,000) for the period commencing November 1,
1999 and ending May 31, 2000, increasing to One Hundred Fifty Thousand Dollars
($150,000) for the period commencing June 1, 2000 and ending May 31, 2001, and
thereafter, at an annualized rate of not less than One Hundred Seventy-Five
Thousand Dollars ($175,000), subject to annual adjustment, upwards but not
downwards, for the remainder of the Employment Period, and as the same may be
renewed or extended. The salary shall be payable to Employee in semi-monthly
payments in accordance with the Company's standard payroll policies.
SECTION 3.02. Bonus. In addition to the Salary, Employee shall be
entitled to an annual bonus (the "Bonus") in the amount of Twenty-Five Thousand
Dollars ($25,000) payable on or before December 31, 1999, and thereafter, shall
be entitled to such additional bonuses as may be determined by the Company's
Board of Directors.
SECTION 3.03. Stock Options. Company and Employee acknowledge and agree
that Employee has previously been granted options to purchase One Hundred
Thousand (100,000) shares of the Company's Common Stock pursuant to that certain
written compensatory agreement dated July 23, 1999. Employee shall be entitled
to such additional stock options as may be granted to him under any Company
stock option plan(s) from time to time in effect at the Company.
SECTION 3.04. Participation in Employee Benefit Plans. Company shall
make available to the Employee the Company benefit program currently in effect
or as may be established from time to time by its Board of Directors for
similarly situated employees, including without limitation, any incentive
compensation plans or group benefit plans.
SECTION 3.05. Vacation and Sick Leave Provisions. Employee shall receive
not less than fifteen (15) working days' vacation each year, exclusive of legal
holidays. At the option of Employee, unused vacation days may be carried over to
succeeding years or Employee shall be entitled to payment therefor at the end of
Company's fiscal year or Employee's anniversary date of employment, whichever is
mutually determined appropriate by Company and Employee. In addition, the
Employee shall be entitled to sick leave benefits during the term of this
Agreement in accordance with the customary policies applied to similarly
situated employees of the Company.
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SECTION 3.06. Reimbursement of Expenses. Subject to prior approval by
the Company, Employee shall be reimbursed for reasonable expenses incurred in
connection with the business of Company upon the presentation by Employee, from
time to time, of an itemized account of and proper receipts for such
expenditures, including without limitation, a monthly automobile allowance in an
amount not less than Seven Hundred Fifty Dollars ($750).
SECTION 3.07. Other Compensation. Employee shall receive such other
compensation as may from time to time be granted to Employee by Company's Board
of Directors.
SECTION 3.08. Withholding. All payments due to Employee under any
provisions of this Agreement shall be reduced by any amounts required to be
withheld by Company from time to time from such payments under applicable
Federal, state or local law or regulations then in effect.
IV. TERMINATION
SECTION 4.01. Termination by Either Party Upon Notice. Either party may
terminate this Agreement, with or without cause, effective upon delivery of
written notice of termination to the other party.
SECTION 4.02. Termination by Company for Cause. Company may, at any
time, terminate this Agreement, for Cause. "Cause" means: (a) willful and
repeated failure to comply with the lawful directions of the Board of Directors;
(b) gross negligence or willful misconduct in the performance of Employee's
duties to the Company; (c) commission of any act of fraud against, or
misappropriation of material property belonging to the Company; or (d) action by
Employee that is materially injurious to the business or reputation of the
Company, in each case as determined in good faith by the Board of Directors,
including without limitation, action by Employee involving violation of any
criminal statute constituting a misdemeanor involving moral turpitude or a
felony, chronic alcoholism or drug addiction.
Upon termination pursuant to the provisions of this Section, Employee would be
entitled to receive only such compensation accrued and unpaid as of the
termination date.
SECTION 4.03. Termination for Death and Disability. This Agreement shall
be terminated effective immediately and automatically, upon the death or
permanent disability of Employee. For purposes of this subsection, "permanent
disability" shall be deemed to have occurred if Employee is unable by reason of
illness or physical or mental disability to perform the services required under
this Agreement for a period aggregating 120 days within any period of 12
consecutive months during the Employment Period. Upon termination for death,
Employee would be entitled to receive only such compensation accrued and unpaid
as of the termination date. Under termination for permanent disability, Employee
would be entitled to receive full compensation and benefits for the initial six
(6) months following the determination
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of "permanent disability", and one-half of such compensation and benefits for
the next succeeding six (6) month period.
SECTION 4.04. Termination Other Than for Cause. If Employee is
terminated for any reason other than as set forth in Sections 4.02 and 4.03
hereof, then Employee would be entitled to receive compensation and benefits as
follows:
(a) Cash Severance.
(i) During the first, second and third year of this
Agreement, 200% of the annual Salary at its then current level,
payable in a lump sum or at the times such salary would
otherwise have been payable were Employee to remain employed
with Company, as determined by Employee in his sole discretion,
and acceleration of vesting of all options;
(ii) During the fourth year of this Agreement, 250% of
the annual Salary at its then current level, payable in a lump
sum or at the times such salary would otherwise have been
payable were Employee to remain employed with Company, as
determined by Employee in his sole discretion, and acceleration
of vesting of all options;
(iii) During the fifth year of this Agreement, 299% of
the annual Salary at its then current level, payable in a lump
sum or at the times such salary would otherwise have been
payable were Employee to remain employed with Company, as
determined by Employee in his sole discretion, and acceleration
of vesting of all options; and
(b) Continuation of Benefits. Company would maintain in full
force and effect Employee's benefit plans (or provide Employee with
alternative substantially equivalent coverage) for a period equal to
nine (9) months, or as otherwise required by applicable Federal and/or
state law.
Further, if Executive is terminated after a Change in Control (as
hereinafter defined), or if Executive elects to terminate his employment within
six months following a Change in Control, then Executive shall be entitled to
receive not less than the compensation and benefits set forth in this Section,
including the acceleration of vesting of all options. For purposes of this
Section, the term "Change in Control" shall be deemed to have occurred if (i)
any "person" (as defined in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934 (the "Exchange Act")) other than the Company or a
subsidiary of the Company (a "Company") or any employee benefit plan sponsored
by the Company or any Company shall after the date hereof directly or indirectly
acquire or dispose of a beneficial interest (within the meaning of Rule 13d-3
under the Exchange Act) in securities of the Company representing thirty percent
(30%) or more of the combined voting power of Company's then outstanding
securities, (ii)
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during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of Company cease for any reason to
constitute a majority thereof (unless each new director was elected by, or on
the recommendation of, a majority of the directors then still in office who were
directors at the beginning of the period); or (iii) Company disposes of a
substantial portion of its assets. In the event of a merger or other business
combination in which Company is a party, the term "Board of Directors" shall
include the board of directors (or equivalent) of the entity which ultimately,
directly or indirectly, succeeds to the business and operations of Company.
SECTION 4.05. Effect of Termination. Termination of this Agreement shall
not release or discharge either party hereto from any obligation, debt or
liability which may previously have occurred and remains to be performed upon
the date of termination. In addition, the provisions of Article V of this
Agreement shall survive such termination or expiration of the term of this
Agreement.
V. OBLIGATIONS OF EMPLOYEE
SECTION 5.01. Acceptance of "Confidentiality and Invention Assignment
Agreement". Employee hereby agrees to execute and deliver, and to abide by, the
terms and conditions set forth in that certain "Confidentiality and Invention
Assignment Agreement" attached hereto.
SECTION 5.02. Competition. Without Company's prior written approval,
Employee agrees that, during the Employment Period (and as the same may be
renewed or extended) or, if Employee terminates this Agreement without a
material breach by Company, for a period of one (1) year from the date thereof,
Employee shall not, directly or indirectly, for his own account or the account
of any other person, firm or company, limited solely to super-hero content
created for exploitation over the Internet or otherwise (the "Super Hero
Business"), (i) offer or sell any products or services, or participate in any
business which offers or sells any products or services which compete directly
or indirectly with the Super Hero Business on the date of such expiration or
termination that Employee would have knowledge of by virtue of his capacity;
(ii) induce or attempt to induce any person(s) or entities which were customers
of Company during the Employment Period or were being actively solicited at the
time of termination of the Employment Period to cease doing business or not to
commence doing business in whole or in part with Company or solicit the business
of any such customer which compete with the Super Hero Business on the date of
such expiration or earlier termination that Employee would have knowledge of by
virtue of his capacity; or (iii) solicit, interfere with, or endeavor to cause
any employee or consultant of Company to leave his employment or engagement or
induce or attempt to induce any such employee or consultant to breach his
employment or engagement agreement with Company. Participation in a business
shall include, but not be limited to, serving as a director, officer, employee,
agent or other representative of or having an interest in the business as an
owner, stockholder, partner, limited partner, joint venturer, material creditor
or any other financial interest; provided, however, that the following
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shall not be in violation of this covenant: (i) the ownership by Employee of not
more than three (3) percent of the outstanding shares of stock of any such
business listed on any national stock exchange or registered under the federal
securities laws and actively traded in the over-the-counter market; and (ii)
participation by Employee in any capacity in any business, which participation
has received a specific written approval of a majority of the Board of Directors
of Company.
SECTION 5.03. Rights and Remedies Upon Breach of Employee's Obligations.
Because of the unique and proprietary nature of the Company's Confidential
Information and business operations and practices, and the unique character of
Employee's services, and because any material breach of any of the provisions of
this Agreement will cause irreparable injury to Company for which money damages
would not be an adequate remedy, it is understood and agreed that Company's
remedy for a material breach by Employee of this Agreement will be inadequate,
and that, therefore, in the event of any material breach by Employee of his
obligations pursuant to the terms of this Agreement, Company shall be entitled,
upon application to any court of competent jurisdiction, to equitable relief
(including, without limitation, provisional and permanent injunctive relief and
specific performance) in order to enforce or prevent violation of such provision
or provisions. Nothing contained herein shall be construed as prohibiting
Company from pursuing any other remedies provided to it by this Agreement or
available to it at law or in equity for such breach including, without
limitation, the recovery of money damages from Employee.
SECTION 5.04. Survival of Employee's Obligations. Employee's obligations
pursuant to this Article shall survive the termination of this Agreement.
VI. GENERAL PROVISIONS
SECTION 6.01. Notices. All notices, requests, consents or other
communications provided for in or to be given under this Agreement shall be in
writing, may be delivered in person, by facsimile transmission (fax), by
overnight air courier or by mail, and shall be deemed to have been duly given
and to have become effective (a) upon receipt if delivered in person or by fax,
(b) one (1) day after having been delivered to an overnight air courier or (c)
three (3) days after having been deposited in the mails as certified or
registered matter, all fees prepaid, directed to the parties or their assignees
at the following addresses (or at such other address as shall be given in
writing by a party hereto):
If to Employee: Xxxxxxx X. Xxxxxx
00000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
If to Company: Xxxx Xxx Media, Inc.
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00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention of Chief Operating Officer
Fax: (000) 000-0000
SECTION 6.02. Assignment. This Agreement shall not be assigned, pledged
or transferred in any way by either party hereto. Any attempted assignment,
pledge, transfer or other disposition of this Agreement or any rights, interests
or benefits contrary to the foregoing provisions shall be null and void.
SECTION 6.03. Conflicting Agreements. Employee hereby represents and
warrants to Company that his entering into this Agreement, and the obligations
and duties undertaken by him hereunder, will not conflict with, constitute a
breach of or otherwise violate the terms of any employment or other agreement to
which he is a party and that he is not required to obtain the consent of any
person, firm, corporation or other entity in order to enter into this Agreement.
SECTION 6.04. Indemnification; Insurance. Company shall indemnify
Employee and hold Employee harmless from any claims, actions, charges, expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with any proceeding to which Employee was or is a party or is
threatened to be made a party arising by reason of the fact that Employee is or
was an employee of Company. For purposes of this Section, "proceeding" means any
threatened, pending or completed action or proceeding, whether civil, criminal,
administrative or investigative, and includes an action or proceeding by or in
the right of Company to procure a judgment in its favor, and "expenses"
includes, without limitation, attorneys' fees and any expenses of establishing a
right to indemnification under this Agreement or under the laws of the State of
California. In addition, to the extent economically practicable as determined by
the Company in its sole discretion, Company shall include Employee as an
additional named insured on its insurance policies.
SECTION 6.05. No Waiver. No term or condition of this Agreement shall be
deemed to have been waived, nor shall any party hereto be estopped from
enforcing any provision of this Agreement, except by written instrument of the
party charged with such waiver or estoppel. Any written waiver shall not be
deemed a continuing waiver unless specifically stated, shall operate only as to
the specific term or condition waived and shall not constitute a waiver of such
term or condition for the future or as to any act other than the act
specifically waived.
SECTION 6.06. Governing Law; Venue. This Agreement shall be governed by
and construed in accordance with the laws of the State of California. In the
event of any dispute or controversy arising under this Agreement or the
transactions contemplated herein, the parties mutually consent to the
jurisdiction of the state and federal courts located in Los Angeles, California,
and agree that any litigation may be served outside of California with the same
force
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and effect as if service had been made in California.
SECTION 6.07. Entire Agreement; Amendments. This Agreement, including
the "Confidentiality and Invention Assignment Agreement" attached hereto, is
intended by the parties as a final expression of their Agreement with respect to
the terms included herein, and may not be contradicted or varied by evidence of
any prior or contemporaneous agreement. All prior negotiations, correspondence,
memoranda, and agreements, whether oral or written, are merged herein. Any
change, revision or modification of any provision of this Agreement shall not be
binding unless executed in writing and signed by a duly authorized
representative of each of the parties hereto.
SECTION 6.08. Headings. Headings contained herein are for convenient
reference only; they are not a part of this Agreement and are not to affect in
any way the substance or interpretation of this Agreement.
SECTION 6.09. Survival of Provisions. In case any one or more of the
provisions or any portion of any provision contained in this Agreement
(including, without limitation, any geographical or temporal restrictions,
contained in Article V hereof) should be found to be invalid, illegal or
unenforceable in any respect, such provision or portion thereof shall be
modified or deleted in such manner so as to afford the parties the fullest
protection commensurate with making this Agreement, as modified, legal and
enforceable under applicable laws, and the validity, legality and enforceability
of any such provision shall not in any way be affected or impaired thereby, such
remaining provisions or portion of any such provision construed as severable and
independent thereof.
SECTION 6.10. Arbitration; Attorneys' Fees. Any dispute or conflict
which arises between the parties hereto shall be submitted to the American
Arbitration Association, before a single arbitrator, in accordance with its then
current Commercial Rules in Los Angeles, California, for arbitration and the
parties shall be bound by the results of such arbitration in accordance with
applicable California law. If either party brings an action for judicial review
or enforcement of the arbitration proceedings, award or decision, the prevailing
party in any such action, trial or appeal shall be entitled to its reasonable
attorneys' fees to be paid by the nonprevailing party as fixed by the court.
SECTION 6.11. Waiver of Jury. With respect to any dispute arising under
or in connection with this Agreement or any related agreement, as to which no
party invokes the right to arbitration hereinabove provided, or as to which
legal action nevertheless occurs, each party irrevocably waives all rights it
may have to a jury trial. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND
VOLUNTARILY MADE BY EACH PARTY, AND EACH ACKNOWLEDGES THAT NONE OF THE OTHER
PARTIES NOR ANY PERSON ACTING ON BEHALF OF THE OTHER PARTIES HAS MADE ANY
REPRESENTATION OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO
MODIFY OR NULLIFY ITS EFFECT. EACH PARTY FURTHER ACKNOWLEDGES THAT
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IT HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE
SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER, BY INDEPENDENT LEGAL
COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL. EACH PARTY FURTHER ACKNOWLEDGES THAT IT HAS
READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION.
SECTION 6.12. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be considered a duplicate original.
SECTION 6.13. Construction. Each of the parties hereto has been
represented by counsel throughout this transaction who has carefully negotiated
the provisions hereof. The language in all parts of this Agreement shall be in
all cases construed simply according to its fair meaning and not strictly for or
against any of the parties. When the context so requires in this Agreement, the
masculine gender includes the feminine and/or the neuter, and the singular
number includes the plural.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, in the case of Company by its duly authorized officer(s) empowered so
to act, all as of the date first above written.
XXXX XXX MEDIA, INC.,
By: /s/ Xxxx Xxx
-----------------------------------
Xxxx Xxx, Chairman
/s/ Xxxxxxx X. Xxxxxx
---------------------------------------
[Signature of Employee]
Xxxxxxx X. Xxxxxx
---------------------------------------
[Type or Print Name of Employee]
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CONFIDENTIALITY AND INVENTION ASSIGNMENT AGREEMENT
AGREEMENT dated as of October 8, 1999, between XXXX XXX MEDIA, INC., a
Colorado corporation and its affiliated companies (collectively, the "Company"),
and XXXXXXX X. XXXXXX ("Employee").
In consideration of the commencement of Employee's employment and the
compensation paid to Employee, Employee acknowledges and agrees with the Company
as follows:
I. EFFECTIVENESS
This Agreement shall become effective on the earlier of (i) commencement
of Employee's employment with the Company, or (ii) the date and time at which
any Confidential Information (as defined in Section 2.01 below) was or is first
disclosed to Employee.
II. PROTECTION OF COMPANY'S CONFIDENTIAL INFORMATION
SECTION 2.01. Confidential Information. The Company has and will
develop, compile, and own certain proprietary techniques and confidential
information which have great value in its business (said techniques and
information being hereinafter referred to, collectively, as "Confidential
Information"). The Company has and also will have access to Confidential
Information of its Clients. ("Clients" shall mean any persons or entities for
whom the Company performs services or furnishes goods, or from whom the Company
or Employee obtains information). Confidential Information includes not only
information disclosed by the Company or its Clients to Employee in the course of
his or her employment, but also information developed or learned by Employee
during the course of his or her employment with the Company, such as Innovations
(as defined in Section 4.01 below). Confidential Information is to be broadly
defined. Confidential Information includes all information that has or could
have commercial value or other utility in the business in which the Company or
Clients are engaged or contemplate engaging. Confidential Information also
includes all information of which the unauthorized disclosure could be
detrimental to the interests of the Company or Clients, whether or not such
information is identified as Confidential Information by the Company or Clients.
By example and without limitation, Confidential Information includes all
technical and non-technical information including copyright, trade secret and
proprietary information, pricing strategies and models, know-how, processes,
algorithms, software programs, software source documents, and formulas related
to the current, future or proposed products and services of the Company, and
includes, without limitation, the Company's information concerning pricing
strategies, financial information, procurement and purchasing requirements,
business forecasts, and sales and marketing plans and information.
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Notwithstanding the foregoing, Confidential Information shall expressly
exclude any information that (i) was in the public domain at the time it was
communicated to the Employee; (ii) entered into the public domain subsequent to
the time it was communicated to the Employee through no fault of the Employee;
(iii) was in the Employee's possession free of any obligation of confidence at
the time it was communicated to the Employee; (iv) was developed by Employee
independently of and without reference to any information communicated to the
Employee by the Company; or (v) disclosure was required by any governmental
body, was otherwise required by law, or was necessary to establish the rights of
either party under this Agreement.
SECTION 2.02. Protection of Confidential Information. Employee agrees
that at all times during or after his or her employment, he or she will hold in
trust, keep confidential, and not disclose to any third party or make any use of
the Confidential Information of the Company or Clients except for the benefit of
the Company or Clients and in the course of his or her employment with the
Company. Employee further agrees not to cause the transmission, removal, or
transport of Confidential Information or Innovations from the Company's
principal place of business at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxxxx, 00000, or such other place of business specified by the Company,
without prior written approval of the President of the Company. Employee
acknowledges that he or she is aware that the unauthorized disclosure of
Confidential Information of the Company or its Clients may be highly prejudicial
to their interests, an invasion of privacy, and an improper disclosure of trade
secrets. Whenever the approval, designation, specification, or other act of the
President of the Company is required under this Agreement, the President may, by
written designation, authorize an agent of the Company to perform such act.
III. PRIOR KNOWLEDGE AND RELATIONSHIPS
SECTION 3.01. Prior Knowledge and Innovations. Except as disclosed on
Schedule A to this Agreement, Employee does not know anything about the
Company's Confidential Information, other than the information he or she has
learned from the Company. Employee also has disclosed on Schedule A a complete
list of all inventions or innovations proprietary to Employee and which Employee
wants to exclude from the application of this Agreement. The Company agrees to
receive and hold all such disclosures in confidence.
SECTION 3.02. Prior Commitments. Except as disclosed on Schedule A to
this Agreement, Employee has no other agreements, relationships, or commitments
to any other person or entity which conflict with Employee's obligations to the
Company under this Agreement.
SECTION 3.03. Proprietary Information or Trade Secrets of Others.
Employee will not disclose to the Company, or use, or induce the Company to use,
any proprietary information or trade secrets of others. Employee represents and
warrants that he or she has returned all property and confidential information
belonging to all prior employers.
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IV. ASSIGNMENT OF EMPLOYEE INNOVATIONS
SECTION 4.01. Disclosure. Employee will promptly disclose in writing to
the Company all discoveries, developments, designs, ideas, innovations,
improvements, inventions, formulas, processes, techniques, know-how, and data
(whether or not patentable or registerable under copyright or similar statutes)
made, conceived, reduced to practice, or learned by Employee (either alone or
jointly with others) during the period of his or her employment, that are
related to or useful in the business of the Company, or which result from tasks
assigned to Employee by the Company, or from the use of premises owned, leased,
or otherwise acquired by the Company (all of the foregoing being hereinafter
referred to, collectively, as "Innovations").
SECTION 4.02. Assignment of Innovations. Employee acknowledges and
agrees that all Innovations belong to and shall be the sole property of the
Company and shall be Innovations of the Company subject to the provisions of
this Agreement. Employee hereby assigns to the Company all right, title, and
interest Employee may have or may acquire in and to all Innovations. Employee
agrees to sign and deliver to the Company (either during or subsequent to his or
her employment) such other documents as the Company considers desirable to
evidence (1) the assignment of all rights of Employee, if any, in any
Innovations to the Company and/or (2) the Company's ownership of such
Innovations. Any provision in this Agreement requiring Employee to assign rights
to an Innovation does not apply to any invention that qualifies under California
Labor Code Section 2870, which section is reproduced in the Written Notification
to Employee attached as Schedule C hereto.
SECTION 4.03. Power of Attorney. In the event the Company is unable to
secure Employee's signature on any document necessary to apply for, prosecute,
obtain, or enforce any patent, copyright, or other right or protection relating
to any Innovation, whether due to mental or physical incapacity or any other
cause, Employee hereby irrevocably designates and appoints the Company and each
of its duly authorized officers and agents as his or her agent and
attorney-in-fact, to act for and in his or her behalf and stead to execute and
file any such document and to do all other lawfully permitted acts to further
the prosecution, issuance, and enforcement of patents, copyrights, or other
right or protections with the same force and effect as if executed and delivered
by the Employee.
V. TERMINATION OF EMPLOYMENT
SECTION 5.01. Delivery of Documents and Data on Termination of
Employment. In the event of termination (voluntary or otherwise) of Employee's
employment with the Company, Employee agrees, promptly and without request, to
deliver to and inform the Company of all documents and data pertaining to his or
her employment and the Confidential Information and Innovations of the Company
or Clients, whether prepared by Employee or
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otherwise coming into his or her possession or control, and to sign Schedule B
to this Agreement. Employee will not retain any written or other tangible
material containing any information concerning or disclosing any of the
Confidential Information or Innovations of the Company or Clients. Employee
recognizes that the unauthorized taking of any of the Company's trade secrets is
a crime under California Penal Code Section 499c and is punishable by
imprisonment in a state prison or in a county jail for a time not exceeding one
year, or by a fine not exceeding Five Thousand Dollars ($5,000), or by both such
fine and such imprisonment. Employee further recognizes that such unauthorized
taking of the Company's trade secrets could also result in civil liability under
California Civil Code Section 3426, and that willful misappropriation may result
in an award against Employee for triple the amount of the Company's damages and
the Company's attorneys' fees in collecting such damages.
SECTION 5.02. Obligations of Employee After Termination of Employment.
In the event of termination (voluntary or otherwise) of Employee's employment
with the Company, Employee agrees that he or she will protect the value of the
Confidential Information and Innovations of the Company and Clients and will
prevent the misappropriation or disclosure thereof. Employee will not disclose
or use to his or her benefit (or the benefit of any third party) or to the
detriment of the Company or its Clients any Confidential Information or
Innovation. Employee further agrees that for a period of one year immediately
following termination (voluntary or otherwise) of Employee's employment with the
Company, Employee shall not interfere with the business of the Company by
inducing an employee to leave the Company's employ or by inducing a consultant
to sever the consultant's relationship with the Company.
In addition, each party hereto shall refrain thereafter from uttering
any disparaging remarks or criticisms of the other party or its officers,
directors, shareholders, employees, representatives or agents which might have
the effect of injuring such party or such officers', directors', shareholders',
employees', representatives' or agents' character, reputations, or
profitability, and such party shall be entitled in the case of each such
utterance to liquidated damages in the amount of $10,000. Each party hereto
acknowledges that the liquidated damages specified above approximate the amount
of damages which a party would sustain taking into account, from the nature of
the case, that it would be impracticable or extremely difficult to fix the
actual damages. Each party hereto acknowledges further that such damages are
reasonable under the circumstances existing at the time this Agreement is made
and that this provision for liquidated damages is valid under Section 1671 of
the California Civil Code. Each party's entitlement to liquidated damages as
provided herein is in addition to, and not in lieu of, all its other rights and
remedies available hereunder or under applicable law or in equity.
VI. GENERAL PROVISIONS
SECTION 6.01. Notices. All notices, demands, requests, consents,
approvals or other communications required or permitted to be given hereunder
shall be in writing and may
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be personally served or may be deposited in the United States mail, registered
or certified, return receipt requested, postage prepaid, addressed as follows:
If to the Company: Xxxx Xxx Media, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000 Xxxxxx,
XX 00000 Attention of Chief Operating
Officer.
If to the Employee: Xxxxxxx X. Xxxxxx
00000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
or at such other address as such party shall have specified most recently to the
other party by written notice. Notice mailed as provided herein shall be deemed
given on the date of delivery, as evidenced by the return receipt.
SECTION 6.02. Governing Law. This Agreement shall be construed under the
substantive laws of the State of California and without giving effect to
California choice-of-law or conflict-of-law principles. In the event of any
dispute or controversy arising under this Agreement or the transactions
contemplated herein, the parties mutually consent to the jurisdiction of the
state courts of California and the federal district court for the Central
District of California, and agree that any litigation may be served outside of
California with the same force and effect as if service had been made in
California.
SECTION 6.03. Parties in Interest. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that this Agreement may not be assigned by the
Employee without the prior written consent of the Company; provided, however,
further, that the Company shall be entitled to assign all its rights and
delegate all its duties hereunder without the consent or any act on the part of
the Employee. In case of such assignment and delegation of duties by the
Company, the Employee hereby agrees to execute any releases and other
certificates, agreements and instruments requested by the Company to effectuate
the release of the Company from any liabilities and obligations hereunder.
SECTION 6.04. Entire Agreement; Amendment. This Agreement and the
schedules hereto constitutes and contains the entire agreement of the parties
hereto and supersedes any and all prior negotiations, correspondence,
undertakings and agreements between the parties respecting the subject matter
hereof. This Agreement may not be amended or modified, except by written
instrument signed by the party to be bound.
SECTION 6.05. Waiver. Neither any failure nor any delay on the part of
the Company or the Employee in exercising any right, power or privilege
hereunder shall
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operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise or the exercise of any other right, power
or privilege.
SECTION 6.06. Survival of Provisions. In case any one or more of the
provisions or any portion of any provision contained in this Agreement should be
found to be invalid, illegal or unenforceable in any respect, such provision or
portion thereof shall be modified or deleted in such manner so as to afford the
parties the fullest protection commensurate with making this Agreement, as
modified, legal and enforceable under applicable laws, and the validity,
legality and enforceability of any such provision shall not in any way be
affected or impaired thereby, such remaining provisions or portion of any such
provision construed as severable and independent thereof.
SECTION 6.07. Arbitration; Attorneys' Fees. Any dispute or conflict
which arises between the parties hereto shall be submitted to the American
Arbitration Association in accordance with its then current Commercial Rules in
Los Angeles County, California, for arbitration and the parties shall be bound
by the results of such arbitration in accordance with the California Code of
Civil Procedure Section 1283.05. If either party brings an action for judicial
review or enforcement of the arbitration proceedings, award or decision, the
prevailing party in any such action, trial or appeal shall be entitled to its
reasonable attorneys' fees to be paid by the nonprevailing party as fixed by the
court.
SECTION 6.08. Waiver of Jury. With respect to any dispute arising under
or in connection with this Agreement or any related agreement, as to which no
party invokes the right to arbitration hereinabove provided, or as to which
legal action nevertheless occurs, each party irrevocably waives all rights it
may have to a jury trial. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND
VOLUNTARILY MADE BY EACH PARTY, AND EACH ACKNOWLEDGES THAT NONE OF THE OTHER
PARTIES NOR ANY PERSON ACTING ON BEHALF OF THE OTHER PARTIES HAS MADE ANY
REPRESENTATION OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO
MODIFY OR NULLIFY ITS EFFECT. EACH PARTY FURTHER ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER, BY INDEPENDENT LEGAL COUNSEL
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL. EACH PARTY FURTHER ACKNOWLEDGES THAT IT HAS READ AND
UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION.
SECTION 6.09. Employment at Will. Employment and compensation can be
terminated, with or without cause, and with or without notice, at any time, at
the option of the Company or the Employee. No provision set forth in this
Agreement shall limit or otherwise alter the foregoing.
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SECTION 6.10. Counterparts. This Agreement may be executed in two or
more counterparts, but all of which, when taken together, shall constitute one
and the same Agreement.
IN WITNESS WHEREOF, the Employee and in the case of the Company, by its
duly authorized officer empowered so to act, have duly executed this Agreement,
as of the date first above written.
COMPANY: XXXX XXX MEDIA, INC.,
By: /s/ Xxxx Xxx
------------------------------
Xxxx Xxx, Chairman
CAUTION: THIS AGREEMENT AFFECTS YOUR RIGHTS TO INNOVATIONS YOU MAKE DURING YOUR
EMPLOYMENT, AND RESTRICTS YOUR RIGHT TO DISCLOSE OR USE THE COMPANY'S
CONFIDENTIAL INFORMATION DURING OR SUBSEQUENT TO YOUR EMPLOYMENT. EMPLOYEE HAS
READ THIS AGREEMENT CAREFULLY AND UNDERSTANDS ITS TERMS. EMPLOYEE HAS COMPLETELY
FILLED OUT SCHEDULE A TO THIS AGREEMENT AND HAS RECEIVED A COPY OF THE WRITTEN
NOTIFICATION TO EMPLOYEE CONTAINING CALIFORNIA LABOR CODE SECTION 2870 ATTACHED
AS SCHEDULE C HERETO.
EMPLOYEE: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
XXXXXXX X. XXXXXX
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