Exhibit 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into as of this 15th day of August 2003, by and between Alpha Virtual, Inc., a
Delaware corporation (the "Company"), and Xxxx Xxxx, an individual (the
"Executive"). Company or Executive are sometimes referred to herein as "party"
or collectively "parties."
WHEREAS, the Company and Cavio Corporation have entered into a binding
letter of intent whereby Cavio will become a wholly owned subsidiary of the
Company (the "Transaction");
WHEREAS, Company and Executive now mutually desire to enter into this
Agreement, to become effective upon the closing of the Transaction, in
consideration of the mutual covenants and agreements hereinafter contained, and
for other good and valuable consideration, it is hereby agreed by and between
the parties hereto as follows:
1. Employment and Duties
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1.1 Employment. Company hereby employs Executive as the President and
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Chief Executive Officer of the Company and its subsidiaries and Executive hereby
accepts such employment as of the Effective Date pursuant to the terms,
covenants and conditions set forth herein.
1.2 Duties. While serving in these corporate capacities, Executive
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shall have the responsibilities, duties, obligations, rights, benefits and
requisite authority as is customary for his positions and as may be determined
by the Company's Board of Directors (the "Board") and as may be set forth in the
Bylaws of the Company and/or those of its subsidiaries. Executive shall perform
said duties to the best of his ability and in a manner satisfactory to the
Company.
1.3 Time and Efforts. Executive shall devote his professional full-time
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efforts, attention, and energies exclusively to the business of the Company and
its subsidiaries.
1.4 Place of Employment. Executive and the Company agree that during
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the Term (as defined below), his services will be performed at Cavio
Corporation's principal offices in Vancouver, British Columbia, or such other
place as agreed to between the Executive and the Company, subject to any
necessary travel requirements of his position and duties hereunder.
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2. Term
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Except as otherwise provided in this Agreement, the term of this
Agreement (the "Term") shall be for a period of one year commencing upon the
closing of the Transaction and shall automatically renew for successive periods
of one year unless either party gives notice of the termination of the Agreement
to the other not fewer than 30 days prior to the expiration of the applicable
yearly period.
3. Compensation
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3.1 Compensation. As the total consideration for Executive's services
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rendered hereunder, Executive shall be entitled to annual compensation of
$175,000 ("Base Salary"), payable in accordance with ordinary Company payroll
procedures and subject to applicable withholding. Executive shall also be
eligible to earn an annual bonus of $20,000 for every $1.5 million in gross
consolidated revenue of the Company for said year, said bonus to be paid no
later than ninety (90) days following the and of said calendar year. The bonus
shall be net of any amounts required to be withheld by the Company in respect to
taxes.
3.2 Stock Options. Executive shall be entitled to a ten year Stock
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Option under the Company Stock Option Plan for 150,000 shares of the Company's
Common Stock at an exercise price of $3.50 per share to be vested over a 24
month period. The Stock Option shall vest in full if this Agreement is
terminated Without Cause further to Section 5.2 herein.
3.3 Expenses. During employment, Executive is entitled to reimbursement
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for reasonable and necessary business expenses incurred by Executive in
connection with the performance of Executive's duties and pursuant to applicable
Company policy.
3.4 Vacation. Executive shall be entitled to receive twenty (20) days
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of paid vacation each year. Executive's vacation shall be governed by the
Company's usual policies applicable to all executives.
3.5 Benefits. Executive shall be entitled to participate in and receive
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all benefits made available by the Company, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements, including without limitation, medical, dental, vision, life and
disability insurance plans and coverage.
3.6 Work Permits. The Company shall use reasonable efforts to secure
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all work permits and visas required by the Executive in those geographic areas
where Executive is required to work to fulfill his duties hereunder.
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4. Proprietary Information
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Executive shall execute the Company's Confidentiality, Proprietary
Information, and Assignment of Inventions Agreement.
5. Termination
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Executive's employment shall terminate upon the happening of any of the
following:
5.1 Termination For Cause. The Company may terminate this Agreement for
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Cause if the Board of Directors determines that Cause exists. For purposes of
this Agreement, "Cause" shall mean:
(a) A proven act of dishonesty, fraud, embezzlement, or
misappropriation of proprietary information in connection with the Executive's
responsibilities as an Executive;
(b) Executive's conviction of, or plea of nolo contendere to, a
felony;
(c) Executive's willful misconduct in connection with his
employment duties that is detrimental to the Company and which cannot be cured
on reasonable notice to Executive; or
(d) Executive's failure or refusal to perform his employment duties
under this Agreement if such failure or refusal is not cured by Executive within
twenty (20) days after receiving written notice thereof from the Company.
(e) In the event of Executive's termination for Cause pursuant to
this section 5.1, Executive shall not be entitled to severance pay or further
salary.
5.2 Termination Due to Disability or Death. Executive's employment
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hereunder may be terminated by the Company as follows:
(a) To the extent permitted by law, upon thirty (30) days' notice
to Executive in the event that Executive has been unable to perform
substantially all of his duties under this Agreement for an aggregate of 90 days
(inclusive of weekends and holidays) within any 12-month period, as the result
of Executive's incapacity to perform the essential functions of his job due to a
physical or mental disability and after reasonable accommodation made by the
Company, and within thirty (30) days of receipt of such notice, Executive shall
not have returned to the full-time, continuing performance of his duties
hereunder; or
(b) Immediately upon the death of Executive.
(c) In the event of Executive's termination due to disability or
death pursuant to this section 5.2, Executive shall not be entitled to severance
pay or further salary.
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5.3 Voluntary Termination. Executive's employment hereunder may be
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terminated by Executive for any reason (other than by Termination Due to
Disability or Death) upon Executive providing Company with thirty (30) days'
notice of Executive's voluntary termination. In the event of Executive's
voluntary termination pursuant to this section 5.3, Executive shall not be
entitled to severance pay or further salary.
6. Non-Solicitation
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During Executive's employment with Company and for a period of six (6)
months following termination for any reason, Executive shall not, directly or
indirectly, solicit business from, divert business from, or attempt to convert
to other methods of using the same or similar products or services as provided
by Company, any client, account or location of Company with which Executive has
had any contact as a result of his engagement by Company.
7. Assignment
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This Agreement is personal in nature, and neither this Agreement nor
any part of any obligation herein shall be assignable by Executive. The Company
shall be entitled to assign this Agreement to any affiliate of the Company that
assumes the ownership and control of the business of the Company.
8. Severability
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Should any term, provision, covenant or condition of this Agreement be
held to be void or invalid, the same shall not affect any other term, provision,
covenant or condition of this Agreement, but such remainder shall continue in
full force and effect as though each such voided term, provision, covenant or
condition is not contained herein.
9. Governing Law
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This Agreement shall be governed by and construed in accordance with
the laws of the State of California applicable to contracts made and to be
carried out in California.
10. Arbitration Agreement
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Both Executive and the Company mutually agree that any and all disputes
between Executive and the Company (including any of the Company's related
entities, employees, officers, directors, agents or assigns), that arise out of
or relate to Executive's employment with, recruitment to, investment in, or
termination from the Company shall be resolved through final and binding
arbitration, pursuant to the Federal Arbitration Act and applicable California
law. This shall include any controversy, claim or dispute of any kind relating
to employment, including, without limitation, claims for breach of contract;
claims for wages, benefits or compensation; claims based on tort, public policy,
emotional distress, defamation, fraud or misrepresentation; claims for unfair
competition or concerning the unauthorized use and/or disclosure of any
confidential information, trade secret or any other intellectual property right;
and any statutory claims relating to employment, including discrimination,
harassment, or retaliation under Title VII of the Civil Rights Act of 1964, the
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Age Discrimination in Employment Act, the Americans with Disabilities Act, the
Family and Medical Leave Act, the California Fair Employment and Housing Act,
the California Labor Code, or any other federal, state or local law or
regulation now in existence or hereinafter enacted relating to employment.
The only claims not covered by this Arbitration Agreement are (a)
claims for workers' compensation benefits, unemployment insurance, or state and
federal disability insurance, which shall be brought according to their
applicable laws, and (b) any other dispute or claim that has been expressly
excluded from arbitration by statute.
Either party may initiate the arbitration process by submitting a
written demand letter to the other party briefly setting forth the nature of the
claim or dispute, including a short factual summary of the supporting
allegations. To be timely, the letter demand must be received by the other party
within the time limits established by any applicable statute of limitations with
respect to the asserted claims. Any disputes and/or claims required to be
submitted to arbitration under this Agreement shall be conducted by a neutral
arbitrator pursuant to the applicable rules of the American Arbitration
Association, subject to any applicable discovery or other rules required by
California law, and also subject to the right of either party to seek
provisional remedies as provided by the California Code of Civil Procedure
ss.1281.8.
The arbitration shall be held in Los Angeles, California. The Company
shall pay the costs directly related to the arbitration, including the
arbitrator's fees and any administrative fees. Each party shall otherwise bear
their own respective attorneys' fees and costs, including the costs of any
expert witnesses, depositions, travel or similar costs, unless an applicable
contract or statute provides otherwise to the prevailing party, in which case
the arbitrator shall make such determinations as required or permitted by law.
The arbitrator shall issue a written decision or award that sets forth
the essential findings and conclusions on which the award is based. The
arbitrator shall have the authority to award all of the types of relief or
damages that would otherwise be available in a civil court proceeding.
THE ARBITRATION SHALL BE INSTEAD OF ANY CIVIL LITIGATION, MEANING THAT
THE EXECUTIVE AND THE COMPANY ARE WAIVING ANY RIGHT TO A JURY TRIAL, AND THE
ARBITRATOR'S DECISION SHALL BE FINAL AND BINDING TO THE FULLEST EXTENT PERMITTED
BY LAW, SUBJECT ONLY TO ANY LIMITED JUDICIAL REVIEW AS REQUIRED OR PERMITTED BY
APPLICABLE LAW.
11. Binding Agreement
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This Agreement shall inure to the benefit of and shall be binding upon
the Company, its successors and assigns.
12. Captions
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The Section captions herein are inserted only as a matter of
convenience and reference and in no way define, limit or describe the scope of
this Agreement or the intent of any provisions hereof.
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13. Entire Agreement
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This Agreement contains the entire agreement of the parties relating to
the subject matter hereof, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement
that are not set forth otherwise herein. In this regard, each of the parties
represents and warrants to the other party that such party is not relying on any
promises or representations that do not appear in writing herein. This Agreement
supersedes the prior Letter Agreement with the Company, except as specifically
referenced herein. Each of the parties further agrees and understands that this
Agreement can be amended or modified only by a written agreement signed by all
parties.
14. Notice
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All notices and other communications under this Agreement shall be in
writing and mailed, telegraphed, telecopied, or delivered by hand (by a party or
a recognized courier service) to the other party.
15. Attorneys' Fees
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In the event that any party shall bring an action or proceeding in
connection with the performance, breach or interpretation of this Agreement,
then the prevailing party in any such action or proceeding, as determined by the
court or other body having jurisdiction, shall be entitled to recover from the
losing party all reasonable costs and expenses of such action or proceeding,
including reasonable attorneys' fees, court costs, costs of investigation,
expert witness fees and other costs reasonably related to such action or
proceeding.
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IN WITNESS WHEREOF, this Agreement is executed as of the day and year
first above written.
"COMPANY"
ALPHA VIRTUAL, INC.,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: President
And
"EXECUTIVE"
/s/ Xxxx Xxxx
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Xxxx Xxxx
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