EXHIBIT 10.3
EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of April 25, 2002,
by and between Princeton Video Image, Inc., a Delaware corporation (the
"Company"), and Xxxxxx Xxxxxxxx (the "Employee"), effective as of December 1,
2001 (the "Effective Date").
WHEREAS, the Company and the Employee wish to enter an agreement whereby
the Employee shall be employed by the Company as its Executive Vice President
for International and Special Projects;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:
1. Term of Employment. Subject to the terms and conditions hereof, the
Company will employ the Employee, and the Employee will serve the Company, as
Executive Vice President for International and Special Projects, or such other
similar or comparable position or positions as the Company may request from time
to time, for a period beginning on December 1, 2001, the Effective Date, and
terminating on the second anniversary of such date (the "Initial Term").
Following the expiration of the Initial Term, the Agreement may be extended upon
written consent of both parties (such term, as it may be shortened by
termination of Employee's employment hereunder pursuant to the provisions hereof
or extended, the "Term of Employment").
2. Duties. During the Term of Employment, the Employee will serve as
Executive Vice President for International and Special Projects, or such other
similar or comparable position or positions as determined by the Company,
subject to the terms of this Agreement and the direction and control of the
Chief Executive Officer of the Company. The primary location of the Employee's
employment hereunder shall be the offices of the Company in Lawrenceville, New
Jersey. The Employee will serve, in addition to holding the position of
Executive Vice President for International and Special Projects of the Company,
in such other capacities as may be determined from time to time by the Company.
The Employee shall devote all of his business time to the performance of his
duties hereunder, provided, that the Employee shall not be precluded from
serving as a member of up to two boards of directors or advisory boards of
companies or organizations so long as such service does not violate the
provisions of Section 9 of this Agreement or interfere with the performance of
the Employee's duties hereunder.
3. Compensation. The Company will, during the Term of Employment, pay to
the Employee as compensation for the performance of his duties and obligations
hereunder:
(a) Cash. A base salary at the rate of $168,000 per annum
("Salary"), payable in equal semi-monthly installments, with such Salary to be
reviewed by the Company in July 2002;
(b) Stock Options. The Company will grant the Employee an option
(the "First Option Grant") to purchase 48,000 shares of Common Stock of the
Company at an exercise price equal to the fair market value of the Company's
Common Stock on December 1, 2001, which option shall vest at the rate of 8,000
shares for each full calendar month of service by
Employee, and be deemed fully vested as of June 1, 2002. Subject to the approval
of the Board of Directors of the Company, which approval management of the
Company shall promptly seek in good faith following execution of this Agreement,
the Company will also grant the Employee an option ("Second Option Grant") to
purchase 72,000 shares of Common Stock of the Company at an exercise price equal
to the fair market value of the Company's Common Stock as of the date of such
Board approval. The Second Option Grant shall vest and become exercisable at the
rate of 4,000 shares for each full calendar month of service by Employee from
and after June 1, 2002. The First and Second Option Grants, and the
determination of fair market value, shall in all respects be subject to the
terms, definitions and provisions of the Princeton Video Image, Inc. 1993 Stock
Option Plan, as amended; and
(c) Commission. The Employee shall be eligible to receive a bonus
equal to three (3) percent of net revenue actually received by the Company
during the Term of Employment that is derived from new international business
principally attributable to the Employee's efforts. All determinations regarding
whether and how much commission is earned by Employee under this provision shall
be made by the Company's Chief Executive Officer and shall be final and binding
on the Employee.
(d) Fund Raising Commission. The Employee shall receive a commission
of up to five percent (5%) of the gross cash proceeds actually received by the
Company during the term of this Agreement from new equity investment which
investment is reasonably determined by the Company to have been procured
principally as a result of the Employee's efforts from prospective investor
contacts the Company has approved in advance. Any commission payable to Employee
on account of such investment shall be reduced to the extent the Company must
pay to any other person (whether an investment banker, broker, finder,
consultant, shareholder, other employee, or otherwise) other fees or costs
associated with procuring such investment and shall not be payable with respect
to the later exercise or conversion of securities previously purchased or
received. Commission payable under this Section 3(d) shall be payable within 30
days after the closing and receipt of the investment.
All determinations regarding whether and how much bonus or commission is
earned by the Employee pursuant to any provision of this Section 3, including
the calculation of net revenue, shall be made in the reasonable discretion of
the Company and shall be final and binding on the Employee. Nothing in this
Agreement shall obligate the Company to manage, operate, or account for the
operation of any division of the Company in any particular manner at any time or
to adopt or continue any management, operation, or accounting policy regarding
any division of the Company for any period.
4. Other Benefits. During the Term of Employment:
(a) The Employee shall be entitled to participate in employee
benefit plans and programs of the Company to the extent that his position,
tenure, salary, age, health and other qualifications make him eligible to
participate. The Company does not guarantee the adoption or continuance of any
particular employee benefit plan or program during the Term of Employment, and
the Employee's participation in any such plan or program shall be subject to the
provisions, rules, regulations and laws applicable thereto; provided, however,
that the Employee shall be entitled to health and hospital insurance benefits
consistent with the past practices of the Company in effect with respect to
Company personnel generally.
(b) While employed hereunder, the Employee shall be entitled to
vacation benefits consistent with the past practices of the Company in effect
with respect to Company
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personnel generally. Such vacation may be taken by the Employee at such times as
do not unreasonably interfere with the business of the Company. The accumulation
of annual vacation time earned but not taken will be in accordance with the
Company policy guidelines. Additional vacation will be earned in accordance with
Company policy.
5. Expenses. During the Term of Employment, all travel and other
reasonable business expenses incident to the rendering of services by the
Employee under this Agreement will be paid or reimbursed by the Company subject
to the submission of appropriate vouchers and receipts in accordance with the
Company's policy from time to time in effect.
6. Death or Disability.
(a) The Employee's employment under this Agreement shall be
terminated by the death of the Employee. In addition, the Employee's employment
under this Agreement may be terminated by the Board of Directors of the Company
if the Employee shall be rendered incapable by illness or any other disability
from complying with the terms, conditions and provisions on his part to be kept,
observed and performed for a period in excess of 180 days (whether or not
consecutive) or 90 days consecutively, as the case may be, during a 12-month
period during the Term of Employment ("Disability"). If the Employee's
employment under this Agreement is terminated by reason of Disability of the
Employee, the Company shall give notice to that effect to the Employee in the
manner provided herein. In the event that the Employee receives disability
insurance benefits for which payment was made by the Company after the date of
this Agreement and prior to termination of the Employee's employment under this
Agreement pursuant to this Section 6(a), the Employee's Salary shall be reduced
by an amount equal to such disability insurance benefits during such period.
(b) In addition to and not in substitution for any other benefits
which may be payable by the Company in respect of the death of the Employee, in
the event of such death after the Employee's employment has begun, the Salary
payable hereunder shall continue to be paid at the then current rate for three
(3) months after the termination of employment, and any bonus to which the
Employee would have been entitled for the year in which his death occurs shall
be pro rated to the date of his death and paid not later than three (3) months
after the termination of employment. All sums payable pursuant to this Section
6(b) shall be paid to the Employee's personal representative.
(c) In addition to and not in substitution for any other benefits
which may be payable by the Company in respect of the Disability of the
Employee, in the event of the termination of the Employee's employment hereunder
due to such Disability pursuant to Section 6(a) after the Employee's employment
has begun, the Company shall pay the Employee, in six (6) equal semi-monthly
installments, an aggregate amount equal to three (3) months' Salary at the rate
in effect on the effective date of such termination; provided, however, that the
Company shall deduct from such payments the amount of any and all disability
insurance benefits paid during such three-month period with respect to the
Employee that were paid for by the Company during any period for which payment
was made by the Company after the date of this Agreement and prior to the
termination of the Employee's employment. In addition, any bonus to which the
Employee would have been entitled for the year in which such termination of
employment occurs shall be pro rated to the date of such termination and paid
not later than twelve (12) months after such termination.
7. Disclosure of Information, Inventions and Discoveries. The Employee
shall promptly disclose to the Company all processes, trademarks, inventions,
improvements
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discoveries and other information related to the business of the Company
(collectively, "Developments") conceived, developed or acquired by him alone or
with others during the Term of Employment or during any earlier period of
employment by the Company or any predecessor of the Company, whether or not
during regular working hours or through the use of materials or facilities of
the Company. All such Developments shall be the sole and exclusive property of
the Company, and, upon request, the Employee shall promptly deliver to the
Company all drawings, sketches, models and other data and records relating to
such Developments. In the event any such Development shall be deemed by the
Company to be patentable, the Employee shall, at the expense of the Company,
assist the Company in obtaining a patent or patents thereon and execute all
documents and do all such other acts and things necessary or proper to obtain
letters patent and to invest in the Company full right, title and interest in
and to such Developments.
8. Non-Disclosure. The Employee shall not, at any time during or after the
Term of Employment or any earlier period of employment by the Company or any
predecessor of the Company, divulge, furnish or make accessible to anyone
(otherwise than in the regular course of business of the Company) or use for his
own account or for the account of any other person any knowledge or information
with respect to confidential or secret processes, inventions, discoveries,
improvements, formulae, plans, materials, devices or ideas or other know-how,
whether patentable or not, with respect to any confidential or secret
development or research work or with respect to any other confidential or secret
aspects of the Company's business (including, without limitation, customer
lists, supplier lists and pricing arrangements with customers or suppliers)
(collectively, the "Confidential Information"). This Section 8 shall not apply
to any information which (i) is or becomes generally available to the public
other than as a result of a disclosure directly or indirectly by the Employee,
(ii) is or becomes available to the Employee on a non-confidential basis from a
person other than the Company or its officers, directors or agents who, to the
Employee's knowledge after due inquiry, is not and was not bound by a
confidentiality obligation to the Company and was not otherwise prohibited from
transmitting such information to the Employee, (iii) is independently developed
by the Employee without the use of any Confidential Information, or (iv) as may
be required by a court of law of competent jurisdiction or pursuant to a validly
issued subpoena.
9. Non-Competition. The Company and the Employee agree that the services
rendered by the Employee are unique and irreplaceable. In addition to and in
furtherance of Section 8 of this Agreement, the Company and the Employee agree
that the Employee has had, and will continue to have, unlimited access to the
Confidential Information and that preserving the proprietary nature of the
Confidential Information is of utmost importance to the Company. By giving the
Employee an opportunity or incentive to breach his obligations to the Company
under Section 8 of the Agreement, any relationship between the Employee and a
competitor of the Company during or following the Term of Employment will
potentially cause the Company irreparable injury, regardless (in the event of
termination or expiration of the Term of Employment) of the circumstances under
which the Term of Employment ends, and even if the Employee is terminated by the
Company for cause. Therefore, in light of the foregoing, the Employee agrees
that during the Term of Employment and for a period of two (2) years thereafter,
the Employee shall not, directly or indirectly, through any other person, firm,
corporation or other entity (whether as an officer, director, employee, partner,
consultant, holder of equity or debt investment, lender or in any other manner
or capacity):
(a) compete with the Company's Business in any geographical area in
the United States or in those foreign countries where the Company, during the
Term of Employment, conducts or has undertaken activities to begin to conduct
its Business on the date
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of the termination of Employee's employment under this Agreement for any reason
(For purposes of this provision the Company's "Business" means the design,
manufacture, sale, marketing, license and supply of video and television
technology applications for real time or post production insertion, either
upstream or downstream of distribution, of electronic images (including video)
into video streams that are delivered by telecast, the Internet, or any other
medium, and such other specific kinds of proprietary video and television
technology applications as the Company may develop or acquire during the Term of
Employment.);
(b) initiate conversations to solicit, induce, encourage or attempt
to induce or encourage any employee of the Company to terminate his or her
employment with the Company or to breach any other obligation to the Company;
(c) solicit, interfere with, disrupt, alter or attempt to disrupt or
alter the relationship, contractual or otherwise, between the Company and any
customer, potential customer, or supplier of the Company; or
(d) engage in or participate in any business conducted under any
name that shall be the same as or similar to the name of the Company or any
trade name used by it.
provided, however, that in the event the Employee's employment is terminated by
the Company for cause pursuant to Section 11 of this Agreement, then following
such termination Employee shall have no further obligations under this Section 9
unless the Company, in its sole discretion, elects to make additional payments
to Employee as provided under Section 12.
The Employee acknowledges that the foregoing geographic, activity and time
limitations contained in this Section 9 are reasonable and properly required for
the adequate protection of the Company's business. In the event that any such
geographic, activity or time limitation is deemed to be unreasonable by a court,
the Employee shall submit to the reduction of either said activity or time
limitation to such activity or period as the court shall deem reasonable. In the
event that the Employee is in violation of the restrictive covenants set forth
in this Section 9, then the time limitation for such covenants shall be extended
for a period of time equal to the pendency of any proceedings brought to enforce
such covenants, including any appeals.
10. Remedies.
(a) The Employee acknowledges that irreparable injury would result
to the Company if the provisions of Section 7, 8, 9 or 14 of this Agreement were
not specifically enforced and agrees that the Company shall be entitled to any
appropriate legal, equitable or other remedy, including injunctive relief, in
respect to any failure to comply with the provisions of Section 7, 8, 9 or 14,
as determined by a court of competent jurisdiction.
(b) In furtherance of and not in limitation of Section 10(a), in the
event that, subsequent to the Term of Employment, the Employee breaches any of
his obligations to the Company under Section 7, 8, 9 or 14 of this Agreement,
then the Company's obligation to make further payments to the Employee pursuant
to this Agreement shall terminate. Any such termination shall not limit or
affect the Company's right to pursue any other remedy available to the Company
at law or in equity.
11. Termination for Cause. In addition to any other remedy available to
the Company, either at law or in equity, the Employee's employment with the
Company may be terminated by the Board of Directors for cause, which shall
include (i) the Employee's conviction
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from which no further appeal may be taken for, or plea of nolo contendere to, a
felony or a crime involving moral turpitude, (ii) the Employee's commission of a
breach of fiduciary duty involving personal profit in connection with the
Employee's employment by the Company, (iii) the Employee's commission of an act
which the President or the Chairman shall reasonably have found to have involved
willful misconduct or gross negligence on the part of the Employee, in the
conduct of his duties under this Agreement, (iv) habitual absenteeism, (v) the
Employee's material breach of any material provision of this Agreement which
remains uncured for a period of thirty (30) days following notice by the
Company, or (vi) the willful and continued failure by the Employee to perform
substantially his duties with the Company (other than any such failure resulting
from his incapacity due to physical or mental illness). With respect to the
matters set forth in subsections (iii), (iv), (v) and (vi) of this Section 11,
the Company may not terminate the Employee's employment unless the Employee has
first been given notice of the conduct forming the cause for such termination
and an opportunity to explain such conduct to the Company. In the event of
termination under this Section 11, the Company's obligations under this
Agreement shall cease, and the Employee shall forfeit all rights to receive any
future compensation under this Agreement. Notwithstanding any termination of
this Agreement pursuant to this Section 11, the Employee, in consideration of
his employment hereunder to the date of such termination, shall remain bound by
the provisions of Section 7, 8, 9 and 14 hereof following any such termination.
12. Termination Without Cause, Severance.
(a) Each of the Company and the Employee may terminate the
Employee's employment under this Agreement at any time for any reason
whatsoever, without any further liability or obligation of the Company to the
Employee or of the Employee to the Company from and after the date of such
termination (other than liabilities or obligations accrued but unsatisfied on,
or surviving, the date of such termination), by sending written notice to the
other party.
(b) In the event the Company elects to terminate the Employee's
employment under this Agreement pursuant to this Section 12, the Company shall
continue to pay the Employee, in equal semi-monthly installments, the full
Salary (inclusive of paid medical plan, but exclusive of bonuses, if any) as
such Salary otherwise would have accrued, as described in Section 3, for a
period equal to six (6) months.
(c) Prior to any termination for "Good Cause" (as hereinafter
defined) by Employee of his employment hereunder, Employee shall provide a
notice to the Company of any Good Cause for the Employee's termination of
employment and shall provide the Company with a reasonable opportunity of not
less than fifteen (15) business days to cure the reason(s) for the notice, if
such reason consists of a claim of material breach of this Agreement. If the
Company does not cure the reason for the notice within the period provided and
Employee terminates his employment for Good Cause, the Company shall continue to
pay the Employee, in equal semi-monthly installments, the full Salary (inclusive
of paid medical plan, but exclusive of bonuses, if any) as such Salary otherwise
would have accrued for a period equal to six (6) months. In the event the
Employee elects to terminate the Employee's employment under this Agreement,
other than as set forth in the immediately preceding sentences, prior to the end
of the Term of Employment, the Company's obligation to pay Salary shall cease as
of the effective date of termination.
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(d) Any termination of the Employee's employment under this
Agreement by the Company as provided in this Section 12 shall be in addition to,
and not in substitution for, any rights with respect to termination of the
Employee which the Company may have pursuant to Section 11. Notwithstanding any
termination of the Employee's employment under this Agreement pursuant to this
Section 12, the Employee, in consideration of his employment hereunder to the
date of such termination, shall remain bound by the provisions of Section 7, 8,
9 and 14 hereof following any such termination.
(e) For purposes of this Section 12, "Good Cause" shall mean either
a Detrimental Change as defined in Section 12(f) below or that the Company shall
have materially breached its obligations under this Agreement and such breach
shall not have been cured at the time the Employee terminates his employment.
(f) As used in this Agreement, "Detrimental Change" shall mean a
detrimental change in the nature or scope of the Employee's employment or duties
which is substantially inconsistent with those of an executive officer of the
Company. Detrimental Change shall include, without limitation, the assignment of
the Employee to any duties substantially inconsistent with those of an executive
officer of the Company, the removal of the Employee from, or any failure to
re-elect him as an officer of the Company, a reduction in Salary or other
employee benefits, the failure by the Company to continue to provide the
Employee with substantially similar bonus opportunities, the relocation of the
Employee's primary office of employment to a location more than fifty (50) miles
from the location of such office prior to the relocation, and substantially
increased travel requirements. If the Employee fails to notify the Company
within thirty (30) days of the relocation that he will terminate his employment
with the Company due to the relocation, then such failure to notify shall
constitute a waiver and such relocation shall not be deemed a Detrimental
Change.
13. Resignation. In the event that the Employee's services under this
Agreement are terminated under any of the provisions of this Agreement (except
by death), the Employee agrees that he will deliver to the Board of Directors
his written resignation from all positions held with the Company, such
resignation to become effective immediately; provided, however, that nothing
herein shall be deemed to affect the provisions of Section 7, 8, 9 and 14 hereof
relating to the survival thereof following termination of the Employee's
services hereunder; and provided, further, that except as expressly provided in
this Agreement, the Employee shall be entitled to no further compensation
hereunder.
14. Data. Upon expiration or termination of the Term of Employment or
termination pursuant to Section 1, 6, 11 or 12 hereof, the Employee or his
personal representative shall promptly deliver to the Company all books,
memoranda plans, records and written data of every kind relating to the business
and affairs of the Company which are then in his possession or control.
15. Insurance. The Company shall have the right, at its own cost and
expense to apply for and to secure in its own name, or otherwise, life, health
or accident insurance or any or all of them covering the Employee, and the
Employee agrees to submit to usual and customary medical examinations and
otherwise to cooperate with the Company in connection with the procurement of
any such insurance and any claims thereunder.
16. Waiver of Breach. Any waiver of any breach of this Agreement shall not
be construed to be a continuing waiver or consent to any subsequent breach on
the part either of the Employee or the Company.
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17. Assignment. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the Company upon any sale of all or
substantially all of the Company's assets, or upon any merger or consolidation
of the Company with or into any other entity (including, without limitation, any
change in control of the Company), all as though such successors and assigns of
the Company and their respective successors and assigns were the Company.
Insofar as the Employee is concerned, this Agreement, being personal, may not be
assigned, and any such purported assignment shall be void and of no effect.
18. Severability. To the extent any provision of this Agreement shall be
invalid or unenforceable, it shall be considered deleted herefrom, and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect. In furtherance and not in limitation of the
foregoing, should the duration or geographical extent of, or business activities
covered by, any provision of this Agreement be in excess of that which is valid
and enforceable under applicable law, then such provision shall be construed to
cover only that duration, extent or activities which may be validly and
enforceably covered.
19. Notices. All notices, requests and other communications pursuant to
this Agreement shall be in writing and shall be deemed to have been duly given,
if delivered in person or by courier, telegraphed, telexed or by facsimile
transmission (receipt confirmed) or five (5) business days after being sent by
registered or certified mail, return receipt requested, postage paid, addressed
as follows:
(a) If to the Employee:
Xxxxxx Xxxxxxxx
00 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
(b) If to the Company:
Princeton Video Image, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Attn: President & CEO
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Smith, Stratton, Wise, Xxxxx & Xxxxxxx
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Any party may, by written notice to the other in accordance with this Section
19, change the address to which notices to such party are to be delivered or
mailed.
20. General. Except as otherwise provided herein, the terms and provisions
of this Agreement shall constitute the entire agreement by the Company and the
Employee with respect to the subject matter hereof and shall supersede any and
all prior agreements or
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understandings between the Employee and the Company, whether written or oral.
This Agreement shall be construed and enforced in accordance with the laws of
the State of New Jersey. This Agreement may be amended or modified only by a
written instrument executed by the Employee and the Company. The headings of the
sections of this Agreement are for convenience of reference only and do not
constitute part of this Agreement. This Agreement may be executed in any number
of counterparts, each of which, when executed, shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.
* * * * *
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IN WITNESS WHEREOF, each of the parties have executed or caused to be
executed by its duly authorized representative this Employment Agreement as of
the day and year first above written.
PRINCETON VIDEO IMAGE, INC.
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Co-Chief Executive Officer
Employee:
/s/ Xxxxxx Xxxxxxxx
----------------------------------
Xxxxxx Xxxxxxxx
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