EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 14th day of February, 2000 (the "Effective Date"), by and between XXXXX
XXXXXXX, an individual ("Executive"), and NEW VISUAL ENTERTAINMENT, INC., a Utah
corporation ("Employer").
RECITALS:
WHEREAS, Employer desires to employ Executive upon the terms set forth
in this Agreement; and
WHEREAS, Executive desires to be employed by Employer upon the terms
set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained, Employer and Executive agree as follows:
AGREEMENTS:
1. EMPLOYMENT.
Subject to the terms and conditions stated in this Agreement, Employer
hereby employs Executive and Executive hereby accepts such employment.
2. DUTIES OF EXECUTIVE.
(a) During the Term of Employment (hereinafter defined),
Executive shall be employed as the Vice President and Chief Operating Officer of
Employer and shall perform customary functions and duties with respect to such
position. Executive shall devote all of his working time and attention to the
design, marketing and development of the metallic high-speed transmission
technology referred to as the "Technology" (as that term is defined in the
Merger Agreement [defined herein]) or other duties related to the business of
Employer that the Board of Directors of Employer may from time to time specify
that Executive shall perform.
(b) Executive shall perform his duties within a
newly-established facility (the "Facility") in the East San Francisco Bay
metropolitan area. Executive acknowledges and agrees that the performance of his
duties may entail travel and other promotional activities on behalf of Employer,
and that Executive may often perform his duties from his home through the use of
his personal telephone and computer equipment.
(c) Executive acknowledges and agrees that the conduct of the
business of Employer shall, at all times, be within the exclusive control of the
Board of Directors of Employer.
3. COMPENSATION.
As compensation for Executive's services rendered hereunder, Employer
shall pay Executive a minimum aggregate annual base salary equal to $208,000 per
annum commencing on the Effective Date. Such salary shall be paid in accordance
with customary payroll practices of Employer from time to time in effect but no
less frequently than in equal bi-weekly payments. Executive shall also be
entitled to a bonus of $12,500 payable within ten (10) days of the execution of
this Agreement. Executive shall also be entitled to such additional, annual
bonus as shall be determined by the Board of Directors. During the Term of
Employment, Executive will be entitled to all benefits, if any, ordinarily
accorded to, and will participate in all employee plans, other than health or
medical plans, ordinarily participated in by, full-time employees of Employer,
to the extent Executive is eligible under the terms of such plans, including,
without limitation, all retirement, life and disability insurance plans
established by Employer, in accordance with the terms of such plans. In
addition, Employer will pay the monthly premium of the health/medical plan
designated by Executive as his health/medical plan. During the Term of
Employment, Executive shall be entitled to participate in any pension and
retirement plans, stock option or ownership plans and other fringe benefit plans
as are or may be made available from time to time to executive or other salaried
employees of Employer to the extent that Executive is eligible under the terms
of such plans. In addition, Executive shall be entitled to such vacation time
each year during the Term of Employment (all of which vacation must be utilized
in the respective calendar year in which it accrues) which senior executives of
Employer are afforded pursuant to Employer's standard policies and practices and
other benefits afforded to Executive prior to the date hereof.
4. EXPENSES.
Executive is authorized, in carrying out all of his responsibilities
and duties hereunder, to incur reasonable expenses while promoting the business
of Employer in accordance with the policies of Employer from time to time in
effect. Employer will either pay such expenses directly or promptly reimburse
Executive for such reasonable out-of-pocket expenses incurred at the request or
on behalf of Employer upon receipt by Employer of appropriate documentation
thereof.
5. TERM OF EMPLOYMENT.
Unless sooner terminated in accordance with this Agreement, the Term of
Employment (herein so called) shall become effective as of the Effective Date
and shall continue through any and all times through and including September 14,
2000, provided, however, that the Term of Employment shall:
(a) be automatically renewed through February 14, 2001, upon
the occurrence of the Milestone (as that term is defined in that certain
Agreement and Plan of Merger [the "Merger Agreement"] by and between Employer
and Astounding Acquisition Corporation, a Delaware corporation, on the one hand,
and Xxxxxxx Xxxxxxxx, Xxxxx Xxxxxxx, and New Wheel Technologies, Inc., a
California corporation, on the other hand, dated as of the date hereof); or
(b) if the Milestone has not occurred, be renewed at the
option of Employer for an additional term(s) of six months, upon ten (10) days
prior written notice given to Executive by the Employer.
6. TERMINATION.
(a) TERMINATION BY EMPLOYER.
1. WITH NOTICE. The Term of Employment may be
terminated by Employer at any time, by written notice to Executive for cause.
Cause shall mean (a) gross negligence or willful misconduct or malfeasance by
Executive in the performance of his services by or on behalf of the Employer
that has a material adverse effect on the financial condition or business of the
Employer or which is to the material detriment of Employer; (b) any violation by
Executive of the covenants set forth in paragraphs 7 or 8; or (c) Executive
becomes mentally or physically incapacitated to such extent that Executive is
unable to substantially perform his duties under this Agreement for a period of
more than ninety (90) consecutive days.
2. AUTOMATIC. This Agreement shall automatically
terminate upon the death of Executive.
(b) RESERVED.
(c) EFFECT. Upon termination of the Term of Employment,
whether by Executive or Employer, all continuing rights and obligations
hereunder shall cease except for (i) the rights and obligations arising under
Paragraph 3 of this Agreement to the extent the agreements governing any such
benefits and plans so require, (ii) the rights and obligations under Paragraph 4
of this Agreement with respect to expenses incurred prior to the date of
termination, (iii) the rights and obligations under this Subparagraph 6(c), and
(iv) the rights and obligations under Paragraphs 7, 8 and 9 hereof. The
covenants set forth in Xxxxxxxxxx 0, 0 xxx 0 xxxxx xx construed as agreements
ancillary to but independent of any other provision of this Agreement. The
existence of any claim or cause of action against Employer, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement of said covenants. Executive expressly authorizes Employer to deduct
from any compensation payable to Executive on the expiration or termination of
this Agreement, the value of any monetary advances or loans received by
Executive from Employer, the value of any personal expenses of Executive borne
by Employer which are outstanding, and the value of any property or materials
belonging to Employer which are not returned to Employer upon expiration or
termination.
7. CONFIDENTIALITY COVENANTS.
During the Term of Employment (except with respect to disclosures
occurring during the normal course of Executive performing his services in
accordance herewith) and continuing in perpetuity, Executive shall:
(a) preserve as confidential all knowledge and information
pertaining to the business, affairs, directors, officers, shareholders,
employees, and other personnel of Employer, all affiliates of Employer and any
predecessors of Employer obtained by Executive from any source whatsoever and
which is not a matter of public knowledge, unless disclosure is otherwise
required by applicable law, and
(b) not use, except on behalf of Employer during the Term of
Employment, Employer's records, documents, contracts, writings, data or other
information, whether or not in written or other recorded form, unless they are a
matter of public knowledge.
Without limiting the generality of the foregoing, the prohibitions
contained above shall be operative, whether inside or outside the United States,
with respect to any information or knowledge that Employer or any affiliate of
Employer now or hereafter may deem to be confidential, including, without
limitation, the following information with respect to Employer: (i) directors,
officers, shareholders, employees, and other personnel; (ii) operations or
planning, including customer lists, lists of suppliers, and information
pertaining to potential customers or suppliers; (iii) bids or progress under, or
negotiations pursuant to, government or other contracts, or with respect to
facilities and equipment, including contents of any manual, practice or
procedure, or operating revenue, expense, private or public debt or equity
financing or banking, accounting, or financial matters; (iv) advertising or
promotional plans or programs; (v) matters contained in applications to or
matters or proceedings pending under the jurisdiction of any regulatory agency
or court, including those that are only threatened; (vi) any system, procedure,
or administrative operation; (vii) plans for the extension of the present
business or commencement of a new business; (viii) the Technology; (ix) any
copyrights, trade secrets, know-how, proprietary information, patents,
inventions, marks, software, licenses or technology, and any registrations or
applications for registration relating to the foregoing, owned or utilized by
Employer, or any affiliate of Employer, or work in progress with respect to such
items; and (x) plans with respect to business combinations or reorganizations.
8. INDUCEMENT OF CLIENTS.
During the Term of Employment and continuing during the Restricted
Period (as defined below), Executive hereby agrees that he shall not, directly
or indirectly, solicit or interfere, for the benefit of any Competing Business
or in any manner materially detrimental to Employer, with the Clients (as
defined below), employees and business relationships of Employer. The term
"Restricted Period" shall mean, in the event of the termination of the Term of
Employment for any reason, any and all times through and including the date
which is one (1) year following the termination of this Agreement. The term
"Competing Business" shall mean any business enterprise which is engaged in the
Business of Employer (as defined below) in any area of the world in which
Employer or any of its affiliates are then conducting business. The term
"Clients" shall mean any individual, proprietorship, partnership, corporation,
association, or other entity that is solicited or served by Employer or its
affiliates during the Term of Employment. The term "Business of Employer" shall
mean the type of business engaged in or proposed to be engaged in by Employer at
the time of Executive's termination, including, without limitation, the
development of and operations related to the Technology. Without in any manner
limiting the scope of the foregoing provisions, if the Executive engages in any
of the following acts he shall be considered to have violated this covenant:
(a) induces or attempts to induce any Client or prospective
Client to withdraw, curtail, divert, or cancel its business or any agreements
with Employer or its affiliates;
(b) induces or attempts to induce any employee of Employer or
its affiliates to terminate his or her employment therewith;
(c) induces or attempts to induce any independent contractor
providing services on behalf of Employer or its affiliates to terminate his or
her business relationship therewith;
(d) develops any materials utilizing the confidential
information of Employer or its affiliates, except for the benefit of Employer or
its affiliates; or
(e) disrupts in any manner whatsoever any of Employer's or its
affiliate's existing business relationships.
9. INTELLECTUAL PROPERTY RIGHTS.
(a) Executive agrees that he will make prompt and full
disclosure to Employer, will hold in trust for the sole right and benefit of
Employer, and will promptly assign to Employer, all of Executive's right, title
and interest in and to any trademarks, service marks, trade names, patents and
copyrights, all applications therefor and registrations thereof in the United
States and all foreign countries, all trade secrets, know-how, works of
authorship, inventions, innovations, improvements, developments, methods,
designs, analyses, drawings, reports and similar or related information, which
Executive solely or jointly conceives, develops, or reduces to practice, causes
to be conceived, developed or reduced to practice, or with respect to which
Executive or any entity with which Executive is affiliated obtains any ownership
interest in, during the Term of Employment (the "Executive Property"). To the
extent any of the intellectual property rights of the type noted in this
subparagraph 9(a) have not been acquired by Employer, Executive shall promptly
assign all of his right, title and interest in such property to Employer.
Employer acknowledges that it has no claim, right, title or interest in or to
the intellectual properties of Executive set forth on Exhibit A attached hereto
(the "Excluded Properties"). Executive acknowledges that he has no claim, right,
title or interest in or to the Technology, as defined in the Merger Agreement
after the effective date of the Merger Agreement.
(b) Executive acknowledges that all works of authorship which
are made by him (solely or jointly with others) within the scope of his
employment and during the Term of Employment shall be deemed "works made for
hire", as that term is defined in the United States Copyright Act (17 U.S.C.
'101 et. seq.), such that Employer shall be considered the author of such works
and owner of all copyrights therein. Executive warrants and represents that all
works of authorship which he made (solely or jointly with others) within the
scope of his employment and during all times he was employed by the
predecessors-in-interest to Employer were likewise deemed to be "works made for
hire," such that the respective predecessors-in-interest to Employer were
considered the authors of such works and owners of all copyrights therein. In
the event that any such works made during the Term of Employment with Employer,
or made during Executive's employment with the predecessors-in-interest to
Employer, are for any reason not held to be works made for hire, Executive
hereby irrevocably assigns to Employer all of Executive's right, title and
interest in and to such works and all copyrights therein, whether now existing
or hereafter created.
(c) Executive agrees to assist and cooperate with Employer as
may be necessary or desirable from time to time in furtherance of the purposes
of this paragraph 9, including, without limitation, the execution, verification
and delivery of documents and the doing or taking of such lawful actions as
Employer may reasonably request in the United States and all foreign countries.
Without limiting the generality of the foregoing, Executive agrees without
further compensation to execute and deliver such documents and take such actions
(including appearing as a witness) as may be useful to enable Employer to apply
for, register, obtain, assign, perfect, evidence, sustain, record and enforce
any of the Executive Property and/or other rights assigned or to be assigned to
Employer pursuant to this Agreement, in the United States and all foreign
countries, and in connection with the assignments (and recording thereof) of
such Executive Property and/or other rights to Employer or its designee. The
obligations of Executive pursuant to this paragraph 9(c) shall continue beyond
the Term of Employment, but following the Term of Employment with Employer,
Employer shall compensate Executive at a reasonable rate after Executive's
termination for the time actually spent by Executive in this connection at
Employer's request.
(c) Executive hereby assigns to Employer any and all claims,
of any nature whatsoever, which Executive may now or hereafter have for
infringement, including past infringement, of any rights assigned or to be
assigned to Employer pursuant to this Agreement, except claims relating to the
Excluded Properties.
10. REMEDIES.
Without limiting any other rights of Employer, in the event of breach
or threatened breach by Executive of any provision in Paragraphs 7, 8 or 9
hereof, Employer shall be entitled to (i) relief by temporary restraining order,
temporary injunction, permanent injunction or otherwise, as issued by a court of
law or equity, (ii) recovery of all attorneys' fees and costs incurred by
Employer in obtaining such relief, and (iii) any other legal and equitable
relief to which it may be entitled, including any and all monetary damages which
any Employer may incur as a result of said breach or threatened breach or
violation. Employer may pursue any remedy available to it, including declaratory
relief, concurrently or consecutively in any order as to any breach, violation,
or threatened breach or violation, and the pursuit of one such remedy at any
time will not be deemed an election of remedies or waiver of the right to pursue
any other remedy. Employer has the right to pursue partial enforcement and/or to
seek declaratory relief regarding the enforceable scope of this Agreement
without penalty and without waiving Employer's right to pursue any other
available remedy subsequent to or concurrently with declaratory relief. The
provisions of this Paragraph 10 shall not in any manner limit the rights and
remedies available to Employer for any breach of the terms of this Agreement.
11. NO BREACH.
Executive represents and warrants that the execution and delivery of
this Agreement and his performance and consummation of the transactions
contemplated under those documents, do not, and will not, conflict, breach, or
constitute a default under any other agreement, instrument, covenant or
restriction that Executive is a party to or is otherwise bound.
12. NOTICES.
Any notice or request herein required or permitted to be given to
either party hereunder shall be given in writing and shall be personally
delivered or sent to such party by prepaid mail at the address of such party set
forth below or at such other address as such party may designate by written
communication to the other parties to this Agreement:
If to Executive: Xxxxx Xxxxxxx
0000 Xxxx Xxxxxx Xxxx
Xxxx, Xxxxxxxxxx 00000
If to Employer: NEW VISUAL ENTERTAINMENT, INC.
000 Xxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Each notice given in accordance with this paragraph shall be deemed to have been
given, if personally delivered, on the date personally delivered or, if mailed,
on the fifth day following the day on which it is deposited in the United States
mail, certified or registered mail, return receipt requested, with postage
prepaid.
13. HEADINGS.
The headings of the paragraphs of this Agreement have been inserted for
convenience of reference only and shall in no way restrict or modify any of the
terms or provisions hereof.
14. SEVERABILITY.
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future laws effective during the term hereof,
such provision shall be fully severable and this Agreement shall be construed
and enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of each such illegal, invalid, or unenforceable
provision, there shall be added automatically as a part of this Agreement a
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid, and enforceable.
15. ENTIRE AGREEMENT; SURVIVAL.
This Agreement embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, if any, relating to the subject matter
hereof. The covenants, agreements, representations and warranties contained in
or made pursuant to this Agreement shall survive Executive's termination of
employment and the termination of this Agreement.
16. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of each
of the parties hereto and their respective successors, heirs, assigns, and legal
representatives, but Executive may not assign this Agreement nor any rights or
obligations hereunder without the prior consent in writing of Employer. This
Agreement may be assigned by Employer to any party who acquires substantially
all of the assets of Employer or who merges or consolidates with Employer;
provided that such party agrees to assume and be liable for all of the
obligations of Employer hereunder.
17. ATTORNEYS' FEES.
If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs, and necessary disbursements in addition to
any other relief to which he or it may be entitled.
18. WAIVERS.
One or more waivers of any covenant, term, or provision of this
Agreement by either party hereto shall not be construed as a waiver of the
breach of any other covenant, term, or provision or of any subsequent breach of
the same or any other covenant, term, or provision. The consent or approval of
either party hereto with respect to the act of the other party hereto shall not
be deemed to waive or render unnecessary consent to or approval of any
subsequent similar act. No custom or practice of the parties shall constitute a
waiver of either party's rights to insist upon strict compliance with the terms
hereof.
19. GOVERNING LAW.
This Agreement shall be governed in all respects, including validity,
interpretation and effect by the laws of the State of California.
20. ARBITRATION.
(a) It is understood and agreed between the parties hereto
that any and all claims, grievances, demands, controversies, causes of action or
disputes of any nature whatsoever (including, but not limited to, tort and
contract claims, and claims upon any law, statute, order or regulation)
(hereinafter "Transaction Claims") arising out of, in connection with or in
relation to (i) the interpretation, performance or breach of this Agreement,
(ii) the arbitrability of any Transaction Claims under this Agreement, or (iii)
any relationship before, at the time of entering into, during the term of or
upon or after expiration or termination of this Agreement, between the parties
hereto, shall be resolved by final and binding arbitration administered by a
single arbitrator to be agreed upon by the parties or, if the parties cannot
agree upon an arbitrator within five (5) days, a single arbitrator which shall
be appointed by the American Arbitration Association (in either case, the
"Arbitrator").
(b) All Transaction Claims shall be filed before the
Arbitrator. Neither party nor the Arbitrator shall disclose the existence,
content or results of any arbitration hereunder without the prior written
consent of all parties. Except as provided herein, the Federal Arbitration Act
shall govern the interpretation, enforcement and all proceedings pursuant to
this Section 20. The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the State of California, or federal law, or both, as
applicable. The Arbitrator is without jurisdiction to apply any different
substantive law. The Arbitrator shall have the authority to entertain a motion
to dismiss and/or a motion for summary judgment by any party and shall apply the
standards governing such motions under the Federal Rules of Civil Procedure. The
Arbitrator shall render an award and a written, reasoned opinion in support
thereof. Such award shall include reasonable attorneys' fees to the prevailing
party. Judgment upon the award may be entered in any court having jurisdiction
thereof.
(c) Adherence to this dispute resolution process shall not
limit the parties' rights to obtain any provisional remedy, including without
limitation, injunctive or similar relief, from any court of competent
jurisdiction as may be necessary to protect their rights and interests.
Notwithstanding the foregoing sentence, this dispute resolution procedure is
intended to be the exclusive method of resolving any Transaction Claims arising
out of or relating to this Agreement.
(d) This dispute resolution process shall survive the
termination of this Agreement. If any provision in this Section 20 is adjudged
to be void or otherwise unenforceable, in whole or in part, such adjudication
shall not affect the validity of the remainder of this Section. The parties
expressly acknowledge that by signing this Agreement, they are giving up their
respective rights to a jury trial.
[SIGNATURE PAGE FOLLOWS]
EXECUTED to be effective as of the date first above written.
EMPLOYER:
NEW VISUAL ENTERTAINMENT, INC.
By: /s/ XXX XXXXXXXXXX
-------------------------------------
Xxx Xxxxxxxxxx, President
EXECUTIVE:
/s/ XXXXX XXXXXXX
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Xxxxx Xxxxxxx
