Exhibit 10.48
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of __________, 1999 (this "Agreement"),
by and between 7TH LEVEL, INC., a Delaware corporation (the "Company"), and
XXXXXXX X. XXXXXXX ("Employee").
RECITALS
WHEREAS, the Company desires to employ Employee as President of
ViaGrafix on the terms and conditions hereinafter set forth and Employee desires
to accept such employment.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT.
1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to employ Employee during the Term (as defined in Section 2) as
President of ViaGrafix. Employee shall report to the Chief Executive Officer of
the Company and/or the President or Chief Operating Officer of the Company. As
President of ViaGrafix, Employee shall be responsible for the management of
ViaGrafix and shall perform such duties and responsibilities as are customarily
performed by a president of a company the size and nature of ViaGrafix, and such
other managerial duties and responsibilities with the Company which are
appropriate for his position at the Company as, from time to time, may be
assigned to him by the Chief Executive Officer of the Company and/or the
President or Chief Operating Officer of the Company.
1.2 Subject to the terms and conditions of this Agreement,
Employee hereby accepts employment as President of ViaGrafix and agrees to
devote at least a majority of his working time and efforts (but no less than
such time as is necessary to achieve the goals for ViaGrafix that are
established by mutual agreement of the Employee and the Company) to the
performance of services, duties and responsibilities in connection therewith
(other than during periods of illness, disability or vacation).
1.3 Employee agrees, that if requested by the Company,
Employee shall serve as a member of the Company's Board of Directors.
2. TERM OF EMPLOYMENT. The term of this Agreement (the "Term") shall be
for a period commencing on the date hereof and continuing through the fifth
anniversary of the date hereof; subject to earlier termination in accordance
with the terms and conditions contained in Section 6 hereof.
3. PLACE OF EMPLOYMENT. During the Term, Employee shall perform his
services at the principal place of business of the Company's ViaGrafix
subsidiary which will be located at Xxx Xxxxxxxx Xxx, Xxxxx, Xxxxxxxx 00000.
Employee shall be furnished with office facilities and services suitable to his
position and suitable for the performance of his duties. Employee acknowledges
and agrees that in connection with his employment, however, he may be required
to travel on behalf of the Company.
4. COMPENSATION.
4.1 SALARY. During the Term, the Company shall pay Employee a
base salary ("Base Salary") at the rate of One Hundred Eighty Five Thousand
Dollars ($185,000) per annum (pro rated for the balance of fiscal 1999 ending
December 31, 1999, and for any partial year during the Term). The Base Salary
shall be payable in accordance with the ordinary payroll practices of the
Company for its Employee officers but in no event less frequently than
semi-monthly. The Base Salary shall be reviewed annually by the Board on or
before the last day of each fiscal year, and may be increased in the sole
discretion of the Board taking into account corporate and individual
performance, any increase in Employee's responsibilities on account of
acquisitions by, or the general growth of, ViaGrafix and general business
conditions.
4.2 STOCK OPTIONS. As an inducement to Employee to enter into
this Agreement, the Company has on the date hereof (the "Grant Date") granted to
Employee options (the "Options") to purchase 900,000 shares of common stock, par
value $.01 per share, of the Company ("Common Stock") exercisable at a price
equal to the closing market price of the Common Stock on the Nasdaq Stock Market
(as reported by The Wall Street Journal) at the Effective Time (as defined in
the Merger Agreement). Pursuant to the terms of the grant, vesting of such
Options shall occur as follows, provided the Employee is still then employed by
the Company (except as set forth in Sections 7.1 and 7.3 hereof):
300,000 Options shall vest on the second anniversary of the
Grant Date;
300,000 Options shall vest on the third anniversary of the
Grant Date;
300,000 Options shall vest on the fourth anniversary of the
Grant Date.
5. EMPLOYEE BENEFITS.
5.1 EMPLOYEE BENEFIT PROGRAMS, PLANS AND PRACTICES. The
Company shall provide Employee during the Term, with coverage under all employee
benefit programs, plans and practices which the Company and ViaGrafix makes
available from time to time to its senior employees, with at least the same
opportunity to participate as the other senior employees of the Company and
ViaGrafix including, without limitation, retirement, pension, profit sharing,
medical, dental, hospitalization, life insurance, short and long term
disability, accidental death and dismemberment and travel accident coverage.
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5.2 VACATION AND PERQUISITES. Employee shall be entitled to
paid vacation and perquisites consistent with historical practices at ViaGrafix.
5.3 EXPENSES. Employee is authorized to incur reasonable
expenses in carrying out his duties and responsibilities under this Agreement,
(in accordance with the policies and procedures established from time to time by
the Company) including, without limitation, entertainment and travel expenses
(and the cost of living while away from home on business or at the request of,
and in the service of the Company), and similar items related to such duties and
responsibilities. The Company will reimburse Employee in full for all such
out-of-pocket expenses upon presentation by Employee from time to time of a
proper account of such expenditures in accordance with the policies and
procedures established by the Board and applicable to employees of the Company.
6. TERMINATION OF EMPLOYMENT.
6.1 DISABILITY. If Employee shall fail during the Term,
because of illness, physical or mental disability or other incapacity, for a
period of 120 consecutive days or any 180 days in any 365 consecutive days, to
render the services provided for by this Agreement or be adjudged an incompetent
("Disability"); provided that the date on which the Disability will be deemed to
occur shall be such 120th day or 180th day, respectively, or the date on which
Employee is adjudged an incompetent, as the case may be, the Company may
terminate Employee's employment on not less than two (2) weeks written notice
thereof, setting forth the facts and circumstances claimed to provide a basis
for termination of Employee's employment under this Section 6.1.
6.2 DEATH. Employee's employment hereunder will terminate
automatically if he should die.
6.3 TERMINATION FOR CAUSE. The Company shall have the right to
terminate the employment of Employee with or without Cause (as hereinafter
defined). The term "Cause," as used herein, shall mean (i) Employee's willful
refusal or failure (other than during periods of illness, Disability or
vacation) to perform his duties hereunder or under any lawful directive of the
Board (consistent with the terms of this Agreement), (ii) Employee's willful
misconduct or gross neglect in the performance of his duties hereunder, (iii)
the willful breach of this Agreement by Employee, (iv) the conviction, plea of
guilty or nolo contendre of Employee in respect of any felony, other than motor
vehicle offenses, or for any misdemeanor constituting theft or embezzlement from
the Company; provided that an indictment of Employee in such matters shall cause
the Company to suspend Employee with pay until such matters are, to the
Company's satisfaction, clarified or finalized, (v) other fraudulent action
against the Company or (vi) any violation by Employee, or conduct by Employee
that poses a substantial threat of causing the Company to violate, any statute,
law, ordinance or regulation promulgated or enforced by any entity with
jurisdiction over the Company or Employee, concerning employment
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discrimination or other employment-related wrongs. For purposes of this Section
6.3, no act, or failure to act, on Employee's part, will be considered "willful"
unless done or omitted to be done by him not in good faith or without a
reasonable belief that his action or omission was in furtherance of and in the
best interests of the Company's business. Termination by the Company for Cause
may be effected by written notice of the Company to Employee; provided, however,
that if the Company determines to terminate the Employee's employment pursuant
to clause (i) or (iii) hereof, the Company shall give the Employee written
notice of the facts and circumstances providing Cause and shall allow Employee
no less than twenty (20) days in the case of a proposed termination pursuant to
clause (i) or (iii) above to remedy, cure or rectify the situation giving rise
to Cause.
7. COMPENSATION UPON TERMINATION.
7.1 TERMINATION BY THE COMPANY WITHOUT CAUSE. If Employee's
employment is terminated by the Company without Cause or by Employee for Good
Reason (as defined below), Employee shall be entitled to (A) receive Employee's
Base Salary and benefits as set forth in Section 5 to which Employee is entitled
up to and including the effective date of Employee's termination of employment
hereunder, (B) receive Employee's Base Salary paid consistent with the Company's
payroll practices for nine (9) months and (C) vesting of Options held by
Employee pro rata determined by the portion of the time period in the vesting
schedule in Section 4.2 that has elapsed at the time of such termination (for
example, if such termination occurs on the 250th day of the Term, employee shall
vest in 102,740 options and if such termination occurs on the 900th day of the
term, employee shall vest in 433,151 options). Employee also shall be entitled
to receive, during the period he is being paid Base Salary under this Agreement,
the benefits provided under Section 5.1; except to the extent that such
continued participation is not permitted under the plan, program or practice or
would cause the plan, program or practice to cease to be qualified under any
applicable law or regulation. Notwithstanding the foregoing, nothing herein
shall cause the Company to maintain Employee's status as an employee of the
Company after termination.
7.2 TERMINATION BY EMPLOYEE WITHOUT GOOD REASON; TERMINATION
BY THE COMPANY FOR CAUSE. If Employee's employment is terminated by the Company
for Cause or by Employee without Good Reason, Employee shall be entitled to
receive Employee's Base Salary and benefits as set forth in Section 5 to which
Employee is entitled up to and including the effective date of Employee's
termination of employment hereunder. After such termination of employment, the
obligations of the Company under this Agreement to make any further payments, or
to provide any benefits specified herein, to Employee shall thereupon cease and
terminate.
7.3 TERMINATION UPON A CHANGE OF CONTROL. In the event of a
"Change of Control", Employee shall become immediately and fully vested in all
Options held by Employee. For purposes of this Agreement, a "Change of Control"
shall mean that (i) any "person" (as such term is defined within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934,
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as amended (the "1934 Act")), other than any person who as of the date hereof
beneficially owns (as defined in Rule 13d-3 of the 0000 Xxx) directly or
indirectly 15% or more of the Company's outstanding Common Stock or as of the
date hereof is on, or has designated a member of, the Board, becomes a
beneficial owner directly or indirectly of securities of the Company
representing in excess of fifty percent (50%) of the Company's then outstanding
securities having the right to vote for the election of directors, (ii) the
Company shall have consummated the sale of all or substantially all of the
assets of the Company, (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (or other entity), other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the voting power of the voting securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation; (iv) the stockholders of the Company approve a plan of
complete liquidation of the Company; or (v) the following individuals cease for
any reason to constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the Board and any new director
(other than a director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company's
stockholders was approved or recommended by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors on the date
hereof or whose appointment, election or nomination for election was previously
so approved or recommended.
7.4 GOOD REASON. Employee shall be entitled to terminate his
employment for "Good Reason." For purposes of this Agreement, "Good Reason"
shall mean (without Employee's express prior written consent as a stockholder or
otherwise) (i) failure by the Company to pay any compensation when due
hereunder, (ii) any significant reduction by the Company of Employee's
authorities, powers, functions, duties or responsibilities or the assignment of
duties to Employee by the Chief Executive Officer of the Company inconsistent
with Employee's position (except in connection with termination of Employee's
employment for Cause, as a result of Disability, as a result of Employee's death
or by Employee other than for Good Reason) or (iii) any material breach by the
Company of any other material provision of this Agreement. If Employee desires
to terminate his employment with the Company for Good Reason, he shall first
give written notice of the facts and circumstances providing Good Reason to the
Company, and shall allow the Company no less than twenty (20) days to remedy,
cure or rectify the situation giving rise to Good Reason. If the Company does
not remedy, cure or rectify such situation giving rise to Good Reason to the
reasonable satisfaction of Employee, Employee shall be entitled to terminate his
employment for Good Reason as of the expiration of such twenty day period.
7.5 NO SUBSTITUTION. Nothing contained in Section 7.1 shall be
construed to represent a substitution for compensation already paid to or earned
by Employee. In addition, Employee shall be entitled to receive all amounts in
respect of the period prior to the date of
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termination otherwise payable herein (without double counting), including such
payments provided for in Sections 4 and 5.
8. NONDISCLOSURE.
8.1 (a) Employee agrees to keep confidential and, without the
prior written approval of the Company, not to disclose, publish, use or
authorize anyone else to disclose, publish, use, any confidential information,
proprietary or technical information, and trade secrets, acquired by him in the
course of his employment hereunder. For purposes of this Agreement,
"Confidential Information" and "Trade Secrets" shall mean all information,
computer software or programs and related documentation, concerning methods,
practices, fabricated techniques, formulas, product design and development
information, processes, technical plans, customer lists, pricing techniques,
marketing plans, financial information of the Company and its subsidiaries and
its dealers and all other compilations of information which relate to the
business of, and are owned by, the Company and its subsidiaries and which have
not been disclosed by the Company and its subsidiaries to the general public or
which do not exist in the public domain. Employee acknowledges that, during the
term of his employment hereunder, he will have access to and become familiar
with Confidential Information and Trade Secrets that are owned by the Company
and its subsidiaries. Employee agrees not to use in any way or disclose any of
the Confidential Information and Trade Secrets, directly or indirectly, at any
time after termination of his employment. All files, records, documents,
information, data and similar items and documentation relating to the business
of the Company and its subsidiaries, whether prepared by or otherwise coming
into his possession, shall remain the exclusive property of the Company and its
subsidiaries and shall not be removed from the premises of the Company and its
subsidiaries under any circumstances without the prior written consent of the
Company. If such materials are removed during employment, they shall be promptly
delivered to the Company upon termination of employment.
(b) Employee agrees not to disclose and hereby
assigns to the Company (to the extent not already legally the property of the
Company) all copyrights in any copyrightable works and all inventions and
improvements made by him within the scope of his employment or that are
otherwise made through the use of the Company or its subsidiaries' time,
facilities or material. Employee will execute any and all assignments,
applications or other documents deemed necessary by the Company to file for and
obtain copyright registrations or patents, and to perfect and register the
Company's title to, such copyrights, inventions or improvements and any
applications or registrations relating thereto, when requested to by the Company
at its expense.
8.2 Employee and the Company agree that the covenant of
non-disclosure is a reasonable covenant under the circumstances, and further
agree that if in the opinion of any court of competent jurisdiction such
covenant is not reasonable in any respect, such court shall have the right,
power and authority to excise or modify such provision or provisions of this
covenant as to the court shall appear not reasonable and to enforce the
remainder of this covenant as so
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amended. Employee agrees that any breach of the covenant contained herein would
irreparably injure the Company. Accordingly, Employee hereby agrees that, in
such event, the Company shall be entitled to obtain a temporary and/or permanent
injunction to restrain any such breach or threatened breach or to obtain
specific performance of any such provisions, all without prejudice to any and
all other remedies which the Company may have at law or in equity.
9. NOTICES. Any notice, request, demand or other communication required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand, electronic transmission (with a copy following by
hand or by overnight courier), by registered or certified mail, postage prepaid,
return receipt requested or by overnight courier addressed to the other party.
All notices shall be addressed as follows, or to such other address or addresses
as may be substituted by notice in writing:
To the Company:
7th Level, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Fax No.: (000) 000-0000
with a copy to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
Fax No.: (000) 000-0000
To Employee:
Xxxxxxx X. Xxxxxxx
c/o ViaGrafix Corporation
Xxx Xxxxxxxx Xxx
Xxxxx, Xxxxxxxx 00000
with a copy to:
Johnson, Allen, Xxxxx & Xxxxxxxxxx, Inc.
000 Xxxxxxxxx Xxxx Xxxxxxxx
601 S. Boulder
Tulsa, Oklahoma
Attention: Xxxx X. Xxxxxxx, Xx., Esq.
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Fax No.: (000) 000-0000
Communications delivered by hand or by overnight courier shall be deemed
received on the date of delivery; communications sent by electronic means shall
be deemed received one (1) business day after the sending thereof, and
communications sent by registered or certified mail shall be deemed received
three (3) business days after the sending thereof.
10. SEPARABILITY; LEGAL FEES. If any provision of this Agreement shall
be declared to be invalid or unenforceable, in whole or in part, such invalidity
or unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. Each party shall bear the costs of any legal
fees and other fees and expenses which may be incurred in respect of enforcing
its respective rights under this Agreement.
11. ASSIGNMENT. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Employee and the assigns and
successors of the Company. Neither this Agreement nor any rights hereunder shall
be assignable or otherwise subject to hypothecation by Employee (except by will
or by operation of the laws of intestate succession) or by the Company, except
that the Company may assign this Agreement to any successor (whether by merger,
acquisition of stock, purchase or otherwise) to all or substantially all of the
assets or business of the Company, if such successor expressly agrees in writing
to assume the obligations of the Company hereunder.
12. AMENDMENT; WAIVER. This Agreement may only be amended by written
agreement signed by the parties hereto. A waiver by the Company or Employee of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by the other party.
13. BENEFICIARIES; REFERENCES. Employee shall be entitled to select
(and change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Employee's death, and may change such election, in either case by giving the
Company written notice thereof. In the event of Employee's death or a judicial
determination of his incompetence, reference in this Agreement to Employee shall
be deemed, where appropriate, to refer to his beneficiary, estate or other legal
representative. Any reference to the masculine gender in this Agreement shall
include, where appropriate, the feminine.
14. SURVIVORSHIP. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section 14 are in addition to the survivorship provisions of
any other section of this Agreement.
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15. GOVERNING LAW. This Agreement shall be construed, interpreted and
governed in accordance with the laws of the State of Oklahoma, without reference
to rules relating to conflicts of law.
16. ENTIRE AGREEMENT. This Agreement and the Merger Agreement contain
the entire understanding between Employee and the Company and supersede in all
respects any prior or other agreement or understanding between the Company and
Employee as to the matters set forth herein and therein. Except for the
obligations specifically set forth herein and therein, the Company does not owe
any obligations to Employee and Employee does not owe any obligations to the
Company with respect to the matters set forth herein and therein.
17. WITHHOLDING. The Company shall withhold from any payments due to
Employee hereunder, all taxes, FICA or other amounts required to be withheld
pursuant to any applicable law.
18. HEADINGS. The section headings contained in this Agreement are
for the convenience of reference only and shall not affect the construction
of any provision of this Agreement.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which together
this shall constitute one and the same instrument.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be signed on the date and year first above written.
7TH LEVEL, INC.
By:
------------------------------------------
Name:
Title:
EMPLOYEE
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Xxxxxxx X. Xxxxxxx
