EXECUTIVE EMPLOYMENT AGREEMENT
The
Executive Employment Agreement (the “Agreement”)
is
made as of the first day of June 2005 (the “Effective
Date”),
by
and between International Microcomputer Software Inc., a California corporation
(the “Company”)
and
Xxxxxx Xxxxx (“Executive”),
an
individual residing in California.
WHEREAS,
the Company is in need of an executive with significant experience in the
development and marketing of precision design products to perform the regular
duties of the Executive Vice President of Precision Design as determined by
the
Board of Director’s and President of IMSI; and
WHEREAS,
Executive has experience in such fields; and
WHEREAS,
the Company wishes to engage Executive to serve as its Executive Vice President
of Precision Design,
NOW
THEREFORE, in consideration of the premises and the covenants contained herein,
the parties hereby agree as follows:
DUTIES
AND POSITION.
During
the term of the Agreement, Executive agrees to be employed by and to serve
the
Company as its Executive Vice President of Precision Design. The Company agrees
to employ and retain Executive in such capacity and Executive accepts and agrees
to such employment, subject to the general supervision, advice and direction
of
the Company’s Board of Directors. Executive shall perform such duties as are
customarily performed by an executive in a similar position. Executive shall
devote his full business time to the performance of his duties as Executive
Vice
President of Precision Design. Executive’s reasonable attention to personal
investments and other business matters of his immediate family shall not be
deemed to be a violation of the Agreement.
1. TERMS
OF EMPLOYMENT.
1.1. Term
of Employment.
The
Agreement shall be effective as of the date first set forth above and shall
continue until terminated pursuant to the provisions set forth herein (the
“Term”).
1.2. Place
of Performance.
Executive shall be based at the principal offices of the Company, which are
located at 000 Xxxxxxx Xxx, Xxxxxx, Xxxxxxxxxx. In no case will Executive be
required or expected to move his principal residence from the San Francisco
Bay
Area.
2. SALARY,
BENEFITS AND BONUS COMPENSATION.
2.1. Salary.
As
payment for the services to be rendered by Executive as provided in Section
1
and subject to the terms and conditions of Section 4, the Company agrees to
pay
to Executive a salary equal to $144,000.00 dollars per year, payable in
twenty-four equal installments on the 15th
and the
last days of each month (as may be adjusted from time to time, the “Base
Salary”).
Executive’s salary shall be reviewed by the Company’s Board of Directors in
accordance with Company policies, and Executive shall be eligible for increases
in salary and benefits as determined by the Company’s Board
of
Directors in its sole discretion. In no event shall Executive’s salary be
reduced below the Base Salary except with Executive’s consent which may be
withheld in Executive’s sole discretion.
2.2. Bonuses.
Executive shall be eligible to receive discretionary quarterly bonuses of up
to
$15,000.00 related to Executive’s success in meeting job specific [MBOs] and
corporate performance as documented in the Quarterly Bonus Plan to be agreed
on
by Executive and his direct supervisor, as determined by the
Company’s Board
of
Directors.
87
2.3. Incentive
Bonus:
(a) During
fiscal 2005, 2006 and 2007. Executive will earn a cash bonus of $75,000.00
for
the sale of any assets or product line associated with the Precision Design
Business Unit. Payment of bonuses from the sale of assets, products or companies
shall be made to Executive 15 days after the sale of such assets.
2.4. Employee
Benefits.
Executive shall be eligible to participate in all benefit plans generally
available to employees who are managers of the Company including health, dental,
life insurance, stock and bonus compensation programs.
3. TERMINATION.
3.1. Definitions.
For
purposes of the Agreement, the following terms shall have the following
meanings:
(a) “Termination
For Cause”
shall
mean termination by the Company of Executive’s employment by the Company for
reasons of Executive’s conviction of, or plea of “guilty” or “no contest” to, a
felony involving moral turpitude, persistent dishonesty or fraud, persistent
willful breaches of the material terms of the Agreement, or habitual neglect
of
the duties which he is required to perform hereunder.
(b) “Termination
Other Than For Cause”
shall
mean termination by the Company of Executive’s employment by the Company (other
than a Termination For Cause), or a Demotion, as defined below.
(c) “Voluntary
Termination”
shall
mean termination of Executive’s employment with the Company by action of
Executive (other than termination by reason of Executive’s disability or death
as described in Sections 4.4 and 4.5).
(d) “Demotion”
shall mean (i) any reduction of Executive’s then current Base Salary; (ii) any
material reduction in the package of benefits and incentives provided to
Executive or any action by the Company which would materially and adversely
affect Executive’s participation or reduce Executive’s benefits under any such
plans, except to the extent that such benefits and incentives of all other
officers of the Company are similarly reduced; (iii) any material diminution
of
Executive’s duties, responsibilities, or authority; or (iv) any requirement that
Executive relocate to a work site that would increase Executive’s one-way
commute distance to more than fifty (50) miles from Executive’s principal
residence.
3.2. Termination
For Cause.
(a) Termination
For Cause may be effected by the Company at any time during the Term and shall
be effected by notice to Executive.
(b) Upon
Termination For Cause, Executive immediately shall be paid any accrued salary,
any bonus compensation to the extent earned, any vested deferred compensation
(other than pension plan or profit sharing plan benefits which will be paid
in
accordance with the applicable plan), any benefits under any plan of the Company
in which Executive is a participant to the full extent of Executive’s rights
under such plans, any accrued vacation pay and any appropriate business expenses
incurred by Executive in connection with his duties hereunder, all to the date
of termination, but Executive shall not be paid any other compensation or
reimbursement of any kind, including without limitation, severance
compensation.
88
3.3. Termination
Other Than For Cause.
(a) Notwithstanding
anything else in the Agreement, the Company may effect a Termination Other
Than
For Cause at any time upon notice to Executive of such termination.
(b) Upon
any
Termination Other Than For Cause, Executive shall be paid any accrued salary,
any bonus compensation to the extent earned, any deferred compensation (other
than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any accrued vacation pay and any
appropriate business expenses incurred by Executive in connection with his
duties hereunder, all to the date of termination, and any severance compensation
provided in section 5,
but
Executive shall be entitled to no other compensation or reimbursement of any
kind.
3.4. Termination
by Reason of Disability.
(a) If,
during the Term, Executive is determined by an examining physician to have
failed to perform his duties under the Agreement on account of illness or
physical or mental incapacity, and such illness or incapacity continues for
a
consecutive period of more than four (4) months, or an aggregate of more than
six (6) months in a twelve (12) month period, the Company shall have the right
to terminate Executive’s employment hereunder by notice to
Executive.
(b) Upon
a
termination by reason of disability, the Company shall pay to the Executive
any
accrued salary, any bonus compensation to the extent earned, any vested deferred
compensation (other than pension plan or profit sharing plan benefits which
will
be paid in accordance with the applicable plan), any benefits under any plans
of
the Company in which Executive is a participant to the full extent of
Executive’s rights under such plans, any accrued vacation pay and any
appropriate business expenses incurred by Executive in connection with his
duties hereunder, all to the date of termination, but no other compensation
or
reimbursement of any kind.
3.5. Death.
(a) In
the
event of Executive’s death during the Term, Executive’s employment shall be
deemed to terminate as of the last day of the month during which his death
occurs.
(b) Upon
termination by death, the Company shall pay to Executive’s estate any accrued
salary, any bonus compensation to the extent earned, any vested deferred
compensation (other than pension plan or profit sharing plan benefits which
will
be paid in accordance with the applicable plan), any accrued vacation pay and
any appropriate business expenses incurred by Executive in connection with
his
duties hereunder, all to the date of termination, [and any severance
compensation provided in Section 5,] but no other compensation or reimbursement
of any kind.
3.6. Voluntary
Termination.
Executive may effect a Voluntary Termination of his Agreement at any time upon
thirty (30) days notice to the Company. In the event of a Voluntary Termination,
the Company immediately shall pay any accrued salary, any bonus compensation
to
the extent earned, any vested deferred compensation (other than pension plan
or
profit sharing plan benefits which will be paid in accordance with the
applicable plan), any benefits under any plans of the Company in which Executive
is a participant to the full extent of Executive’s rights under such plans, any
accrued vacation pay and any appropriate business expenses incurred by Executive
in connection with his duties hereunder, all to the date of termination, but
no
other compensation or reimbursement of any kind.
4. SEVERANCE
COMPENSATION.
Upon
a
Termination Other Than for Cause, Executive shall receive a severance fee equal
to six (6) months at his then current base salary to be paid over twelve (12)
months.
89
(a) any
benefits under any plans of the Company in which Executive is a participant
to
the full extent of Executive’s rights under such plans for a period of six (6)
months following the date of termination, or (at the Company’s option) payment
in cash of the cost of such benefits at COBRA rates then in effect;
and
(b) full
vesting of any and all unvested incentive stock options held by Executive as
of
the date of termination.
5. PAID
TIME OFF. Executive
shall eligible to accrue vacation and sick leave according to company policy.
During the first year of employment, Executive will accrue vacation time off
on
a monthly basis at the rate of 1.416 days per month or ten (17) days per year.
Executive is ineligible to accrue vacation benefits while Executive is absent
without pay including, but not limited to, unpaid leaves of absence. The purpose
of vacation leave is, among other things, to provide time for recreation and
relaxation. The Company encourages all of its employees to take accrued vacation
leave each year. Accordingly, the maximum vacation Executive will be permitted
to accrue is twenty-four (24) days or 192 hours. Once the cap on the accrual
of
vacation has been reached, no additional vacation leave will accrue until
Executive has reduced the balance of unused vacation to less than twenty-four
(24) days. Thereafter, vacation leave will accrue on a prospective basis as
long
as Executive’s total accrual remains under the cap. The Company reserves the
right to compensate Executive for earned, unused vacation at any time in its
sole discretion. In addition to vacation leave, Executive will be eligible
to
accrue six (6) days of sick leave a year.
6. HOLIDAYS. Executive
shall be entitled to holidays with pay during each calendar year consistent
with
the holiday schedule applicable to management employees of the Company,
generally.
7. COMPLIANCE
WITH EMPLOYER’S RULES. The
employment relationship between the parties shall be governed by the general
employment policies and procedures of the Company, including (but not limited
to) those relating to the protection of confidential information and assignment
of inventions; provided, however, that when the terms of the Agreement differ
from or are in conflict with the Company’s general employment policies or
procedures, the Agreement shall control. Executive agrees to abide by all of
the
Company’s policies and procedures in effect from time to time.
8. RETURN
OF PROPERTY. Upon
termination of Executive’s employment, Executive shall deliver all property
(including keys, records, notes, lists, data, memoranda, models, and equipment)
that is in the Executive’s possession or under the Executive’s control which is
the Company’s property or related to the Company’s business.
9. INDEMNIFICATION
OF EXECUTIVE.
The
Company shall indemnify Executive against any direct losses incurred by
Executive in the course of his duties to the fullest extent permissible under
applicable law.
10. MISCELLANEOUS.
10.1. Every
notice or other communication required or contemplated by the Agreement by
either party shall be delivered to the other party at the address set forth
on
the signature page below by: (i) personal delivery; (ii) postage prepaid, return
receipt requested, registered or certified mail; (iii) internationally
recognized express courier, such as Federal Express, UPS or DHL; or (iv)
facsimile or email with a confirmation copy sent simultaneously by postal mail.
Notice not given in writing shall be effective only if acknowledged in writing
by a duly authorized representative of the party to whom it was given. Either
party may change its or his address for notice from time to time by providing
written notice in the manner set forth above.
10.2. Attorney
Fees. In
the
event that any action, suit or other proceeding at law or in equity is brought
to enforce the provisions of the Agreement, or to obtain money damages for
the
breach thereof, and such action results in the award of a judgment for money
damages or in the granting of any injunction in favor of the Company, then
all
reasonable expenses, including, but not limited to, reasonable attorneys’ fees
and disbursements (including those incurred on appeal) of the Company in such
action, suit or other proceeding shall (on demand of the Company) forthwith
be
paid by Executive. If such action results in a judgment in favor of Executive,
then all reasonable expenses, including but not limited to, reasonable
attorney’s fees and disbursements (including those incurred on appeal) of
Executive in such action, suit or other proceeding shall (on demand of
Executive) forthwith be paid by the Company.
90
10.3. Entire
Agreement. The Agreement
supersedes all prior agreements, and the terms set forth herein represent the
entire understanding and agreement between the Company and Executive regarding
compensation, employment, status and position. It is further understood that
the
Company’s policies, procedures and rules may be amended or changed at any time
by the Company.
10.4. Amendment. The
Agreement may be modified or amended only if the amendment is made in writing
and is signed by both parties. The Agreement cannot be altered in any way by
any
oral statement(s) made by Executive or the Company.
10.5. Severability. If
any
provision(s) of the Agreement shall be held to be invalid or unenforceable
for
any reason, the remaining provisions shall continue to be valid and enforceable.
If a court finds that any provision(s) of the Agreement is invalid or
unenforceable, but that by limiting such provision it would become valid or
enforceable, then such provision shall be deemed to be written, construed,
and
enforced as so limited.
10.6. Waiver
Of Contractual Right. The
failure of either party to enforce any provision of the Agreement shall not
be
construed as a waiver or limitation of that party’s right subsequently to
enforce and compel strict compliance with every provision of the
Agreement.
10.7. Applicable
Law. The
Agreement shall be governed by the laws of the State of California.
IN
WITNESS WHEREOF, the parties have executed his Agreement as of the date first
above written.
|
COMPANY
/s/
XXXXXX XXXX III
Xxxxxx
Xxxx III
000
Xxxxxxx Xxx
Xxxxxx,
XX 00000
Fax:
(000) 000-0000
|
EXECUTIVE
/s/
XXXXXX XXXXX
Xxxxxx
Xxxxx
____________
Address
Fax:
___________
|
