EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 13, 1999 (this "Agreement"), by
and between 7TH LEVEL, INC., a Delaware corporation (the "Company"), and XXXXX
XXXXXXX ("Executive").
RECITALS
WHEREAS, the Company is simultaneously entering into an Agreement and
Plan of Merger by and among the Company, 7th Level Acquisition Corporation, a
Delaware corporation and wholly-owned subsidiary of the Company ("Acquisition
Corporation"), Panmedia Corporation, a California corporation ("Panmedia"),
Executive and Xxxxxxxx Xxxxxxx (the "Merger Agreement") pursuant to which
Acquisition will merge with and into Panmedia;
WHEREAS, Executive is the current President and Chief Executive
Officer of Panmedia; and
WHEREAS, the Company desires to employ Executive as an Executive Vice
President of the Company on the terms and conditions hereinafter set forth and
Executive 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 Executive during the Term (as defined in Section 2) as
an Executive Vice President of the Company. Executive shall report to the Chief
Executive Officer of the Company. As Executive Vice President of the Company,
Executive shall be primarily responsible for managing the Company's consumer
internet business and shall perform such other duties and responsibilities as
are customarily performed by an Executive Vice President of a company the size
and nature of the Company, 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.
1.2 Subject to the terms and conditions of this Agreement,
Executive hereby accepts employment as an Executive Vice President of the
Company and agrees to devote his full working time and efforts to the
performance of services, duties and responsibilities in connection therewith
(other than during periods of illness, disability or vacation). Nothing in this
Agreement shall preclude Executive, so long as, in the reasonable determination
of the Board of Directors of the Company (the "Board"), such activities do not
materially interfere with his
duties and responsibilities hereunder, from engaging in charitable and community
affairs, from managing any passive investment made by him in real estate or
other property (provided that no such investment may exceed 2% of the equity
securities of any entity, without the prior approval of the Board, which
approval shall not be unreasonably withheld), or from serving, subject to the
prior approval of the Board, which approval shall not be unreasonably withheld,
as a member of boards of directors or as a trustee of any other company,
association or entity.
1.3 So long as the Executive shall serve as an Executive Vice
President of the Company, the Company shall cause Executive to be a member of
the Board as more fully described in Section 6.04 of the Merger Agreement.
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 second
anniversary of the date hereof; subject to earlier termination in accordance
with the terms and conditions contained in Section 7 hereof.
3. PLACE OF EMPLOYMENT. During the Term, Executive shall perform his
services at 000 Xxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx 00000 or another location
within twenty (20) miles of 000 Xxxx Xxxx Xxxx unless such location is chosen or
agreed to by Executive. Executive shall be furnished with office facilities and
services suitable to his position and suitable for the performance of his
duties. Executive acknowledges and agrees that in connection with his
employment, he may be required to travel on behalf of the Company.
4. COMPENSATION.
4.1 SALARY. During the Term, the Company shall pay Executive a
base salary ("Base Salary") at the rate of One Hundred Twenty Five Thousand
Dollars ($125,000) 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 executive 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 Executive's responsibilities on account of
acquisitions by, or the general growth of, the consumer internet business of the
Company and general business conditions.
4.2 PERFORMANCE BONUS. Executive shall be entitled to receive
an annual performance bonus (each, a "Performance Bonus") for the fiscal year in
which such bonus is earned; provided that the Performance Bonus for the first
fiscal year in which such bonus is earned shall be not less than $15,000.
Subject to the immediately preceding sentence, the amount of any such
Performance Bonus shall be determined by the Board, in its sole discretion, and
shall be based on such quantitative and qualitative initiatives as identified by
the Board upon consultation with the Chief Executive Officer and upon approval
of the budget for the respective
2
fiscal year. Any such Performance Bonus shall be paid to Executive within 120
days of the end of the fiscal year to which it relates.
4.3 STOCK OPTIONS.
(a) As an inducement to Executive to enter into this
Agreement, the Company has on the date hereof (the "Grant Date") granted to
Executive options (the "Options") to purchase 300,000 shares of common stock,
par value $.01 per share, of the Company ("Common Stock") exercisable at 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 Executive is still then employed by the Company
(except as set forth in Sections 8.1 and 8.2 hereof):
150,000 Options shall vest on the second anniversary of the
Grant Date;
150,000 Options shall vest on the third anniversary of the
Grant Date.
(b) If Executive's employment is terminated by the
Company without Cause (as hereinafter defined) or if Executive terminates his
employment with the Company for Good Reason (as hereinafter defined), all
Options shall fully and immediately vest.
5. EMPLOYEE BENEFITS.
5.1 EMPLOYEE BENEFIT PROGRAMS, PLANS AND PRACTICES. The
Company shall provide Executive during the Term, with coverage under all
employee benefit programs, plans and practices which the Company makes available
from time to time to its senior executives, with at least the same opportunity
to participate as the other senior executives of the Company 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. Executive shall be given
credit under such programs, plans and practices for all service with Panmedia
for purposes of eligibility and vesting to the extent permissible and applicable
under such programs, plans and practices and by law as set forth in Section 6.03
of the Merger Agreement.
5.2 VACATION AND FRINGE BENEFITS.
(a) Executive shall be entitled to four (4) weeks
paid vacation in each year (pro rated as necessary for partial calendar years
during the Term). Executive may take his allotted vacation days at such times as
are mutually convenient for the Company and Executive, consistent with the
Company's vacation policy in effect from time to time with respect to its
executive officers.
3
(b) Executive shall be entitled to the perquisites
and fringe benefits normally made available to other senior executives of the
Company, commensurate with his position with the Company.
5.3 EXPENSES. Executive 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 Executive in full for all such
out-of-pocket expenses upon presentation by Executive 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 executive officers of the
Company.
5.4 INDEMNIFICATION. Executive shall be entitled, at all times
(including after the termination of this Agreement for any reason), to the
benefit of the maximum indemnification and advancement of expenses available
from time to time under the Company's Restated Certificate of Incorporation and
By-laws, and if not set forth therein, to the maximum extent available under the
laws of the Company's state of incorporation.
6. KEY-PERSON INSURANCE. Executive agrees that the Company may at any
time and from time to time, and for the Company's own benefit, apply for and
take out term life, health, accident, and/or other insurance covering Executive
("Key-Person Insurance") in an amount to be determined in the sole discretion of
the Board in consultation with Executive. The Company shall own all rights in
any such Key-Person Insurance policies and proceeds thereof and Executive shall
not have any right, title or interest therein; except that if Executive is no
longer employed by the Company (other than as a result of his death or
Disability (as herein defined in Section 7.2)) then the Company shall terminate
such Key-Person Insurance policies or, at the option of Executive, arrange for
such Key-Person Insurance policies to be assigned to Executive; provided,
however, that said policies permit such assignment and Executive is solely
responsible for the payment of any premiums after such assignment. Executive
agrees to assist the Company at the Company's expense in obtaining any such
Key-Person Insurance by among other things, submitting to the customary
examinations and correctly preparing, signing and delivering such applications
and other documents as may be required by insurers.
7. TERMINATION OF EMPLOYMENT.
7.1 GOOD REASON. Executive shall be entitled to terminate his
employment for "Good Reason." For purposes of this Agreement, "Good Reason"
shall mean (without Executive'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 Executive's
authorities, powers, functions, duties or responsibilities in managing the
consumer internet business of the Company or the assignment of duties to
Executive by the Chief
4
Executive Officer of the Company inconsistent with Executive's position (except
in connection with termination of Executive's employment for Cause (as defined
in section 7.4), as a result of Disability, as a result of Executive's death or
by Executive other than for Good Reason) or (iii) any material breach by the
Company of any other material provision of this Agreement including, without
limitation, Section 3. If Executive 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
Executive, Executive shall be entitled to terminate his employment for Good
Reason as of the expiration of such twenty day period.
7.2 DISABILITY. If Executive shall fail during the Term,
because of illness, physical or mental disability or other incapacity, for a
period of 90 consecutive days or any 120 days in any 365 consecutive days, to
render the services to be rendered under this Agreement or be adjudged an
incompetent by a court of competent jurisdiction ("Disability"); provided that
the date on which the Disability will be deemed to occur shall be such 90th or
120th day, respectively, or the date on which Executive is adjudged an
incompetent, as the case may be, the Company may terminate Executive'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
Executive's employment under this Section 7.2.
7.3 DEATH. Executive's employment hereunder will terminate
automatically if he should die.
7.4 TERMINATION FOR CAUSE. The Company shall have the right to
terminate the employment of Executive with or without Cause (as hereinafter
defined). The term "Cause," as used herein, shall mean (i) Executive's
continuing, repeated and willful refusal and 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) Executive's willful misconduct or gross neglect in the performance of his
duties hereunder, (iii) the willful material breach of this Agreement by
Executive, (iv) the conviction, plea of guilty or nolo contendre of Executive 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 Executive in such matters shall cause the Company to suspend Executive with
pay until such matters are, to the Company's reasonable satisfaction, clarified
or finalized, (v) other fraudulent action against the Company or (vi) any
violation by Executive, or conduct by Executive 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
Executive, concerning employment discrimination or other employment-related
wrongs. For purposes of this Section 7.4, no act, or failure to act, on
Executive'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
5
business. Termination by the Company for Cause may be effected by written notice
of the Company to Executive; provided, however, that if the Company determines
to terminate the Executive's employment pursuant to clause (i) or (iii) hereof,
the Company shall give the Executive written notice of the facts and
circumstances providing Cause and shall allow Executive 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.
7.5 TERMINATION UPON A CHANGE OF CONTROL. In the event of a
"Change of Control", Executive shall become immediately and fully vested in all
Options held by Executive. 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, 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.
8. COMPENSATION UPON TERMINATION.
8.1 CONSTRUCTIVE TERMINATION; TERMINATION BY THE COMPANY
WITHOUT CAUSE; TERMINATION BY EXECUTIVE FOR GOOD REASON. (i) If Executive
terminates his employment for Good Reason pursuant to Section 7.1, or (ii) if
Executive's employment is terminated by the Company without Cause, or (iii) if
the Company determines not to extend the Term of this Agreement for an
additional one year period, Executive shall be entitled to (A) receive
Executive's Base Salary and benefits as set forth in Section 5 to which
Executive is entitled up to and including the effective date of Executive's
termination of employment hereunder, (B) receive
6
Executive's Base Salary paid consistent with the Company's payroll practices for
nine (9) months after the termination of Executive's employment hereunder and
(C) become immediately and fully vested in all Options held by Executive.
Executive 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. Continuation of
such benefits shall be in addition to any right Executive may have under
applicable law. Notwithstanding the foregoing, nothing herein shall cause the
Company to maintain Executive's status as an employee of the Company after
termination.
8.2 TERMINATION BY EXECUTIVE OTHER THAN FOR GOOD REASON;
TERMINATION BY THE COMPANY FOR CAUSE. If Executive's employment is terminated by
the Company for Cause or by Executive other than for Good Reason pursuant to
Section 7.1, Executive shall be entitled to receive Executive's Base Salary and
benefits as set forth in Section 5 to which Executive is entitled up to and
including the effective date of Executive'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 Executive shall thereupon cease and terminate.
8.3 NO SUBSTITUTION. Nothing contained in Section 8.1 shall be
construed to represent a substitution for compensation already paid to or earned
by Executive. In addition, Executive shall be entitled to receive all amounts in
respect of the period prior to the date of termination otherwise payable herein
(without double counting), including such payments provided for in Sections 4
and 5.
9. NONDISCLOSURE; NON-COMPETITION AND NON-SOLICITATION.
9.1 NONDISCLOSURE. Executive shall not during the Term and
thereafter, without the prior written consent of the Company, divulge, disclose
or make accessible to any other person, firm, partnership, corporation or other
entity any Confidential Information (as herein defined) pertaining to the
business of the Company, except (i) while employed by the Company, in the
business of and for the benefit of the Company or (ii) when required to do so by
a court of competent jurisdiction, by any governmental agency having supervisory
authority over the business of the Company, or by any administrative body or
legislative body (including a committee thereof) with purported or apparent
jurisdiction to order Executive to divulge, disclose or make accessible such
information. For purposes of this Agreement, "Confidential Information" shall
mean non-public information concerning the Company's financial data, strategic
business plans, product development (or other proprietary product data),
customer information, discoveries, practices, processes, methods, marketing
plans and other material non-public, proprietary and confidential information of
the Company, that, in any case, is not otherwise generally available to the
public. In the event Executive's employment is terminated hereunder, he shall
immediately return to the Company all Confidential Information in his
7
possession other than information which Executive is entitled to receive in his
capacity as a shareholder of the Company. "Confidential Information" shall not
include information which becomes available to Executive on a non-confidential
basis from a source other than the Company or was available to Executive on a
non-confidential basis prior to its disclosure to Executive by the Company.
9.2 PROHIBITION ON COMPETITION. During the period of his
employment with the Company (other than on behalf of the Company) and for twenty
four (24) months after the date of termination of his employment with the
Company (the "Non-Competition Period"), Executive agrees that, without the prior
written consent of the Company: (i) he will not, directly or indirectly, either
as principal, manager, agent, consultant, officer, stockholder, partner,
investor, lender or employee, or in any other capacity (and whether or not for
compensation) carry on, be engaged in or employed by or be a consultant to or
have any financial interest in, any business which is "in competition with the
business of the Company" (as defined in Section 9.5).
9.3 NON-SOLICITATION OF EMPLOYEES. During the Non-Competition
Period (other than on behalf of the Company), Executive will not:
(a) solicit or request any employee of or consultant
to the Company or its affiliates to (a) leave the employ or
cease consulting for the Company or its affiliates or (b) join
the employ of or begin consulting for any individual or entity
that is in competition with the business of the Company;
(b) solicit or request or suggest or otherwise abet any
individual or entity that is in competition with the business
of the Company to employ any employee of or consultant to the
Company or its affiliates; or
(c) employ, assist in employing or otherwise associate with
any employee, officer or agent of or consultant to the Company
or its affiliates in any business or venture which is in
competition with the business of the Company.
9.4 NON-SOLICITATION OF CUSTOMERS. During the Non-Competition
Period (other than on behalf of the Company), Executive will not, directly or
indirectly, through brokers or otherwise, solicit or attempt to solicit, or sell
services or attempt to sell services which are in competition with the business
of the Company to any "Customer"; for purposes hereof, "Customer" shall mean
(A) all customers of the Company (i) during the term of this Agreement, (ii) as
of the date hereof and (iii) within the two (2) year period preceding the date
hereof and (B) all potential customers of the Company who are being actively
solicited by the Company at the time of the termination of Executive's
employment.
9.5 For purposes of this Section 9, a person or entity which
is "in competition with the business of the Company" shall mean an entity
engaged in the business of animation preparation and production software as
presently conducted or proposed to be conducted and any
8
other business actually engaged in during the term hereof, directly or
indirectly, by the Company or its subsidiaries including, but not limited to,
web based education, learning and training. Nothing in this Section 9 shall be
construed so as to preclude Executive from (i) investing in any publicly held
company provided Executive's beneficial ownership of any class of such company's
securities does not exceed 2% of the outstanding securities of such class, (ii)
owning memberships, or other similar rights or interests therein, of any United
States or foreign securities, commodities, options or similar exchange, board of
trade, contract market or terminal association (collectively "Exchanges") and
exercising the rights and privileges attendant to such ownership for his own
personal account or for the account of any spouse, child, parent or sibling or
any trust created for the benefit of Executive or any of the foregoing or for
the account of any entity wholly owned by Executive or any of the foregoing
relatives or trusts or (iii) trading or dealing on any Exchanges for Executive's
own personal account or for the account of any relative or any trust created for
the benefit of any relative of Executive.
9.6 Executive and the Company agree that the covenants of
non-competition and non-solicitation are reasonable covenants under the
circumstances, and further agree that if in the opinion of any court of
competent jurisdiction such covenants are not reasonable in any respect, such
court shall have the right, power and authority to excise or modify such
provision or provisions of these covenants as to the court shall appear not
reasonable and to enforce the remainder of these covenants as so amended.
Executive agrees that any breach of the covenants contained herein would
irreparably injure the Company. Accordingly, Executive hereby agrees that, in
such event, the Company shall be entitled, without the necessity of proving
damages or posting a bond or security, and notwithstanding any election by the
Company to claim damages, 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.
10. MITIGATION OF DAMAGES. Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment (which may include self-employment) or otherwise, and,
after his termination of employment hereunder, any payments made by the Company
hereunder shall not be reduced by any amount Executive receives from any other
such employment.
11. 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:
9
To the Company:
7th Level, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Chairman of the Board
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 Executive:
Xxxxx Xxxxxxx
000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
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.
12. 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. The prevailing party shall be entitled to
recover its reasonable costs of any legal fees and other fees and expenses which
may be incurred in respect of enforcing its rights under this Agreement from the
other party.
10
13. ASSIGNMENT. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company. Neither this Agreement nor any rights hereunder shall
be assignable or otherwise subject to hypothecation by Executive (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.
14. AMENDMENT; WAIVER. This Agreement may only be amended by written
agreement signed by the parties hereto. A waiver by the Company or Executive 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.
15. BENEFICIARIES. Executive 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 Executive's
death, and may change such election, in either case by giving the Company
written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
16. 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 16 are in addition to the survivorship provisions of
any other section of this Agreement.
17. GOVERNING LAW. This Agreement shall be construed, interpreted and
governed in accordance with the laws of the State of New York, without reference
to rules relating to conflicts of law.
18. ENTIRE AGREEMENT. This Agreement, the Merger Agreement and the
Registration Rights Agreement of even date herewith by and among the Company,
Executive and Xxxxxxxx Xxxxxxx, contain the entire understanding between
Executive and the Company and supersede in all respects any prior or other
agreement or understanding between the Company and Executive 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 Executive and
Executive does not owe any obligations to the Company with respect to the
matters set forth herein and therein.
19. WITHHOLDING. The Company shall withhold from any payments due to
Executive hereunder, all taxes, FICA or other amounts required to be withheld
pursuant to any applicable law.
11
20. 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.
21. 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.]
12
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: /s/ Xxxx X. Xxxxx
-----------------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President and Chief Financial Officer
EXECUTIVE
/s/ Xxxxx Xxxxxxx
-----------------------------------------
Xxxxx Xxxxxxx
