EXHIBIT 10.14
XX. XXXXXX XXXXX EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This Agreement, dated as of June 15, 1999, is between Interactive
Network, Inc., a California corporation ("Company"), and Xxxxxx X. Xxxxx
("Executive"). Company and Executive agree to the following terms and conditions
of employment.
1. PERIOD OF EMPLOYMENT. Company shall employ Executive to render services to
Company in the position and with the duties and responsibilities described in
Section 2 for the period (the "Period of Employment") commencing on the date of
this Agreement and ending upon the earlier of (i) June 22, 2002 or (ii) the date
upon which the Period of Employment is terminated in accordance with Section 4.
2. POSITION AND RESPONSIBILITIES.
(a) POSITION. Executive accepts employment with Company as Chief
Technology Officer and shall perform all services appropriate to that position,
as well as such other services as may be assigned by the Chief Executive Officer
of the Company ("CEO"). Executive shall devote his best efforts and full-time
attention to the performance of his duties. Executive shall report to and be
subject to the direction of the CEO. Executive shall be expected to travel if
necessary or advisable in order to meet the obligations of his position.
(b) OTHER ACTIVITY. Except upon the prior written consent of Company,
Executive (during the Period of Employment) shall not (i) accept any other
employment; or (ii) engage, directly or indirectly, in any other business,
commercial, or professional activity (whether or not pursued for pecuniary
advantage) that is or may be competitive with Company, that might create a
conflict of interest with Company, or that otherwise might interfere with the
business of Company, or any Affiliate. An "Affiliate" shall mean any person or
entity that directly or indirectly controls, is controlled by, or is under
common control with Company.
(c) WARRANTY. Executive agrees that he will not use for the benefit of,
or disclose to, Company any confidential information belonging to any former
employer or other entity unless he has written permission from the employer or
entity to do so (or unless Company has been granted such permission).
3. COMPENSATION AND BENEFITS.
(a) COMPENSATION. In consideration of the services to be rendered under
this Agreement, Company shall pay Executive as follows, payable semi-monthly:
(iv) $125,000 per year from June 22, 1999 through June 21, 2000;
(v) $135,000 per year from June 22, 2000 through June 21, 2001;
(vi) $145,000 per year from June 22, 2001 through June 21, 2002.
All compensation and comparable payments to be paid to Executive under this
Agreement shall be less withholdings required by law.
(b) BENEFITS. Executive shall be entitled to three (3) weeks of paid
vacation, in addition to approved holidays. Executive shall have the right to
participate in and to receive benefits from all present and future benefit plans
specified in Company's policies and generally made available to similarly
situated employees of Company, including, without limitation, medical and dental
benefits and participation in a 401(k) plan when established. The amount and
extent of benefits to which Executive is entitled shall be governed by the
specific benefit plan, as amended. Until such time as the Company provides
medical and dental benefits, Company shall reimburse Executive for the total
premium costs of his present policies for said benefits. Executive also shall be
entitled to any benefits or compensation tied to termination as described in
Section 4.
(c) EXPENSES. Company shall reimburse Executive for reasonable travel
and other business expenses incurred by Executive in the performance of his
duties, in accordance with Company's policies, as they may be amended in
Company's sole discretion.
(d) STOCK OPTIONS. As approved by the Board of Directors of Company,
Company shall issue to Executive effective June 22, 1999 ("Issue Date") options
to purchase Three Hundred Thousand (300,000) shares of Company's common stock,
which shall vest as follows:
100,000 options to vest effective June 22, 1999
100,000 options to vest effective June 22, 2000
100,000 options to vest effective June 22, 2001
These options shall (i) be issued as ISO (incentive stock options);
(ii) have an exercise price equal to the fair market value of the stock as of
the Issue Date; (iii) be subject to the 1999 Stock Option Plan adopted by
Company ("Stock Option Plan"); and (iii) expire June 16, 2004. In the event of a
Corporate Transaction, as defined in the Stock Option Plan, if the acquiring or
surviving entity does not agree in writing to convert Executive's stock options
outstanding immediately prior to the Transaction into options of equivalent
value for the common stock of said entity, then Company shall pay Executive
immediately prior to the closing of said Transaction a lump sum equal to the
difference between the exercise price and the fair market value of Company's
common stock as of the closing for all options which terminate due to the
Transaction.
4. TERMINATION OF EMPLOYMENT.
(a) BY COMPANY NOT FOR CAUSE. At any time, and without prior notice,
Company may terminate Executive without Cause (as defined below). If Company
terminates Executive without Cause, Company shall pay Executive on the date of
termination, less withholdings required by law, all unpaid salary and accrued
but unused vacation through the date of termination, plus a lump sum payment
equal to Executive's then present salary for the greater of (i) the balance of
the three (3) year term of this Agreement or (ii) six (6) months. Upon such
payment, all of Company's obligations under this Agreement shall cease. Company
may dismiss Executive as provided in this Section 4 notwithstanding anything to
the contrary contained in or arising from any statements, policies, or practices
of Company relating to the employment, discipline, or termination of its
employees.
(b) BY COMPANY FOR CAUSE. At any time, and without prior notice,
Company may terminate Executive for Cause. Company shall pay Executive all
compensation then due and owing; thereafter, all of Company's obligations under
this Agreement shall cease. Termination shall be for "Cause" if Executive: (i)
acts in bad faith and to the detriment of Company; (ii) willfully refuses or
fails to act in accordance with any specific direction or order of the Board or
CEO; (iii) exhibits in regard to his employment dishonesty, misconduct, or
unsatisfactory performance; (iv) is convicted of a crime involving dishonesty,
breach of trust, or physical or emotional harm to any person; or (v) breaches
any material term of this Agreement.
(c) BY EMPLOYEE NOT FOR GOOD REASON. At any time, Executive may
terminate his employment without Good Reason (as defined below) by providing
Company sixty (60) days' advance written notice. Company shall have the option,
in its complete discretion, to make Executive's termination effective at any
time prior to the end of such notice period, provided Company pays Executive all
compensation due and owing through the last day actually worked, plus an amount
equal to the base salary Executive would have earned through the balance of the
above notice period, not to exceed ninety (60) days; thereafter, all of
Company's obligations under this Agreement shall cease.
(d) BY EMPLOYEE FOR GOOD REASON. Executive may terminate his employment
for Good Reason, provided Executive gives Company thirty (30) days' advance
written notice of the reason for termination and his intent to terminate this
Agreement. During this period, Company shall have an opportunity to correct the
condition constituting Good Reason. If the condition is remedied within this
period, Executive's notice to terminate shall be rescinded automatically; if not
remedied, termination shall become effective upon expiration of the above notice
period. In this event, Company shall pay Executive on the effective date of
termination the same amounts as provided in Section 4(a), "Termination of
Employment By Company Not For Cause".
Termination shall be for "Good Reason" if: (i) there is a material and adverse
change in Executive's position, duties, responsibilities, or status with
Company; (ii) there is a reduction in Executive's salary then in effect, other
than a reduction comparable to reductions generally applicable to similarly
situated employees of Company; (iii) there is a material reduction in
Executive's benefits, other than a reduction comparable to reductions generally
applicable to similarly situated employees of Company; or (iv) Company
materially breaches this Agreement.
(e) TERMINATION OBLIGATIONS.
(i) Executive agrees that all property, including, without
limitation, all equipment, tangible Proprietary Information (as defined
below), documents, books, records, reports, notes, contracts, lists,
computer disks (and other computer-generated files and data), and
copies thereof, created on any medium and furnished to, obtained by, or
prepared by Executive in the course of or incident to his employment,
belongs to Company and shall be returned promptly to Company upon
termination of the Period of Employment.
(ii) All benefits to which Executive is otherwise entitled
shall cease upon Executive's termination, unless explicitly continued
either under this Agreement or under any specific written policy or
benefit plan of Company.
(iii) Upon termination of the Period of Employment, Executive
shall be deemed to have resigned from all offices and directorships
then held with Company or any Affiliate.
(iv) The representations and warranties contained in this
Agreement and Executive's obligations under this Section 4(e) on
Termination Obligations, Section 5 on Proprietary Information, and
Section 6 on Inventions and Ideas shall survive the termination of the
Period of Employment and the expiration of this Agreement.
(v) Following any termination of the Period of Employment,
Executive shall fully cooperate with Company in all matters relating to
the winding up of pending work on behalf of Company and the orderly
transfer of work to other employees of Company. Executive shall also
cooperate in the defense of any action brought by any third party
against Company that relates in any way to Executive's acts or
omissions while employed by Company.
5. PROPRIETARY INFORMATION.
(a) DEFINED. "Proprietary Information" is all information and any idea
in whatever form, tangible or intangible, pertaining in any manner to the
business of Company, or any Affiliate, or its employees, clients, consultants,
or business associates, which was produced by any employee of Company in the
course of his or her employment or otherwise produced or acquired by or on
behalf of Company. All Proprietary Information not generally known outside of
Company's organization, and all Proprietary Information so known only through
improper means, shall be deemed "Confidential Information."
(b) GENERAL RESTRICTIONS ON USE. During the Period of Employment,
Executive shall use Proprietary Information, and shall disclose Confidential
Information, only for the benefit of Company and as is necessary to carry out
his responsibilities under this Agreement. Following termination, Executive
shall neither, directly or indirectly, use any Proprietary Information nor
disclose any Confidential Information, except as expressly and specifically
authorized in writing by Company. The publication of any Proprietary Information
through literature or speeches must be approved in advance in writing by
Company.
6. INVENTIONS AND IDEAS.
(a) DEFINED; STATUTORY NOTICE. The term "Invention/Idea" includes any
and all ideas, processes, trademarks, service marks, inventions, technology,
computer hardware or software, original works of authorship, designs, formulas,
discoveries, patents, copyrights, products, and all improvements, know-how,
rights, and claims related to the foregoing that are conceived, developed, or
reduced to practice by Executive, alone or with others, during the Period of
Employment, except to the extent that California Labor Code Section 2870
lawfully prohibits the assignment of rights in such intellectual property.
Executive acknowledges that he understands that this definition is
limited by California Labor Code Section 2870, which provides:
"(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or
(2) Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to require
an employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable."
Nothing in this Agreement is intended to expand the scope of protection provided
Executive by Sections 2870 through 2872 of the California Labor Code.
(b) DISCLOSURE. Executive shall maintain adequate and current written
records on the development of all Invention/Ideas and shall disclose promptly to
Company all Invention/Ideas and relevant records, which records will remain the
sole property of Company. Executive agrees that all information and records
pertaining to any idea, process, trademark, service xxxx, invention, technology,
computer hardware or software, original work of authorship, design, formula,
discovery, patent, copyright, product, and all improvements, know-how, rights,
and claims related to the foregoing ("Intellectual Property"), that Executive
does not believe to be an Invention/Idea, but that is conceived, developed, or
reduced to practice by Executive (alone or with others) during the Period of
Employment, shall be disclosed promptly to Company (such disclosure to be
received in confidence). Company shall examine such information to determine if
in fact the Intellectual Property is an Invention/Idea subject to this
Agreement.
(c) ASSIGNMENT. Executive agrees to, and hereby does, assign to Company
his entire right, title, and interest (throughout the United States and in all
foreign countries), free and clear of all liens and encumbrances, in and to each
Invention/Idea, which shall be the sole property of Company, whether or not
patentable. In the event any Invention/Idea is deemed by Company to be
patentable or otherwise registrable, Executive shall assist Company (at its
expense) in obtaining letters patent or other applicable registrations thereon
and shall execute all documents and do all other things necessary or proper
thereto (including testifying at Company's expense) and to vest Company, or any
entity or person specified by Company, with full and perfect title thereto or
interest therein. Executive shall also take any action necessary or advisable in
connection with any continuations, renewals, or reissues thereof or in any
related proceedings or litigation. Should Company be unable to secure
Executive's signature on any document necessary to apply for, prosecute, obtain,
or enforce any patent, copyright, or other right or protection relating to any
Invention/Idea, whether due to Executive's mental or physical incapacity or any
other cause, Executive irrevocably designates and appoints Company and each of
its duly authorized officers and agents as Executive's agent and
attorney-in-fact, to act for and in Executive's behalf and stead and to execute
and file any such document, and to do all other lawfully permitted acts to
further the prosecution, issuance, and enforcement of patents, copyrights, or
other rights or protections with the same force and effect as if executed,
delivered, and/or done by Executive.
(d) EXCLUSIONS. Executive represents that there are no Invention/Ideas
that he desires to exclude from the operation of this Agreement. To the best of
Executive's knowledge, there is no existing contract in conflict with this
Agreement and there is no contract to assign any Intellectual Property that is
now in existence between Executive and any other person or entity.
7. NOTICES. Any notice or other communication under this Agreement must be in
writing and shall be effective upon delivery by hand, upon facsimile
transmission to either party (but only upon receipt by the transmitting party of
a written confirmation of receipt), or three (3) business days after deposit in
the United States mail, postage prepaid, certified or registered, and addressed
to Company or to Executive at the corresponding address or fax number below.
Executive shall be obligated to notify Company in writing of any change in his
address. Notice of change of address shall be effective only when done in
accordance with this Section.
Company's Notice Address:
ATTN: Chief Executive Officer
Interactive Network, Inc.
0000 Xxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Fax Number: (000) 000-0000
Executive's Notice Address:
Xxxxx X. Xxxxx
Interactive Network, Inc.
0000 Xxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Fax Number: (000) 000-0000
8. ACTION BY COMPANY. All actions required or permitted to be taken under this
Agreement by Company, including, without limitation, exercise of discretion,
consents, waivers, and amendments to this Agreement, shall be made and
authorized only by the Chairman of the Board or by his or her representative
specifically authorized in writing to fulfill these obligations under this
Agreement.
9. INTEGRATION. This Agreement is intended to be the final, complete, and
exclusive statement of the terms of Executive's employment by Company. This
Agreement supersedes all other prior and contemporaneous agreements and
statements, whether written or oral, express or implied, pertaining in any
manner to the employment of Executive, and it may not be contradicted by
evidence of any prior or contemporaneous statements or agreements. To the extent
that the practices, policies, or procedures of Company, now or in the future,
apply to Executive and are inconsistent with the terms of this Agreement, the
provisions of this Agreement shall control.
10. AMENDMENTS; WAIVERS. This Agreement may not be amended except by an
instrument in writing, signed by each of the parties. No failure to exercise and
no delay in exercising any right, remedy, or power under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, or power under this Agreement preclude any other or further
exercise thereof, or the exercise of any other right, remedy, or power provided
herein or by law or in equity.
11. ASSIGNMENT; SUCCESSORS AND ASSIGNS. Executive agrees that he will not
assign, sell, transfer, delegate, or otherwise dispose of, whether voluntarily
or involuntarily, or by operation of law, any rights or obligations under this
Agreement. Any such purported assignment, transfer, or delegation shall be null
and void. Nothing in this Agreement shall prevent the consolidation of Company
with, or its merger into, any other entity, or the sale by Company of all or
substantially all of its assets, or the otherwise lawful assignment by Company
of any rights or obligations under this Agreement. Subject to the foregoing,
this Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, legal representatives, successors, and
permitted assigns, and shall not benefit any person or entity other than those
specifically enumerated in this Agreement.
12. SEVERABILITY. If any provision of this Agreement, or its application to any
person, place, or circumstance, is held by an arbitrator or a court of competent
jurisdiction to be invalid, unenforceable, or void, such provision shall be
enforced to the greatest extent permitted by law, and the remainder of this
Agreement and such provision as applied to other persons, places, and
circumstances shall remain in full force and effect.
13. ATTORNEYS' FEES. In any legal action, arbitration, or other proceeding
brought to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees and costs.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the law of the State of California.
15. INTERPRETATION. This Agreement shall be construed as a whole, according to
its fair meaning, and not in favor of or against any party. By way of example
and not in limitation, this Agreement shall not be construed in favor of the
party receiving a benefit nor against the party responsible for any particular
language in this Agreement. Captions are used for reference purposes only and
should be ignored in the interpretation of the Agreement.
16. EMPLOYEE ACKNOWLEDGMENT. Executive acknowledges that he has had the
opportunity to consult legal counsel in regard to this Agreement, that he has
read and understands this Agreement, that he is fully aware of its legal effect,
and that he has entered into it freely and voluntarily and based on his own
judgment and not on any representations or promises other than those contained
in this Agreement. Executive specifically acknowledges that he has received
notice of his statutory rights under Section 2870 of the California Labor Code,
as set forth in the above Section 6 on Inventions and Ideas.
The parties have duly executed this Agreement as of the date first written
above.
/S/ Xxxxxx Xxxxx
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Xxxxxx X. Xxxxx
Interactive Network, Inc.
/S/ Xxxxx X. Xxxxx
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By: Xxxxx X. Xxxxx
Its: Chief Executive Officer
