EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 1st day of January, 1996 between LASER VIDEO
NETWORK, INC., a Delaware corporation (the "Company"), and XXXXXX XXXXX
("Executive") residing at 00 Xxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
W I T N E S S E T H :
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WHEREAS, Company wishes to employ Executive and Executive wishes such
employment, all upon the terms and conditions herein contained.
NOW,THEREFORE, in consideration of the covenants herein contained, the
parties hereto hereby agree as follows:
1. Employment.
1.1 General. Company hereby employs Executive in the capacity of
Executive Vice President - Media Sales and Executive hereby accepts such
employment, all subject to the terms and conditions herein obtained. In such
capacity, Executive agrees to perform such duties (consistent with his position)
as may be assigned to Executive from time to time by the Company.
1.2 Full-Time Position. Executive hereby agrees that during the
Employment Term (as defined in Section 3 hereof) he will devote all of his
business time, attention and skills to the business and affairs of the Company
and its subsidiaries, except during vacation time and any periods of illness.
2. Compensation.
2.1 Base Salary. Subject to the terms and conditions herein
contained, Company will pay to Executive, and Executive will accept, for all
services which say be rendered by him pursuant to this Agreement an annual base
salary ("Base Salary") at the rate of $170,000 per year, effective from the date
set forth above. The Base Salary shall be payable in such installments as in
effect from time to time in accordance with the payroll practices of the
Company.
2.2 Commission. In addition to his base salary, Executive shall be
paid a commission equal to three (3%) percent of "Net Sales" of the Company in
excess of $1,250,000 for each year of the Employment Term. "Net Sales" shall
mean gross revenues from advertising shown on the College Television Network,
net of commissions paid to third party persons, firms or agencies. Net Sales
shall be pro-rated for a portion of a year
in determining whether commissions are payable under the circumstances described
in Sections 4.3(a) and 4.3(c). For example, if the Executive's employment is
terminated under Section 4.3(c) as of June 30, 1997, and if Net Sales from
January 1 through June 30, 1997 amounted to $700,000, the Executive would be
entitled to a commission equal to three (3%) percent times $75,000 ($700,000
less $625,000 [$1,250,000 times 6/12]).
2.3 Stock Options. The Executive shall also be entitled to an
award of stock options under the Company's Stock Option Plan (the "Plan"), as
follows:
(a) 15,000 options on the date of actual signing of
the agreement, at the fair market value of the Common Stock on
such date, as determined in accordance with the Plan.
(b) In the event that Net Sales during either
calendar year of the Employment Term exceed $2,250,000, then
the Employee shall receive non-qualified stock options
entitling him to buy 7,500 shares of the Company's common
stock, pursuant to the Plan. He shall also receive an
additional 7,500 options for each additional million dollars
of annual net sales (i.e., achieving $3,250,000, $4,250,000,
etc.) during any such calendar year. The options provided for
herein shall be exercis-able at the fair market value of the
Company's common stock on December 31 of the year in which
such Net Sales were achieved, and the grant shall be made
effective on that date.
(c) The options described in this Section 2.3 shall
have a duration of five (5) years and otherwise conform to the
terms and provisions of the Plan and of the Company's basic
form of Stock Option Agreement adopted pursuant to the Plan.
3. Term of Employment. The employment by Company of Executive pursuant
hereto will commence on the date hereof and, subject to the provisions of
Section 4, will terminate on Decem- ber 31, 1997 (the "Employment Term").
4. Premature Termination.
4.1 Events of Termination. Anything in this Agreement contained to
the contrary notwithstanding, Executive's employment hereunder will terminate
upon the following events and conditions:
(a) Death. Executive's employment hereunder will
terminate forthwith upon the death of Executive.
(b) Disability. Executive's employment hereunder will
terminate, at the option of Company, in the event that Company
makes a good faith determination that Executive is so
disabled, for mental or physical
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reasons, as to be unable to substantially perform his duties
hereunder for an aggregate of 180 days during any period of 12
consecutive months of which at least 60 days are consecutive.
The existence of a disability will be determined by the Board
of Directors in consultation with a reputable, licensed
physician selected by Company and approved by Executive, and
Executive will cooperate in all reasonable respects to enable
an examination to be made by such physician.
(c) By Company For Cause. Executive's employment
hereunder will terminate, at the option of Company, in the
event (i) Executive engages in any conduct, action or behavior
that has or may reasonably be expected to have a material
adverse effect on the reputation of Company; (ii) Executive
commits an act involving moral turpitude or dishonesty, in
connection with Executive's employment hereunder; or (iii) of
a material failure on the part of Executive to perform his
obligations hereunder, which failure is not remedied within 30
days after written notice thereof is furnished by Company to
Executive.
4.2 Notice. In the event of the termination of Executive's
employment pursuant to Section 4.1(b) and 4.1(c) above, not less than 10 days'
prior written notice of such termination will be given by Company to Executive,
which notice will specify the effective date of termination.
4.3 Payment Upon Premature Termination.
(a) Termination Upon Death or Disability. In the
event that Executive's employment hereunder is terminated
pursuant to Section 4.1(a) or 4.1(b), Executive will be paid
his Base Salary plus commissions on prorated Net Sales, if
earned, under Section 2.2 through the date of such
termination, as payment in full of all amounts due and owing
by Company to Executive.
(b) Termination by Company for Cause. In the event
that Executive's employment hereunder is terminated pursuant
to Section 4.1(c), or if Executive voluntarily terminates his
own employment hereunder, Executive will be paid his Base
Salary up to the effective date of termination as payment in
full.
(c) Termination by Company Without Cause. In the
event that Executive's employment hereunder is ter- minated
other than pursuant to Section 4.1(a) or 4.1(b) above,
Executive will be paid his Base Salary for the greater of (i)
12 months from the date of termination or (ii) the then
remaining term hereof, plus commissions on pro-rated Net
Sales, if earned, under Section 2.2 through the date of such
termination,
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as payment in full of all amounts due and owing by Company to
Executive. Commencing 120 days prior to the expiration of this
Agreement, the parties will discuss whether the Agreement will
be renewed or extended, and if so, the terms on which such
renewal or extension shall take place. It is understood and
agreed that the failure of the parties to reach agreement of a
renewal or extension shall not constitute a termination of the
Agreement by the Company without cause.
5. Expenses. Company will reimburse Executive (upon the submission by
his of reasonably itemized accounts thereof) for such costs and expenses as
Executive may reasonably incur in connection with the performance by him of his
duties hereunder in accordance with Company's policy with respect thereto as in
effect from time to time during the term of this Agreement.
6. Benefits
6.1 Participation in Executive Benefit Plans. Executive will
participate in all benefits and plans which Company say from time to time,
during the term of Executive's employment hereunder, provide for its employees
and for which Executive is eligible.
6.2 Vacation. Executive will be entitled to take three weeks paid
vacation in each twelve-month period during the term hereof.
7. Nondisclosure: Noncompete.
7.1 "Confidential Information" Defined. As used in this Section 9,
the term "Confidential Information" will mean any and all information (verbal
and written) relating to Company or any of its operations, other than such
information which is in the public domain other than as the result of a breach
of the provisions of Section 7.2 below, including, but not limited to,
information relating to: identity and description of services used; purchasing;
costs; pricing; design and development; customers and prospects; marketing; and
selling and servicing.
7.2 Nondisclosure of Confidential Information. Executive hereby
agrees not to, at any time, directly or indirectly use, communicate, disclose or
disseminate any Confidential Information in any manner whatsoever.
7.3. Non-Compete. Executive agrees that he will not, during the
term of Executive's employment hereunder, and for the balance of the term of
this Agreement if the Executive is terminated for cause or leaves voluntarily,
directly or indirectly, compete, or engage in any business or enterprise
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competitive with the business of Company -- i.e., selling media on college
campuses -- or serve as an officer, director to employee of, or consultant to,
or own any interest in, any entity which competes, directly or indirectly, with
such business of Company. Notwithstanding the foregoing, Executive may own
securities of any publicly held entity provided that such securities do not
represent more than two (2%) percent of the outstanding voting securities of
such entity.
7.4 Certain Activities. Executive agrees that he will not, during
the term of Executive's employment hereunder and for the balance of the term of
this Agreement, if the Executive is terminated for cause or leaves voluntarily,
directly or indirectly, offer to hire, hire, entice away or in any other manner
persuade or attempt to persuade any officer, employee, agent, customer,
prospective customer or supplier of Company to discontinue or alter his or its
relationship with Company or take any action which constitutes an interference
with or disruption of the operation of the business of the Company.
7.5 Injunctive Relief, etc. The parties hereto hereby acknowledge
and agree that (a) Company would be irreparably injured in the event of a breach
by Executive of any of his obligations under this Section 7, (b) monetary
damages would not be an adequate remedy for any such breach, (c) Company will be
entitled to injunctive relief, in addition to any other remedy which it may
have, at law, in equity or otherwise, in the event of any such breach, and (d)
the existence of any claims which Executive may have against Company, whether
under this Agreement or otherwise, will not be a defense to the enforcement by
Company of any of its rights under this Section 7.
7.6 Scope of Restriction. It is the intent of the parties hereto
that the restrictions contained in this Section 7 will be enforced to the
fullest extent permissible under the laws and public policies of each
jurisdiction in which enforcement is sought (Executive hereby acknowledging that
said restrictions are reasonably necessary for the protection of Company).
Accordingly, it is hereby agreed that if any one or more of the provisions of
this Section a will be adjudicated to be invalid or unenforceable for any reason
whatsoever, this Section 7 will be (only with respect to the operation thereof
in the particular jurisdiction in which such adjudication in made) construed by
limiting and reducing it so as to be enforceable to the maximum extent
permissible.
7.7 Additional Undertakings. The provisions of this Section 7 will
be in addition to, and not in lieu of any other obligations with respect to the
subject matter hereof, whether arising as a matter of contract, by law or
otherwise, including, but not limited to, any obligations which may be contained
in any other agreement between Executive and Company.
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8. Intellectual Property. Executive hereby acknowledges and agrees that
all right, title and interest, proprietary or otherwise, in all software
programs and other similar properties, whether or not patented, patentable,
copyrighted, copyrightable or otherwise protected or protectable developed,
initiated as otherwise created by or with the assistance of Executive during the
Employment Term shall vest immediately and exclusively in the Company and
Executive hereby covenants and agrees to execute and deliver such agreements,
instruments and other documents necessary or appropriate to protect Company's
rights and interests therein.
9. Miscellaneous Provisions.
9.1 Execution in Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same document.
9.2 Notices. All notices, requests, demands and other
communications hereunder will be in writing and will be deemed duly given when
delivered by hand or mailed by registered or certified mail or private courier
service, postage prepaid, return receipt requested, as follows:
If to Company, to:
Laser Video Network, Inc.
000 Xxxxx Xxxxxx
Xxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxx Xxxxx
Copy to:
Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx, Esq.
If to Executive to:
Xx. Xxxxxx Xxxxx
00 Xxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as either party hereto will have designated by like
notice to the other party hereto.
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9.3 Amendment. This Agreement may only be supplemented, abandoned,
discharged or amended by a written instrument executed by each of the parties
hereto.
9.4 Entire agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties hereto, oral
and written, with respect to the subject matter hereof.
9.5 Applicable Law. This Agreement will be governed by the laws of
the State of New York applicable to contracts made and to be wholly performed
therein.
9.6 Headings. The headings contained herein are for the sole
purpose of convenience of reference, and will not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
9.7 Binding Effect: Benefits. Executive may not delegate his
duties or assign his rights hereunder. This Agreement will inure to the benefit
of, and be binding upon, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
9.8 Waiver, etc. The failure of either of the parties hereto to at
any time enforce any of the provisions of this Agreement will not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the right of either of the
parties hereto to thereafter enforce each and every provision of this Agreement.
No waiver of any breach of any of the provisions of this Agreement will be
effective unless set forth in a written instrument executed by the party against
whom or which enforcement of such waiver is sought; and no waiver of any such
breach will be construed or deemed to be a waiver of any other or subsequent
breach.
9.9 Capacity, etc. Executive hereby represents and warrants to
Company that: (a) he has full power, authority and capacity to execute and
deliver this Agreement, and to perform his obligations hereunder, (b) such
execution, delivery and performance will not (and with the giving of notice.or
lapse of time or both would not) result in the breach of any agreements or other
obligations to which he is a party or otherwise bound, and (c) this Agreement is
his valid and binding obligation enforceable against him in accordance with its
terms. Company hereby represents that it has the full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder and
this Agreement is the valid and binding obligation of Company enforceable
against it in accordance with its terms.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto as of the date first above written.
LASER VIDEO NETWORK, INC.
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx, Chairman
Executive:
By; /s/ Xxx Xxxxx
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Xxx Xxxxx
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