EMPLOYMENT AGREEMENT
January 1, 1997
The parties to this agreement are Xxxxxx Xxxxxxxxx, residing at 0000 Xxxx
Xxxxxxx Xxxxxx, Xxxx, Xxxxxxx 00000 (the "Executive"), and Network Event
Theater, Inc., a Delaware corporation with its principal office at 000 Xxxxx
Xxxxxx, Xxx Xxxx, X.X. 00000 (the "Company").
The parties have agreed upon the employment of the Executive by the Company
on the terms set forth below.
It is agreed as follows:
1. Employment.
During the term of the Executive's employment under this agreement,
the Company shall employ the Executive, and the Executive shall serve the
Company, as the Company's Vice President - Campus Operations. The Executive
shall report to the Company's chief executive officer and president and
shall have such duties, responsibilities and powers as either of them shall
from time to time determine. The Executive shall devote her full business
time to the performance of her duties under this agreement.
2. Term of Employment.
The term of the Executive's employment under this agreement shall
commence on or before January 1, 1997 (the date her employment commences
being referred to as the "Commencement Date") and, subject to earlier
termination upon the Executive's death or disability (as provided in
section 5.1) or pursuant to section 6 or 7, shall continue thereafter for
three years. 3. Compensation and Stock Options.
3.1 Basic Compensation. As basic compensation for her services under
this agreement, the Executive shall be entitled to a salary (subject to
applicable withholding of income taxes, social security taxes, etc.) at the
annual rate of $65,000, payable in equal installments in accordance with
the Company's customary payroll practices for its executives.
3.2 Increases in Basic Compensation and Bonuses. Following the end of
each fiscal year during the term of this agreement, the Company's board of
directors may, in its sole discretion, grant the Executive a bonus based on
the Executive's performance during that year or increase the Executive's
basic compensation for the following year.
3.3 Stock Options. Upon the Commencement Date, the Company shall grant
to the Executive, pursuant to the Company's 1996 Employee Stock Option
Plan, the option (which shall not be an incentive stock option) to purchase
up to 10,000 shares of the Company's Common Stock at an exercise price
equal to the fair market value of the Company's Common Stock on the
Commencement Date. The terms of the option shall be set forth in an
agreement,
4. Reimbursement of Expenses; Fringe Benefits.
4.1 Reimbursement of Expenses. The Company shall reimburse the
Executive for all reasonable expenses incurred by the Executive in
connection with the performance of her duties, upon presentation of
appropriate vouchers covering the expenses.
4.2 Fringe Benefits. The Executive and her immediate family shall be
entitled to participate in all medical, dental, disability, life insurance,
deferred compensation, savings and 401(k) plans, retirement plans, profit
sharing plans, stock purchase plans, and other fringe benefits and
executive perquisites generally provided to senior executives of the
Company and their immediate families. The Executive shall be entitled to
three weeks paid vacation during each twelve-month period during the term
of this agreement.
5. Termination of Employment Due to Disability or Death.
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5.1 Termination of Employment. If, as the result of any physical or
mental disability, the Executive shall fail or be unable to perform her
duties for a total of 120 days in any 12-month period, the Company may, by
notice to the Executive, terminate her employment under this agreement as
of the date of the notice. The Executive's employment under this agreement
shall be terminated upon her death.
5.2 Payments on Death or Disability. If the Executive's employment is
terminated pursuant to section 5.1, the Executive (or her estate) shall be
entitled to receive, in full discharge of all of the Company's obligations
to the Executive, (a) the Executive's full salary (at the rate in effect on
the date of termination) payable under section 3.1 for six months following
the date of termination (or, if a shorter period, for the remainder of the
three-year term), less the amount of any disability payments received by
her under any disability insurance coverage provided to her by the Company,
(b) any accrued and unpaid bonus previously awarded to the Executive by the
Company's board of directors, and (c) the amount of all expense
reimbursements due to the executive under section 4.1 for periods prior to
the date of termination.
6. Termination of Employment for Cause.
6.1 Definition. The Company may terminate the Executive's employment
under this agreement for cause. For purposes of this agreement, the term
"cause" shall mean: (a) the Executive's conviction of a felony, (b) the
Executive's conviction of a crime involving any financial impropriety or
which would materially interfere with the Executive's ability to perform
her services required under this agreement or otherwise be materially
injurious to the Company, (c) a material breach by the Executive of the
duty of loyalty, good faith and fair dealing owed by the Executive to the
Company as an employee, or (d) the Executive's willful failure to perform
in a material respect her obligations under this agreement.
6.2 Payments upon Termination for Cause. If the Executive's employment
under this agreement is terminated for cause pursuant to section 6.1, the
Company shall pay to the Executive, in full discharge of all of the
Company's obligations to the Executive, the accrued amount of salary due to
her through the date of termination and the amount of all expense
reimbursements due to her under section 4.1 for periods prior to the date
of termination.
7. Termination of Employment for Other Reasons.
At any time after the first anniversary of the Commencement Date the
Company may terminate the Executive's employment under this agreement for
any reason upon thirty days notice to the Executive. If the Executive's
employment under this agreement is terminated by the Company pursuant to
this provision (i.e., other than for cause or by reason of the Executive's
death or disability), the Company shall pay to the Executive, in full
discharge of all of the Company's obligations to the Executive, (a) the
Executive's full salary under section 3.1 (at the rate in effect on the
date of notice of termination) until the effective date of termination and
for a period of two months thereafter, (b) any accrued and unpaid bonus
previously awarded to the Executive by the Company's board of directors,
and (c) the amount of all expense reimbursements due to the executive under
section 4.1 for periods prior to the date of termination.
8. Confidential Information.
The Executive shall not, directly or indirectly, either during her
employment by the Company or at any time thereafter, disclose to anyone or
use (except as authorized in the regular course of the Company's business)
any information acquired by her during her employment with respect to any
of the Company's trade secrets or other confidential information. For this
purpose, information generally known to the public shall not be considered
a trade secret or confidential information.
9. Non-Solicitation of Employees; Non-Competition.
9.1 Non-Solicitation. The Executive shall not, for a period of three
years after termination of her employment (regardless of the reason for
termination), directly or indirectly employ or retain, solicit the
employment or retention of, or be associated with any entity that employs
or retains or solicits the employment or retention of, any person who was
an employee of the Company at any time during the twelve months preceding
the termination of the Executive's employment.
9.2 Non-Competition. For a period of one year after the termination of
the Executive's employment under this agreement, the Executive shall not
directly or indirectly engage or be interested in any business or entity
that engages, anywhere in the world, in any business competitive with any
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business in which the Company is engaged at the time of termination of the
Executive's employment or with any business activity that the Company then
has under active consideration. For the purpose of this section 9.2, the
Executive shall be deemed to be directly or indirectly interested in a
business or entity if she is engaged or interested in that business or
entity as a stockholder, director, officer, employee, salesperson, sales
representative, agent, broker, partner, individual proprietor, lender,
consultant or otherwise, but not if her interest is limited solely to the
ownership of 5% or less of any class of the equity or debt securities of a
corporation whose shares are publicly traded.
9.3 Injunctive Relief. Since a breach by the Executive of the
provisions of section 8 or of section 9.1 or 9.2 would injure the Company
in a way that could not be adequately compensated for by damages, in
addition to any other remedies available to the Company it may obtain an
injunction restraining any such breach, without the necessity of showing
actual damage and without any bond or other security being required.
10. Merger or Sale of Assets.
If the Company shall merge or consolidate with another corporation or
shall transfer all or substantially all of its assets this agreement shall
be assigned to the successor in the merger or consolidation or the
transferee of the assets, the Company shall cause the successor or
transferee to assume all of the Company's obligations under this agreement,
and the Executive shall thereafter be employed by the successor or
transferee in accordance with the terms of this agreement.
11. Miscellaneous.
11.1 Headings. The section headings of this agreement are for
reference purposes only and are to be given no effect in the construction
or interpretation of this agreement.
11.2 Notices. All notices and other communications under this
agreement shall be in writing and shall be deemed given when delivered
personally or mailed by registered mail, return receipt requested, to the
parties at their respective addresses set forth above (or to such other
address as a party may have specified by notice given to the other party
pursuant to this provision). Any notice to the Company shall be directed to
the attention of its chief executive officer.
11.3 Separability. The invalidity or unenforceability of any provision
of this agreement shall not affect the validity or enforceability of any
other provision of this agreement, which shall remain in full force and
effect.
11.4 Waiver. Either party may waive compliance by the other party with
any provision of this agreement. The failure of a party to insist on strict
adherence to any term of this agreement on any occasion shall not be
considered a waiver or deprive that party of the right thereafter to insist
upon strict adherence to that term or any other term of this agreement. No
waiver of any provision shall be construed as a waiver of any other
provision. Any waiver must be in writing.
11.5 Assignment. Neither party may assign any of its rights or
delegate any of its duties under this agreement (other than as contemplated
by section 10 of this agreement) without the prior consent of the other and
any assignment or delegation in violation of this prohibition shall be
void.
11.6 Governing Law. This agreement shall be governed by and in
accordance with the substantive law of the state of New York applicable to
agreements made and to be performed in New York.
11.7 Entire Agreement. This agreement contains, and is intended as, a
complete statement of all the terms of the arrangements between the parties
with respect to the matters provided for, supersedes any previous
agreements and understandings between the parties with respect to those
matters, and cannot be changed or terminated orally.
NETWORK EVENT THEATER, INC.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
Executive Vice President-
Chief Financial Officer
By: /s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
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