EMPLOYMENT AGREEMENT
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AGREEMENT made as of this 17th day of December, 1997, by and
between ALLIED DIGITAL, INC. ("Employer") a New York corporation, having an
office at 00 Xxxxxxxxx Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000 and XXXXXXXX
XXXXXXX ("Executive"), residing at 0000 X. Xxxxxx Xxxxx, Xxxxxxxxx Xxxxxxx,
Xxxxxxxx 00000.
W I T N E S S E T H
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WHEREAS, Executive is a shareholder and the President of Denver
Dubbing, Inc. ("Predecessor"); and
WHEREAS, in light of the acquisition by Employer of substantially
all of the assets and the business of the Predecessor, Employer desires to
secure the services of Executive as its President, Denver Division, and
Executive is willing to render her services for Employer in such position upon
the terms, provisions and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, it is hereby agreed by and between Employer
and Executive as follows:
1. Employer hereby employs Executive, and Executive hereby
accepts employment, as Division Manager-Denver of Employer for a two year
period commencing December 17, 1997 and ending December 31, 1999, unless
sooner terminated as hereinafter provided. Executive, as Division
Manager-Denver of Employer, shall perform such services with respect to the
operations of the Employer as she has customarily performed for the
Predecessor, subject to the direction and control of the Chief Operating
Officer and Board of Directors of Employer, and shall report to Employer's
Chief Operating Officer. Executive shall devote all of her business time and
attention to the affairs of Employer, except for vacation periods, and for
reasonable periods permitted for illness or other incapacity. Executive's
duties shall be primarily performed at Employer's office in Englewood,
Colorado, subject to travel from time to time as is necessary or appropriate
for the performance of Executive's duties hereunder.
2. Employer agrees to pay Executive and Executive shall accept
from Employer, for her services to be rendered hereunder, a base salary at the
rate of $150,000 per year. Such base salary shall be paid in accordance with
Employer's regular payroll practices for executives, but no less frequently
than bi-weekly.
3. In addition to the payment of the compensation set forth in
Section 2, Employer also agrees that:
(a) Executive shall be included in all plans that are
hereafter adopted for the benefit of executive personnel of Employer of
Executive's level and for the general benefit of Employer's employees, in the
same manner and amount provided for other executives of Executive's level,
such as pension plans, non-qualified retirement plans, investment funds,
medical and hospitalization and group or other insurance plans and benefits,
if and to the extent that she is and remains eligible to participate
thereunder, and subject to the provisions of such plans as the same may be in
effect from time to time. Employer has no present intention to adopt any such
plan or benefit and nothing herein contained shall require Employer to adopt
or continue any such plan or benefit.
(b) Executive shall be reimbursed for such reasonable items
of travel and miscellaneous business expenses as are necessarily incurred by
her in the performance of her duties hereunder, upon presentation of detailed
vouchers therefor sufficient for Employer to deduct same for its income tax
purposes.
(c) Executive shall be entitled to have, at all times
during her employment hereunder, all office accommodations and secretarial
help as shall be necessary and appropriate for the performance of her
services.
(d) Executive shall be entitled to three (3) weeks paid
vacation during each year of her employment hereunder, to be taken at such
reasonable times as Executive desires in light of Employer's business needs.
(e) Executive shall be entitled to the number of paid
holidays, personal and sick days, during her employment hereunder as shall be
consistent with Employer's policies for executives of Executive's level.
(f) Employer shall withhold all taxes, social security and
Medicare contributions and other sums required to be withheld from each
compensation or other payment to Executive pursuant to this Agreement.
4. If, during the term of this Agreement:
(a) The employment of Executive by Employer should
terminate by reason of Executive's voluntary action, or by Employer for
"cause", which for these purposes is defined as (i) fraud in dealings with or
concerning Employer or misappropriation or embezzlement of property of
Employer, on the part of Executive, (ii) Executive's willful failure to
perform her services hereunder or to obey a specific instruction from the
President of the Employer, either of which failures shall continue for five
(5) days after notice thereof to Executive, (iii) Executive's conviction of
any felony or any other crime which other crime shall result in
be intended to result in gain or personal enrichment of
Executive at the expense of the Employer or (iv) the breach by Executive of
any material covenant of this Agreement and, if such breach does not involve
Section 5 of this Agreement, the failure of
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Executive to remedy such breach within five (5) days, then Employer's
obligations under this Agreement, including but not limited to for payment of
compensation under Section 2, and any and all of its obligations under Section
3 and any other obligation of Employer to contribute or make provision for
Executive in or with respect to any plan, benefit or program shall thereupon
cease and terminate.
(b) The employment of Executive by Employer should be
terminated by Employer without cause, then Employer shall pay to Executive, as
liquidated damages and in lieu of any other claim Executive might have for
breach of this Agreement, wrongful discharge or otherwise, but subject to the
results of Executive's obligation to mitigate damages, an amount equal to the
aggregate base salary Executive would have been entitled to receive had she
continued her employment hereunder for the balance of the term of this
Agreement at the annual salary rate in effect on the date of such termination,
and the aggregate amount of such salary payments shall be made by Employer in
equal installments over the remaining portion of the term on the same dates
that salary would have been paid to Executive;
(c) The employment of Executive by Employer should
terminate by reason of Executive's death, then Employer shall pay to
Executive's estate or representative, (i) Executive's unpaid base salary at
the rate in effect on the date of death, through the end of the month in which
death shall occur and (ii) expense reimbursements through the date of death,
and all other obligations of Employer to Executive hereunder shall cease and
terminate; or
(d) Executive shall become disabled so as not to be able to
substantially render her customary services to Employer for two consecutive
months or three months in the aggregate out of any twelve consecutive months
then, thereafter at any time prior to the cessation of such disability
Employer may terminate Executive's employment hereunder effective upon two (2)
days notice of termination and in such event the Employer shall pay to
Executive or her legal representative (i) Executive's unpaid base salary at
the rate in effect at the date of termination through the end of the month
during which such termination shall become effective and (ii) expense
reimbursements through the date of termination, and all other obligations of
Employer to Executive hereunder shall cease and terminate; in the event
Executive shall receive payments under any disability policy provided by
Employer while she is disabled and being paid any salary by Employer, the
amount of such receipts shall reduce the salary to which Executive otherwise
would be entitled for the corresponding period.
5. (a) The Executive acknowledges that (i) her employment by
Employer is of a special, unique, unusual and extraordinary character, and
(ii) the nature of the Executive's services, position and expertise and the
businesses of the Company are such that she is capable of competing with the
Employer in the business conducted by the Employer from nearly any location in
the United States. The Executive further acknowledge that her employment and
ownership relationships with the Predecessor and with Employer have brought
and will bring her into close contact with many confidential affairs of the
Employer and its parent, Allied Digital Technologies Corporation ("Allied"),
including, without limitation, information about products,
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manufacturing, processes, costs, profits, markets, sales, contracts, key
personnel, pricing policies, operational methods and other business affairs
and methods, plans for future development and other information not readily
available to the public. In recognition of the foregoing considerations the
Executive covenants and agrees that during the period of her employment by
Employer and for three (3) years thereafter, the Executive shall not, directly
or indirectly, in any location in the United States or Canada: (1) own,
manage, operate, control, or engage or participate as an officer, partner,
director, consultant, employee, agent or otherwise in the ownership,
management, operation or control of, or have a financial interest in the
ownership, management, operation or control of, or aid or assist anyone else
in the conduct of, any Competitive Business (as hereinafter defined), or (2)
take away or interfere with any trade, business or patronage of the Employer
or Allied related to any Competitive Business or interfere with any officer,
employee, representative or agent of the Employer or Allied or induce any of
the foregoing to leave the employ of the Employer or Allied or violate the
terms of any agreement with the Employer or Allied; provided, however, that
nothing contained in this Section (5) shall prohibit the Executive from
acquiring or holding, as a passive investor, 2% or less of the outstanding
capital stock or other securities of any corporation whose securities are
publicly traded on any national securities exchange or in the over-the-counter
market and quoted on NASDAQ, or becoming a creditor in a transaction that does
not otherwise violate this Section (5). For purposes of this Section (5), the
term "Competitive Business" shall mean any business activity which, during the
employment of the Executive by the Employer, the Employer or Allied was
engaged in or conducting, or which is similar to or in the same field as any
business conducted by the Predecessor within the two year period preceding the
date of this Agreement, or which Employer shall have planned to engage in or
conduct, as to which planned activities there shall be evidence of the
Employer's good faith intention to engage therein within such applicable
period.
(b) In recognition of the considerations described in
Section (a) , the Executive covenants and agrees that she will keep secret all
confidential matters and trade secrets of the Employer and Allied, except
those which are in the public domain other than through a breach by the
Executive of this Section 5 (b) , and will not disclose them to any one
outside of the Employer or Allied or use them for herself or otherwise, at any
time during or after the period of Executive's employ by the Employer.
Executive further represents and warrants that she will deliver to the
Employer upon termination of her employment or upon earlier demand by the
Employer, all memoranda, notes, records, reports and other documents (and all
copies thereof) relating to the Employer's or Allied's business which she has
possessed or had under her control.
(c) If the Executive commits a breach of any of the
provisions of Sections 5(a) or 5(b), the Employer and shall have
the right and remedy to have such provisions specifically enforced by any
court of competent jurisdiction, it being acknowledge and agreed that any such
breach or threatened breach will cause irreparable injury to the Employer or
Allied and that money damages will not provide an adequate remedy to the
Employer or Allied. The parties hereto recognize that the laws and public
policies of various jurisdictions may differ as to the validity and
enforceability of agreements similar to those
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contained in this Agreement. It is the intention of the Executive and the
Employer that the provisions of this Agreement shall be enforced to the
fullest extent permissible under the laws and public policies of each
jurisdiction in which such enforcement is sought.
(d) The right and remedy set forth in Section 5(c) shall be
in addition to and not in lieu of any other rights and remedies available to
the Employer and Allied under law or in equity. If the courts of any one or
more jurisdictions shall hold all or any part of the provisions of this
Agreement unenforceable by reason of the breadth of their scope or otherwise,
it is the intention of the parties that such determination shall not bar or in
any way affect the Employer's or Allied's right to relief in the courts of any
other jurisdiction as to failures to observe such provisions in such other
jurisdictions, the above provisions as they relate to each jurisdiction being,
for this purpose, severable into diverse and independent provisions. If any
provision contained in this Agreement is held to be unenforceable because of
the duration of such provision or the geographical area or businesses covered
thereby, the parties hereto agree that the court making such determination
shall have the power to reduce the duration and/or area and/or businesses
covered by such provision and in its reduced form said provision shall then be
enforceable.
(e) It is agreed that because of the nature of the industry
and the business of Employer, Predecessor and Allied, Allied is a third party
beneficiary of the provisions of this Section 5 and may enforce the same in
its own name and right as above provided.
6. This Agreement contains the entire understanding of the
parties with respect to the subject matter thereof, supersedes any and all
prior agreements of the parties with respect to the subject matter thereof and
cannot be changed or extended except by a writing signed by both parties
hereto. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, legal representatives, executors,
administrators, successors and assigns. Neither this Agreement nor any rights
hereunder shall be assigned by either party except that Employer may assign
this Agreement to any subsidiary or parent corporation or to any purchaser of
substantially all of the assets of Employer. This Agreement and all matters
and issues collateral thereto shall be governed by the laws of the State of
Colorado applicable to contracts made and to be performed entirely therein. If
any provision of this Agreement, as applied to either party or to any
circumstance, shall be adjudged by a court to be void or unenforceable, the
same shall in no wise affect any other provision of this Agreement or the
validity or enforceability thereof.
7. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of them taken together shall
constitute one and the same instrument.
8. All notices or other communications hereunder shall be given
in writing and shall be deemed given if served personally against signed
receipt (in the case of Employer,
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by its President), dispatched by facsimile transmission to any facsimile
number as either party may hereafter designate in a notice to the other, sent
by nationally recognized overnight courier service or mailed first-class
postage prepaid by registered or certified mail, return receipt requested, to
the parties at their addresses set forth above, or at such other address or
facsimile number as either as may hereafter designate in a notice to the
other, and, in the case of Employer, addressed to the attention of the
President, with a copy of each Employer to be simultaneously given as above
provided, to Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxxx & Kuh, LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx, Esq., Facsimile No.
IN WITNESS WHEREOF the parties have executed this Agreement on
the date first above stated.
ALLIED DIGITAL, INC.
By:
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Vice-President
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Xxxxxxxx Xxxxxxx
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