EXHIBIT 10.14
MANAGEMENT AGREEMENT
As of the last date written below, International Microcomputer Software, Inc., a
California corporation, ("IMSI") and Xxxx X. Xxxxx ("Executive") enter into this
Management Agreement ("Agreement").
A. WHEREAS, IMSI desires to enter into a management agreement with Executive;
B. WHEREAS, IMSI requires Executive's personal services on a regular basis to
operate and expand the business of IMSI; and
C. WHEREAS, Executive requires that IMSI provide the necessary resources for
Executive to discharge his responsibilities under this Agreement:
NOW, THEREFORE, the Parties agree as follows:
15. EMPLOYMENT - IMSI hereby hires Executive as Executive Vice President, COO,
IMSI. The Executive agrees to accept the responsibilities of Executive Vice
President and the duties assigned by the President.
16. COMPENSATION - IMSI shall compensate Executive as follows:
Base Salary - IMSI shall pay Executive $156,000 per year ($13,000 per month) in
salary payable on the 15th and the last day of each month. Executive's salary
will be adjusted based upon the following events or milestones: overall
compensation shall be reviewed by the Board after the initial 6 months and
compensation shall be increased if the company is ahead of its cash and profit
forecasts for the prior month period.
Options - Executive shall be granted 350,000 options. The strike price shall be
in accordance with IMSI's stock option plans. In the event that the majority
control of IMSI changes or Executive is terminated without cause, all options
held by Executive shall immediately vest and the right to exercise them shall
survive for one year thereafter. Options shall vest pro rata monthly over 24
months.
Bonuses - IMSI shall pay Executive a bonus of up to 25% of Executive base pay on
the 15th day of the 2d month after the end of each calendar quarter if and when
Executive meets profit and cash goals agreed to by the Executive committee. The
initial plan for bonus purposes will be completed the week of 9/2/01 and shall
include the combined forecasts for IMSI, ArtToday and Keynomics.
Executive Benefits - Executive shall have the right to participate in any and
all health benefits, executive retirement income and welfare benefit plans,
policies, programs, agreements or arrangements generally made available from
time to time to salaried executives and/or other executives of IMSI which shall
include, at a minimum, medical and dental insurance (the premiums for which
shall be paid in full by IMSI) and other benefits which are presently in effect
for executives of IMSI. Executive shall be entitled to thirty (30) days'
vacation time each year without loss of compensation. In the event Executive is
unable to take the total amount of vacation time authorized herein during any
year, he may accrue that time and add it to vacation time for the following
year. Executive's specific rights under any of the Executive Benefits, however,
shall be governed by the terms, provisions and conditions of the underlying
plans, policies, programs, agreements or arrangements relating to the particular
Executive Benefits. At Executive's option IMSI shall pay Executive the amount of
the premium for medical and dental insurance at the same cost that IMSI would
incur for such premium so that Executive can maintain and pay for health and
dental insurance directly. IMSI agrees to maintain adequate errors and omissions
insurance for Executive as an officer of the corporation and agrees to pay all
legal expense related to claims against Executive as an officer or Director of
IMSI.
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(f) Incentive Plans - Executive shall be covered under and participate in any
incentive compensation, bonus, discretionary pay, or performance award plans,
programs, polices, arrangements, or any stock option or stock appreciation
rights plans which IMSI may have or put into effect for its executives
(Incentive Plans).
17. TERMINATION OF EMPLOYMENT - IMSI may terminate Executive's employment at any
time with or without cause.
Termination Without Cause - Termination without cause shall include, but not be
limited to, IMSI choosing to substantially alter the position, geographic
location or responsibilities of Executive during the term of this Agreement.
Termination without cause shall result in IMSI paying full compensation to
Executive for a minimum of six (6) months and Executive Benefits and Incentive
Plans shall also be paid for a period of six (6) months and will be paid to
Executive on a normally scheduled basis. If termination without cause occurs in
connection with the merger or acquisition of IMSI or change in control of the
Board of IMSI, Executive shall be entitled to twenty four (24) months of
compensation and benefits.
Termination by IMSI For Cause - IMSI may terminate this Agreement for cause by
giving thirty (30) days' written notice to Employee. For purposes of this
Agreement, "for cause" shall be limited to the following:
Commitment of a crime or illegal act constituting a felony under the criminal
laws of the jurisdiction in which the act occurs.
b) Gross negligence.
Termination by Executive - Executive may terminate his employment with IMSI at
any time with or without cause.
Effect of Termination by Executive - Executive shall continue to receive
compensation for a period of three (3) months after termination of employment
and IMSI shall pay his medical and dental benefits for twelve (12) months after
any termination.
These termination provisions shall survive termination of this Agreement and can
only be modified by a subsequent written agreement executed by Executive and
IMSI.
18. TRADE SECRETS - Executive acknowledges that IMSI possesses and will continue
to develop and acquire valuable Proprietary Information. The value of that
Proprietary Information depends on it remaining confidential. IMSI depends on
Executive to maintain that confidentiality, and Executive accepts that position
of trust. Executive agrees, upon leaving employment with IMSI for any reason, to
promptly deliver to IMSI all material documents, including but not limited to,
writings and computer data, in Executive's possession, custody, or under
Executive's control containing or disclosing Proprietary Information.
19. CONFLICTS WITH OTHER ACTIVITIES - Executive agrees that his employment with
IMSI is non-exclusive but requires substantial attention and effort. Therefore,
while employed by IMSI, Executive will not, without IMSI's consent, engage in
any employment or business competitive with the business.
20. ADDITIONAL PROVISIONS RELATING TO PAYMENTS - If IMSI finds that, at the time
any payment is due under this Agreement, Executive is unable to care for his
affairs because of illness or accident, payment (unless a duly qualified
guardian or other legal representative of Executive has made IMSI an earlier
claim for it) may be paid to any individual deemed by IMSI to be maintaining
Executive or responsible for Executive's maintenance, and any such payment shall
be deemed to be payment for the Executive's account and shall be a complete
discharge of any liability under this Agreement. IMSI will honor any request
made prior to his disability by Executive regarding such payments. IMSI may
withhold from any amounts payable under this Agreement all federal, state, city
or other taxes as required under any law or government regulation or ruling.
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21. GOVERNING LAW - This Agreement shall be construed and its performance
enforced in accordance with the laws of the State of California, excluding its
choice of law provisions.
22. MODIFICATIONS - Any and all modifications, amendments, or additions to this
Agreement shall be in writing. Similarly, any and all waivers of any terms of
this Agreement shall be in writing. Any and all oral modifications, amendments,
additions, and/or waivers shall be unenforceable.
23. DISPUTE RESOLUTION - The Parties agree to submit any disputes involving
money or damages greater than $5,000 relating to this Agreement and/or
transactions, duties, or obligations to be performed under this Agreement, to
mediation with a mediator approved by the Parties to the dispute. If the Parties
resolve their disputes through mediation, the Parties shall share the mediator's
fees evenly but pay their own attorneys' fees and other expenses related to
mediation. If mediation fails to resolve all disputes within thirty (30) days
after submission to the mediator, then either Party may file a lawsuit or
request arbitration. The Parties agree that mediation is a pre-condition to
filing a lawsuit. The prevailing Party in any law suit or arbitration relating
to the transactions contemplated by this Agreement shall be entitled to costs
and expenses including reasonable attorneys fees and the attorneys' fees and
expenses incurred in connection with mediation that failed to resolve the
dispute. Claims of $5,000 or less may be submitted to mediation or small claims
court.
24. SEVERABILITY - If a court of competent jurisdiction or arbitrator finds that
one or more provisions of this Agreement is or are illegal or unenforceable, the
remaining provisions of this Agreement shall remain in full force and effect as
if such provision or provisions never existed.
25. WAIVER - No Party's right to require performance of another Party's
obligations under this Agreement shall be affected by any previous delay in
enforcing such right, express waiver of prior similar right to require
performance, or course of dealing.
26. INTEGRATION CLAUSE - This Agreement contains the entire agreement of the
Parties relating to the subject matter of this Agreement. The Parties have made
no agreements, representations, or warranties relating to the subject matter of
these Agreements that are not stated herein.
27. INTERPRETATION OF THIS AGREEMENT - The Parties acknowledge that they and
their attorneys have had an opportunity to review this Agreement in detail and
to comment on and draft any and all additional terms or modifications to this
Agreement. Accordingly, the Parties agree that this Agreement shall not be
interpreted against any Party under California Civil Code Section 1654 because
the attorney for that Party drafted this Agreement or any provision of this
Agreement.
28. SUCCESSORS - Should any change in IMSI ownership or structure occur, this
Agreement shall survive and inure to the benefit of and be binding on the legal
representatives, successors and assigns of the parties.
15. INDEMNIFICATION OF LOSSES OF EMPLOYEE - IMSI shall indemnify Executive for
all losses sustained by Executive in direct consequence of the discharge of his
duties on IMSI's behalf.
16. NOTICES. Notices under this Agreement shall be sufficient only if
sent (a) by overnight courier, or (b) by facsimile or other electronic
means and by U. S. Mail, or (c) personally delivered to the other
Party. Notices shall be addressed as follows:
To IMSI To Executive:
Fax: Fax:
Tel: Tel:
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Any Party may change the above information by giving written notice as set forth
above.
17. COUNTERPARTS. This Agreement may executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the only Agreement.
IN WITNESS WHEREOF, the Parties execute this Agreement as of the last date
written below.
Date: September 1, 2001 By: /s/ XXXX X. XXXXX
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Date: September 1, 2001 By: /s/ XXXXXX XXXX III
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