CONSPIRACY ENTERTAINMENT CORPORATION
EMPLOYMENT AGREEMENT
This Agreement is entered into as of January 1, 2002 (the "Effective
Date") by and between CONSPIRACY ENTERTAINMENT CORPORATION (the "Company") and
Xxxxx Xxxxxx ("Employee"). In consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually covenanted and
agreed by and between the parties as follows:
1. POSITION AND DUTIES. Employee shall be employed to serve as Chief
Executive Officer, with involvement in the entire operation of the Company while
discharging such responsibilities as are commensurate with Employee's
position.or to serve in such additional or different capacities and with such
other responsibilities as the Company' s President and/or Chief Executive
Officer may determine from time to time. Employee shall perform Employee's
duties faithfully and to the best of Employee's ability and shall devote
Employee's full time and effort exclusively to the performance of Employee's
duties hereunder. Employee shall abide by all Company policies, rules and
regulations now in effect and as such are promulgated in the future by the
Company in its sole and absolute discretion. Company will use its commercially
reasonable efforts to assist Employee to obtain an appropriate visa for
employment at the Company, including reimbursing Employee's reasonable expenses
in connection therewith.
2. PERIOD OF EMPLOYMENT. The term of employment pursuant to this Agreement
shall be three (3) years ("Term"), commencing January 1, 2002, and continuing
until December 31, 2004, subject to earlier termination during this period in
accordance with the provisions below. Continued employment after December 31,
2004, shall be based on the mutual consent of both Employee and the Company.
3. COMPENSATION. For all services to be rendered pursuant to this
Agreement by Employee, Employee shall receive a base salary ("Base Salary") at
the monthly rate of Seven Thousand Two Hundred and Fifty Dollars ($27,000.00),
payable in accordance with the Company's normal payroll practices and subject to
the usual and required employee payroll deductions and withholdings. Employee
understands and agrees that neither Employee's job performance nor promotions,
commendations, bonuses or the like from the Company give rise to or in any way
serve as the basis for modification, amendment, or extension by implication or
otherwise, of this Agreement.
a. Corporate Vehicle Allowance. Employee shall be entitled to a
corporate vehicle allowance of $800.00 per month towards the lease or purchase
of a vehicle. In addition, the company agrees to pay for all gasoline,
maintenance and repair, and insurance for the vehicle through the termination of
this agreement.
4. OTHER BENEFITS. During Employee's employment hereunder, Employee shall
be entitled to participate in such employee benefit plans and programs of the
Company, if any, as are maintained by Company from time to time, and are
generally available to the benefit of its employees, subject to an in accordance
with the terms and eligibility requirements of the applicable benefit or plan.
The Company reserves the right to cancel or change the benefit plans and
programs it offers to its employees at any time in its sole and absolute
discretion. Notwithstanding anything to the contrary contained herein, Employee
acknowledges that, in light of Employee's compensation in Section 3, he shall
not be entitled to participate in any equity-based compensation plan established
by the Company.
5. TAXES. In the event that Employee owes any taxes by virtue of any
payments made or benefits conferred by the Company, the Company shall not be
liable to pay or obligated to reimburse Employee for any such taxes or to make
any adjustment of Employee's compensation under this Agreement. Any compensation
due to Employee under this Agreement, including, but not limited to, the Base
Salary, Annual Bonus, Game Design Bonus, Equity Compensation and any other
taxable benefit, shall be reported as required on all earnings statements and
shall be reduced by any required withholding for federal, state and local taxes
and other appropriate payroll deductions.
6. EXPENSES. Pursuant to Company policy, Employee shall be reimbursed for
all reasonable, appropriate and properly documented business and travel expenses
which Employee incurs in the performance of his responsibilities as an employee
of the Company.
7. TERMINATION. Either Employee or the Company may terminate Employee's
employment at any time, with or without cause or notice. If Employee is
terminated without cause during the Term of this Agreement, Employee shall
receive the following: (i) Base Salary and accrued, unused vacation benefits
through the date of termination; (ii) Equity Compensation; and (3) Game Design
Bonus. In the event Employee resigns for any reason, Employee will receive
Employee's Base Salary and accrued, unused vacation benefits through the date of
termination, but Employee will not be eligible for the Equity Compensation
described in clause (ii) above or any other bonus payment not yet accrued or due
and payable.
a. Termination for Cause. The Company shall not be obligated to
provide any Game Design Bonus or Equity Compensation in the event of a
termination for "Cause", which for purposes of this Agreement shall mean a
determination by the Company, based upon its good faith judgment, that Employee
has committed an act or omission detrimental to the best interests of the
Company, including, but not limited to, dishonesty, neglect, insubordination,
failure to perform the duties assigned to Employee, felony or crime of
dishonesty, or breach of any obligation under this Agreement or any Exhibit
hereto. In the event of a termination for Cause, Employee shall only receive
payment of Employee's Base Salary and any accrued, unused vacation time earned
through the date of termination.
8. RIGHT TO ADVICE OF COUNSEL. Employee acknowledges that he has had the
right to consult with counsel and is fully aware of Employee's rights and
obligations under this Agreement.
9. SUCCESSORS.
(a) Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets shall assume the obligations under this Agreement and agree
expressly to perform the obligations under this Agreement in the same manner and
to the same extent as the Company would be required to perform such obligations
in the absence of a succession. For all purposes under this Agreement, the term
"Company," shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this
subsection (a) or which becomes bound by the terms of this Agreement: by
operation of law.
2
(b) Employee's Successors. Employee shall not assign or transfer
this Agreement or any right or obligation under this Agreement to any other
person or entity.
10. CONFIDENTIAL INFORMATION AND ASSIGNMENT OF INVENTIONS. Employee agrees
that as a condition to the effectiveness of this Agreement, Employee shall
execute the Company's standard Proprietary Information and Inventions Agreement
attached hereto as Exhibit C and incorporated herein by this reference.
11. CONFLICTING EMPLOYMENT. Employee shall not, during the term of
Employee's employment with the Company, engage in any other employment,
occupation, consulting or other business activity in any way related to the
business in which the Company is now involved (e.g., development, production,
publishing, licensing, sale and distribution of computer technology and games)
or becomes involved during the term of Employee's employment, nor will he engage
in any other activities that conflict with Employee's obligations to the Company
without the Company's prior written consent.
12. RETURNING COMPANY DOCUMENTS. At the time of leaving the employ of the
Company, Employee covenants that he shall deliver to the Company (and will not
keep in Employee's possession, recreate or deliver to anyone else) any and all
devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings blueprints, sketches, materials, equipment, other
documents or property, or reproductions of any aforementioned items developed by
Employee pursuant to Employee's employment with the Company or otherwise
belonging to the Company, its successors or assigns. In the event of the
termination of Employee's employment, Employee hereby covenants to sign and
deliver the "Termination Certification" attached hereto as Exhibit A, which is
incorporated herein in its entirety by this reference.
13. NOTIFICATION OF NEW EMPLOYER. In the event that Employee leaves the
employ of the Company, Employee agrees to grant consent to notification by the
Company to Employee's new employer about Employee's rights and obligations under
this Agreement.
14. SOLICITATION OF EMPLOYEES. Employee covenants that, for a period of
twelve (12) months immediately following the termination of Employee's
relationship with the Company for any reason, whether with or without cause, he
shall not either directly or indirectly solicit, induce, recruit or encourage
any of the Company's employees to leave their employment, or take away such
employees, or attempt to solicit, induce, recruit, encourage or take away
employees of the Company, either for Employee or for any other person or entity.
3
15. CONFLICT OF INTEREST GUIDELINES. Employee covenants that he shall
diligently adhere to the Conflict of Interest Guidelines attached hereto as
Exhibit B, which is incorporated herein in its entirety by this reference.
16. NOTICE CLAUSE.
(a) Manner. Any notice hereby required or permitted to be given
shall be sufficiently given if in writing and delivered in person or sent by
First Class, registered or certified mail, postage prepaid, to either party at
the address of such party or such other address as shall have been designated by
written notice by such party to the other party.
(b) Effectiveness. Any notice or other communication required or
permitted to be given under this Agreement will be deemed given on the day when
delivered in person, or the third business day after the day on which such
notice was mailed in accordance with this Section.
17. ARBITRATION.
(a) Exclusive Remedy. Arbitration shall be the sole and exclusive
remedy for any dispute, claim, or controversy of any kind or nature (a "Claim")
arising out of, related to, or connected with Employee's employment relationship
with Company, or the termination of Employee's employment relationship with
Company, including any Claim against any parent, subsidiary, or affiliated
entity of Company, or any director, officer, general or limited partner,
employee or agent of Company or of any such parent, subsidiary or affiliated
entity.
(b) Claims Subject to Arbitration. This paragraph specifically
includes (without limitation) all claims under or relating to any federal, state
or local law or regulation prohibiting discrimination, harassment or retaliation
based on race, color, religion, national origin, sex, age, disability or any
other condition or characteristic protected by law; demotion, discipline,
termination or other adverse action in violation of any contract, law or public
policy; entitlement to wages or other economic compensation; and any claim for
personal, emotional, physical, economic or other injury.
(c) Claims Not Subject to Arbitration. This Agreement does not apply
to any legal action by the Company or Employee seeking injunctive relief for
unfair competition or breach of any Company policies regarding the protection of
Company property, trade secrets or confidential information. This Agreement also
does not apply to any claims by Employee: (a) for workers' compensation
benefits; (b) for unemployment insurance benefits; (c) under a benefit plan
where the plan specifies a separate arbitration procedure; or (d) which are
otherwise expressly prohibited by law from being subject to arbitration under
this Agreement.
(d) Procedure. Any Claim submitted to arbitration shall be decided
by a single, neutral arbitrator (the "Arbitrator") in the exclusive venue of Los
Angeles County, California. The parties to the arbitration shall mutually select
the Arbitrator not later than 15 days after service of the demand for
arbitration. If the parties for any reason do not mutually select the Arbitrator
within the 15 day period, then any party may apply to any court of competent
jurisdiction to appoint a retired judge as the Arbitrator. The parties agree
that arbitration shall be conducted in accordance with California Code of Civil
Procedure sections 1280 et seq., except as modified in this Agreement. The
Arbitrator shall apply the substantive federal, state, or local law and statute
of limitations governing any Claim submitted to arbitration. In ruling on any
Claim submitted to arbitration, the Arbitrator shall have the authority to award
only such remedies or forms of relief as are provided for under the substantive
law governing such Claim. Judgment on the Arbitrator's decision may be entered
in any court of competent jurisdiction.
4
(e) Costs. Employee shall only pay the share of fees and costs
incurred in the arbitration (e.g., filing fees and transcript costs) that he
would normally pay in the course of litigation. All other fees and costs,
including the Arbitrators' fees, shall be borne by the Company. The parties
shall be responsible for their own attorneys' fees and costs, except that the
Arbitrator shall have the authority to award attorneys' fees and costs to the
prevailing party in accordance with the applicable law governing the dispute.
(f) Interpretation of Arbitrability. The Arbitrator, and not any
federal or state court, shall have the exclusive authority to resolve any issue
relating to the interpretation, formation or enforceability of this Agreement,
or any issue relating to whether a Claim is subject to arbitration under this
Agreement, except that any party may bring an action in any court of competent
jurisdiction to compel arbitration in accordance with the terms of this
Agreement.
18. SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement, or any terms hereof, shall not affect the validity or
enforceability of any other provision or term of this Agreement.
19. INTEGRATION. This Agreement and the Exhibits hereto represent the
entire agreement and understanding between the parties as to the subject matter
herein and supersede all prior or contemporaneous agreements whether written or
oral. No waiver, alteration, or modification of any of the provisions of this
Agreement shall be binding unless in writing and signed by duly authorized
representatives of the parties hereto.
20. SURVIVIAL. The following sections shall survive any termination of
this Agreement: 5, 7, 9, 10, 12-21 and any other provision which states that it
survives the Agreement's termination.
21. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal substantive laws, but not the choice of law rules,
of the state of California.
22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which together
shall constitute one and the same instrument.
5
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officers, as of the day and year
first above written.
CONSPIRACY ENTERTAINMENT CORPORATION
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Xxxxx Xxxxxx
-------------------------------------------
President
EMPLOYEE
/s/ Xxxxx Xxxxxx
----------------------------------------------
Xxxxx Xxxxxx
00000 Xxxxxx Xxxxxx
Xxxx 000
Xxx Xxxxxxx, XX 00000
6
EXHIBIT A
CONSPIRACY ENTERTAINMENT CORPORATION
TERMINATION CERTIFICATION
This is to certify that I do not have in my possession, nor have I failed
to return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned
items belonging to Conspiracy Entertainment Corporation, its subsidiaries,
affiliates, successors oz* assigns (together, the "Company").
I further certify that I have complied with all the terms of the
Employment Agreement signed by me, including the reporting of any inventions and
original works of authorship (as defined therein), conceived or made by me
(solely or jointly with others) covered by that agreement.
I further agree that, in compliance with the Employment Agreement, I will
preserve as confidential all trade secrets, confidential knowledge, data or
other proprietary information relating to products, processes, know-how,
designs, formulas, developmental or experimental work, computer programs, data
bases, other original works of authorship, customer lists, business plans,
financial information or other subject matter pertaining to any business of the
Company or any of its employees, clients, consultants or licensees.
I further agree that for twelve (12) months from this date, I will not
hire any employees of the Company and I will not solicit, induce, recruit or
encourage any of the Company's employees to leave their employment.
Date:
---------------------------
-------------------------------------
Xxxxx Xxxxxx
7
EXHIBIT B
CONSPIRACY ENTERTAINMENT CORPORATION
CONFLICT OF INTEREST GUIDELINES
It is the policy of CONSPIRACY ENTERTAINMENT CORPORATION (the "Company")
to conduct its affairs in strict compliance with the letter and spirit of the
law and to adhere to the highest principles of business ethics. Accordingly, all
officers, employees and independent contractors must avoid activities which are
in conflict, or give the appearance of being in conflict, with these principles
and with the interests of the Company. The following are potentially
compromising situations which must be avoided. Any exceptions must be reported
to the President and written approval for continuation must be obtained.
1. Revealing confidential information to outsiders or misusing
confidential information. Unauthorized divulging of information is a
violation of this policy whether or not for personal gain and
whether or not harm to the Company is intended.
2. Accepting or offering substantial gifts, excessive entertainment,
favors or payments which may be deemed to constitute undue influence
or otherwise be improper or embarrassing to the Company.
3. Participating in civic or professional organizations that might
involve divulging confidential information of the Company.
4. Initiating or approving personnel actions affecting reward or
punishment of employees or applicants where there is a family
relationship or appears to be a personal or social involvement.
5. Initiating or approving any form of personal or social harassment of
employees.
6. Investing in or affiliating with suppliers, customers, or competing
companies, including financial speculations, where such investment
or affiliation might influence in any manner a decision or course of
action of the Company.
7. Borrowing from or lending to employees, customers or suppliers.
8. Acquiring real estate of interest to the Company.
9. Improperly using or disclosing to the Company any proprietary
information or trade secrets of any former or concurrent employer or
other person or entity with whom obligations of confidentiality
exist.
10. Unlawfully discussing prices, costs, customers sales or markets with
competing companies or their employees.
8
11. Making any unlawful agreement with distributors with respect to
prices.
12. Improperly using or authorizing the use of any inventions (or
intellectual property) which are the subject of patent (or other
intellectual property) claims of any other person or entity.
13. Engaging in any activities which are competitive with or detrimental
to the business of the Company.
14. Engaging in any conduct which is not in the best interest of the
Company.
Each officer, employee and independent contractor must take every
necessary action to ensure compliance with these guidelines and to bring problem
areas to the attention of higher management for review. Violations of this
conflict of interest policy may result in discharge without warning.
9
EXHIBIT C
CONSPIRACY ENTERTAINMENT CORPORATION
[STANDARD NON-DISCLOSURE AND ASSIGNMENT OF INVENTIONS AGREEMENT]
10
