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EXHIBIT 10.35
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as
of the 12th day of May, 1999, between INTERVISUAL BOOKS, INC., a California
corporation (the "Company"), and XXXXX XXXXXXX (the "Executive").
In consideration of the promises and covenants set forth below,
the parties hereto agree as follows:
1. Employment.
The Company subject to the final negotiation and signing of a
definitive agreement to acquire Fast Forward Marketing, Inc. and the subsequent
closing and acquisition of Fast Forward Marketing, Inc., hereby agrees to employ
Executive, and Executive hereby agrees to accept such employment with the
Company, on the terms and conditions set forth herein.
2. Term.
The employment of Executive by the Company as provided in
this Agreement will commence on May 12, 1999, (the "Start Date"), and end on May
12 2001, unless sooner terminated as hereinafter provided. As a condition
precedent to the effectiveness of this Agreement, Executive shall report for
work at the principal executive offices of the Company on the Start Date. The
Company and Executive shall attempt to negotiate in good faith between September
30, 2000, and, May 12, 2001, the terms of employment of Executive by the Company
for a period following the expiration of this Agreement.
3. Position and Duties.
Executive shall serve as Senior Vice President Sales and
Marketing of the Company, or such other position or positions as may be agreed
upon by Executive and The President or the Board of Directors. The Executive
will be required to travel as needed. Executive shall at all times perform his
duties and obligations faithfully and diligently and shall devote all his
business time and best efforts exclusively to the business of the Company.
Executive shall at all times industriously perform his duties and report to the
President of the Company and shall accept and comply with all directions from
and all policies established from time to time by the President or Chairman of
the Board and Board of Directors of the Company. Executive's primary duties
shall include but are not limited to, oversee and manage all aspects of the
sales and marketing efforts of Intervisual Books, Inc.( excluding International
Sales) and Fast Forward Marketing and on a personal and direct basis, sell and
manage any accounts as required.
Executive shall promote the trade and business of the Company
to the best of his ability and shall not willingly do anything to prejudice the
Company's trade or business. Executive shall not at any time intentionally make
any untrue statement regarding the Company and shall not after the termination
of employment by the Company represent himself as being employed or connected
with the Company. Executive shall not directly or indirectly render any services
of a business, commercial or professional nature to any other person, entity or
organization, whether for compensation or otherwise, without the prior written
consent of the Company's Board of Directors.
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Executive shall adhere to all of the Company's policies and procedures
applicable to Company's employees generally.
4. Place of Performance.
In connection with Executive's employment by the Company and
except for required travel on Company business, Executive shall be based at the
principal executive offices of the Company or such other place or places as the
interests, needs, business and opportunities of the Company require or deem
advisable and only upon mutual agreement with Executive.
5. Compensation and Related Matters.
(a) Salary. During the term of Executive's employment
hereunder, the Company shall pay to Executive a salary of $162,500 per annum.
Such salary shall be paid in equal semi-monthly installments (or such shorter
intervals as the Company may elect) and shall accrue from day to day. Such
salary shall be subject to any withholding or taxes the Company is required by
law to make or pay.
(b) Commissions. For the year ended December 31, 1999 the
Executive shall be paid an override of (i) 3/4% of the amount of sales from the
book division in excess of $15,000,000, plus (ii) 1/2% of the amount of sales
from the video division in excess of $15,000,000. Book division sales of
self-published titles must be at an average discount of no greater than 55% and
video division sales must be at least at historic Fast Forward Marketing Inc.
discounts. Overrides for subsequent years will be negotiated in good faith by
the Executive and the Company by March 31, of each applicable calendar year.
Overrides will be paid 45 days after year end. Such overrides shall be subject
to any withholding or taxes the Company is required by law to make or pay.
(c) Vacation. During the term of Executive's employment
hereunder, Executive shall be entitled to four weeks of vacation in each
calendar year, and to compensation with respect to earned but unused vacation
days determined in accordance with the Company's vacation policy. Executive's
vacation shall be scheduled by mutual agreement between the Executive and the
Company's President.
(d) Expenses. During the term of Executive's employment
hereunder, Executive shall be entitled to receive reimbursement for all
reasonable out-of-pocket travel and other expenses (excluding ordinary commuting
expenses) incurred by Executive in performing Executive's services hereunder,
provided that:
(i) Each such expenditure is of a nature qualifying it as a
proper business expenditure of the Company and is approved by the
Company; and
(ii) Executive furnishes to the Company adequate records and
other documentary evidence required by the Company for the
substantiation of such expenditures as proper business expenditures of
the Company, and Executive otherwise complies with general Company
policies with respect to expense reimbursement.
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(e) Stock Options. Executive acknowledges that, as additional
compensation for Executive's employment hereunder, Executive will be granted
nonstatutory stock options to acquire 100,000 shares of the Company's common
stock at $ 1.25 per share pursuant to the Stock Option Agreement attached hereto
as Exhibits A. The terms of such stock options shall be governed by the
provisions of the Stock Option Agreements (including Executive's right to
exercise such options upon termination.)
(f) Life Insurance. During the term of Executive's employment
hereunder, Executive will be entitled to reimbursement for the cost of an
Executive owned life insurance policy up to a maximum of $1500 per year. Payment
will be made with in fifteen days after submission of a copy of the premium
notice by the Executive.
(g) 401(k). During the term of Executive's employment
hereunder, Executive will be entitled to participate in the Company's 401(k)
plan, or other similar plans established by the Company, generally applicable to
full-time employees of the Company.
(h) Car Allowance. Executive shall be paid a monthly car
allowance of $600.
(6) Termination.
(a) Cause. The Company may at any time upon written notice to
Executive terminate this Agreement and Executive's employment hereunder for
Cause pursuant to the provisions of this Section 6(a). Executive shall be given
written notice by the Board of Directors of its intention to terminate Executive
for Cause, which notice shall state the acts or omissions that constitute
grounds on which the proposed termination for Cause is based. In the Board of
Director's reasonable business judgment, the Board shall permit Executive an
opportunity to address the Board or a committee of one or more directors
regarding the grounds on which the proposed termination for Cause is based. In
every case, the good faith judgment of the Board of Directors shall be
conclusive as to whether Cause for termination exists.
For purposes of this Agreement, the Company shall have
"Cause" to terminate Executive's employment hereunder upon:
(i) The breach by Executive of any material provision or covenant
of this Agreement, and if such breach is susceptible to cure by Executive, the
failure to effect such cure within twenty (20) days after written notice of such
breach is given to the Executive; or
(ii) The willful failure or neglect of Executive to perform
Executive's duties hereunder or the gross negligence of Executive in the
performance of such duties, and if such failure or gross negligence is
susceptible to cure by Executive, the failure to effect such cure by Executive
within twenty (20) days after written notice of such failure or gross negligence
is given to Executive; or
(iii) Except as permitted hereunder, Executive's unexplained and
regular absences from the Company; or
(iv) Executive's use of alcohol or illegal drugs, which use
interferes with the performance of Executive's duties hereunder; or
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(v) Executive's indictment for a crime or for theft,
embezzlement, fraud, misappropriation of funds or any other alleged act of
dishonesty by Executive or Executive's indictment for any other felony or other
crime involving moral turpitude; or
(vi) Executive's violation of any law or ethical rule relating to
Executive's employment by the Company, including, but not limited to a violation
by Executive of Executive's fiduciary duty of loyalty to the Company which
Executive owes to the Company as an officer and/or director; or
For purposes of this Agreement, an action shall be considered
"willful" if it is done intentionally, purposely or knowingly.
(b) Death. This Agreement and Executive's employment
hereunder shall terminate automatically upon Executive's death.
(c) Incapacity. If Executive becomes incapacitated during
Executive's employment hereunder, this Agreement and Executive's employment
hereunder shall terminate on the date of determination by the Board of Directors
of the Company of such incapacity. As used herein, "incapacity" shall mean any
physical or mental illness or disability, or both, which renders Executive
incapable of performing substantially all of his managerial and executive
services hereunder for 120 days or more in the aggregate during any calendar
year, and which at any time after such 120 days the Company's Board of Directors
shall determine continues to render Executive incapable of performing
substantially all of his managerial and executive services hereunder. Any
determination made in good faith by the Company's Board of Directors shall be
conclusive and binding upon Executive.
(d) Without Cause. The Company shall be entitled to terminate
this Agreement and Executive's employment hereunder at any time without Cause.
(e) Resignation. Executive shall be entitled to terminate
this Agreement and Executive's employment hereunder at any time on thirty days
prior written notice delivered by Executive to the Company.
(f) Notice of Termination. Any termination of Executive's
employment by the Company or by Executive (other than termination pursuant to
subsection 6(b) above) shall be communicated by a written Notice of Termination
to the other party hereto. For purposes of this Agreement, a "Notice of
Termination" means a notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth the circumstances which
provide a basis for termination of Executive's employment under the provisions
so indicated, and (iii) if the termination date is other than the date of
receipt of such notice, specifies the termination date of this Agreement (which
date shall not be more than 30 days after the giving of such notice).
(g) Date of Termination. "Date of Termination" shall mean the
date of death, the date of receipt of the Notice of Termination or the date
specified therein, as the case may be.
(h) Arbitration Rights. Nothing contained in this Section 6
shall contravene the Company and Executive's right and obligation to arbitrate
disputes as provided for in Section 11 of this Agreement.
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7. Obligations of the Company Upon Termination.
(a) Termination for Cause. If this Agreement is terminated
pursuant to Section 6(a), the Company shall have no further obligation or
liability to Executive, except that Executive shall be entitled to receive only
(i) the portion of Executive's salary as set forth in Section 5(a) which has
been earned up to the Date of Termination, (ii) compensation for any accrued and
unused vacation up to the Date of Termination, and (iii) reimbursement, subject
to the requirements set forth in Section 5(c), for business expenses incurred up
to the Date of Termination (collectively, the "Minimum Payments").
(b) Termination for Death or Disability. If this Agreement is
terminated pursuant to Sections 6(b) or 6(c), the Company shall have no further
obligation or liability to Executive, except that Executive shall be entitled to
receive only the Minimum Payments.
(c) Termination Without Cause. If this Agreement is
terminated by the Company pursuant to Section 6(d), the Company shall have no
further obligation or liability to Executive, except that Executive shall be
entitled to receive only (i) the Minimum Payments, and (ii) an amount equal to
six (6) months salary based on executive's rate of pay at the date of
termination. Any amounts owed to Executive pursuant to subsection (ii) above
shall be paid semi-monthly through the company's regular payroll commencing one
month from the Date of Termination until paid in full.
(d) Resignation. If this Agreement is terminated by Executive
pursuant to Section 6(e), the Company shall have no further obligation or
liability to Executive, except that Executive shall be entitled to receive only
the Minimum Payments.
(e) Exclusivity of Payments. Upon termination of Executive's
employment hereunder, Executive shall not be entitled to any severance payments
or severance benefits from the Company or any payments by the Company on account
of any claim for wrongful termination, including but not limited to claims under
any federal, state or local human and civil rights or labor laws, other than the
payments provided in this Section 7, except for any benefits which may be due to
Executive in the normal course under any employee benefit plan of the Company
which provides for benefits after termination of employment. Executive agrees
that any right to receive payments hereunder upon termination of employment will
cease if Executive breaches any provision of Sections 8 or 9 below.
8. Proprietary Information.
(a) Definition. Executive hereby acknowledges that Executive
possesses and may make use of, acquire, create, develop or add to certain
confidential and/or proprietary information regarding the Company and its
business (whether in existence prior to, as of or after the date hereof,
collectively, "Proprietary Information"), which Proprietary Information shall
include, without limitation, all of the following materials and information
(whether or not reduced to writing and whether or not patentable or protected by
copyright): trade secrets, inventions, processes, formulae, programs, technical
data, "know-how," manuals, confidential reports and communications, product
sales or cost information, new product ideas or improvements, new packaging
ideas or improvements, research and development programs, identities or lists of
suppliers, vendors or customers, financial information and financial projections
of the Company of any nature whatsoever, or any other confidential or
proprietary information relating to the Company and/or its business. The term
"Proprietary
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Information" does not include any information that (i) at the time of disclosure
is generally available to and known by the public (other than as a result of its
disclosure by Executive), (ii) was available to Executive prior to disclosure by
the Company, provided that the person who was the source of such information was
not known by Executive to be subject to an obligation of confidentiality to the
Company, or (iii) becomes available to Executive on a non-confidential basis
from a person other than the Company or its representatives, provided that the
source of such information was not known by Executive to be subject to an
obligation of confidentiality to the Company.
(b) Nondisclosure. During the term of this Agreement and
thereafter, Executive will not, without the prior express written consent of the
Board of Directors, disclose or make any use of any Proprietary Information
except as may be required in the course of the performance of Executive's
services under this Agreement.
(c) Ownership. Executive acknowledges and agrees that all
right, title and interest in and to any Proprietary Information shall be and
shall remain the exclusive property of the Company. Without limiting the
foregoing, Executive shall assign to the Company any and all right, title or
interest which Executive may have in all Proprietary Information made, developed
or conceived of in whole or in part by Executive during his employment
hereunder.
(d) Agreement Not to Solicit Customers. To protect the
Proprietary Information and trade secrets of the Company, Executive agrees,
during the term of this Agreement and for a period of one year after termination
of this Agreement, not to, directly or indirectly, either on Executive's own
behalf or on behalf of any other person or entity, attempt to intentionally
persuade any customer of the Company to cease to do business or to reduce the
amount of business which any customer of the Company has customarily done or
contemplates doing with the Company. Executive agrees that the covenants
contained in this paragraph are reasonable and desirable.
(e) Agreement Not to Solicit Employees. To protect the
Proprietary Information and trade secrets of the Company, Executive agrees,
during the term of this Agreement and for a period of one year after termination
of this Agreement, not to, directly or indirectly, either on Executive's own
behalf or on behalf of any other person or entity, solicit or employ any person
who is an employee of the Company. Executive agrees that the covenants contained
in this paragraph are reasonable and desirable.
(f) Proprietary Information Agreement. By execution of this
Agreement, Executive agrees and acknowledges that he shall be bound by all of
the terms of the Company's Proprietary Information Agreement attached hereto as
Exhibit B. Executive has reviewed such Proprietary Information Agreement and
agrees that any breach by Executive of any term or covenant contained therein
shall constitute a breach by Executive of this Agreement.
9. Protection of Property.
All records, files, manuals, documents, specifications, lists
of customers, banks, forms, materials, supplies, computer programs and other
materials furnished to the Executive by the Company, used on its behalf or
generated or obtained during the course of the performance of the Executive's
services hereunder, shall be and remain the property of the Company. Executive
shall be a holder thereof for the sole use and benefit of the Company, and shall
safely keep and preserve such property, except as consumed in the normal
business operations of the Company. Executive acknowledges that this property is
not readily accessible to the Company's competitors. Upon
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termination of Executive's employment with the Company for any reason, Executive
shall immediately deliver to the Company, or its authorized representative, all
such property, including all copies, remaining in Executive's possession or
control.
10. Specific Performance.
In the event of the breach by Executive of any of the
provisions of Sections 8 or 9, the Company, in addition and supplementary to all
other rights and remedies existing in its favor and notwithstanding the
provisions of Section 11 hereof, may apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce or prevent any violations of the provisions thereof.
11. Arbitration.
The parties hereto acknowledge that it is in their best
interests to facilitate the informal resolution of any disputes arising out of
this Agreement or otherwise by mutual cooperation and without resorting to
litigation. As a result, if any party has a dispute arising hereunder or
otherwise, including but not limited to any claim for breach of any contract or
covenant (express or implied), tort claims, claims for discrimination
(including, but not limited to, race, sex, religion, national origin, age,
handicap or disability), claims for compensation or benefits (except where a
benefit plan or pension plan or insurance policy specifies a different claims
procedure) and claims for violation of any federal, state or other governmental
law, statute, regulation or ordinance (except for claims involving workers'
compensation benefits), and the parties are unable to reach agreement among
themselves, then a settlement conference must be held within thirty (30) days
upon receipt of a notice by the complaining party describing in detail the
complaint and setting forth a proposed solution to the complaint. The settlement
conference will be held in any Los Angeles office of the Judicial Arbitration
and Mediation Services, Inc. ("JAMS"). The complaining party must contact JAMS
to schedule the conference and the parties must agree on a retired judge from
the JAMS panel. If the parties are unable to agree upon such a retired judge,
JAMS shall provide a list of three available judges and each party may strike
one judge. The remaining judge will serve as the mediator at the settlement
conference.
If the dispute is not settled by the above-described format,
the parties agree to submit the dispute to JAMS for binding arbitration. A
three-judge panel will be selected to arbitrate the dispute. JAMS will provide
the names of five potential arbitrators, giving each party the opportunity to
strike one name. The remaining three arbitrators will serve as the arbitration
panel. The parties agree that the arbitration must be initiated within six
months after the claimed breach occurred and that failure to initiate
arbitration within the six-month period constitutes an absolute bar from the
institution of any new proceedings. Arbitration may be initiated by the
aggrieved party by sending written notice of an intent to arbitrate by
registered certified mail to all parties and to JAMS. The notice must contain a
description of the dispute, the amount involved and the remedies sought. If and
when a demand for arbitration is made by either party, the parties agree to
execute a Submission Agreement provided by JAMS, setting forth the rights of the
parties if the case is arbitrated and rules and procedures to be followed at the
arbitration hearing.
Nothing contained in this Section 11 shall prevent the
Company from seeking and obtaining equitable relief in a court to enforce any of
its rights under Sections 8 or 9 hereof.
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12. Additional Covenants, Representations and Warranties of
Executive.
(a) Executive hereby represents and warrants that the
execution, delivery and performance of this Agreement by Executive does not (i)
breach, or result in a default under, any agreement to which Executive is a
party or by which Executive is bound, (ii) breach or otherwise violate any
order, writ, judgment, order or decree binding upon Executive, or (iii) violate
any applicable law or regulation.
13. Reimbursement of Expenses.
Executive shall promptly furnish to the Company adequate
records and other documentary evidence as requested by the Company to
substantiate any costs or expenses for which reimbursement is sought hereunder.
14. Successors.
This Agreement is personal to the Executive and is not
assignable by the Executive otherwise than by will or the laws of descent and
distribution without the prior written consent of the Company's Board of
Directors. This Agreement shall inure the benefit of and be enforceable by
Executive's legal representatives. This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns.
16. Notice.
For purposes of this Agreement, notices, demands and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Executive: Executive's address as on file with the
Company
If to Company: Intervisual Books, Inc.
0000 Xxxxx Xxxx Xxxx., #0000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Chairman of the Board
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt thereof.
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17. Entire Agreement.
This Agreement, together with the documents referenced
herein, contains the entire agreement of the parties hereto with respect to the
subject matter hereof. It supersedes any and all other agreements, either oral
or in writing, between the parties hereto with respect to the employment of
Employee by the Company. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, written, oral or
otherwise, have been made by any party, or anyone acting on behalf of any party,
which are not embodied herein, and that no other agreement, statement or promise
not contained in this Agreement shall be valid or binding.
18. Amendment; Waiver; Governing Law.
No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in a
writing signed by Executive and by such officer of the Company as may be
specifically designated by the Company's Board of Directors. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of California.
19. Validity.
The invalidity or unenforceability of any provision or
provisions 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.
20. Counterparts.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together will
constitute one and the same instrument.
21. Withholding of Taxes; Tax Reporting.
The Company may withhold from any amounts payable under this
Agreement all such Federal, state, city and other taxes, and may file with
appropriate governmental authorities all such information, returns or other
reports with respect to the tax consequences of any amounts payable under this
Agreement, as may, in its reasonable judgment, be required by law.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
INTERVISUAL BOOKS, INC.
By: /s/ XXXXXX X. XXXXXXX 5/13/99
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Name: Xxxxxx X. Xxxxxxxx Date
Title: President
EXECUTIVE
/s/ Xxxxx Xxxxxxx 5/12/99
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Xxxxx Xxxxxxx Date
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