EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of July 1,
1996, by and between SPATIALIGHT, INC., A NEW YORK CORPORATION ("Company"),
and XXXXXXX X. XXXXXX ("Employee") , with reference to the following facts:
RECITALS
A. Employee is currently employed by Company.
B. Company and Employee wish to enter into this Agreement to assure
Company of the services of Employee and to set forth the rights and
duties of the parties.
NOW THEREFORE, the parties agree as follows:
AGREEMENT
1. EMPLOYMENT.
(a) Company hereby employs Employee as its Chief Executive Officer,
and Employee hereby accepts and agrees to said employment by the Company for
the purpose of rendering on behalf of Company services as a Chief Executive
Officer, upon the terms and conditions set forth herein.
(b) Employee shall perform such services and duties with the
Company as are usually associated with the position of Chief Executive
Officer and as otherwise decided upon by the Board of Directors of the
Company. Employee shall report directly to the Board of Directors of
Company. Employee further agrees that, except during vacation periods or in
accordance with Company's personnel policies covering leaves of absence and
reasonable periods of illness or other incapacitation, Employee shall devote
substantially all of his time and services to the business and interests of
the Company. Notwithstanding the foregoing, Employee shall also be permitted
to serve on the boards of directors of other business corporations and may
participate in charitable, cultural, professional, civic and business
association activities. Employee shall perform the duties of his position
and those assigned to him by the Company's Board of Directors with fidelity,
to the best of his ability, in the best interests of the Company, in a
professional manner and at all times in compliance with all laws, rules and
regulations. Employee agrees that to the best of his ability and experience
he will at all times loyally and conscientiously perform all of the duties
and obligations required of him either expressly or implicitly by the terms
of this Agreement. Additionally, Employee agrees to comply with corporate
policies, standards and regulations adopted by the Company from
time to time to the extent the same are reasonable and not in violation of law.
2. TERM OF EMPLOYMENT.
Employee's term ("Term") of employment by the Company as set forth
herein shall commence as of the date of this Agreement (the "Effective
Date") and shall continue thereafter for a period of three years unless
otherwise terminated pursuant to the provisions of Section 7 below.
Notwithstanding the foregoing, the Term shall automatically be renewed, upon
the same terms and conditions contained herein, for consecutive periods of
one year each (a "Renewal Term") upon expiration of the immediately preceding
term unless and until either party elects not to so renew this Agreement by
delivering written notice to the other party not less than thirty (30) days
prior to the expiration of the Term, or any then existing Renewal Term.
Nothing in this Section shall be deemed or construed as limiting or waiving
any of the rights of Company or Employee set forth in Section 7.
3. COMPENSATION.
a. Salary - Upon the Effective Date, the Company shall pay
Employee a salary ("Salary") at the annual rate equal to One Hundred Twenty
Thousand Dollars ($120,000). Employee's Salary shall be paid pursuant to
Company's normal payroll practices. Company shall have the right to deduct
from the compensation due to Employee hereunder any and all sums required for
social security and withholding taxes, and for any other federal, state or
local charge and/or tax which may now be in effect or is hereafter enacted or
required as a charge on the compensation of Employee.
b. Benefits - Employee shall be entitled to the following
benefits provided by the Company: (i) a suitable office and furnishings
commensurate with Employee's position and such related facilities as are
necessary for the performance of Employee's duties, (ii) medical and dental
insurance, providing coverage on terms no less beneficial than those afforded
other senior executives employed by the Company, (iii) 4 weeks of paid
vacation per year earned pro-rata over each year of the Term and (iv) 1 week
of paid sick-leave per year earned pro-rata over each year of the Term.
Employee acknowledges and agrees that some of the benefits provided to
Employee by Company hereunder may be taxable to Employee, and that Company
may be required to make payroll withholdings in respect of such taxable
benefits.
c. Bonuses - Employee shall be entitled to receive bonuses from
time to time in such amounts, as the Company's Board of Directors may
determine in its sole and absolute discretion.
4. EMPLOYEE EXPENSES.
Employee shall be responsible for payment of all personal business
expenses incurred by Employee, including entertainment, automobile and travel
related expenses and expenses relating to professional organizations.
Subject to Company's prior approval, and upon submission of a detailed
accounting supported by receipts, Company shall reimburse Employee for all
expenses incurred by Employee at Company's specific request.
5. CONFIDENTIAL INFORMATION.
a. Within the scope of his employment hereunder, Employee will
have access to confidential information and trade secrets relating to
Company's business. This confidential information and trade secrets
includes, but is not limited to, know-how, research and development,
marketing strategy, sales methods and expertise, customer lists, confidential
records and data pertaining to Company's customers and other customer
information, and all other information owned by Company and regularly used in
the operation of the business of Company, including, without limitation, all
lists, books, records, files documents and similar items relating to the
business or products of Company, whether prepared by Employee or otherwise
coming into Employee's possession; all of the foregoing being deemed
"Confidential Information". Employee and Company agree that all such
Confidential Information consists of protectable trade secrets and
confidential information within the meaning of California Civil Code Section
3426 ET SEQ. and all other applicable provisions of California law. Employee
agrees that, during the term and continuance of his employment by Company, and
for the 2 year period commencing on the date of termination of said
employment for any reason whatsoever, he will not directly or indirectly make
known, disclose or divulge to any person, firm, entity or corporation any of
the Confidential Information described herein unless Employee is specifically
authorized to do so in writing by Company. The provisions of this Section
apply to all Confidential Information of Company which Employee may develop,
obtain or learn about during or as a result of his employment by Company,
whether such Confidential Information is prepared by Employee or comes into
Employee's possession in any other way and whether or not it contains or
constitutes trade secrets owned by Company.
b. Employee acknowledges and agrees that all Confidential
Information is and shall remain the exclusive property of Company and shall
not be removed from the premises of Company under any circumstances
whatsoever (provided that if such removal is necessitated to perform
Employee's duties hereunder, then such removal shall be permitted on a
temporary basis to perform such activities) without the prior written consent
of Company. Upon termination of employment for any reason, all such
Confidential Information, whether prepared by Employee or otherwise coming
into
Employee's possession, shall be immediately returned to Company by Employee.
c . Employee acknowledges that he has not disclosed, and is not
required as a condition of employment to disclose, to Company any
confidential information which is owned by any of his prior employers.
d. If Employee should materially breach any of his covenants
under this Section 5, then in addition to all other rights or remedies
provided for hereunder or at law or in equity, Company shall have the
immediate right to terminate Employee's employment with Company (such
termination to be deemed for "cause" as set forth in Section 7.a. below)
and/or Company shall be entitled to injunctive relief without the posting of
bond or other security, since the remedy at law would be inadequate and
insufficient. In addition, Company shall be entitled to such damages as it
can show it has sustained by reason of Employee's breach. Furthermore,
Employee agrees to defend, indemnify and hold Company and its shareholders,
directors, officers, agents and employees, and their successors, assigns and
heirs, harmless from and against any and all claims (including third-party
claims) arising from or in connection with any breach or default by Employee
in Employee's covenants under this Section 5, together with all costs,
expenses and liabilities incurred in, or in connection with, each such claim
or action or proceeding brought thereon, including, without limitation,
reasonable attorneys fees and costs. The provisions of this Section 5 shall
apply to any breach by Employee occurring during the term of his employment
and/or during the 2 years after termination of his employment for any reasons
whatsoever.
6. DEVELOPMENT/OWNERSHIP OF NEW PROCEDURES.
a. All know-how, expertise, procedures, processes, products,
inventions, patents, copyrights, trademarks, service marks and other
intangible rights (hereinafter collectively "inventions") that may be
conceived or developed by Employee, either alone or with others, during the
term of Employee's employment, whether or not conceived or developed during
Employee's working hours, and with respect to which any equipment, supplies,
facilities, know-how, expertise or trade secret information of Company was
used, or that relate, at the time of conception or reduction to practice of
the invention, procedure, process, or item subject to patent, copyright or
similar protection, or other intangible right, to the business of Company or
to Company's actual or demonstrably anticipated research and development, or
that relate to or result from any work performed by Employee for Company,
shall be disclosed to Company during the term of Employee's employment and
for 2 years thereafter. To the extent the Company does not have rights
therein hereunder, such disclosure shall be received by the Company in
confidence and does not extend the assignment made in Section 6(b) below.
b. All inventions which Employee makes, conceives, practice or
develop (in whole or in part, either alone or jointly with others) during his
employment by Company shall be the sole property of the Company to the
maximum extent permitted by Section 2870 of the California Labor Code, a copy
of which is attached hereto as Exhibit "A", and to the extent permitted by
law shall be "works made for hire". Company shall be the sole owner of all
patents, copyrights, trade secret rights, rights with respect to mask works
and other intellectual property or other rights in connection therewith
unless agreed in writing to the contrary by the Company. Employee hereby
assigns to Company any rights he may have or acquire in such inventions.
Employee agrees to perform, during and after employment with Company, all
acts deemed necessary or desirable by Company to permit and assist it, at
Company's expense, in obtaining and enforcing patents, copyrights, trade
secret rights, rights with respect to mask works or other rights on such
inventions and/or any other inventions Employee have or may at any time
assign to Company in any and all countries. Such acts may include, but are
not limited to, execution of documents and assistance or cooperation in legal
proceedings. Employee hereby irrevocably designates and appoints Company and
its duly authorized officers and agents, as his agents and attorneys-in-fact
to act for and in his behalf and instead of him, to execute and file any
applications or related filings and to do all other lawfully permitted acts
to further the prosecution and issuance of patents, copyrights, trade secret
rights, rights with respect to mask works or other rights thereon with the
same legal force and effect as if executed by Employee.
c. If Employee should breach any of his covenants under this
Section 6, then in addition to all other rights or remedies provided for
hereunder or at law or in equity, the Company shall have the immediate right
to terminate Employee's employment with the Company and/or the Company shall
be entitled to injunctive relief without the posting of bond or other
security, since the remedy at law would be inadequate and insufficient. In
addition, the Company shall be entitled to such damages as it can show it has
sustained by reason of Employee's breach. Furthermore, Employee agrees to
defend, indemnify and hold Company and its shareholders, partners,
directors, officers, agents and employees, and their successors, assigns and
heirs, harmless from and against any and all claims (including third-party
claims) arising from or in connection with any breach or default by Employee
in Employee's covenants under this Section 6, together with all costs,
expenses and liabilities incurred in, or in connection with, each such claim
or action or proceeding brought thereon, including, without limitation,
reasonable attorneys fees and costs.
7. TERMINATION.
a. Company may terminate this Agreement and Employee's employment
at any time prior to the expiration of the Term or any
Renewal Term for "cause". For the purposes of this Agreement, "cause" shall
mean:
(i) Employee's continued willful and habitual neglect of his
duties following notification of such neglect by Company's Board of
Directors and failure by Employee to cure such neglect within 30 days
after such notification.
(ii) Employee's conviction, after the date hereof, of a
felony which, by its nature, would materially injure the reputation
of Company as determined by Company's Board of Directors acting in
good faith and upon reasonable grounds.
(iii) Employee's incapacity to perform the duties required
of him hereunder as a result of mental or physical illness, which
incapacity continues for a period of 180 days in any 12 consecutive
month period.
(iv) Company ceases or fails to continue to do business.
(v) Death of the Employee.
Termination of Employee's employment for cause shall not be in limitation of
any other right or remedy Company may have under this Agreement or in law or
equity.
b. Notwithstanding the termination of this Agreement pursuant to
Section 7a herein or as a result of the expiration of the Term or any Renewal
Term, this Section 7b and Sections 5, 7a, 8, 9, 10, 11, 12, 13, 14, 15, 161
17 and 18 herein shall remain in full force and effect.
8. NON-COMPETE.
As a material inducement for Company to enter into this Agreement,
Employee agrees that for a period of 2 years following the termination of
this Agreement for any reason whatsoever, Employee will not directly or
indirectly (i) solicit, or agree to service for his benefit or the benefit of
any third-party, any of Company's customers whether or not serviced directly
by Employee during the term of this Agreement and (ii) disrupt, damage,
impair or interfere with the business of Company, whether by way of breaching
any obligation under this Agreement, interfering with any customer of
Company, Company's employees, disrupting Company's relationships with
customers, agents, representatives or vendors or otherwise.
9. REASONABLENESS.
The parties recognize that this Agreement contains conditions,
covenants, and time limitations that are reasonably required for the
protection of the confidential information, trade secrets and
business of the parties or a particular party. If any limitation, covenant
or condition shall be deemed to be unreasonable and unenforceable by a court
or arbitrator of competent jurisdiction, then this Agreement shall
thereupon be deemed to be amended to provide for modification of such
limitation, covenant and/or condition to such extent as the court or
arbitrator shall find to be reasonable and such modification shall not affect
the remainder of this Agreement.
10. REMEDIES.
No remedy conferred by any of the specific provisions of this Agreement
is intended to be exclusive of any other remedy given hereunder or hereafter
existing at law or in equity. The election of any one or more remedies by
any party shall not constitute a waiver of the right to pursue other
available remedies.
11. SEVERABLE PROVISIONS.
The provisions of this Agreement are severable, and if any one or more
provisions may be determined to be judicially unenforceable, in whole or in
part, the remaining provisions shall nevertheless be binding and enforceable.
12. INJUNCTIVE RELIEF.
Employee acknowledges that, in the event Employee breaches this
Agreement, money damages will not be adequate to compensate Company for the
loss occasioned by such breach. Employee, therefore, consents, in the event
of such a breach, to the granting of injunctive relief against Employee by
any court of competent jurisdiction.
13. BINDING AGREEMENT.
The rights and obligations of the parties under this Agreement shall
inure to the benefit of and shall be binding on their successors and assigns.
Notwithstanding the foregoing, Employee may not assign his rights or
obligations hereunder.
14. NOTICES.
Any notice to be given to the Company under the terms of this Agreement
shall be addressed to the Company at the address of its principal place of
business, and any notice to be given to Employee shall be addressed to him at
his home address last shown on the records of the Company, or at such other
address as either party may hereafter designate in writing to the other. All
notices shall be in writing and shall be delivered personally, sent by United
States certified or registered mail, return receipt requested, first class
postage prepaid, or by private messenger or courier service. Any such notice
shall be deemed to have been received on
the earlier of (i) five (5) business days after it is mailed or (ii) the date
it is actually received.
15. WAIVER.
Either party's failure to enforce any provision or provisions of this
Agreement shall not in any way be construed as a waiver of any such
provision, or prevent that party thereafter from enforcing each and every
other provision of this Agreement.
16. TITLE AND HEADINGS.
Titles and headings to sections in this Agreement are for the purpose of
reference only and shall in no way limit, define, or otherwise affect the
provisions of it.
17. ATTORNEYS' FEES AND COSTS OF LITIGATION.
In any action at law or in equity to enforce any of the provisions or
rights under this Agreement, the unsuccessful party, as determined by the
court in a final judgment or decree, shall pay the successful party all
costs, expenses and attorneys' fees actually incurred by the successful party
(including, without limitation, the costs, expenses and attorneys fees on any
appeal) and if the successful party shall recover a judgment in any such
action or proceeding, the costs, expenses and attorneys, fees shall be
included as part of the judgment.
18. GOVERNING LAW.
The parties hereto agree that it is their intention and covenant that
this Agreement and performance under it, and all suits and
special proceedings that may ensue from its breach, be construed in
accordance with and under the laws of the State of California, and that in
any action, special proceeding, or other proceeding that may be brought
arising out of, in connection with, or by reason of this Agreement, the laws
of the State of California shall be applicable and shall govern to the
exclusion of the law of any other forum, without regard to the jurisdiction
in which any action or special proceeding may be instituted.
19. WAIVER OF JURY TRIAL.
Company and Employee hereby agree to waive their respective rights to a
jury trial of any claim or cause of action raised upon or arising out of this
Agreement. The scope of this waiver is intended to be all encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation, contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Company and Employee each acknowledge that this waiver is
a material inducement for Company and Employee to enter into a business
relationship, that Company and Employee have
already relied on this waiver in entering into this Agreement and that each
will continue to rely on this waiver in their related future dealings.
Company and Employee further warrant and represent that each has reviewed
this waiver with its legal counsel, and that each knowingly and voluntarily
waives its jury trial rights following consultation with legal counsel. This
waiver is irrevocable, meaning that it may not be modified either orally or
in writing, and this waiver shall apply to any subsequent amendments,
renewals, supplements or modifications to this Agreement. In the event of
litigation, this Agreement may be filed as a written consent to a trial by
court.
EMPLOYEE'S INITIALS COMPANY'S INITIALS
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"Company" "EMPLOYEE"
.SPATIALIGHT, INC.,
A NEW YORK CORPORATION
------------------------
XXXXXXX X. XXXXXX
BY:
NAME: XXXXXXXX XXXXXXXX
TITLE: CHAIRMAN OF BOARD
EXHIBIT A
2870. APPLICATION OF PROVISION PROVIDING THAT EMPLOYEE SHALL ASSIGN OR
OFFER TO ASSIGN RIGHTS IN INVENTION TO EMPLOYER.
(a) Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to
his or her employer shall not apply to an invention that the employee
developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer.
(2) Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to require
an employee to assign an invention otherwise excluded from being required to
be assigned under subdivision (a), the provision is against the public policy
of this state and is unenforceable.
