EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") dated as of the 1st day of
September, 1997, is entered into by and between VIDEOLAN TECHNOLOGIES, INC., a
Delaware corporation ("Company") and XXXXXX X. XXXXXXXXXX ("Xx. Xxxxxxxxxx")
under the following circumstances:
W I T N E S S E T H:
WHEREAS, the Company desires to induce Xx. Xxxxxxxxxx to enter the employ
of the Company for the period provided in this Agreement in accordance with the
terms and conditions set forth below; and
WHEREAS, Xx. Xxxxxxxxxx is willing to accept such employment with the
Company on a full-time basis in accordance with such terms and conditions;
NOW, THEREFORE, for and in consideration of the premises hereof and the
mutual covenants contained herein, the parties hereto hereby covenant and agree
as follows: 1. Employment Duties. Xx. Xxxxxxxxxx shall perform the duties of
Senior Vice President - Finance, Chief Financial Officer, and Treasurer and Xx.
Xxxxxxxxxx shall report directly to the Company's Chief Executive Officer.
2(a). COMPENSATION. Company shall during the term hereof pay to Xx.
Xxxxxxxxxx a base salary at the annual rate of not less than One Hundred Ninety
Thousand Dollars ($190,000) ("Base Salary"). Company shall pay Xx. Xxxxxxxxxx
the Base Salary in accordance with Company's normal salary payment schedule.
2(b). ANNUAL BONUSES. Xx. Xxxxxxxxxx shall be entitled to receive annual
bonuses under an annual executive bonus plan to be developed by the Company if
such plan is approved by the Company's Board of Directors.
3. BENEFITS. During the term of this Agreement, Company shall provide Xx.
Xxxxxxxxxx with fringe benefits which are equivalent or preferable to the
benefits which Company shall provide for its employees generally and to which
Xx. Xxxxxxxxxx would otherwise be entitled.
4. BUSINESS EXPENSES.
A. Company, in accordance with the rules and regulations that it may
issue from time to time, shall reimburse Xx. Xxxxxxxxxx for ordinary and
reasonable business expenses incurred in carrying our his duties hereunder.
B. In addition to the ordinary expenses specified in Section 4-A
above, Company shall reimburse Xx. Xxxxxxxxxx or advance on Xx. Xxxxxxxxxx'x
behalf
reasonable expenses incurred in traveling from Xx. Xxxxxxxxxx'x primary
residence to Company headquarters (airfare), local transportation ($600.00 per
month), lodging (i.e. apartment or hotel), and other reasonable incidental
expenses.
5. COVENANT NOT TO COMPETE. Company and Xx. Xxxxxxxxxx agree that the
services to be rendered by Xx. Xxxxxxxxxx hereunder are unique. In consideration
for all the rights granted to Xx. Xxxxxxxxxx in this Agreement, Xx. Xxxxxxxxxx
hereby agrees that during the term of this Agreement, and for a period of two
(2) years after the termination of Xx. Xxxxxxxxxx'x employment with Company
unless such termination is by the Company without cause, Xx. Xxxxxxxxxx will
not, from any location in the United States of America or elsewhere where the
Company conducts business during the term of this Agreement, engage in or
participate in, directly or indirectly, individually or as an agent, employee,
officer, director, shareholder (excluding being the holder of stock which
represents not more than a 1% interest in a publicly-held corporation), partner,
financier or in any other capacity whatsoever or lend his name to any business
involved in the research, development, commercialization, manufacture, assembly,
sale, licensing, sublicensing, distribution, supplying or marketing of desktop
video conferencing products, video on demand products, and/or related products
and other applications of Company's technology and/or products as currently
exist or are developed in the future.
6. NON-DISCLOSURE.
A. "Proprietary Information" means information disclosed to or
otherwise made available to Xx. Xxxxxxxxxx or known by him as a consequence of
or through Xx. Xxxxxxxxxx'x employment by Company and related to any
technologies, applications, patents, patent applications and/or claims,
products, processes, or services in which Company is currently or is likely to
become engaged, and which gives either Company and/or subsidiaries and
affiliates a competitive advantage, including, without limitation, information
relating to patents, patent applications, research, development and inventions.
B. Xx. Xxxxxxxxxx recognizes and acknowledges that all information
defined herein as Proprietary Information, is valuable, special, and unique
belonging solely to Company. Xx. Xxxxxxxxxx shall not, during the term of this
Agreement or at any time thereafter, directly or indirectly, use or disclose
Proprietary Information whether or not specifically described above except (I)
as required in connection with the performance of his duties as contemplated
under the terms of this Agreement or (ii) as permitted, in writing, by the Board
of Directors of the Company.
C. The obligation of Xx. Xxxxxxxxxx to protect and not to disclose the
Proprietary Information disclosed to him shall not apply to information that is:
(1) Generally available to the public prior to its disclosure by
the Company or that becomes generally available to the public after disclosure
by the Company through no fault of Xx. Xxxxxxxxxx.
(2) Obtained or acquired by Xx. Xxxxxxxxxx from a third party in
possession of such information who is not under obligation to the Company not to
disclose the information; or
(3) Ordered by a court of competent jurisdiction or governmental
agency to be produced by Xx. Xxxxxxxxxx; provided, however, that upon receipt of
any such order, Xx. Xxxxxxxxxx shall immediately notify the Company of such
order so that an appropriate protective agreement or order can be sought.
7. EFFECTIVE DATE. The term of this Agreement shall commence on September
1, 1997 (the "Effective Date").
8. TERM.
A. The initial term of this Agreement shall commence of the Effective
Date and shall continue until the date one (1) year from the Effective Date,
unless sooner terminated pursuant to Section 11 hereof.
B. Subsequent to the expiration of the initial one (1) year term, this
Agreement shall continue in full force and effect for successive year renewal
terms unless either party gives the other party written notice of non-renewal at
least six (6) months prior to the expiration of the initial term or any renewal
term.
9. TERMINATION.
A. This Agreement shall be terminated immediately upon the death of
Xx. Xxxxxxxxxx. This Agreement may be terminated by Company if Xx. Xxxxxxxxxx
should be rendered incapable by illness or any other causes relating to Xx.
Xxxxxxxxxx'x health from complying with the provisions of this Agreement for a
consecutive six month period ("Disability"). If this Agreement is terminated by
reason of the Disability of Xx. Xxxxxxxxxx, Company shall give at least thirty
(30) days' written notice of such termination to Xx. Xxxxxxxxxx.
B. This Agreement shall terminate immediately "For Cause" at the
option of Company, in the event Xx. Xxxxxxxxxx shall (i) have been convicted of
, or pled guilty or no contest to, a felony or lesser crime involving direct
injury to the Company or moral turpitude, or (ii) commits an act which Xx.
Xxxxxxxxxx knows will have adverse consequences to Company, is not in the best
interest of Company and is designed to benefit Xx. Xxxxxxxxxx'x own interest,
including, but not limited to, a breach by Xx. Xxxxxxxxxx of the Covenant Not to
Compete provided for in Section 5 above.
C. After the termination of this Agreement, Xx. Xxxxxxxxxx shall
remain bound by the provisions Sections 5, 6, and 7 hereof. In addition, in the
event of termination pursuant to this Section 9, Xx. Xxxxxxxxxx shall not be
entitled to receive any further compensation under this Agreement.
10. POST-TERMINATION BENEFITS.
A. In the event Company terminates Xx. Xxxxxxxxxx'x employment "For
Cause" (as provided in Section 9 of this Agreement), Company shall have no
continuing obligation to make any payments or to provide Xx. Xxxxxxxxxx any
benefits under this Agreement, except for Salary earned by Xx. Xxxxxxxxxx prior
to the effective date of Company's termination, but not yet paid.
B. In the event Company terminates Xx. Xxxxxxxxxx'x employment other
than "For Cause" during the term of this Agreement, Company shall continue to
pay Xx. Xxxxxxxxxx his Base Salary for six (6) months, despite such earlier
termination.
11. DATA. Upon termination of this Agreement for any reason, Xx. Xxxxxxxxxx
or his personal representative shall promptly deliver to Company all books,
memoranda, plans, records, information and written data, and all copies of same,
of every kind relating to the business and affairs of Company which are then in
his possession.
12. WAIVER OF BREACH. Any waiver of any breach of this Agreement shall not
be construed to be a continuing waiver or consent to any subsequent breach on
this part of either of Xx. Xxxxxxxxxx or of Company.
13. NOTICES. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing and delivered in person or sent by
certified mail or overnight express carrier to Company at its then current
principal place of business to the attention of the Chief Executive Officer or
to Xx. Xxxxxxxxxx at his residence as shown on Company's payroll records.
14. ASSIGNMENT. Neither party hereto may assign his or its rights or
delegate his or its duties under this Agreement without the prior written
consent of the other party.
15. SEVERABILITY. If any provision of this Agreement is held to be
unenforceable for any reason, the remainder of this Agreement shall,
nevertheless, remain in full force and effect.
16. ENTIRE AGREEMENT. On the Effective Date, the terms and provisions of
this Agreement constitute the entire agreement between the Company and Xx.
Xxxxxxxxxx with respect to the subject matter hereof, and shall supersede any
and all prior agreements or understanding between the Company and Xx.
Xxxxxxxxxx, with respect to the subject matter hereof, whether written or oral.
This Agreement may be
amended or modified only by written instrument executed by Xx. Xxxxxxxxxx and
Company.
17. GOVERNING LAW. This Agreement shall be governed by, and its provisions
construed and enforced in accordance with , the laws of the State of Delaware.
18. RELEASE. Xx. Xxxxxxxxxx hereby releases any and all rights which he may
have with respect to the Company's Proprietary Information, technology, patents
and patent applications.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
VIDEOLAN TECHNOLOGIES, INC.
By:_________________________________
Its: Chief Executive Officer
____________________________________
XXXXXX X. XXXXXXXXXX
