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EXHIBIT 10.20
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made and entered into
effective as of the 28th day of September, 1999 (the "Effective Date"), by and
between Novo Media Group, a California corporation d/b/a/ Novo Interactive (the
"Company"), located at 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, and
Xxxxxx Xxxxxxx ("Executive"), an individual residing in Tokyo, Japan.
In consideration of the promises herein made and on the terms and subject
to the conditions herein contained, the Company and Executive hereby agree as
follows:
1. Employment. The Company hereby employs Executive on the terms
set forth herein and Executive hereby accepts such employment for an indefinite
term beginning on the Effective Date, subject to termination as provided under
Section 5 below.
2. Duties.
(a) Executive shall be the Vice President - General
Manager of New York Operations, shall report to the Chief Operating
Officer ("COO") and shall have input in the management and direction of
the Company as well as such other duties and responsibilities
commensurate with such title as the COO may assign to Executive.
(b) Executive shall faithfully and diligently perform
Executive's duties in conformity with the reasonable and appropriate
directions of COO to the best of Executive's ability. Executive shall
devote substantially all of Executive's entire working time, attention
and energies to the business and affairs of the Company, subject to
vacations and sick leave as provided herein and in accordance with
Company policy. Notwithstanding the foregoing, Executive's devotion of
time to personal investments and other business and personal matters
will not be deemed a breach of this Agreement unless such activity
substantially interferes with the performance of Executive's duties
hereunder.
(c) Executive shall, subject to travel requirements on
behalf of the Company, be based at the Company's offices in New York, in
this regard, Executive shall maintain Executive's personal residence at
a location within reasonable access to Executive's place of employment.
3. Compensation and Benefits.
(a) Base Salary. The Company agrees to pay to Executive
for employment hereunder a base salary ("Base Salary") at the annual
rate One Hundred Fifty Thousand Dollars and No Cents ($150,000).
Executive's Base Salary may be increased (but shall not be required to
increase) in such amount as shall be determined at the discretion of the
Company. Executive's Base Salary will be reviewed in December of each
calendar for potential increase in January of the following year. Base
Salary shall be payable in installments consistent with the Company's
payroll practices then in effect and
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the Company shall withhold from such compensation all applicable federal
and state income, social security, and disability and other taxes as
required by applicable laws.
(b) Performance Bonus. Executive shall be eligible to
receive an annual performance-based bonus (Performance Bonus) in an
amount not less than twenty-five percent (25%) of Executive's Base
Salary over the period for which the Performance Bonus is calculated
(Bonus Period). Such Performance Bonus shall be based upon the
performance of the Company, be determined by uniform standards applied
to all Vice Presidents, and shall be payable within 30 days after the
last day of the Bonus Period. The Executive and the Company must achieve
the performance levels so specified for each year (or shorter period, if
applicable) in order for Executive to earn the Performance Bonus. The
Bonus Period will be from January I to December 31 annually. If the
Executive is not employed during the entire Bonus Period, the
Performance Bonus will be pro-rated based on their Executive's start
date with the Company.
(c) One-Time Cost. The Company shall pay you a one-time
allowance of net $10,000 to cover your costs associated with previous
commitments. This bonus will be payable within 30 days of your start
date provided you return all necessary paperwork.
(d) One-Time Bonus. The Company shall pay you a one-time
bonus of $40 000, less applicable taxes and withholdings. This bonus
will be payable within 30 days of your start date provided you return
all necessary paperwork.
(e) Grant of Option. The Company will grant Executive an
option to acquire One Hundred Thousand (100,000) shares of Common Stock
in the Company pursuant to the Stock Option Agreement ("Option
Agreement"), a copy of which is attached hereto as Exhibit A
(f) Benefits and Perquisites. Executive shall be entitled
to participate in such equity, compensation and other incentive plans,
benefit plans and programs, including health insurance, and receive the
benefits and perquisites, as are made available to any of the management
executives of the Company. In addition to normal holidays recognized by
the Company, Executive shall be entitled to 3 weeks paid vacation per
year accrued in accordance with the terms of the Company's vacation
policy, provided however that any determination of amounts owed as
accrued vacation upon termination of employment will be based on the
Company's vacation policy then in effect at the time of termination and
based solely upon Executive's Base Salary, as described in Section 3(a),
above.
(g) Travel and Business Expenses. Upon submission of
itemized expense statements in the manner reasonably specified by the
Company, Executive shall be entitled to reimbursement for reasonable
travel and other reasonable business expenses duly incurred by Executive
in the performance of Executive's duties under this Agreement in
accordance with the policies and procedures established by the Company
from time to time for the Company's management executives.
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4. No Conflict; No Other Employment. During Executive's
employment with the Company, Executive shall not: (i) engage in any activity
which conflicts or interferes with or derogates from the performance of
Executives duties, hereunder nor shall Executive engage in any other business
activity, whether or not such business activity is pursued for gain or profit,
except as approved in advance in writing by the Board of Directors of the
Company, such approval not to be unreasonably withheld; or (ii) accept any other
full-time or substantially full-time employment, whether as an executive or
consultant or in any other capacity, and whether or not compensated therefor.
5. Termination of Employment.
(a) Termination At Will By Either Party. Subject to the
payment of Executive of the applicable severance payment as provided in
Section 5(d) below, if any, either party may terminate this Agreement,
for any reason, with or without Cause (as defined at Section 5(c)
below), upon written notice to the other.
(b) Death or Permanent Disability of Executive. This
Agreement will terminate automatically upon the death or permanent
disability of Executive. Executive will be deemed permanently disabled
for the purpose of this Agreement if, in the good faith determination of
the Board, based on sound medical advice, Executive has become
physically or mentally incapable of performing his duties hereunder for
a continuous period of 120 days, in which event Executive will be deemed
permanently disabled upon the expiration of such 120-day period. In the
event of a termination of this Agreement due to the death or permanent
disability of Executive, Executive or his estate will be entitled only
to the Base Salary and bonuses earned through the date of such death or
disability, in accordance with Section 3(a) above, and will receive in
addition severance payment as outlined with Section 5(d)(ii). During any
period that Executive fails to perform Executives duties hereunder as a
result of incapacity due to physical or mental illness (a "Disability
Period), Executive shall continue to receive the compensation and
benefits provided by Section 3 hereof until Executive's employment
hereunder is terminated; provided, however, that the amount of
compensation and benefits received by Executive during the Disability
Period shall be reduced by the aggregate amounts, if any, payable to
Executive under disability benefit plans and programs of the Company or
under the Social Security disability insurance program.
(c) Executive's Termination for Cause. The Company will
have the right to terminate Executive's employment hereunder for "Cause"
at any time effective upon giving notice to Executive of the facts and
circumstances constituting such Cause. For such purposes, "Cause" shall
mean the occurrence of one or more of the following: (i) conviction of
or plea of nolo contendere to any crime (whether or not involving the
Company) constituting a felony or involving an act of embezzlement,
fraud or theft with respect to the property of the Company; (ii)
habitual alcohol or drug abuse on the job or in a manner affecting
Executive's job performance; (iii) the intentional breach of fiduciary
duty to the Company; (iv) gross neglect or intentional misconduct in the
performance of Executive's duties hereunder which causes material loss,
damage or injury to or otherwise materially endangers the property,
reputation or employees of the Company; (v) material
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incompetence or failure or refusal to perform the duties required by
this Agreement as may be assigned to Executive; provided such duties are
commensurate with the Executive's position, after a written demand is
delivered to Executive by the Company which specifically identifies the
manner in which such Company believes that Executive has engaged in
incompetence or failure or refusal to perform the duties required, and
Executive is given ten (10) days to correct the alleged incompetence or
failure or refusal to perform the duties required; (vi) commission of
any other action with the intent to materially harm or injure the
Company; or (vii) the material breach of any provision of this Agreement
by Executive, after a written demand is delivered to Executive by the
Company which specifically identifies the manner in which such Company
believes that Executive has breached the agreement, and Executive is
given ten (10) days to correct the alleged breach.
(d) Compensation Upon Termination.
(i) In the event the Company terminates Executive's
employment for Cause pursuant to Section 5(c) above or Executive
voluntarily resigns his employment, Executive will be entitled to
only: (A) the compensation provided for in Section 3(a) hereof
for the period of time ending with the date of termination; (B)
compensation for any unused vacation that Executive may have
accrued, as well as all earned benefits, up to and including the
date of termination; (C) "COBRA" benefits to the extent required
by applicable law; and (D) reimbursement for such expenses as
Executive may have properly incurred on behalf of the Company as
provided in Section 3(e) above prior to the date of termination.
(ii) In the event the Company terminates
Executive's employment without Cause, in addition to the amounts
payable pursuant to Section 3(a) and 5(d)(i) above, Executive
will be entitled to receive a severance payment equal to the Base
Salary that Executive would have otherwise received through the
period of 6 months from the effective date of such termination,
commencing with such date of termination, payable in one lump sum
within thirty (30) days of the date of termination. In addition
Executive will receive payment for three months outplacement
service, provided however that in any case the Company's
obligation to pay any severance, COBRA, or outplacement service
payment to Executive, will be expressly conditioned upon the
execution by Executive and delivery by him to the Company of a
general release and waiver of all claims (employment-related and
otherwise) against the Company and its affiliates and their
respective officers, directors, employees and agents, and
covenant not to xxx any such party in connection with such
released claims, in reasonable form provided by the Company.
(iii) The payments set forth in this Section
5(d)(ii) will fully discharge all responsibilities of the Company
to Executive under this Agreement or relating to or arising out
of the termination of Executive's employment.
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6. Assignment and Transfer.
(a) Company. This Agreement shall inure to the benefit of
and be enforceable by, and may be assigned by the Company to, any
purchaser of all or substantially all of the Company's business or
assets, any successor to the Company or any assignee thereof (whether
direct or indirect, by purchase, merger, consolidation or otherwise).
The Company will require any such purchaser, successor or assignee to
expressly assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it
if no such purchase, succession or assignment had taken place.
(b) Executive. Executive's rights and obligations under
this Agreement shall not be transferable by Executive by assignment or
otherwise, and any purported assignment, transfer or delegation thereof
shall be void; provided, however, that if Executive shall die, all
amounts then payable to Executive hereunder shall be paid in accordance
with the terms of this Agreement to Executive's devisee, legatee or
other designee or, if there be no such designee, to Executive's estate.
7. Unfair Competition by Executive.
(a) Executive agrees that all trade secrets, confidential
or proprietary information with respect to the activities and businesses
of the Company not generally available to the public, including, without
limitation, personnel information, secret processes, know-how, customer
lists, data bases, ideas, techniques, processes, inventions (whether
patentable or not), and other technical plans, business plans, marketing
plans, product plans, forecasts, contacts, strategies and information
(collectively, "Proprietary Information") which were learned by
Executive in the course of his employment by the Company and any other
Proprietary Information received, developed or learned by Executive
hereafter in the course of his future employment by or in association
with the Company are confidential and will be kept and held in
confidence and trust as a fiduciary by Executive. Executive will not use
or disclose Proprietary Information except as necessary in the normal
course of the business of the Company for its sole and exclusive
benefit, unless Executive is compelled so to disclose under process of
law, in which case Executive will first notify the Company promptly
after receipt of a demand to so disclose. Upon termination of
Executive's employment with the Company for any reason, he will
immediately deliver to the Company all tangible, written, graphical,
machine readable and other materials (including all copies) in his
possession or under his control containing or disclosing Proprietary
Information. Executive will not disclose to the Company or use in
connection with his employment on behalf of the Company any confidential
information of any third party. Executive represents to the Company that
his employment with the Company, and his activities on its behalf, will
not violate any obligation or commitment that Executive has to any third
party.
(b) For a period of two (2) years following the
termination of his employment with the Company for any reason, Executive
will not, without the Company's express written consent, either on his
own behalf or on behalf of another, solicit employees of the Company
for the purpose of hiring them.
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(c) Executive and the Company acknowledge that: (i) each
covenant and restriction contained in Sections 7 and 8 of this Agreement
is necessary, fundamental, and required for the protection of the
Company's business; (ii) such relate to matters which are of a special,
unique, and extraordinary character that gives each of them a special,
unique, and extraordinary value; and (iii) a breach of any such covenant
or restriction will result in irreparable harm and damage to the Company
which cannot be compensated adequately by a monetary award. Accordingly,
it is expressly agreed that, in addition to all other remedies available
at law or in equity, and notwithstanding anything to the contrary in
Section 10 below, the Company will be entitled to the immediate remedy
of a temporary restraining order, preliminary injunction, or such other
form of injunctive or equitable relief as may be used by any court of
competent jurisdiction to restrain or enjoin any of the parties hereto
from breaching any such covenant or restriction, or otherwise
specifically to enforce the provisions contained in Sections 7 and 8 of
this Agreement.
8. Proprietary Matters. Executive expressly understands and agrees
that any and all improvements, inventions, discoveries, processes, or know-how
that are generated or conceived by Executive during the term of this Agreement,
whether so generated or conceived during Executive's regular working hours or
otherwise, will be the sole and exclusive property of the Company, and
Executive will, whenever requested to do so by the Company (either during the
term of this Agreement or thereafter), execute and assign any and all
applications, assignments and/or other instruments and do all things which the
Company may deem necessary or appropriate in order to apply for, obtain,
maintain, enforce and defend patents, copyrights, trade names or trademarks of
the United States or of foreign countries for said improvements, inventions,
discoveries, processes, or know-how, or in order to assign and convey or
otherwise make available to the Company the sole and exclusive right, title, and
interest in and to said improvements, inventions, discoveries, processes,
know-how, applications, patents, copyrights, trade names or trademarks, subject
to California Labor Code section 2870, which reads as follows:
"(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, or
(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."
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9. Key-Man Insurance. Executive agrees to make himself available
and to undergo, at the Company's request and expense, any physical examination
or other procedure necessary to allow the Company to obtain a key-man insurance
policy on Executive. If the Company obtains such policy, it will maintain the
policy at its expense and all proceeds will be the sole property of the Company.
10. Arbitration. The parties will attempt in good faith promptly
by negotiations to resolve any dispute or controversy arising out of or relating
to this Agreement or the employment or termination of Executive by the Company.
If a party intends to be accompanied at a negotiation meeting by an attorney,
the other party will be given at least three working days' notice of such
intention and may also be accompanied by an attorney. All negotiations pursuant
to this clause are confidential and will be treated as compromise and settlement
negotiations for the purposes of the Federal Rules of Evidence and state rules
of evidence.
In the event the parties are unable to settle such controversy
amicably through negotiations, the dispute will be submitted to binding
arbitration before a single arbitrator in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association provided that: (i) the
arbitrator will be instructed and empowered to take whatever steps to expedite
the arbitration as he or she deems reasonable; (ii) each party will bear its own
costs in connection with the arbitration; (iii) the arbitrator's judgment will
be final and binding on the parties, except that it may be challenged on the
grounds of fraud or gross misconduct; and (iv) the arbitration will be held in
San Francisco, California. Judgment upon any verdict in arbitration may be
entered in any court of competent jurisdiction. The parties hereby consent to
the jurisdiction of, and proper venue in, the federal and state courts located
in New York, New York.
11. Approval of Plan. The Company hereby represents that its
Board of Directors has approved the Option Plan.
12. Miscellaneous.
(a) Governing Law; Interpretation. This Agreement and its
Exhibits will be governed by the substantive laws of the State of
California. The headings and captions of the Sections of this Agreement
are for convenience only and in no way define, limit or extend the scope
or intent of this Agreement or any provision hereof. This Agreement will
be construed as a whole, according to its fair meaning, and not in favor
of or against any party, regardless of which party may have initially
drafted certain provisions set forth herein.
(b) Assignment. This Agreement is personal to Executive
and he may not assign any of his rights or delegate any of his
obligations hereunder without first obtaining the prior written consent
of the Board of Directors of the Company.
(c) Notices. Any notice, request, claim or other
communication required or permitted hereunder will be in writing and
will be deemed to have been duly given if delivered by hand or if sent
by certified mail, postage and certification prepaid, to Executive at
his residence (as noted in the Company's records), or to the Company at
its address as set forth below its signature on the signature page of
this Agreement, or to
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such other address or addresses as either party may have furnished to
the other in writing in accordance herewith.
(d) Severability. In the event any provision of this
Agreement or the application of any such provision to either of the
parties is held by a court of competent jurisdiction to be contrary to
law, such provision will be deemed amended to the extent necessary to
comply with such law, and the remaining provisions of this Agreement
will remain in full force and effect.
(e) Entire Agreement; Amendments. This Agreement together
with Exhibit A constitutes the final and complete expression of all of
the terms of the understanding and agreement between the parties hereto
with respect to the subject matter hereof, and this Agreement replaces
and supersedes any and all prior or contemporaneous negotiations,
communications, understandings, obligations, commitments, agreements or
contracts, whether written or oral, between the parties respecting the
subject matter hereof. Except as provided in Section 12(d) above, this
Agreement may not be modified, amended, altered or supplemented except
by means of the execution and delivery of a written instrument mutually
executed by both parties.
13. Executive Acknowledgment. Executive acknowledges, that he has been
given the opportunity to consult with legal counsel concerning the rights and
obligations arising under this Agreement (including for purposes of this
Section 13, the Stock Option Agreement and the related Stock Option Plan), that
he has read and understands each and every provision of this Agreement, and that
he is fully aware of the legal effect and implications of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
NOVO MEDIA GROUP, INC. Executive
By: /s/ XXXXX XXXXXXXX
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Its: PRESIDENT & COO /s/ XXXXXX XXXXXXX 11-1-99
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Xxxxxx Xxxxxxx
Address: Address:
Fax:
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Fax:
