EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of March 22, 2002 is by and between New Visual
Corporation, a Utah corporation ("Employer"), and XXXXXX X. XXXXXX
("Executive").
WITNESSETH:
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WHEREAS, Executive desires to enter into the employment of Employer,
and Employer desires to employ Executive provided that, in so doing, it can
protect its confidential information, business, accounts, patronage and
goodwill.
NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual agreements contained herein, the parties hereto agree as follows:
SECTION 1. POSITION; DUTIES. Executive will commence employment with
Employer effective upon execution of this Agreement and will serve as an officer
of Employer in the position of Chief Executive Officer commencing June 1, 2002
(the "Effective Date"). Executive will report to the Board of Directors of the
Employer and its designees. Executive will perform the duties that the Board of
Directors of the Employer may from time to time reasonably direct, and such
duties as may be specified for his office in the Bylaws of the Employer.
Executive will devote substantially all of his business time, ability and
attention to the business of Employer during the Original Term and any Renewal
Term of this Agreement.
SECTION 2. TERM. The term of this Agreement shall commence on March 22,
2002 and will end three (3) years after the Effective Date of this Agreement
(hereafter the "Original Term"), unless terminated earlier pursuant to Section 4
of this Agreement. After the Original Term, this Agreement shall be
automatically renewed for successive terms of one (1) year each (each a "Renewal
Term") unless terminated earlier pursuant to Section 4 of this Agreement or
unless either party gives the other party sixty (60) days' written notice, prior
to the expiration of the Original Term or any Renewal Term, as the case may be,
of that party's intent to terminate this Agreement at the end of the Original
Term or any Renewal Term.
SECTION 3. COMPENSATION. Subject to Section 4, as compensation for
Executive's services, and as compensation for Executive's covenants set forth in
this Agreement, including without limitation Section 6, the Employer agrees as
follows:
(a) BASE SALARY: During the Original Term and any Renewal
Term, the Employer will pay Executive a base salary ("Base Salary") at
the rate of $20,833.33 per month, prorated for any partial pay period.
The Base Salary will be paid in accordance with the Employer's regular
payroll practices and subject to increase by the Compensation Committee
of the Board of Directors in its sole discretion. During the period
between the execution of this Agreement and the Effective Date, the
Executive shall receive compensation in the amount of 50% of Base
Salary, or $10,416.66 per month.
(b) ANNUAL BONUS: Executive shall be entitled to receive an
annual bonus based upon his performance as determined in the sole
discretion of the Board of Directors of the Employer. At the
Executive's option, the Annual Bonus shall be payable in cash or in an
amount of shares of the Employer's common stock that equals the amount
of the bonus based upon the market price of the Employer's common stock
on the date that the bonus is paid.
(c) STOCK OPTIONS. Executive shall receive options to purchase
1,500,000 shares of common stock of Employer pursuant to the Stock
Option Agreement attached as EXHIBIT A.
(d) MISCELLANEOUS: Executive shall be entitled to the
following additional benefits:
(i) A car allowance not to exceed $500 per month;
(ii) Reimbursement for purchase of a laptop computer
and Executive's monthly cell phone charges;
(iii) Reimbursement of Executive's reasonable
relocation expenses for Executive's relocation from Cupertino,
California to San Diego, California;
(iv) Reimbursement of all properly documented
business expenses, in accordance with the Employer's policy,
as may be modified from time to time, for reimbursement of
business expenses;
(v) An annual paid vacation of twenty (20) business
days in accordance with the Employer's vacation policy for
Executives of the Employer generally; and
(vi) Such other benefits, including health benefits
and participation in Executive benefit plans, made available
to Executives of the Employer generally and provided as soon
as practical without violation of the Employer's policy terms.
SECTION 4. TERMINATION; COMPENSATION UPON TERMINATION. Notwithstanding
the provisions of Section 2 of this Agreement, this Agreement and Executive's
employment shall be terminated upon:
(a) THE OCCURRENCE OF CAUSE. For purposes of this Agreement,
Employer shall have "Cause" to terminate the Executive's employment
hereunder only upon:
(i) The willful failure or neglect by the Executive
to substantially perform his assigned duties to the Employer
or any subsidiary (other than any such refusal resulting from
the Executive's disability or incapacity due to physical or
mental illness);
(ii) The engaging by the Executive in criminal
conduct or conduct constituting moral turpitude;
(iii) The willful insubordination of the Executive;
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(iv) The embezzlement, theft or misappropriation by
the Executive of any property of Employer or its affiliates;
(v) Fraud, acts of dishonesty or misrepresentation,
or other acts (including any breach of the Executive's
covenants contained in this Agreement) that cause harm to
Employer or substantial damage to its reputation or that of
its subsidiaries (other than as a consequence of good faith
decisions made by the Executive in the normal performance of
the Executive's duties hereunder);
(vi) A conviction for or plea of nolo contendere to a
felony which carries a minimum prison sentence upon conviction
of one (1) year or longer;
(vii) Executive commits a material breach of this
Agreement or any written policies of Employer;
(viii) breach of Executive's fiduciary obligations to
the Employer or any of its subsidiaries; and/or
(ix) any chemical dependence which materially affects
the performance of Executive's duties and responsibilities to
the Employer or any of its subsidiaries;
PROVIDED, that in the case of the misconduct set forth in clauses (i)
and (ix) above, such misconduct shall continue for a period of thirty
(30) days following written notice thereof by Employer to Employee.
Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for Cause unless and until there shall be delivered to him a
copy of a duly adopted resolution of the Employer's Board of Directors finding
that the Employer has "Cause" to terminate Executive as contemplated in this
Section 4(a). If Employer terminates Executive's employment for Cause, Employer
will pay Executive his Base Salary in effect on the date of termination through
the date of termination, prorated for any partial payroll period.
(b) EXECUTIVE'S DEATH. If this agreement is terminated due to
Executive's death, the Employer will pay Executive's estate his Base
Salary in effect on the date of termination through the date of
termination, prorated for any partial payroll period.
(c) EXECUTIVE'S DISABILITY. For purposes of this Agreement,
"Disability" means a disability by reason of the occurrence of any
injury or disease (including mental illness) or a physical or mental
condition that, in the opinion of an appropriate physician, (i) results
in Executive becoming unable adequately to perform his customary duties
for the Employer, either with or without reasonable accommodation, (ii)
has lasted for a consecutive period of at least ninety (90) days, and
(iii) is expected to continue to last for more than an additional
consecutive period of at least ninety (90) days. If Executive's
employment is terminated due to disability, Employer will pay Executive
his Base Salary in effect on the date of termination through the date
of termination, prorated for any partial payroll period.
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(d) TERMINATION BY EMPLOYER WITHOUT CAUSE. Employer may
terminate this Agreement and Executive's employment without Cause at
any time, with or without notice. If Employer terminates Executive's
employment without Cause, Employer will pay Executive (i) his Base
Salary in effect on the date of termination through the date of
termination, prorated for any partial payroll period and (ii) a
severance payment equal to twenty-four months of Executive's Base
Salary in effect on the date of termination.
(e) VOLUNTARY TERMINATION BY EXECUTIVE. Executive may
terminate this Agreement at any time upon delivering thirty (30) days'
written notice to the Employer. If Executive voluntarily terminates
this Agreement, other than for "Good Reason," as hereinafter defined,
Employer will pay Executive his Base Salary in effect on the date of
termination through the date of termination, prorated for any partial
payroll period. On or after the date the Employer receives notice of
Executive's resignation (other than resignation for "Good Reason," as
defined below), the Employer may, at its option, pay Executive his Base
Salary through the effective date of his resignation and terminate his
employment immediately.
(f) TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may,
within sixty (60) days after the occurrence of "Good Reason," as
defined below, voluntarily terminate his employment upon thirty (30)
days written notice thereof to Employer. If Executive voluntarily
terminates this Agreement for "Good Reason," as defined below, Employer
will pay Executive (i) his Base Salary in effect on the date of
termination through the date of termination, prorated for any partial
payroll period and (ii) a severance payment equal to twenty-four months
of Executive's Base Salary in effect on the date of termination. On or
after the date the Employer receives notice of Executive's resignation
for "Good Reason," as defined below, the Employer may, at its option,
pay the amounts set forth in this Section 4(f) and terminate his
employment immediately. For purposes of this Agreement, "Good Reason"
shall mean the occurrence of any of the following events: (i) a
material reduction in Executive's authority or responsibility, but not
including termination of Executive for "Cause;" (ii) reduction in the
Base Salary payable to Executive; or (iii) Employer otherwise commits a
material breach of this Agreement; provided that "Good Reason" shall
not include the temporary appointment of another person to fulfill
Executive's responsibilities during any period of disability of
Executive.
(g) TERMINATION BY EXECUTIVE OR EMPLOYEE AFTER CHANGE OF
CONTROL. Within nine months after the occurrence of a "Change of
Control," as defined below, Employer may terminate Executive's
employment and this Agreement without Cause and, upon thirty (30) days'
written notice to Employer, Executive may terminate his employment and
this Agreement for Good Reason (as defined in Section 4(f) above). If
Executive's employment and this Agreement is terminated pursuant to
this Section 4(g), Employer will pay Executive (i) his Base Salary in
effect on the date of termination through the date of termination,
prorated for any partial payroll period and (ii) a severance payment
equal to Executive's Base Salary in effect on the date of termination
and the amount Executive last received under Section 3(b) of this
Agreement, each for a period of two (2) years. On or after the date the
Employer receives notice of Executive's termination under this Section
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4(g), the Employer may, at its option, pay the amounts set forth in
this Section 4(g) and terminate Executive's employment immediately.
This Section 4(g) shall not apply if, after a Change of Control, the
Employer has Cause (as defined in Section 4(a) above) to terminate
Executive's employment or Executive does not have Good Reason (as
defined in Section 4(f) above) to terminate his employment. For
purposes of this Agreement, a "Change of Control" shall be deemed to
exist upon the occurrence of any of the following: (i) the Employer is
merged or consolidated or reorganized into or with another corporation,
and as result of such merger, consolidation, or reorganization less
than a majority of the combined voting power of the then-outstanding
securities of such corporation or entity immediately after such
transaction is held in the aggregate by the holders of Voting Stock (as
hereafter defined) of the Employer immediately prior to such
transaction; (ii) the Employer sells or otherwise transfers all or
substantially all of its assets to any other corporation or legal
person, less than a majority of the combined voting power of the
then-outstanding securities of such corporation or legal person
immediately after such sale or transfer is held in the aggregate by the
holders of the Voting Stock of the Employer immediately prior to such
sale or transfer, (iii) if during any period of twenty-four (24) months
following a merger, tender offer, consolidation, sale of assets, or
contested election, at least a majority of the Board of Directors of
the Employer shall cease to be "Continuing Directors." For purposes of
this Section 4(g), "Continuing Directors" shall mean directors of the
Employer prior to such transaction or who subsequently became directors
and whose election or nomination for election by the stockholders of
the Employer was approved by a vote of at least two-thirds (2/3) of the
directors then still in office prior to such transaction. The term
"Voting Stock" shall mean, for purposes of this Section 4(g), the
then-outstanding securities entitled to vote generally in the election
of directors of the Employer.
(h) OTHER POSITIONS WITH EMPLOYER OR SUBSIDIARIES. Upon the
termination of Executive's employment with Employer, Executive will,
upon request, resign from any position he then holds as an officer or
director of Employer or any subsidiary of Employer. If Executive fails
to do so within three days of such request, Executive agrees that the
Board of Directors of the Employer or any such subsidiary, as
applicable, shall have good cause to remove him from any and all such
positions.
SECTION 5. NON-SOLICITATION; NON-INTERFERENCE. Executive agrees, during
the term hereof and for a period of one (1) year thereafter, not to solicit,
influence or attempt to influence any employee of Employer to terminate his or
her employment or other contractual relationship with Employer for any reason
including, without limitation, working for a competitor. Additionally, Executive
agrees that during the term hereof and for a period of one (1) year thereafter
Executive will not directly or indirectly attempt to solicit or conduct business
with any person or entity that is an active or current client, customer or
active prospect of Employer at the time of Executive's termination if such
business would be in competition with Employer's business. The terms "client,"
"customer" and "active prospect" include, but are not limited to, any person or
entity solicited or contacted by Executive or Employer directly or indirectly
during the term hereof. Executive acknowledges his duty, both by contract and
common law, not to interfere with contractual relationships of Employer.
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The Executive understands that the covenants contained in this Section
5 are essential elements of the transaction contemplated by this Agreement and,
but for the agreement of the Executive to Section 5, Employer would not have
agreed to enter into such transaction. The Executive has been advised to consult
with counsel in order to be informed in all respects concerning the
reasonableness and propriety of Section 5 and its provisions with specific
regard to the nature of the business conducted by Employer. Executive further
agrees and acknowledges that this Agreement (1) is reasonable as to length of
time, scope and geographic area for purposes of protecting the commercial
advantages enjoyed by Employer, (2) will not interfere with Executive's ability
to pursue a proper livelihood in the event of termination of this Agreement with
Employer, (3) does not impose a greater restraint than is necessary to protect
the goodwill or business interests of Employer and (4) is adequately paid for in
the consideration derived by Executive under this Agreement. Employer and
Executive also agree that the court (under Section 17(a)) or arbitrators (under
Section 17(b)) have jurisdiction to modify any provisions of this covenant in
accordance with the court's or arbitrators' respective ruling as to
reasonableness or scope of application and that, consistent with Section 12 of
this Agreement, this Agreement shall remain enforceable as modified or amended
in the jurisdiction where this Agreement is so modified or amended.
SECTION 6. NONDISCLOSURE OF PROPRIETARY INFORMATION. Executive
acknowledges that he has received or may receive information relating to
Employer's and any of its affiliates' assets, operations, clients, and past,
present, and future businesses, including without limitation developments,
technical data, intellectual property, specifications, designs, ideas, product
plans, research and development, personal information, financial information,
customer lists, business methods and operations, strategic plans, marketing
plans and pricing information, all of which are proprietary to Employer and
involve trade secrets, know-how, techniques, and combinations of known
information of a character regarded by Employer as confidential, as well as
other information that Employer has indicated to be confidential or which, by
the nature of the information or the circumstances of its disclosure, Executive
ought reasonably to consider confidential (all of the foregoing, collectively,
the "Proprietary Information"). The Proprietary Information does not include
information which (i) at the time it is disclosed by the Executive was already
in the public domain; (ii) is subsequently published or publicly disclosed by
persons other than Executive through no fault of Executive; (iii) is
subsequently acquired by Executive from a third party having no obligation of
confidentiality toward Employer with respect to such information; or (iv) is
known to Executive at the time of disclosure, provided that Executive shall have
the burden of establishing such prior knowledge by competent written proof. If
Executive is compelled by law to disclose Confidential Information, he shall use
his best efforts to give Employer ten (10) days prior written notice of
compelled disclosure and shall limit such disclosure to the extent legally
possible.
Executive agrees that Executive will not disclose, either during the
term of this Agreement or at any time after termination of this Agreement, any
Proprietary Information to any person or entity, except in the course of
Executive's duties on behalf of Employer or with Employer's consent, and that,
similarly, without Employer's consent, will not use such information for the
benefit of any person or entity other than Employer at any time. Executive
agrees that upon termination of this Agreement, Executive will deposit with or
return to Employer all copies (in any media, including, without limitation,
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electronic storage media) of documents, records, notebooks or any other
information or documentation of Employer's Proprietary Information, and all
derivatives thereof, whether the Proprietary Information or documentation was
developed or prepared by Executive or by others. Executive acknowledges that
this covenant of nondisclosure is an integral term of this Agreement and is
given in consideration of the engagement of Executive and the other
consideration granted in this Agreement.
SECTION 7. RIGHTS IN WORK PRODUCT.
(a) WORK PRODUCT. The work product of Executive's services,
including all results and all ideas, developments, designs, inventions,
derivative works and improvements that Executive makes, conceives or
reduces to practice during the course of his performance under this
Agreement, either solely or jointly with others and either on or off
Employer's premises (collectively, the "Work Product") shall be the
exclusive property of Employer. The Work Product shall be deemed
Employer's proprietary information and shall not be disclosed to anyone
outside of Employer, or used by Executive or others without the prior
written consent of Employer. Any article, paper, treatise, computer
program, or report prepared by Executive pursuant to this Agreement, or
which discusses the services performed hereunder or the results thereof
("Written Data") and which qualifies as a "work-made-for-hire" under
the copyright laws of the United States, shall be the exclusive
property of Employer as a "work-made-for-hire." All right, title, and
interest in and to any Written Data or other Work Product of Executive
hereunder that does not qualify as a "work-made-for-hire" shall be
deemed to have been automatically transferred to Employer from the date
of inception thereof. Upon Employer's request, Executive shall execute
any document and render such other assistance as reasonably necessary
to perfect the full right, title, and interest worldwide in the Written
Data, including formal conveyance of copyright. Written Data shall not
be published or submitted for publication by Executive without the
prior, written approval of Employer. Further, if any such article,
paper, treatise, computer program, or report includes work previously
copyrighted by Executive, Executive hereby grants Employer a
nonexclusive, worldwide, irrevocable, paid-up license under such
copyrights to reproduce, distribute, and use the works in any manner.
(b) APPLICATION OF CALIFORNIA LABOR CODE. This Agreement does
not apply to an invention that qualifies fully under the provisions of
the California Labor Code, Article 3.5, Section 2870 (a copy of such
section is attached hereto as EXHIBIT B).
SECTION 8. EXECUTIVE'S ACKNOWLEDGMENTS AND REPRESENTATIONS. Executive
represents and warrants that he is free to enter into this Agreement and to
perform each of the terms and covenants of it. Executive represents and warrants
that he is not restricted or prohibited, contractually or otherwise, from
entering into and performing this Agreement, and that his execution and
performance of this Agreement is not a violation or breach of any other
agreement between Executive and any other person or entity.
SECTION 9. RESERVED.
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SECTION 10. WAIVER OF BREACH. The actual or apparent waiver by either
party to this Agreement of a breach of any provision of this Agreement will not
operate or be construed as an actual or constructive waiver of that breach or
any subsequent breach by any party. Waivers are not effective unless in writing
and signed by the party granting the waiver.
SECTION 11. MULTIPLE COUNTERPARTS. This Agreement may be executed in
counterparts, each of which for all purposes is to be deemed an original, and
all of which constitute, collectively, one agreement. In making proof of this
Agreement, it will not be necessary to produce or account for more than one
counterpart of this Agreement. Furthermore, a photocopy of any counterpart will
be valid and have the same effect as an original.
SECTION 12. SEVERABILITY AND SAVINGS CLAUSE. If any one or more of the
provisions or subjects contained in this Agreement is for any reason held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability will not affect the validity and enforceability of any other
provisions or subjects of this Agreement, and it is the intention of the parties
that there shall be substituted for such invalid, illegal or unenforceable
provision a provision as similar to such provision as may be possible and yet be
valid, legal and enforceable. Further, should any provisions of this Agreement
ever be reformed or rewritten by a judicial or arbitration body, those
provisions as rewritten will be binding on Executive and the Employer as if
contained in the original Agreement.
SECTION 13. SUCCESSORS; SURVIVAL; AFFILIATES. This Agreement and the
rights and obligations under this Agreement will be binding upon and inure to
the benefit of the parties to this Agreement and their respective legal
representatives, and will also bind and inure to the benefit of any successor of
the Employer by merger or consolidation or any assignee of all or substantially
all of the Employer's assets. Except to any such successor or assignee of the
Employer, neither this Agreement nor any rights or benefits under this Agreement
may be assigned by either party to this Agreement. Each covenant on the part of
Executive contained in Section 5 shall be construed as an agreement independent
of any other provision of this Agreement and shall survive the termination of
this Agreement. The existence of any claim or cause of action of Executive
against the Employer, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Employer of any such
covenant. The protective covenants in Sections 5, 6 and 7 shall also inure to
the benefit of the Employer's affiliates (as hereinafter defined) and these
covenants shall be enforceable against Executive by each of such affiliates as
third party beneficiaries. An "affiliate" of the Employer is any person or
entity that directly, or indirectly through one or many intermediaries, controls
or is controlled by, or is under common control with, the Employer.
SECTION 14. ENTIRE AGREEMENT. This Agreement supersedes that certain
Consulting Agreement dated February 25, 2002, between Executive and Employer,
and any and all other agreements, either oral or in writing, between the parties
with respect to Executive's employment by the Employer (including any prior
offer letter or employment agreement) and contains all of the covenants and
agreements between the parties with respect to such employment. This Agreement
can only be changed by the parties in writing, executed by the party against
whom enforcement of any modifications may be sought. Notwithstanding the
foregoing, the Stock Option Agreement entered into between Executive and
Employer on February 25, 2002 shall remain in effect pursuant to its terms.
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SECTION 15. GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the substantive laws of the State of California
without regard to conflict of law provisions.
SECTION 16. NOTICES. Any notice under this Agreement will be in writing
and will be deemed to have been duly given when delivered personally or three
(3) days after such notice is deposited in the United States mail, registered,
postage prepaid, and addressed, to the Employer, at its principal office, or to
Executive at Executive's last permanent address as shown on the Employer's
records.
SECTION 17. REMEDIES.
(a) INJUNCTIVE RELIEF. Executive agrees that a breach or
threatened breach, based on reasonable and good faith evidence of a
breach on Executive's part, of any covenant contained in Sections 5, 6
or 7 will cause irreparable damage to the Employer. For that reason,
Executive further agrees that the Employer is entitled as a matter of
right to an injunction from any court of competent jurisdiction,
restraining any further violation of any of such covenants by
Executive, Executive's future employers, Executives, partners, agents
or any person or entity related, directly or indirectly, to Executive.
The right to an injunction is in addition to whatever other remedies
the Employer may have, including specifically the recovery of damages.
Venue for any action under this Section 17(a) shall be in the state or
federal courts located in San Diego County, California.
(b) ARBITRATION. Except to the extent provided in Section
17(a) above, any controversy of any nature whatsoever, including but
not limited to tort claims, statutory claims or contract disputes,
between the parties to this Agreement (including their directors,
officers, executives, agents, successors, assigns, heirs, executors and
beneficiaries) relating to the formation, execution, interpretation,
breach or enforcement of this Agreement, or relating to any other
matter arising from Executive's employment with the Employer, shall be
submitted to arbitration before the American Arbitration Association
("AAA"), in accordance with their rules then in effect and the
substantive law of the State of California and the United States. The
arbitration shall be held in San Diego County, California. Each of the
parties to this Agreement shall appoint one person as an arbitrator to
hear and determine such disputes, and if they should be unable to
agree, then the two arbitrators shall choose a third arbitrator from a
panel made up of experienced arbitrators selected pursuant to the
procedures of the AAA and, once chosen, the third arbitrator's decision
shall be final, binding and conclusive upon the parties to this
Agreement. The arbitrators may not award punitive or exemplary damages
for tort, contract or other common law claims, but will have the power
to award such damages to the extent permitted by an applicable statute
and to award prejudgment interest and attorneys' fees to the prevailing
party. The award of the arbitration panel may be confirmed by any state
or federal court of competent jurisdiction located in San Diego County,
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California, and may be challenged only upon the grounds provided in
Section 10 of the Federal Arbitration Act, Title 9, United States Code.
This agreement to arbitrate shall survive the execution of this
Agreement. THE RIGHT TO ARBITRATE IS INTEGRAL TO AND NOT SEVERABLE FROM
THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS
ARBITRATION AGREEMENT AND KNOWINGLY CONSENT TO ITS CONSEQUENCES,
INCLUDING THE WAIVER OF THE RIGHT TO LITIGATE CERTAIN DISPUTES. The
expenses of such arbitration will be borne by the losing party or in
such proportion as the arbitrators decide. A material or anticipatory
breach of any section of this Agreement will not release either party
from the obligations of this Section 17.
[SIGNATURE PAGE TO FOLLOW]
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The parties hereto have executed the Agreement as of the date first
mentioned above.
NEW VISUAL CORPORATION
By: /S/ XXX XXXXXXXXXX, XX.
-----------------------
Name: Xxx Xxxxxxxxxx, Xx.
Title: CEO
/S/ XXXXXX X. XXXXXX
--------------------
Xxxxxx X. Xxxxxx
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EXHIBIT A
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STOCK OPTION AGREEMENT
(SEE ATTACHED)
EXHIBIT B
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CALIFORNIA LABOR CODE SECTION 2870
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INVENTIONS ON OWN TIME -- EXEMPTION FROM AGREEMENT
--------------------------------------------------
(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.
