EMPLOYMENT AGREEMENT
Exhibit
10.5
Xxxxxxx
X. Xxxxxxxx
("Employee") hereby accepts the offer of Left
Behind Games Inc.
("LBG"
or the "Company") for employment as President and Secretary beginning March
1,
2003. Employee
and the Company are sometimes individually referred to herein as a "party"
and
collectively as the "parties."
1. Employment
and Employment Term.
The
Company shall employ Employee, and Employee shall serve the Company, for a
term
beginning on the date of this Agreement and ending on February 28, 2004, unless
sooner terminated pursuant to the provisions of this Agreement (the "Initial
Term"). Thereafter, this Agreement renews automatically for successive one
(1)
year terms unless either party provides ninety (90) days prior written notice
to
the other of its intent not to renew this Agreement (the Initial Term together
with any renewal hereof, is the "Term").
2. Prior
Communication.
Employee
and LBG further understand and agree that nothing in any prior correspondence
or
communication between them is intended to be and nothing therein should be
construed to be a limitation of LBG's right to terminate, transfer, demote,
suspend and administer discipline at any time for any reason. Employee and
LBG
understand and agree nothing in any prior correspondence or communication is
intended to, and nothing in any prior correspondence or
communication should
be
construed to, create an implied or express contract of employment contrary
to
this Agreement.
3. Position
and Responsibilities.
During
employment, Employee shall have such responsibilities, duties and authority
as
LBG through its Board of Directors may from time to time assign to Employee,
and
that are normal and customary duties of a President and Secretary engaged in
the
business of the Company. Employee's initial title shall be President and
Secretary.
4. Compensation.
a. As
compensation for the services to be rendered by Employee to LBG pursuant to
this
Agreement, Employee shall be paid the following compensation and shall receive
the following benefits:
i.
Base
Salary.
Employee's base salary will be at a rate of $95,000 per year, payable no less
frequently than monthly.
ii.
Stock
Options, Savings, and Retirement Plans. Employee
shall be entitled to participate in all stock option, savings, and retirement
plans, policies, and programs made available by the Company to other peer
employees of the Company.
iii.
Automobile.
Company
shall pay Employee, in addition to his base salary, a monthly car allowance
up
to a maximum of $1,000 per month, plus his actual maintenance, repair and
automobile insurance costs, payable on the first day of each month during the
term hereof.
1
iv.
Employee
Benefits.
Employee
shall be entitled to participate during the period of his employment under
this
Agreement
in
standard employee benefits or any other written compensation arrangement
approved by the Board of Directors of LBG.
b. Notwithstanding
any other provision in this Agreement to the contrary, the compensation
specified in Section 4(a) above will accrue on the date the Company closes
an
initial private offering of the Company's stock.
5. Termination.
In the
event of termination or resignation, the following terms and conditions will
apply:
a. Without
Cause, Severance Benefit.
In the
event Employee is terminated by LBG without cause, Employee shall be entitled
to
receive a severance benefit, including standard employee benefits available
to
other employees of LBG, in an amount equal to six (6) months' compensation.
One
half of any severance benefit owing hereunder shall be paid within ten (10)
days
of termination and the balance shall be paid on a bi-weekly basis over the
severance period. As part of Employee's severance benefits, he shall be allowed
(i) to keep all personal business equipment used by him in his office or work
space during his employment such as computers, electronic equipment, software
and (ii) to be provided, upon his request, copies of such non-confidential
information created or prepared by him during his employment.
b. With
Cause, No Severance Benefit.
LBG may
terminate Employee with cause, which shall be limited to the occurrence of
one
or more of the following events: (i) the Employee's commission of any fraud
against LBG; (ii) Employee's intentional appropriation for his or her
personal use or benefit the funds of the Company not authorized by the Board
of
Directors; (iii) Employee's conviction of any crime involving moral turpitude;
(iv) Employee's conviction of a violation of any state or federal law which
could result in a material adverse impact upon the business of LBG; (v) the
Employee engaging in any other professional employment or consulting or directly
or indirectly participating in or assisting any for profit business which is
a
current or potential customer, broker or competitor of LBG without prior written
approval from the Board of Directors of LBG, or (vi) when Employee has been
disabled and is unable to perform the essential functions of the position for
any reason notwithstanding reasonable accommodation and has received from LBG
compensation in an amount equivalent to his or her severance benefit payment.
No
severance benefit shall be due to Employee if Employee is terminated for
cause.
c. Resignation
or Retirement, No Severance Pay.
No
severance pay shall be due to Employee if Employee resigns or retires from
employment.
6. Termination
Obligations.
a. Return
of LBG Company Property.
Employee shall take all reasonable steps to make sure all LBG Company Property
(as defined in Attachment #1) is returned to LBG within two (2) business days
following termination of employment and request by LBG for return of LBG Company
Property.
b. Employee
Cooperation.
Following any termination of employment, Employee shall cooperate fully with
LBG
in all matters relating to completing pending work on behalf of LBG and the
orderly transfer of work to other employees of LBG. Employee shall also
cooperate in the defense of any action brought by any third party against LBG
that relates in any way to Employee's acts or omissions while employed by
LBG.
c. Survival
of Obligations.
Employee's obligations under this Section shall survive the termination of
employment and the expiration or termination of this Agreement.
7. Confidential
Information and Inventions.
Employee
and LBG hereby agree to the Confidential Information and Assignment Agreement,
Covenant of Exclusivity and Covenant Not to Compete attached hereto and made
a
part hereof as Attachment #1. Employee's obligations under this Section shall
survive the termination of employment and the expiration or termination of
this
Agreement.
8. Competitive
Activity.
Employee
covenants, warrants and represents that during the period of his or her
employment with LBG, Employee shall not engage anywhere directly or indirectly
in (as a principal, shareholder, partner, director, officer, agent, employee,
consultant or otherwise) or be financially interested in any for profit business
which is involved in business activities which are the same as, similar to,
or
in competition with business activities carried on by LBG or any business that
is a current or potential customer, broker or competitor of LBG without prior
written approval from the Board of Directors of LBG.
9. Employee
Conduct.
a. Employee
covenants, warrants and represents that during the period of his or her
employment with LBG, Employee shall not accept or encourage the offering of
gifts or gratuities from any customer, broker or other person doing business
with LBG. Employee represents and understands that acceptance or encouragement
of any gift or gratuity may create a perceived financial obligation and/or
conflict of interest for LBG and shall not be permitted as a means to influence
business decisions, transactions or service. In this situation, as in all other
areas of employment, Employee is expected to conduct himself or herself using
the highest ethical standard.
b. Employee
has performed services for non-profit organizations for many years and intends
to continue providing services for non-profit organizations during his
employment with the Company. Provided his services do not materially prevent
his
diligent performance of his responsibilities and obligations to the Company,
Employee shall be allowed to provide services for non-profit
organizations.
2
10. Entire
Agreement.
This
Agreement contains the entire agreement between the parties. It supersedes
any
and all other agreements, either oral or in writing, between the parties hereto
with respect to Employee's employment by LBG. Each party to this Agreement
acknowledges that no representations, inducements, promises or agreements,
oral
or otherwise, have been made by any party, or anyone acting on behalf of any
party, which are not embodied herein and acknowledges that no other agreement,
statement or promise not contained in this Agreement shall be valid or binding.
This Agreement may not be modified or amended by oral agreement or course of
conduct, but only by an agreement in writing signed by the Board of Directors
of
LBG and Employee. To the extent the practices, policies or procedures of LBG,
now or in the future, are inconsistent with the terms of this Agreement, the
provisions of this Agreement shall control.
11. Governing
Law.
This
Employment Agreement shall be construed and enforced in accordance with the
laws
of the State of California.
12. Provisions
Separable.
Should
any part or provision of this Employment Agreement be held unenforceable or
in
conflict with the law of any jurisdiction, the validity of the remaining parts
shall not be affected by such holding.
13. Attorney's
Fees.
Should
any party institute any action, arbitration or proceeding to enforce, interpret
or apply any provision of this Employment Agreement, the parties agree that
the
prevailing party shall be entitled to reimbursement by the non-prevailing party
of all recoverable costs and expenses, including, but not limited to, reasonable
attorney fees.
14. Interpretation.
This
Agreement shall be construed as a whole, according to its fair meaning, and
not
in favor of or against any party. By way of example and not in limitation,
this
Agreement shall not be construed in favor of the party receiving a benefit
nor
against the party responsible for any particular language in this
Agreement.
15. Mediation.
The
Parties shall use reasonable good faith efforts to directly resolve any dispute
arising this Agreement. Either Party may request non-binding mediation with
the
assistance of a neutral mediator from a recognized mediation service. The
Parties shall participate in the mediation in good faith and shall devote
reasonable time and energy to the mediation so as to promptly resolve the
dispute or conclude with the mediator that
they
cannot resolve the dispute within 30 days of notice from the dispute. The
persons attending the mediation shall have the authority to accept a settlement.
LBG shall bear the cost of mediation.
3
|
EMPLOYEE
/s/
Xxxxxxx X. Xxxxxxxx
________________________
Xxxxxxx
X. Xxxxxxxx
LEFT
BEHIND GAMES INC.
a
Delaware corporation
/s/
Xxxx X. Xxxxxx
By:_____________________________________
Xxxx
X. Xxxxxx, CEO
|
4
ATTACHMENT
#1
CONFIDENTIAL
INFORMATION AND INVENTION ASSIGNMENT AGREEMENT, COVENANT OF EXCLUSIVITY AND
COVENANT NOT TO COMPETE
This
Confidential Information And Invention Assignment Agreement ("Agreement") is
made between Left
Behind Games Inc.,
a
Delaware corporation ("Company") and the undersigned Employee.
In
consideration of and as a condition of my prospective and continued employment
relationship with the Company (which for purposes of this Agreement shall be
deemed to include any subsidiaries or affiliates of the Company where
"affiliate" shall mean any person or entity that directly or indirectly
controls, is controlled by, or is under common control with the Company), the
receipt of confidential information while associated with the Company, and
other
good and valuable consideration, I agree to the following, and I agree the
following shall be in addition to the terms and conditions of any Confidential
Information and Invention Assignment Agreement executed by employees of the
Company generally, and which I may execute in addition hereto:
1. Inventions.
a. Disclosure.
I will
disclose promptly in writing to the appropriate officer or other representative
of the Company, any idea, invention, work of authorship, design, formula,
pattern, compilation, program, device, method, technique, process, improvement,
development or discovery, whether or not patentable or copyrightable or entitled
to legal protection as a trade secret, trademark service xxxx, trade name or
otherwise ("Invention"), that I may conceive, make, develop, reduce to practice
or work on, in whole or in part, solely or jointly with others ("Invent"),
during the period of my employment with the Company.
i. The
disclosure required by this Section 1a. applies to each and every Invention
that
I Invent (1) whether during my regular hours of employment or during my time
away from work (2) whether or not the Invention was made at the suggestion
of
the Company, and (3) whether or not the Invention was reduced to or embodied
in
writing, electronic media or tangible form.
ii. The
disclosure required by this Section 1 a. also applies to any Invention which
may
relate at the time of conception or reduction to practice of the Invention
to
the Company's business or actual or demonstrably anticipated research or
development of the Company, and to any Invention which results from any work
performed by me for the Company.
iii. The
disclosure required by this Section 1 a. shall be received in confidence by
the
Company within the meaning of and to the extent required by California Labor
Code §2871, the provisions of which are set forth on Exhibit "A" hereto.
iv. To
facilitate the complete and accurate disclosures described above, I shall
maintain complete written records of all Inventions and all work, study and
investigation done by me during my employment, which records shall be the
Company's property.
v. I
agree
that during my employment I shall have a continuing obligation to supplement
the
disclosure required by this Section 1 a. on a monthly basis if I Invent an
Invention during the period of employment. In order to facilitate the same,
the
Company and I shall periodically review every six months the written records
of
all Inventions as outlined in this Paragraph 1 a. to determine whether any
particular invention is in fact related to Company business.
5
b. Assignment.
I
hereby assign to the Company without royalty or any other further consideration
my entire right, title and interest in and to each and every Invention I am
required to disclose under Section 1a. other than an Invention that I have
or
shall have developed entirely on my own time without using the Company's
Confidential Information or trade secrets. I acknowledge that the Company has
notified me that the assignment provided for in this Section l b. does not
apply
to any Invention to which the assignment may not lawfully apply under the
provisions of Section §2870 of the California Labor Code, a copy of which is
attached as Exhibit "A" hereto. I shall bear the full burden of proving to
the
Company that an invention qualifies fully under Section §2870.
c. Additional
Assistance and Documents.
I will
assist the Company in obtaining, maintaining and enforcing patents, copyrights,
trade secrets, trademarks, service marks, trade names and other proprietary
rights in connection with any Invention I have assigned to the Company under
Section l b., and I further agree that my obligations under this Section l
c.
shall continue beyond the termination of my employment with the Company. Among
other things, for the foregoing purposes I will (i) testify at the request
of
the Company in any interference, litigation or other legal proceeding that
may
arise during or after my employment, and (ii) execute, verify, acknowledge
and
deliver any proper document and, if, because of my mental or physical incapacity
or for any other reason whatsoever, the Company is unable to obtain my signature
to apply for or to pursue any application for any United States or foreign
patent or copyright covering Inventions assigned to the Company by me, I hereby
irrevocably designate and appoint each of the Company and its duly authorized
officers and agents as my agent and attorney in fact to act for me and in my
behalf and stead to execute and file any such applications and to do all other
lawfully permitted acts to further the prosecution and issuance of any United
States or foreign patent or copyright thereon with the same legal force and
effect as if executed by me. I shall be entitled to reimbursement of any
out-of-pocket expenses incurred by me in rendering such assistance and, if
I am
required to render such assistance after the termination of my employment,
the
Company shall pay me a reasonable rate of compensation for time spent by me
in
rendering such assistance to the extent permitted by law (provided, I understand
that no compensation shall be paid for my time in connection with preparing
for
or rendering any testimony or statement under oath in any judicial proceeding,
arbitration or similar proceeding).
d. Prior
Contracts and Inventions; Rights of Third Parties.
I
represent to the Company that, except as set forth on Exhibit "B" hereto, there
are no other contracts to assign Inventions now in existence between me and
any
other person or entity (and if no Exhibit "B" is attached hereto or there is
no
such contract(s) described thereon, then it means that by signing this
Agreement, I represent to the Company that there is no such other contract(s)).
In addition, I represent to the Company that I have no other employments or
undertaking which do or would restrict or impair my performance of this
Agreement. I further represent to the Company that Exhibit "C" hereto sets
forth
a brief description of all Inventions made or conceived by me prior to my
employment with the Company which I desire to be excluded from this Agreement
(and if no Exhibit "C" is attached hereto or there is no such description set
forth thereon, then it means that by signing this Agreement I represent to
the
Company that there is no such Invention made or conceived by me prior to my
employment with the Company). In connection with my employment with the Company,
I promise not to use or disclose to the Company any patent, copyright,
confidential trade secret or other proprietary information of any previous
employer or other person that I am not lawfully entitled so to use or disclose.
If in the course of my employment with the Company I incorporate into an
Invention or any product process or service of the Company any Invention made
or
conceived by me prior to my employment with the Company, and do so without
first
executing a separate assignment agreement, I hereby grant to the Company a
royalty-free, irrevocable, worldwide nonexclusive license to make, have made,
use and sell that Invention without restriction as to the extent of my ownership
or interest.
2. Confidential
Information.
a. Company
Confidential Information.
I will
not use or disclose Confidential Information, whether before, during or after
the period of my employment except to perform my duties as an employee of the
Company based on my reasonable judgment as an Officer of the Company, or in
accordance with instruction or authorization of the Company, without prior
written consent of the Company or pursuant to process or requirements of law
after I have disclosed such process or requirements to the Company so as to
afford it the opportunity to seek appropriate relief therefrom. "Confidential
Information" means any Invention of any person in which the Company has a
written agreement and in addition means any financial, client, customer,
supplier, marketing, distribution and other information of a confidential or
private nature connected with the business of the Company or any person with
whom it has a written agreement, provided by the Company to me or to which
I
have access during or in the course of any employment. Confidential Information
is to be broadly defined, and includes all information that has or could have
commercial value or other utility in the business in which the Company is
engaged or contemplates engaging, and all information of which the unauthorized
disclosure could be detrimental to the interests of the Company, whether or
not
such information is identified as Confidential Information by the Company.
Confidential Information does not include any business or personal relationship
developed by Employee during the course of his employment with whom the Company
does not have a written agreement.
b. Third
Party Information.
I
acknowledge that during my employment with the Company I may have access to
patent, copyright, confidential, trade secret or other proprietary information
of third parties subject to restrictions on the use or disclosure thereof by
the
Company. During the period of my employment and thereafter I will not use or
disclose any such information other than consistent with the restrictions and
my
duties as an employee of the Company.
6
3. Property
of the Company.
All
equipment and all tangible and intangible information relating to LBG, its
employees and its customers or vendors furnished to, obtained by or prepared
by
Employee or any other person during the course of or incident to employment
by
LBG are and shall remain the sole property of LBG ("LBG Company Property").
LBG
Company Property shall include, but not be limited to, computer equipment,
books, manuals, records, reports, notes, correspondence, contracts, customer
lists, business cards, advertising, sales, financial, personnel, operations,
and
manufacturing materials and information, data processing reports, computer
programs, software, customer information and records, business records, price
lists or information, and samples, and in each case shall include all copies
thereof in any medium, including paper, electronic and magnetic media and all
other forms of information storage. Upon termination of employment and request
by LBG, all tangible LBG Company Property shall be returned promptly to
LBG.
4. No
Solicitation of Company Employees.
While
employed by the Company and for a period of one year after termination of my
employment with the Company, I agree not to induce or otherwise encourage any
employee of the Company to terminate their employment with the
Company.
5. Covenant
of Exclusivity and Not to Compete.
During
the period of my employment with the Company, I will not engage in any other
professional employment or consulting or directly or indirectly participate
in
or assist any for profit business which is a current or potential supplier,
customer or competitor of the Company without prior written approval from the
Board of Directors of the Company.
6. General.
a. Assignments,
Successors and Assignees.
All
representations, warranties, covenants and agreements of the parties shall
bind
their respective heirs, executors, personal representatives, successors and
assignees ("transferees") and shall inure to the benefit of their respective
permitted transferees. Neither party shall have the right to assign any or
all
of its rights or to delegate any or all of its obligations hereunder without
the
prior written consent of the other party.
b. Number
and Gender, Headings.
Each
number and gender shall be deemed to include each other number and gender as
the
context may require. The headings and captions contained in this Agreement
shall
not constitute a part thereof and shall not be used in its construction or
interpretation.
c. Severability.
If any
provision of this Agreement is found by any court or arbitral tribunal of
competent jurisdiction to be invalid or unenforceable, the invalidity of such
provision shall not affect the other provisions of this Agreement and all
provisions not affected by the invalidity shall remain in full force and
effect.
d. Amendment
and Modification.
This
Agreement may only be amended or modified in writing, by the
parties.
e. Government
Law.
The
laws of California shall govern the construction, interpretation and performance
of this Agreement and all transactions under it.
f. No
Effect on Other Terms or Conditions of Employment.
I
acknowledge that this Agreement does not affect any term or condition of my
employment except as expressly provided in this Agreement, and that this
Agreement does not give rise to any right or entitlement on my part to
employment or continued employment with the Company. I further acknowledge
that
this Agreement does not affect in any way the right of the Company to terminate
my employment.
g. Consent.
My
signature below signifies that I have read, understand and agree to this
Agreement.
EMPLOYEE
/s/
Xxxxxxx X. Xxxxxxxx
____________________________________
Xxxxxxx
X. Xxxxxxxx
ACCEPTED:
LEFT
BEHIND GAMES INC.
a
Delaware corporation
/s/
Xxxx
X. Xxxxxx
By:_____________________________________
Xxxx
X.
Xxxxxx, CEO
7
EXHIBIT
"A" TO ATTACHMENT #1
California
Labor Code
§
2870. Invention 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.
(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.
§
2871. Restrictions on Employer for Condition of Employment.
No
employer shall require a provision made void or unenforceable by Section 2870
as
a condition of employment or continued employment. Nothing in this article
shall
be construed to forbid or restrict the right of an employer to provide in
contracts of employment for disclosure, provided that any such disclosures
be
received in confidence, of all of the employee's inventions made solely or
jointly with others during the period of his or her employment, a review process
by the employer to determine such issues as may arise, and for full title to
certain patents and inventions to be in the United States, as required by
contracts between the employer and the United States or any of its
agencies.
8
EXHIBIT
"B" TO ATTACHMENT #1
Except
as
set forth below, Employee represents to the Company that there are no other
contracts to assign Inventions now in existence between Employee and any other
person or entity (see Section l d. of the Agreement):
9
EXHIBIT
"C" TO ATTACHMENT #1
Set
forth
below is a brief description of all Inventions made or conceived by Employee
prior to Employee's employment with the Company, which Employee desires to
be
excluded from this Agreement (see Section l d. of the Agreement):
10
