Exhibit 10.39
EXECUTIVE EMPLOYMENT AGREEMENT
------------------------------
AGREEMENT, dated as of November 10, 1999, and effective as of October 27,
1999, between Interactive Magic, Inc., a North Carolina corporation (the
"Company"), and Xxxx Xxxxxx (the "Employee").
WHEREAS, the Company desires to obtain the services of the Employee, and
the Employee desires to provide such services to the Company, on the terms set
forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Employment and Duties.
(a) The Company hereby employs the Employee, and the Employee accepts
employment, to serve as Chief Executive Officer of the Company and to perform
such duties consistent with his position as may reasonably be assigned to him
from time to time by the Company's Board of Directors.
(b) The Employee hereby agrees to perform such duties, to fulfill such
responsibilities and to serve the Company faithfully, industriously and to the
best of his ability, subject to the direction and control of the Company's Board
of Directors, and to devote his best efforts and full working time and attention
to performing his duties under this Agreement.
2. Term; Termination.
Except in the case of earlier termination as hereinafter specifically
provided in Paragraph 4, this Agreement shall be effective as of October 27,
1999 and the term hereof and the Employee's employment hereunder shall continue
until October 27, 2002 (the "Term"). This Agreement shall be automatically
extended for successive one year periods thereafter unless either party gives
not less than sixty (60) days written notice prior to the end of the initial
term or then current renewal term.
3. Compensation; Expenses; Benefits.
The stated annual salary for this position is US $180,000.00. Standard
Company health and disability benefits are to be calculated from this
basis. At the request and initiative of the Employee, this stated base
annual salary shall be reduced to the following, primarily in
consideration of the options to purchase common stock described herein:
(a) As compensation for his services hereunder in whatever capacity
rendered, the Company shall pay the Employee an annual salary at a rate of US
$1.00 per year. Such
salary and the Employee's employee benefits provided pursuant to Paragraph 3(c)
hereof shall continue to be paid and provided, regardless of any illness or
incapacity of the Employee, until this Agreement is terminated.
(b) The Employee shall also be entitled to receive such bonuses as the
Company's Board of Directors or Compensation Committee may deem appropriate.
(c) The Employee and the Employee's spouse and children, if any, shall
be entitled to participate in all employee benefit plans, at the expense of the
Company, generally available from time to time to the senior officers of the
Company, so long as such benefits comply with applicable law (including without
limitation the Internal Revenue Code and ERISA). In addition, Employee shall be
entitled to annual vacation in accordance with Company policy at such times as
are mutually convenient to Employee and the Company.
(d) The Employee shall be entitled to advances or reimbursement for his
ordinary and necessary business expenses incurred in the performance of his
duties hereunder provided that his claims therefor shall be supported by the
documentation required by the Company in accordance with its usual practice.
(e) The Employee shall also be granted options to purchase 800,000
shares of Common Stock of the Company, which options shall vest over a period of
3 years as follows (i) 133,333 immediately upon the date hereof, (ii) 133,333 on
the first anniversary of the date hereof, (iii) 266,667 on the second
anniversary of the date hereof and (iv) 266,667 on the third anniversary of the
date hereof. The exercise price of the options will be $1.09 per share, as
represented by the closing price on October 27, 1999, the date that this and all
other current employee option allocations were granted. The Employee shall also
be entitled to additional stock option grants based upon performance, at the
discretion of the Board of Directors or Compensation Committee.
4. Termination of Employment. If any of the following events occur before
the expiration of the Term, Employee's employment with the Company shall
terminate upon the occurrence of such event:
(a) Employee's death, or any illness, disability or other incapacity
that renders Employee physically unable regularly to perform his duties
hereunder for a period in excess of one hundred twenty (120) consecutive days or
more than one hundred eighty (180) days in any consecutive twelve (12) month
period.
(b) Thirty (30) days after (i) the Company gives written notice to
Employee of his termination if said termination is without cause.
(c) At any time, by written notice from the Company to Employee if said
termination is for cause. For purposes of this Paragraph 4(c) and Paragraph
4(b), "cause" is defined as (i) the material breach by Employee of any provision
of this Agreement (which is not cured within 15 days after written notice to the
Employee thereof), (ii) Employee's conviction of a crime constituting a felony
or involving moral turpitude, (iii) an act by Employee of material
dishonesty or fraud in connection with Employee's performance of his duties to
the Company, or (iv) the good faith determination by the Company's Board of
Directors (after having given the Employee written notice of, and an opportunity
to cure, the deficiency within 30 days) that Employee has willfully failed to
perform his duties to the Company under this Agreement (other than a failure
resulting from the Employee's incapacity due to physical or mental illness) or
willfully engaged in conduct which is materially detrimental to the Company,
monetarily or otherwise, or has been grossly negligent in the performance of his
duties.
In the event Employee's employment is terminated pursuant to Paragraph
4(c) above, Employee shall not be entitled to any severance benefits from the
Company other than those rights accorded him by law. In the event Employee's
employment is terminated pursuant to Paragraph 4(a) or (b) above, Employee shall
be entitled to immediately vest all stock options previously granted to Employee
that would have vested at any time during the calendar year in which such
termination occurs; provided, that the exercise period of such options shall be
reduced to a period of six months following such termination.
5. Representations, Warranties and Covenants of Employee. The Employee
represents, warrants and convenants to and with the Company that (a) he is not
and will not become a party to any agreement, contract or understanding, whether
employment or otherwise, and that he is not subject to any order, judgment or
decree of any court or governmental agency, which would, in any way, restrict or
prohibit him from undertaking or performing his employment in accordance with
the terms and conditions of this Agreement and (b) he is of sufficient physical
and mental health to fulfill his duties, obligations and responsiblities under
the terms of this Agreement.
6. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina applicable to agreements
made and to be performed therein.
(b) Notices. All notices, consents and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given when
(a) delivered by hand (with receipt confirmed), (b) sent by telex or telecopier
(with receipt confirmed), provided that a copy is mailed by registered mail,
return receipt requested, or (c) when received by the addressee, if sent by
Express Mail, Federal Express or other express delivery service (receipt
requested), in each case to the appropriate addresses and telecopier numbers set
forth below (or to such addresses and telecopier numbers as a party may
designate as to itself by notice to the other parties):
If to the Employee:
Xxxx Xxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
If to the Company:
Interactive Magic, Inc.
X.X. Xxx 00000
Xxxxxxxx Xxxxxxxx Xxxx, Xxxxx Xxxxxxxx 00000
Fax No.: (000) 000-0000
Attention: Chairman of the Board
with a copy to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxx Xxxxxx, Esq.
(c) Entire Agreement Amendment. This Agreement shall supersede all
existing agreements between the Employee and the Company relating to the terms
of his employment. This Agreement may not be amended except by a written
agreement signed by both parties.
(d) Waiver. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
(e) Assignment. Subject to the limitations below, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, representatives, successors and assigns. This Agreement shall
not be assignable by the Employee, and shall be assignable by the Company only
to any corporation resulting from the reorganization, merger or consolidation of
the Company with any other corporation or any corporation to which the Company
may sell all or substantially all of its assets.
INTERACTIVE MAGIC, INC.
By: /s/ Xxxx Xxxxxx
-------------------
Name:
Title:
/s/ Xxxx Xxxxxx
-------------------
Xxxx Xxxxxx
