EXHIBIT 10.1
EMPLOYMENT AGREEMENT BY AND BETWEEN
I/OMAGIC CORPORATION, A CALIFORNIA CORPORATION
AND XXXX XXXXXXX, DATED OCTOBER 22, 1993
EMPLOYMENT AGREEMENT
AGREEMENT made this 22nd day of October, 1993, by and between I/OMagic
Corporation, a California corporation, having its principal place of business at
00 XxXxxxx Xxxxx, Xxxxxx Xxxxx, Xx 00000, hereinafter referred to as the
employer, and Xx. Xxxx Xxxxxxx, residing at 00 XxXxxxx Xxxxx, Xxxxxx Xxxxx, Xx
00000, hereinafter referred to as employee:
1. TERM OF EMPLOYMENT: The employer hereby employs the employee and the
employee hereby accepts employment with the employer as President and CEO of
company on permanent basis beginning on October 22, 1993. If agreement
provides for termination under particular circumstances, this agreement may
be terminated as hereinafter provided.
2. EMPLOYMENT AND TITLE: The employer hereby employs the employee and the
employee accepts employment as President and CEO for the employer.
3. DUTIES OF EMPLOYEE:
3.a GENERAL DUTIES: The employee shall serve as the President and CEO of the
employer. He shall do and perform all services, acts, or things necessary or
advisable to manage and conduct the business of the employer, subject always to
the policies set by the Board of Directors.
3.b MATTERS REQUIRING CONSENT OF THE BOARD OF DIRECTORS: The employee shall not
without specific approval of the Board of Directors of the employer, do or
contract for any of the following:
a) Borrow on behalf of the Employer during one fiscal year an amount in
excess of $500,000.00.
b) Permit any customer of the employer to become indebted to the employer in
an amount in excess of $250,000.00.
c) Purchase capital equipment in excess of expenditures budgeted by the
Board of Directors.
d) Sell any single capital asset of the employer having a market value in
excess of $20,000, or a total of capital assets during a fiscal year
having a market value in excess of $100,000.00.
3.c DEVOTION OF ENTIRE TIME TO EMPLOYER'S BUSINESS: The employee shall devote
his entire productive time, ability, and attention to the business of the
employer during the term of this agreement. The employee shall not directly or
indirectly render any services of business, commercial, or professional nature
to any other person or organization, whether for compensation or otherwise,
related to the development of PCMCIA or Multimedia products that are considered
to be direct competitors of the employer, without prior written consent of the
Board of Directors of the employer.
3.d UNIQUENESS OF EMPLOYEE'S SERVICES: The employee hereby represents that the
services to be performed by him under the terms of this contract are a special,
unique, unusual, extraordinary, and intellectual character which gives them a
peculiar value, the loss of which cannot reasonably or adequately be compensated
in damages in an action at law. The employee therefore, expressly agrees that
the employer may possess, shall be entitled to injunctive and other equitable
relief to prevent a breach of this contract by the employee.
4. ANNUAL SALARY: The employer shall pay the employee an annual salary of One
hundrde forty thousand and 00/100 Dollars ($140,000.00) payable in twelve equal
payments on the first day of each month.
5. PROFIT SHARING CASH BONIS: For each fiscal year of the employer in which
the net profits of the employer exceed $100,000.00, the employer agrees to
pay the employee, within two months of the close of the fiscal year, an
annual bonus of $20,000.00, for each fiscal year in which the net profits of
the employer exceed $200,000.00, the employer agrees to pay the employee,
within two months of the close of such fiscal year, an annual bonus of
$50,000.00, for each fiscal year of the employer in which the net profits of
the employer exceed $400,000.00, the employer agrees to pay the employee,
within two months after the close of such fiscal year, an annual bonus of
$70,000.00, for 7% additional bonus will apply on net profits that are
greater than $500,000.00 within two months after the close of such fiscal
year.
For the purpose of determining the amount of the bonus, the net profits of the
employer shall be determined by the firm of an independent certified public
accountants applying generally accepted accounting principles then employed by
the employer.
If the employment term is terminated by the employer for cause against the
employee, the employee shall not be entitled to any portion of the bonus for
such fiscal year. However, in the year for termination of the employment term
provided herein, or in any
in any other fiscal year in which the employment term is terminated for
reasons other than cause against employee, the employee shall be entitled to
that portion of the bonus that the number of months during such fiscal year
that he was employed hereunder bears to twelve months.
6. EMPLOYEE BENEFITS:
6.A USE OF AUTOMOBILE: The employer agrees to pay the employee on the first of
each month a $500.00 automobile allowance during the term of this agreement.
6.B HOUSING ALLOWANCE: The employer agrees to pay the employee housing allowance
in the amount of $2,000.00 per month during the term of this agreement.
6.C MEDICAL AND DENTAL COVERAGE: The employer agrees to obtain a standard
medical and dental insurance policy covering the employee during the term of his
employment.
7. BUSINESS EXPENSES: The employee shall be entitled to receive, within ten
(10) days after delivery to the employer of an itemized statement thereof,
reimbursement for all justified and reasonable expenses incurred in
connection with the performance of employee's duties.
8. TERMINATION OF EMPLOYMENT: If the employee habitually neglects the duties
which is required to be performed under the terms of this agreement, the
employer may at its option terminate this employment provided evidence of
justifiable cause for such action. Only in and under this condition does the
employer maintain the right to terminate employee. In the event of employee
termination employer has the first option to purchase the outstanding shares and
options of the employee. Said purchase option is to be exercised within 30 days
of official notice and on or before the employee's termination. In the event the
employer does not exercise its right, then, the employee has an option to buy
the outstanding shares of stock within 60 days of official notice. The employee
payment schedule will be 20% down payment deposit and 80% installments due over
5 years.
The employer maintains the first right to buy the outstanding stocks and options
of the employee only under the conditions as set forth in Section 8, TERMINATION
OF EMPLOYMENT, under all other prevailing conditions including but not limited
to breach of contract, board of director strong arm tactics, habitually
neglecting duties, the employee maintains the first option to purchase the
outstanding shares of the employer under the same terms and conditions as
recited above for the employee and the employer.
The purchase price will be the prevailing market price at the time of
termination as described by an independent certified public accounting firm
applying generally accepted practices.
9. NOTICES: Any notice to be given hereunder by either party to the other
shall be in writing and may be transmitted by personal delivery or by mail,
registered or certified, postage prepaid with return receipt requested. Mail
notices shall be addressed to the parties at the addresses appearing in the
instructor paragraph of this agreement, but each party may change his address
by written notice in accordance with this paragraph.
10. ARBITRATION: Any controversy between the employer and the employee
involving the construction or application of any of the terms, provisions, or
conditions of this agreement shall on the written request of either party
served on the other by submitted to arbitration. Arbitration shall comply
with and be governed by the provisions of the State of California Arbitration
Act. The cost of the arbitration shall be borne by the losing party or in
such proportions as the arbitrators decide.
11. ATTORNEY'S FEES AND COSTS: If any action at law or in equity is
necessary to enforce or interpret the terms of this agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which that party may be
entitled. This provision shall be construed as applicable to the entire
contract.
12. ENTIRE AGREEMENT: This agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with
respect to the employment of the employee by the employer and contains all of
the covenants and agreements between the parties with respect to that
employment in any manner whatsoever. Each party to this agreement
acknowledges that no representation, inducements, promises, or agreements,
orally or otherwise, have been made by either party, or anyone acting on
behalf of the other party, which are not embodied herein, and that no other
agreement, statement, or promise not contained in this agreement shall be
valid or binding on either party. Any modification of this statement will be
effective only if it is in writing and signed by the parties to be charged.
13. PARTIAL INVALIDITY: If any provision in this agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
14. LAW GOVERNING AGREEMENT: This agreement shall be governed by and construed
in accordance with the laws of the State of California.
15. DAMAGES FOR BREACH OF CONTRACT: In the event of a breach of this
agreement by either the employer or the employee resulting in damages to the
other party, that party may recover from the party breaching the agreement
any and all damages that may be sustained.
16. EFFECT OF WAIVER: The failure of either party to insist on strict
compliance with any terms, covenants, or conditions of this agreement by the
other party shall not be deemed a waiver of that term, covenant, or
condition, nor shall any waiver or relinquishment of that right or power for
any one time or times be deemed a waiver or relinquishment of that right or
power for all or any other times.
Executed on October 22, 1993 at IRVINE, California.
/s/ XXX XXXXX /s/ XXXX XXXXXXX
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Employer Employee
Xxx Xxxxx Xxxx Xxxxxxx
I/OMagic Corporation Officer
