1
EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is dated and
effective as of January 1, 1997, by and between INTERVISUAL BOOKS, INC., a
California corporation (the "Company"), and XXXXXX SALE (the "Employee").
W I T N E S S E T H
WHEREAS, the Company desires to retain the services of
Employee as its Vice President, Publishing Operations; and
WHEREAS, Employee desires to provide her services to the
Company, on the terms and conditions set forth herein:
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto hereby agree as follows:
1. Employment and Term. The Company hereby retains the
Employee as its Vice President, Publishing Operations for a term commencing
January 1, 1997, and continuing to and ending on December 31, 1998, unless this
Agreement is sooner terminated as set forth herein. This Agreement shall be
renewed thereafter for one additional two year term ending on December 31, 2000
(subject to sooner
-1-
2
termination as set forth herein), unless either party shall deliver written
notice to the other party in accordance with Section 9 hereof of its intention
not to so renew no later than October 31, 1998.
2. Position and Duties. Employee agrees to be available
to serve as its Vice President, Publishing Operations and the Company agrees to
retain her as such for the term of this Agreement and any renewal hereof.
In addition to service as its Vice President, Publishing
Operations, Employee may also possess such other titles and serve in such other
capacities commensurate with her position with the Company as the Company and
Employee shall from time to time mutually agree. Employee shall render such
services and have such duties and responsibilities as may be assigned to her
form time to time by the Company consistent with such positions. Employee
shall report directly to the President of the Company. Employee's performance
will be reviewed, approximately every six months upon written request from
Employee to the Company's President, by the President and the Chairman of the
Board of the Company in accordance with the Company's policies and procedures.
Employee shall devote her full working time, attention and energy to the
business of the Company and agrees to perform faithfully and diligently such
duties and responsibilities as may be assigned to her to the best of her
ability. The Company acknowledges and the
-2-
3
Employee agrees that Employee may not serve as a consultant or in any other
capacity for any other business during the term of this Agreement without prior
written consent of the President or the Chairman of the Board.
3. Compensation, Expenses, etc.
3.1 For the services to be rendered by the Employee
hereunder, the Company shall pay to her a salary at the rate of $100,000 per
annum payable semi-monthly in accordance with the regular payroll schedule of
the Company.
3.2 For the calendar year ended December 31, 1997, and
each subsequent year thereafter, during the term of this Agreement, Employee
shall earn a bonus based upon any bonus plan then in effect that is generally
applicable to officers of the Company, as determined by the Compensation
Committee of the Company's Board of Directors.
3.3 The Company shall pay or reimburse the Employee for
all approved out-of-pocket business expenses, in accordance with the Company's
reimbursement policy, reasonably incurred by her in performing her services to
the Company during the term of this Agreement.
3.4 During the term of this Agreement, the Company shall
pay the Employee an automobile allowance in the amount of $600 per month, on or
about the last day of each month, provided that the Employee maintains all
necessary records as required by the Company and the Internal Revenue Service.
The Employee shall be responsible
-3-
4
for all costs and expenses incurred in connection with the maintenance and
operation of such automobile, including but not limited to required insurance.
3.5 Employee shall be entitled to fifteen (15) business
days paid vacation and six (6) business days paid sick leave each year during
the term of this Agreement in accordance with the Company's policies. Any
accrued but unused vacation days and sick leave for a given year will be
carried over into the next year of this Agreement pursuant to the Company's
written policy for officers. Upon termination of this Agreement, the Company
shall pay Employee for unused vacation days and sick leave accrued through the
date of termination in accordance with the Company's policies.
3.6 As of December 12, 1996, Employee was granted options
to acquire 30,000 shares of the Company's common stock under a Company
Incentive Stock Option Plan (the "Stock Option Plan"). The terms of such
options shall be governed by the Stock Option Plan and the agreement entered
into pursuant thereto.
3.7 During the term of this Agreement, the Employee and
Employee's spouse shall have the right to participate in group insurance and
other employee benefit plans now in effect or hereafter established by the
Company for the benefit of the class of employees of which Employee would be a
member for so long as any such plan is maintained
-4-
5
in effect for the benefit of such class, with the participation or share of
Employee and Employee's spouse therein being determined by the provisions and
requirements of the respective plan and the applicable Company policy. The
Company hereby agrees to waive its standard ninety (90) day waiting period for
Employee and Employee's spouse to be eligible to participate in its health
insurance program (but Employee must still satisfy the insurance company's
requirements pertaining to insurability). Employee shall be entitled to
participate in the Company's 401(k) Plan from and after January 1, 1998, and
continuing during the term of this Agreement for such time that the Company's
401(k) Plan remains in effect. The Company agrees to pay $2,400 to Employee
in December 1997.
4. Termination.
4.1 This Agreement shall terminate and the Company shall
have no further obligation or liability to Employee, except for the Minimum
Payments (as hereinafter defined), upon the occurrence of any of the following
events: (a) the death of Employee; (b) the incapacity or disability of
Employee which renders her unable to perform substantially all of the services
contemplated by this Agreement for a continuous period of ninety (90) days; or
(c) the mutual agreement of the parties to this Agreement.
4.2 This Agreement may be terminated by the Company prior
to the date specified in Section 1 hereof
-5-
6
without further obligation or liability to Employee, except for the Minimum
Payments, upon the occurrence of one or more of the following events: (a) the
commission of an act of fraud, dishonesty or embezzlement by Employee; (b) the
willful neglect by Employee in the performance of the services contemplated by
this Agreement in such manner as to provide reasonable cause for terminating
her services, such performance to be determined by the Company's Board of
Directors; or (c) the breach by the Employee of any of the covenants or
obligations under this Agreement and such breach provides reasonable cause for
the Company to terminate this Agreement; provided that, in order to terminate
this Agreement pursuant to subclauses (b) or (c) of this Section 4.2, the
Company shall have given thirty (30) days written notice to the Employee, and
the Employee shall have failed to fully cure or correct such neglect or breach
within the thirty (30) days immediately following such notice.
4.3 This Agreement may be terminated by the Employee
prior to the date specified in Section 1 hereof on thirty (30) days written
notice of termination to the Company if the Company breaches any of its
covenants or obligations under this Agreement and such breach provides
reasonable cause for the Employee to terminate this Agreement.
-6-
7
4.4 In addition to the circumstances under which this
Agreement may be terminated by the Employee pursuant to Section 4.3, the
Employee may terminate this Agreement at any time, without cause, upon thirty
(30) days written notice of termination to the Company, in which event the
Company shall have no further obligation or liability to Employee except for
the Minimum Payments.
4.5 In addition to the circumstances under which this
Agreement may be terminated by the Company pursuant to Section 4.2, the Company
may terminate this Agreement at any time, without cause, upon thirty (30) days
written notice of termination to the Employee; provided, however, that if the
Company terminates this Agreement pursuant to this Section 4.5, then the
Employee shall become entitled to (a) receive the Minimum Payments, (b) receive
severance pay in an amount equal to six (6) months salary payable at the salary
rate then in effect and at the times as such compensation would have been
payable to the Employee pursuant to Section 3.1 hereof had this Agreement not
been terminated, and (c) receive a prorated portion of the bonus that would
have been due to Employee in accordance with Section 3.2 for the calendar year
during which such termination occurs. The proration of Employee's bonus shall
be based on the number of days of the calendar year elapsed prior to the
termination date using a 365-day year, and any such payment
-7-
8
of a prorated bonus shall be made at the time and in the manner set forth in
Section 3.2.
4.6 If this Agreement is terminated pursuant to any of
the provisions of this Section 4, the Company shall pay to Employee (a) the
portion of Employee's salary as set forth in Section 3.1 which has been earned
up to the date of termination, (b) reimbursement for business expenses pursuant
to Section 3.3 incurred up to the date of termination, and (c) compensation for
any accrued and unused vacation pursuant to Section 3.5 up to the date of
termination (collectively, the "Minimum Payments").
4.7 Notwithstanding any termination of the Employee's
services hereunder, all of the covenants of the Employee contained in Sections
5 and 6 shall continue in full force and effect in accordance with their
respective terms.
5. Confidential Information. The Employee acknowledges
that, in the course of the performance of her services hereunder, she may
become acquainted with confidential information regarding the Company (and
companies controlled, owned or operated by the Company) and their business,
operations, finances, personnel, accounts, customers and suppliers. This
information may include information relating to persons, firms, corporations
and other entities which are or become suppliers or customers of the Company
(or a company controlled, owned or operated by
-8-
9
the Company). The Employee will not, either during the term of this Agreement
or thereafter, without the prior express written consent of the Company,
disclose or make any use of such confidential information except as may be
required in the course of the performance of her services under this Agreement.
As used in this Section 5, the term "confidential information" does not include
information that (a) becomes or is generally available to the public other than
as a result of a disclosure by Employee; (b) was available to Employee on a
non-confidential basis prior to its disclosure by Company to Employee; or (c)
becomes available to Employee on a non-confidential basis from a source other
than Company who is not known to Employee to be bound by a confidentiality
agreement with Company.
By execution of this Agreement, Employee agrees and
acknowledges that she shall be bound by all of the terms of the Company's
Proprietary Information Agreement. Employee has reviewed such Proprietary
Information Agreement and agrees that any breach by Employee of any term or
covenant contained therein shall constitute a breach by Employee of this
Agreement.
6. Protection of Property. All records, files, manuals,
lists of customers, blanks, forms, materials, supplies, computer programs and
other materials furnished to the Employee by the Company (or any company
controlled, owned or operated by the Company), used on their behalf or
-9-
10
generated or obtained during the course of the performance of the Employee's
services hereunder, shall be and remain the property of the Company (or any
company controlled, owned or operated by the Company, as the case may be). The
Employee shall be a holder thereof for the sole use and benefit of the Company
(or any company controlled, owned or operated by the Company), and shall safely
keep and preserve such property, except as consumed in the normal business
operations of the Company (or any company controlled, owned or operated by the
Company, as the case may be). The Employee acknowledges that this property is
not readily accessible to the Company's competitors. Upon termination of this
Agreement hereunder, the Employee shall immediately deliver to the Company, or
its authorized representative, all such property, including all copies,
remaining in the Employee's possession or control.
7. Specific Performance. In the event of the breach by
Employee of any of the provisions of paragraphs 5 or 6, the Company, in
addition and supplementary to all other rights and remedies existing in its
favor, may apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any violations of the provisions thereof.
8. Assignment. Neither the rights nor obligations under
this Agreement may be assigned,
-10-
11
transferred, pledged or hypothecated by any party hereto, except that this
Agreement shall be binding upon and inure to the benefit of any successor of
the Company, whether by merger, purchase or otherwise and the Company may
assign this Agreement to any subsidiary or affiliate of the Company.
9. Notices. Any notices required or permitted to be
given under this Agreement shall be deemed to have been duly given if in
writing and if personally delivered or sent by registered or certified mail,
return receipt requested, with postage prepaid, to the following address:
If to the Company:
Intervisual Books, Inc.
0000 Xxxxx Xxxx Xxxx., #0000
Xxxxx Xxxxxx, XX 00000
Attention: President
If to Employee:
At the address on the Company's
records.
Any party may change the address to which notices are to be sent to it or her
by giving ten (10) days written notice of such change of address to the other
party in the manner above provided for giving notice. Notices will be
considered delivered on the date of personal delivery or on the date of deposit
in the United States mail in the manner above provided for giving notice by
mail.
10. Waiver. The waiver by any party hereto of a breach
of any of the provisions of this Agreement by the
-11-
12
other party shall not operate or be construed as a waiver of any subsequent
breach hereof by such party.
11. Severability. If any one or more covenants,
agreements or provisions herein contained shall be held or determined for any
reason whatsoever to be invalid or unenforceable, either in whole or in part,
then such covenants, agreements or provisions, or portion thereof, shall be
null and void and shall be deemed separable from the remaining covenants,
agreements or provisions hereof and shall in no way affect the validity of any
of the other provisions hereof.
12. Attorneys' Fees. The prevailing party in any
arbitration or litigation concerning the enforcement or interpretation of this
Agreement shall be entitled to recover reasonable costs and attorneys' fees.
13. Arbitration. The parties hereto acknowledge that it
is in their best interests to facilitate the informal resolution of any
disputes arising out of this Agreement or otherwise by mutual cooperation and
without resorting to litigation. As a result, if any party has a dispute
arising hereunder or otherwise, including but not limited to any claim for
breach of any contract or covenant (express or implied), tort claims, claims
for discrimination (including, but not limited to, race, sex, religion,
national origin, age, handicap or disability), claims for compensation or
benefits (except where a benefit plan or
-12-
13
pension plan or insurance policy specifies a different claims procedure) and
claims for violation of any federal, state or other governmental law, statute,
regulation or ordinance (except for claims involving workers' compensation
benefits), and the parties are unable to reach agreement among themselves, then
a settlement conference must be held within thirty (30) days upon receipt of a
notice by the complaining party describing in detail the complaint and setting
forth a proposed solution to the complaint. The settlement conference will be
held in any Los Angeles office of the Judicial Arbitration and Mediation
Services, Inc. ("JAMS"). The complaining party must contact JAMS to schedule
the conference and the parties must agree on a retired judge from the JAMS
panel. If the parties are unable to agree upon such a retired judge, JAMS
shall provide a list of three available judges and each party may strike one
judge. The remaining judge will serve as the mediator at the settlement
conference.
If the dispute is not settled by the above-described
format, the parties agree to submit the dispute to JAMS for binding
arbitration. A three-judge panel will be selected to arbitrate the dispute.
JAMS will provide the names of five potential arbitrators, giving each party
the opportunity to strike one name. The remaining three arbitrators will serve
as the arbitration panel. The parties agree that the arbitration must be
initiated within
-13-
14
six months after the claimed breach occurred and that failure to initiate
arbitration within the six-month period constitutes an absolute bar from the
institution of any new proceedings. Arbitration may be initiated by the
aggrieved party by sending written notice of an intent to arbitrate by
registered certified mail to all parties and to JAMS. The notice must contain
a description of the dispute, the amount involved and the remedies sought. If
and when a demand for arbitration is made by either party, the parties agree to
execute a Submission Agreement provided by JAMS, setting forth the rights of
the parties if the case is arbitrated and rules and procedures to be followed
at the arbitration hearing.
The parties hereto agree that arbitration in
accordance with this Section 13 shall be the sole and exclusive remedy for any
dispute arising hereunder or otherwise. Notwithstanding the foregoing, nothing
contained in this Section 13 shall prevent the Company from seeking and
obtaining equitable relief in a court to enforce any of its rights under
Sections 5 or 6 hereof or under the Company's Proprietary Information
Agreement.
14. Withholding of Taxes; Tax Reporting. The Company may
withhold from any amounts payable under this Agreement all such Federal, state,
city and other taxes, and may file with appropriate governmental authorities
all such information, returns or other reports with respect to the
-14-
15
tax consequences of any amounts payable under this Agreement, as may, in its
reasonable judgment, be required by law.
15. Choice of Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of California.
16. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original, but all
of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
INTERVISUAL BOOKS, INC.
By:___________________________
Xxxxx X. Xxxx,
Chairman of the Board and
Chief Executive Officer
EMPLOYEE
______________________________
Xxxxxx Sale
-15-
