EMPLOYMENT AGREEMENT
WITH
▇▇▇▇ ▇. FAROUDJA
DATED MARCH 8, 1996
Faroudja Laboratories, Inc. (the "Employer"), a California
corporation, and ▇▇▇▇ ▇. Faroudja (the "Executive") agree as follows:
1. EMPLOYMENT AND DUTIES. Subject to section 11(b), the Employer
shall employ the Executive, and the Executive shall serve the Employer, as
president, chief executive officer and chief technical officer during the term
set forth in section 2. As president and chief executive officer and subject to
section 11(b), the Executive shall, subject to the ultimate control of the board
of directors of the Employer, be in charge of all hiring and firing decisions.
The Executive shall use his best efforts to promote the interests of the
Employer, and he shall perform his duties faithfully and diligently, consistent
with sound business practices. Subject to the following sentence, the Executive
shall devote no less than half of his business time during the first year of the
term of this agreement and no less than one-third of his business time during
the second year of the term of this agreement to the performance of his duties
for the Employer, and the Executive shall not engage in any other business
activities (whether or not competitive with business of the Employer) that
interfere with the performance of his duties under this agreement. The
Executive shall serve as a member of board of directors of Faroudja Research
Enterprises Inc. ("FRE") and may engage in business activities on behalf of FRE.
2. TERM OF EMPLOYMENT. The term of the Executive's employment under
this agreement shall commence on the date of this agreement and shall continue
until the close of business on the second anniversary of this agreement, except
that the Executive's employment shall be subject to earlier termination under
section 4 and, with the mutual agreement of the parties, shall be subject to
extension after the second anniversary of this agreement.
3. COMPENSATION.
(a) As compensation for all services the Executive renders
during his employment under this agreement the Employer shall pay the Executive
a salary at the rate of $100,000 for the first year of the term of this
agreement and $66,600 for the second year of the term of this agreement. The
Executive's salary shall be payable in equal installments at least twice a
month.
(b) Notwithstanding the foregoing, if pursuant to an agreement
between the Executive and the Employer, the Executive devotes more than one-half
of his business time
during the first year of the term of this agreement or more than one-third of
his business time during the second year of the term of this agreement to the
performance of his duties for the Employer, the Executive's salary shall be
increased proportionately.
4. EXPENSES. During the Executive's employment under this
agreement, the Employer shall reimburse the Executive for reasonable business
expenses incurred by him in the performance of his duties on behalf of the
Employer, FRE or any of their affiliates upon presentation of vouchers or other
evidence of such expenses in accordance with the policies of the Employer.
5. FRINGE BENEFITS. During the Executive's employment under this
agreement, the Executive shall be entitled to those fringe benefits and
perquisites (including medical and dental group insurance and participation in
the Employer's 401(k) plan) that are consistent with the Employer's practices in
the past with respect to the Executive or those that are provided to other
senior executives of the Employer generally.
6. AUTOMOBILE. During the Executive's employment under this
agreement, the Executive shall have use, at no charge, of the company car that
he presently uses (license number 3NDV219). If the Executive's employment under
this agreement is terminated other than for cause, or upon expiration of this
agreement, the Employer shall transfer to the Executive title to that car at no
charge to the Executive.
7. KEY MAN LIFE INSURANCE. During the Executive's employment under
this agreement, the Employer may at any time and from time to time obtain
insurance on the Executive's life in such amounts and in such forms as the
Employer may in its sole discretion determine (it being understood that the
Executive shall have no interest in such insurance and, if the Employer so
requests, the Executive shall submit to such medical examinations, supply such
information and execute such documents as may reasonably be required to obtain
such insurance).
8. LOCATION. During the term of the Executive's employment under
this agreement, the Employer's executive offices shall be located in Sunnyvale,
California; PROVIDED that the Executive may manage the Employer's sales and
research from an office to be established in France, and PROVIDED FURTHER, that
the Executive may be required to travel for business purposes for reasonable
lengths of time.
9. TERMINATION.
(a) The Executive's employment shall terminate upon his death,
and may be terminated at any earlier time at the option of the Employer (upon
notice given by the Employer to the Executive as much in advance of the
termination as the Employer considers practicable in the circumstances). On the
termination of the Executive's employment as a result of his death or at the
Employer's option as a result of the Executive's disability (as defined below)
or for cause (as defined below), the Employer shall pay the Executive (or his
named
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beneficiary or estate) the amount of his salary and other benefits accrued to
the date of termination (with no reduction for any period of disability prior to
termination). On the termination of the Executive's employment at the
Employer's option for any reason other than as a result of disability or for
cause, the Employer shall continue to pay the Executive (or his named
beneficiary or estate) the amount of his salary and other benefits in accordance
with this agreement for the remaining employment term specified in section 2, as
and when the same would have otherwise become due and payable. Except as
specifically provided in this agreement, the Employer shall have no other
obligation to the Executive (or his named beneficiary or estate).
(b) As used in this agreement,
(i) the term "disability" means the failure of the
Executive substantially to perform his duties and obligations under this
agreement for 90 consecutive days because of any mental or physical incapacity,
as determined by a physician mutually agreed upon the by the Employer and the
Executive, or if, after 30 days, they are unable to agree about the identity of
the physician, by a physician selected by the American Arbitration Association,
and
(ii) the term "cause" means (A) any action by the Executive
that constitutes dishonesty, a violation of law or a fraud against the Employer
or any of its affiliates, (B) the conviction of the Executive for a felony, (C)
willful misconduct, drunkenness or abuse of any controlled substance by the
Executive (but only if such misconduct, drunkenness or abuse adversely affects
the Executive's performance under this agreement) or (D) any material breach by
the Executive of this agreement or any other written agreement between him, on
the one hand, and the Employer, Faroudja Images, Inc. ("Images") or any of their
affiliates, on the other hand executed and delivered on or as of the date of
this agreement.
10. NON-COMPETITION; CONFIDENTIALITY.
(a) The Executive shall not at any time during his employment
under this agreement, for any reason, engage or become interested (as owner,
lender, stockholder, partner, director, officer, employee, consultant or
otherwise) in any business that is in competition with the business then
conducted by the Employer, FRE or any of their affiliates, PROVIDED that the
foregoing shall not prohibit the Executive from owning as a passive investment
not more than ten percent of the outstanding securities of any class of any
publicly-held company.
(b) The Executive shall not at any time during his employment
under this agreement or for a period of two years thereafter hire on his own
behalf, or on behalf of any other enterprise, any individual who was an employee
of the Employer, FRE or any of their affiliates at any time during the one-year
period immediately preceding the termination of the Executive's employment by
the Employer.
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(c) The Executive shall at all times during his employment and
thereafter hold in confidence all Confidential Information (as defined below)
that may have come or may come into his possession or within his knowledge
concerning the products, services, processes, businesses, suppliers, customers
and clients of the Employer, FRE or any of their affiliates. Except as
otherwise provided in the license agreement (the "License Agreement") dated this
date among the Executive, the Employer and FRE, the Executive agrees that
neither he nor any person or enterprise controlled by him will for any reason
directly or indirectly, for himself or any other person, use or disclose any
trade secrets, proprietary or confidential information, inventions, processes or
procedures, patents, trademarks, trade names, customer lists, service marks,
service names, copyrights, applications for any of the foregoing or licenses or
other rights in respect thereof (collectively, "Confidential Information"),
owned or used by, or licensed to, the Employer, FRE or any of their affiliates,
provided that the Executive may disclose Confidential Information that has
become generally available to the public other than as a result of a breach of
this agreement by the Executive or pursuant to an order of a court of competent
jurisdiction or of a governmental agency, department or commission or that
arises after the fifth anniversary of this agreement. Except as otherwise
provided in the License Agreement, upon termination of his employment under this
agreement, the Executive shall promptly surrender to the Employer all documents
that contain Confidential Information and that are within his possession or
control.
(d) The Executive acknowledges that the remedy at law for breach
of section 10(a), 10(b) or 10(c) would be inadequate and that, in addition to
any other remedy the Employer may have for such a breach, the Employer shall be
entitled to an injunction restraining any such breach or threatened breach.
11. MANAGEMENT.
(a) Except as specifically provided in this agreement, nothing
in this agreement shall (i) give the Executive the right to be employed by or to
continue in the employ of the Employer or any of its affiliates or prevent the
termination of his employment by the Employer at any time, or (ii) limit the
right of the board of directors (or other governing body) of the Employer to
manage the business and affairs of the Employer.
(b) The parties acknowledge that it is their agreement that
Images will recruit additional management of the Employer, subject to the
Executive's approval, including, after consultation with the Executive, a
marketing manager and a chief executive officer. Following the recruitment of a
chief executive officer, the Executive shall cease to be president and chief
executive officer of the Employer and, during the remaining term of his
employment under this agreement, the Executive's title shall be Chairman
Emeritus, Founder and Chief Technical Officer of the Employer.
12. NOTICES. All notices and other communications under this
agreement shall be in writing and may be given by any of the following methods:
(a) personal delivery, (b) facsimile transmission, (c) registered or certified
mail, postage prepaid, return receipt
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requested or (d) overnight delivery service. Notices shall be sent to the
appropriate party at his or its address or facsimile number given below (or at
such other address or facsimile number for that party as shall be specified by
notice given under this section 12):
if to the Executive, to him at:
c/o Faroudja Laboratories, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Godward ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
5 Palo Alto Square, 4th Floor
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Employer, to it at:
Faroudja Laboratories, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
--------------------------------
--------------------------------
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Attention:
Fax:
All such notices and communications shall be deemed received upon (a) actual
receipt by the addressee, (b) actual delivery to the appropriate address or (c)
in the case of a facsimile transmission, upon transmission by the sender and
issuance by the transmitting machine of a confirmation slip confirming the
number of pages constituting the notice have been transmitted without error. In
the case of notices sent by facsimile transmission, the sender shall
contemporaneously mail a copy of the notice to the addressee at the address
provided for above. However, such mailing shall in no way alter the time at
which the facsimile notice is deemed received.
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13. ASSIGNMENT. This agreement shall be binding upon, and inure to
the benefit of, the parties' respective successors, assigns, heirs and legal
representatives. This agreement shall be assigned to and shall inure to the
benefit of any successor to substantially all the assets and business of the
Employer as a going concern, whether by merger, consolidation, liquidation or
sale of substantially all the assets of the Employer or otherwise, and the
Employer shall cause its successors to assume its obligations under this
agreement (but no such assignment shall relieve it of its obligations under this
agreement).
14. SEVERABILITY. If any provision of this agreement, or the
application of any provision to any person or circumstance shall for any reason
or to any extent be invalid or unenforceable, the remainder of this agreement
and the application of that provision to other persons or circumstances shall
not be affected, but shall be enforced to the full extent Permitted by law.
15. 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
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this agreement. Any waiver must be in writing.
16. GOVERNING LAW. This agreement shall be governed by and construed
in accordance with the law of the state of California applicable to agreements
made and to be performed wholly in California.
17. ARBITRATION. All claims, disputes and other matters as to which
the parties disagree arising out of this agreement, or the interpretation or
breach or alleged breach of this agreement, shall be decided by final and
binding arbitration in accordance with the Rules of Practice and Procedure of
the Judicial Arbitration and Mediation Services/Endispute ("JAMS") then in
effect, unless the parties mutually agree otherwise. The arbitration shall be
conducted before a retired judge selected by agreement of the parties from the
JAMS panel. If the parties cannot agree upon the arbitrator, JAMS will provide
a list of three available retired judges and each party may strike one. The
remaining judge will serve as arbitrator. The arbitration shall be held in San
Jose, California at a location selected by the arbitrator. This agreement to
arbitrate shall be specifically enforceable under applicable law in any court of
competent jurisdiction. Notice of the demand for arbitration shall be filed in
writing with the other party to this agreement and with JAMS. The demand for
arbitration shall be made within a reasonable time after the claim, dispute or
other matter in question has arisen, and in no event shall it be made after the
date when institution of legal or equitable proceedings based on such claim,
dispute or other matter in question would be barred by the applicable
contractual, or other, statute limitations. It is the parties' objective to
expedite the arbitration proceedings by placing the following limitations on
discovery: (a) each party may propound only one interrogatory requesting the
name, business affiliation and address of each witness to be called at the
arbitration hearing; (b) on a date to be determined at the pre-hearing
conference, each party may serve one request for the production of documents,
the requests shall be limited to 30, including subparts, and the documents are
to be exchanged 30 days later; and (c) each party may depose
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two witnesses. Each deposition must be concluded within four hours and all
depositions must be completed within 30 days of the pre-hearing conference. Any
party deposing an opponent's expert must pay the expert's fee for attending the
deposition. The arbitration proceedings shall remain confidential. Any
monetary award of the arbitrators may include interest at the prime rate as
published from time to time by The Chase Manhattan Bank, N.A., plus one percent,
which interest shall accrue from the date the claim, dispute or other matter in
question was rightfully due and payable under this agreement until the date the
award is paid to the prevailing party. There shall be no restriction on the
power of the arbitrator to award punitive damages in the appropriate case. The
award rendered by the arbitrator shall be final and judgment may be entered in
accordance with applicable law and in any court having jurisdiction thereof.
Each party shall pay the fees of its own attorneys, expenses of witnesses and
all other expenses connected with the presentation of such party's case. The
cost of the arbitration, including the cost of the record or transcripts of the
record, if any, administrative fees and all other fees involved, shall be shared
equally, unless the arbitrator otherwise directs.
Notwithstanding anything to the contrary in this section 17, this
section 17 shall not govern any claim, dispute or other matter as to which the
parties disagree arising out of the License Agreement.
18. COUNTERPARTS. This agreement may be executed in counterparts,
each of which shall be considered an original, but both of which together shall
constitute the same instrument.
FAROUDJA LABORATORIES, INC.
By:/s/ ▇▇▇▇ ▇. Faroudja
------------------------------------------
Name:
Title:
/s/ ▇▇▇▇ ▇. Faroudja
---------------------------------------------
▇▇▇▇ ▇. Faroudja
The undersigned hereby acknowledges section 11(b) of the foregoing agreement.
FAROUDJA IMAGES, INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Secretary
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