EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into effective May
1, 1998 by and between You Bet, Inc. a Delaware corporation ("the Company") and
Xxx Xxxxxxxxx ("Executive"), in connection with the Company's engagement of
Executive for personal services.
1. EMPLOYMENT; DUTIES AND ACCEPTANCE:
(a) EMPOYMENT BY COMPANY.
The Company hereby engages Executive, and Executive hereby agrees to
provide his services as President and Chief Operating officer of the Company
(Executive)on the terms and conditions of this Agreement. Throughout the Term of
this Agreement Executive shall, subject to the provisions contained herein,
devote substantially all of his work time to the employment described hereunder.
(b) LOCATION OF EMPLOYMENT:
Executive shall render his services at the Company's offices at 0000
Xxxxxxxx Xxxx, Xxx Xxxxxxx, XX 00000; provided, however, that Executive agrees
to render his services at such other locations from time-to-time as the proper
performance of Executive's duties may reasonably require. Notwithstanding the
foregoing, the Company's principal offices shall remain in Southern California,
and Executive need not relocate to render his duties hereunder.
2. TERM
The term of Executive's employment hereunder shall be for a period of
one (1) year commencing as of May 1, 1998 and ending on April 30, 1999 (the
"Term") unless sooner terminated pursuant to Section 7 hereof. After the
contract term the employment will be 'at will', and as such Employee or Employer
may terminate obligations under this Agreement by giving 30 days prior written
notice.
3. COMPENSATION AND BENEFITS:
(a) SALARY:
During the first year of the Term, Executive shall receive a salary
(the "Annual Salary") at the rate of $130,000 per annum. However, upon the
Company raising an additional $5,000,000 in new funding, the Executive's Annual
Salary shall increase thereafter to $150,000. The Annual Salary shall be less
such deductions as shall be required to be withheld by applicable law and
regulations and shall be
pro-rated for any period that does not constitute a full twelve (12) month
period.
(b) BONUS:
A. Executive shall participate in any
formal Bonus plans instituted by the Company for
the benefit of Employees. Cash and or stock
bonuses based on performance may be offered from
time to time at the discretion of the Board of
Directors of the Company. The Company shall define
and commit to a cash bonus in accordance with a
target award schedule for Executive by the
November 1998 Board of Directors meeting. In the
event the Company fails to define and commit to a
cash bonus program the Executive shall have the
right but not the obligation to consider such
event to be a termination without cause of this
agreement, provided the Executive provides the
Company 30 days written notice of intent to
consider lack of a bonus program termination and
the Company has the ability to cure the problem
within the 30 days.
(c) SEVERANCE:
The Executive shall have the right at anytime for any reason to give
thirty (30) days written notice of resignation upon which the Executive shall
receive (2) months of salary, health benefits and vested stock options as of the
date of resignation.
4. PARTICIPATION IN EXECUTIVE BENEFIT PLANS
(a) FRINGE BENEFITS:
Executive shall be permitted during the Term to participate in any
group life, medical, hospitalization, dental, and disability plans, and any
other plans and benefits, generally maintained by Company for executives of the
stature and rank of Executive during the Term hereof, each in accordance with
the terms and conditions of such plans (collectively referred to herein as
"Fringe Benefits"); provided, however, that Company shall not be required to
establish or maintain any such Fringe Benefits.
(b) VACATION:
Executive shall accrue, in addition to sick days
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and days on which Company is closed, paid vacation days at the rate of one and
one-quarter (1-1/4) days per month up to a maximum of fifteen (15) work days.
Under no circumstances can Executive accrue more vacation than twenty (20) work
days (the "Ceiling"). Thus, once the maximum amount of paid vacation time is
accrued or earned, no further vacation time is accrued or earned until after
vacation is taken and the amount of Executive's accrued vacation time goes below
the Ceiling as stated above. At that point, Executive will start to accrue
vacation time again until Executive reaches the Ceiling.
(c) SICK LEAVE:
Employee shall accrue one-half (1/2) day per calendar month as sick
leave with full pay. Upon termination of this Agreement, Employee shall be paid
for any unused sick leave. Under no circumstances can Executive accrue more Sick
Leave than Ten (10) work days (the "Ceiling" ).
(d) EXPENSES:
Company will reimburse Executive for actual and necessary travel and
accommodation costs, entertainment and other business expenses incurred as a
necessary travel and accommodation costs, entertainment and other business
expenses incurred as a necessary part of discharging the Executive's duties
hereunder, subject to receipt of reasonable and appropriate documentation by
Company and in accordance with Company policy.
5. CERTAIN COVENANTS OF EXECUTIVE:
Without in any way limiting or waiving any right or remedy accorded to
Company or any limitation placed upon Executive by law, Executive agrees as
follow:
(a) CONFIDENTIAL INFORMATION:
Executive agrees that, neither during the Term nor at anytime
thereafter shall Executive (i) disclose to any person, firm, or corporation not
employed by the Company, You Bet International, Inc. or any affiliate of either
(the "Protected Company") or not engaged to render services to any Protected
Company or (ii) use for the benefit of himself, or others, any confidential
information of any Protected Company obtained by the Executive prior to the
execution of this Agreement, during the Term or any time thereafter., including,
without limitation, "know-how," trade secrets, details of suppliers, pricing
policies, financial data, operational methods, marketing and sales information
or strategies, product development techniques or plans or any strategies
relating thereto, technical
3
processes, designs and design projects, and other proprietary information of any
Protected Company; PROVIDED, HOWEVER, that this provision shall not preclude
the Executive from (x) upon advice of counsel and notice to the Company, making
any disclosure required by any applicable law or (y) using or disclosing
information known generally to the public (other than information known
generally to the public as a result of any violation of this Section 5 (a).
(b) PROPERTY OF COMPANY:
Any interest in trademarks, service-marks, copyrights, copyright
applications, patents, patent applications, slogans, developments and processes
which the Executive, during the Term, may develop relating to the Business of
the Company in which the Company may then be engaged and any memoranda, notes,
lists, records and other documents (and all copies thereof) made or compiled by
the Executive or made available to the Executive concerning the business of any
Protected Company shall belong and remain in the possession of any Protected
Company, and shall be delivered to the Company promptly upon the termination of
the Executive's employment with Company or at any other time on request.
(c) NON-INTERFERENCE:
Executive will not, during the Term hereof and for a period of one (1)
year after the Term induce any person who is an executive, officer or agent,
customer or supplier of the Company to terminate his relationship with the
Company.
6. OTHER PROVISIONS:
(a) RIGHTS AND REMEDIES UPON BREACH:
If the Executive breaches, or threatens to commit a breach of, any of
the provisions of Section 5 hereof (the "Restrictive Covenants"), the Company
shall have the following rights and remedies, each of which rights and remedies
shall be independent of the other and severally enforceable, and all of which
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company at law or in equity.
4
(b) ACCOUNTING:
The right and remedy to require the Executive to account for and pay
over to the Company all compensation, profits, monies, accruals, increments or
other benefits (collectively "Benefits") derived or received by the Executive as
a result of any transactions constituting a breach of any of the Restrictive
Covenants, and the Executive shall account for and pay over such Benefits to the
Company.
(c) SEVERABILITY OF COVENANTS:
If any court determines that any of the Restrictive Covenants, or any
part thereof, is invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given full effect, without
regard to the invalid portions.
(d) BLUE-PENCILLING:
If any court construes any of the Restrictive Covenants, or any part
thereof, to be unenforceable because of the duration or geographic scope of such
provision, such court shall have the power to reduce the duration or scope of
such provision and, in its reduced form, such provision shall then be
enforceable.
(e) ENFORCEABILITY IN JURISDICTIONS:
The parties intend to and hereby confer jurisdiction to enforce the
Restrictive Covenants upon the courts of any jurisdiction within the
geographical scope of such Restrictive Covenants. If the courts of any one or
more of such jurisdictions hold the Restrictive Covenants unenforceable by
reason of the breadth of such scope or otherwise, it is the intention of the
parties that such determination not bar or in any way affect Company's right to
the relief provided in this Section 6 in the courts of any other jurisdiction
within the geographical scope of such Restrictive Covenants, as to breaches of
such Restrictive Covenants in such other respective jurisdictions, such
Restrictive Covenants as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent covenants.
(f) INJUNCTIVE RELIEF:
Executive agrees and understands that the remedy at law for any breach
by Executive of the provisions of Paragraph 5 hereof may be inadequate and that
damages resulting from such breach may not be susceptible to being measured in
monetary terms. Accordingly, it is acknowledged that upon Executive's breach of
any provision of paragraph 5
5
hereof, the Company shall be entitled to seek to obtain from any court of
competent jurisdiction injunctive relief to prevent the continuation of such
breach. Nothing contained herein shall be deemed to limit the Company's remedies
at law or in equity for any breach of the provisions of Paragraph 5 hereof which
may be available to the Company.
7. TERMINATION:
(a) TERMINATION UPON DEATH OR DISABILITY:
If during the Term, Executive should (i) die or (ii) Executive becomes so
physically or mentally disabled whether totally or partially, that Executive is
unable to perform the duties, functions and responsibilities required hereunder
for (aa) a period of three (3) consecutive months or (bb) shorter periods
aggregating to four (4) months within any period of twelve (12) months
("Disability"), then in such event, Company may, at any time thereafter, by
written notice to Executive, terminate Executive's employment hereunder.
Executive agrees to submit to reasonable medical examinations upon the request
of Company.
The existence of Executive's disability for the purposes of this Agreement shall
be determined by a reputable physician selected by Company who is experienced in
the relevant field of medicine. If Executive's services are terminated, as
aforesaid, Executive or the designated beneficiary of Executive, shall be
entitled to receive Executive's base salary, accrued share of the Bonus for that
Fiscal Year and unused vacation (hereinafter collectively referred to as "Fringe
Benefits"), if any, earned through the date of Executive's termination and
continuing thereafter until the end of the Term of this agreement, and an
additional four (4) months. The Company will deduct any disability payments made
to Executive from any insurance source from payments made to Executive after the
termination date.
(b) DESIGNATION OF BENEFICIARY:
The parties hereto agree that the Executive shall designate, by written
notice to the Company, a beneficiary to receive the payments described in
Section 7 in the event of his death and the designation of any such beneficiary
may be changed by the Executive from time to time by written notice to the
Company. In the event the Executive fails to designate a beneficiary as herein
provided, any payments which are to be made to the Executive's designated
beneficiary under Section 7 shall be made to the Executive's widow, if any,
during her lifetime. If the Executive has no designees or widow, such payments
shall be paid to the Executive's estate.
6
(c) TERMINATION FOR CAUSE:
The Company shall have the option to terminate Executive upon the
occurrence of any of the following:
(i) Executive shall have breached any of the terms of this
Agreement and shall have failed to cure such breach (if such breach is curable)
within 15 days of notice thereof by the Company;
(ii) Executive shall have been convicted of a crime involving
moral turpitude; or
(iii) Any of the representations and warranties of Executive
hereunder shall be breached in a material respect.
If Executive's services are terminated as set forth in this subparagraph
(c), Executive's services shall be terminated as of the effective date of
termination and all compensation shall cease as of such effective date.
(d) TERMINATION WITHOUT CAUSE:
If the Executive is terminated without cause the Executive shall be
entitled to receive Executive's base salary, health benefits, accrued share
of the Bonus for that Fiscal Year and unused vacation, if any, earned through
the date of Executive's termination and base salary continuing thereafter
until the end of the Term of this agreement, and an additional four (4)
months.
(e) Executive Stock Options
If the Executive is terminated without cause, the time period the
Executive may hold stock options as defined in the "1995 Employee Option
Agreement" will be changed to a three (3) year holding period and the
Executive's options will vest through the Term of this agreement.
8. EXECUTIVE'S REPRESENTATIONS AND WARRANTIES:
(a) RIGHT TO ENTER INTO AGREEMENT:
Executive has the unfettered right to enter into this entire Agreement on
all of the terms, covenants and conditions hereof; and Executive has not done
or permitted to be done anything which may curtail or impair any of the rights
granted to Company herein.
(b) BREACH UNDER OTHER AGREEMENT OR ARRANGEMENT:
7
Neither the execution and delivery of this Agreement nor the performance by
Executive of any of his obligations hereunder will constitute a violation or
breach of, or a default under, any agreement, arrangement or understanding, or
any other restriction of any kind, to which Executive is a party or by which
Executive is bound.
(c) SERVICES RENDERED DEEMED SPECIAL, ETC:
Executive acknowledges and agrees that the services to be rendered by him
hereunder are of a special, unique, extraordinary and intellectual character
which gives them peculiar value, the loss of which cannot be adequately
compensated for in an action at law and that a breach of any term, condition or
covenant hereof will cause irreparable harm and injury to the Company and in
addition to any other available remedy the Company will be entitled to seek
injunctive relief.
9. USE OF NAME:
The Company shall have the right during the Term hereof to use Executive's
name, biography and approved likenesses in connection with Company's business,
including advertising their products and services; and the Company may grant
such rights to others, but not for use as a direct endorsement.
10. ARBITRATION:
Any dispute whatsoever arising out of or referable to this Agreement,
including, without limitation, any dispute as to the rights and entitlements and
performance of the parties under this Agreement or concerning the termination of
Executive's employment or of this Agreement or its construction or its validity
or enforcement, or as to the arbitrator's jurisdiction, or as to the ability to
arbitrate any such dispute, shall be submitted to final and binding arbitration
in Los Angeles, California by and pursuant to the Labor Arbitration Rules of the
American Arbitration Association with discovery proceedings pursuant to Section
1283.05 of the California Code of Civil Procedure. The arbitrator shall be
entitled to award any relief which might be available at law or in equity,
including that of a provisional, permanent or injunctive nature. The prevailing
party in such arbitration as determined by the arbitrator, or in any proceedings
in respect thereof as determined by the person presiding, shall be entitled to
receive its or his reasonable attorneys' fees incurred in connection therewith.
8
or remedy, nor any single or partial exercise of any such right or remedy
preclude any other or further exercise thereof or the exercise of any other
right or remedy.
13. GOVERNING LAW:
This Agreement shall be governed by and construed in accordance with the
law of the State of California applicable to agreements entered into and
performed entirely within such State.
14. HEADINGS:
The headings in this Agreement are solely for the convenience of reference
and shall not affect its interpretation.
WHEREFORE, the parties hereto have executed this Agreement as of the day
and year first above written.
/s/ Xxx Xxxxxxxxx
By: --------------------------------------
Xxx Xxxxxxxxx
Agreed to and Accepted:
You Bet!, Inc., a
Delaware Corporation
By: [ILLEGIBLE]
-----------------------
Its: CEO
-----
10
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into effective as of
February 23, 1999 by and between Xxxxxx.xxx, Inc., a Delaware corporation
formerly known as You Bet International, Inc. ("the Company") and Xxx Xxxxxxxxx
("Executive"), in connection with the Company's engagement of Executive for
personal services and supersedes the prior employment agreement between the
Company and Executive.
1. EMPLOYMENT; DUTIES AND ACCEPTANCE:
(a) EMPLOYMENT BY COMPANY.
The Company hereby engages Executive, and Executive hereby agrees
to service as Executive Vice President and Chief Operating Officer of the
Company on the terms and conditions of this Agreement. Throughout the Term of
this Agreement Executive shall, subject to the provisions contained herein,
devote substantially all of his work time to the employment described hereunder.
(b) LOCATION OF EMPLOYMENT.
Executive shall render his services at the Company's offices at
0000 Xxxxxxxx Xxxx., Xxx Xxxxxxx, XX 00000; provided, however, that Executive
agrees to render his services at such other locations from time-to-time as the
proper performance of Executive's duties may reasonably require. Notwithstanding
the foregoing, the Company's principal offices shall remain in Southern
California, and Executive need not relocate to render his duties hereunder.
2. TERM:
(a) The term of Executive's employment hereunder shall commence on
the date hereof and end on April 30, 2000 (the "Term") unless sooner terminated
pursuant to Section 7 hereof. After the Term the employment of Executive shall
be at will, and as such either party may terminate this Agreement upon 30 days
prior written notice to the other party.
3. COMPENSATION AND BENEFITS:
(a) SALARY.
During the Term, Executive shall receive a salary (the "Annual
Salary") at the rate of $150,000 per annum. All Salary shall be less such
deductions as shall be required to
be withheld by applicable law and regulations and shall be pro-rated for any
period that does not constitute a full twelve (12) month period.
(b) BONUS.
Executive shall participate in any formal Bonus plans instituted
by the Company for the benefit of Employees. Cash and or stock bonuses based on
performance may be offered from time to time at the discretion of the Board of
Directors of the Company.
(c) STOCK OPTIONS.
Executive shall be granted 100,000 options pursuant to the
Company's 1998 Stock Option Plan. The 100,000 options will have an exercise
price of $10.50 per share and shall expire on February 22, 2009. The options
will vest as follows:
February 22, 2000 - 25,000 options
February 22, 2001 - 25,000 options
February 22, 2002 - 25,000 options
February 22, 2003 - 25,000 options
Any unvested options shall-terminate if the Executive ceases to
be employed by the Company, or as provided in the Company's 1998 Stock Option
Plan.
All unvested option will vest upon a "Change of Control" if the
Executive is employed with the Company at the time of Change of Control.
For purposes of this Agreement, the term "Change of Control"
shall mean, (i) the acquisition by a single entity or group of affiliated
entities of more than thirty-five percent (35%) of the outstanding capital stock
of the Company and which is accompanied or followed by a change either in a
majority of the members of the Board or of those members of the Board who are
not full time employees of the Company, or (ii) the consummation of any merger
of the Company or any sale, transfer or other disposition of all or
substantially all of the Company's assets, directly or indirectly, if the
shareholders of the Company immediately before the consummation of such a
transaction own, immediately following the consummation of such transaction on a
fully-diluted basis, equity securities (other than options, warrants, or rights
to acquire securities) possessing less than sixty-five percent (65%) of the
voting power of the surviving or acquiring corporation (or any corporation in
control of the surviving or acquiring corporation whose equity securities are
issued or transferred in such transaction).
(d) SEVERANCE. If this Agreement shall be terminated for any reason
other than (i) a termination for disability pursuant to Section 7(a) hereof,
(ii) for cause pursuant to Section
-2-
7(c) hereof or (iii) without cause pursuant to Section 7(d) hereof, Executive
shall be entitled to receive an amount equal to two (2) months of his Annual
Salary.
4. PARTICIPATION IN EXECUTIVE BENEFIT PLANS:
(a) FRINGE BENEFITS.
Executive shall be permitted during the Term to participate in
any group life, medical, hospitalization, dental, health and accident and
disability plans, supplemental health care plans and plans providing for life
insurance coverage, and any other plans and benefits, generally maintained by
Company for executives of the stature and rank of Executive during the Term
hereof, each in accordance with the terms and conditions of such plans
(collectively referred to herein as "Fringe Benefits"); provided, however, that
Company shall not be required to establish or maintain any such Fringe Benefits.
(b) VACATION.
Executive shall accrue, in addition to sick days and days on
which Company is closed, paid vacation days at the rate of one and one-quarter
(1 - 1/4) days per month up to a maximum of fifteen (15) work days. Under no
circumstances can Executive accrue more vacation than twenty (20) work days,
including vacation time accrued prior to the commencement of the Term (the
"Ceiling"). Thus, once the maximum amount of paid vacation time is accrued or
earned, no further vacation time is accrued or earned until after vacation is
taken and the amount of Executive's accrued vacation time goes below the Ceiling
as stated above. At that point, Executive will start to accrue vacation time
again until Executive reaches the Ceiling.
(c) EXPENSES.
Company will reimburse Executive for actual and necessary travel
and accommodation costs, entertainment and other business expenses incurred as a
necessary travel and accommodation costs, entertainment and other business
expenses incurred as a necessary part of discharging the Executive's duties
hereunder, subject to receipt of reasonable and appropriate documentation by
Company and in accordance with Company policy. Company will also reimburse
Executive $750 per month for all business related operating expenses of
Executive's automobile.
-3-
5. CERTAIN COVENANTS OF EXECUTIVE:
Without in any way limiting or waiving any right or remedy accorded to
Company or any limitation placed upon Executive by law, Executive agrees as
follows:
(a) CONFIDENTIAL INFORMATION:
Executive agrees that, neither during the Term nor at anytime
thereafter shall Executive (i) disclose to any person, firm or corporation not
employed by the Company, You Bet!, Inc. or any affiliate of either (the
"Protected Company") or not engaged to render services to any Protected Company
or (ii) use for the benefit of himself, or others, any confidential information
of any Protected Company obtained by the Executive prior to the execution of
this Agreement, during the Term or any time thereafter, including, without
limitation, "know-how," trade secrets, details of suppliers, pricing policies,
financial data, operational methods, marketing and sales information or
strategies, product development techniques or plans or any strategies relating
thereto, technical processes, designs and design projects, and other proprietary
information of any Protected Company; PROVIDED, HOWEVER, that this provision
shall not preclude the Executive from (x) upon advice of counsel ind notice to
the Company, making any disclosure required by any applicable law or (y) using
or disclosing information known generally to the public (other than information
known generally to the public as a result of any violation of this Section
5(a)).
(b) PROPERTY OF COMPANY.
Any interest in trademarks, service-marks, copyrights, copyright
applications, patents, patent applications, slogans, developments and processes
which the Executive, during the Term, may develop relating to the business of
the Company in which the Company may then be engaged and any memoranda, notes,
lists, records and other documents (and all copies thereof) made or compiled by
the Executive or made available to the Executive concerning the business of any
Protected Company shall belong and remain in the possession of any Protected
Company, and shall be delivered to the Company promptly upon the termination of
the Executive's employment with Company or at any other time on request.
(c) NON-INTERFERENCE.
Executive will not, during the Term hereof and for a period of
two (2) years after the Term induce any person who is an executive, officer or
agent, customer or supplier of the Company to terminate his relationship with
the Company.
-4-
6. OTHER PROVISIONS:
(a) RIGHTS AND REMEDIES UPON BREACH.
If the Executive breaches, or threatens to commit a breach of,
any of the provisions of Section 5 hereof (the "Restrictive Covenants"), the
Company shall have the following rights and remedies, each of which rights and
remedies shall be independent of the other and severally enforceable, and all of
which rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company at law or in equity.
(b) ACCOUNTING.
The right and remedy to require the Executive to account for and
pay over to the Company all compensation, profits, monies, accruals, increments
or other benefits (collectively "Benefits") derived or received by the Executive
as a result of any transactions constituting a breach of any of the Restrictive
Covenants, and the Executive shall account for and pay over such Benefits to the
Company.
(c) SEVERABILITY OF COVENANTS.
If any court determines that any of the Restrictive Covenants, or
any part thereof, is invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given full effect, without
regard to the invalid portions.
(d) BLUE-PENCILING.
If any court construes any of the Restrictive Covenants, or any
part thereof, to be unenforceable because of the duration or geographic scope of
such provision, such court shall have the power to reduce the duration or scope
of such provision and, in its reduced form, such provision shall then be
enforceable.
(e) ENFORCEABILITY IN JURISDICTIONS.
The parties intend to and hereby confer jurisdiction to enforce
the Restrictive Covenants upon the courts of any jurisdiction within the
geographical scope of such Restrictive Covenants. If the courts of any one or
more of such jurisdictions hold the Restrictive Covenants unenforceable by
reason of the breadth of such scope or otherwise, it is the intention of the
parties that such determination not bar or in any way affect Company's right to
the relief provided in this Section 6 in the courts of any other jurisdiction
within the geographical scope of such Restrictive Covenants, as to breaches of
such Restrictive Covenants in such other respective jurisdictions, such
Restrictive Covenants as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent covenants.
-5-
(f) INJUNCTIVE RELIEF.
Executive agrees and understands that the remedy at law for any
breach by Executive of the provisions of Section 5 hereof may be inadequate and
that damages resulting from such breach may not be susceptible to being measured
in monetary terms. Accordingly, it is acknowledged that upon Executive's breach
of any provision of Section 5 hereof, the Company shall be entitled to seek to
obtain from any court of competent jurisdiction injunctive relief to prevent the
continuation of such breach. Nothing contained herein shall be deemed to limit
the Company's remedies at law or in equity for any breach of the provisions of
Section 5 hereof which may be available to the Company.
7. TERMINATION:
(a) TERMINATION UPON DEATH OR DISABILITY.
If during the Term, Executive should (i) die or (ii) become so
physically or mentally disabled whether totally or partially, that Executive is
unable to perform the duties, functions and responsibilities required hereunder
for (aa) a period of three (3) consecutive months or (bb) shorter periods
aggregating to four (4) months within any period of twelve (12) months
("Disability"), then in such event, Company may, at any time thereafter, by
written notice to Executive, terminate Executive's employment hereunder.
Executive agrees to submit to reasonable medical examinations upon the request
of Company. The determination of whether a Disability exists shall be made by a
reputable physician selected by Company who is experienced in the relevant field
of medicine. If Executive's services are terminated, as aforesaid, Executive or
the designated beneficiary of Executive, shall be entitled to receive
Executive's Annual Salary, accrued share of the Bonus for that Fiscal Year and
unused vacation, if any, and Fringe Benefits earned through the date of
Executive's termination and continuing thereafter through the end of the Term
and shall also receive four (4) months' of his Annual Salary. The Company shall
deduct any disability payments made to Executive from any insurance source from
payments required to be made to Executive after the termination date.
(b) DESIGNATION OF BENEFICIARY.
The parties hereto agree that the Executive shall designate, by
written notice to the Company, a beneficiary to receive the payments described
in Section 7 in the event of his death and the designation of any such
beneficiary may be changed by the Executive from time to time by written notice
to the Company. In the event the Executive fails to designate a beneficiary as
herein provided, any payments which are to be made to the Executive's designated
beneficiary under Section 7 shall be made to the Executive's widow, if any,
during her lifetime. If the Executive has no designees or widow, such payments
shall be paid to the Executive's estate.
-6-
(c) TERMINATION FOR CAUSE.
The Company shall have the option to terminate Executive upon the
occurrence of any of the following:
(i) Executive shall have breached any of the terms of this
Agreement and shall have failed to cure such breach (if such breach is
curable) within 15 days of notice thereof by the Company;
(ii) Executive shall have been convicted of a crime involving
moral turpitude; or
(iii) Any of the representations and warranties of Executive
hereunder shall be breached in a material respect.
If Executive's services are terminated as set forth in this
subsection (c), Executive's services shall be terminated as of the effective
date of termination and all compensation shall cease as of such effective date.
(d) TERMINATION WITHOUT CAUSE.
If the Executive is terminated by the Company without cause the
Executive shall be entitled to receive his Annual Salary, health benefits,
accrued share of any bonus for that year and unused vacation, if any, earned
through the date of Executive's termination. Executive shall also receive his
Annual Salary until the end of the Term, and for an additional four (4) months
thereafter.
(e) EXECUTIVE STOCK OPTIONS.
If the Executive is terminated without cause by the Company
during the Term, the period within which Executive must exercise stock
options granted under the 1995 Stock Option Plan or the 1998 Stock Option
Plan shall be changed to three years and all options granted to Executive
which would have vested during the Term shall vest.
8. EXECUTIVE'S REPRESENTATIONS AND WARRANTIES;
(a) RIGHT TO ENTER INTO AGREEMENT.
Executive has the unfettered right to enter into this entire
Agreement on all of the terms, covenants and conditions hereof; and Executive
has not done or permitted to be done anything which may curtail or impair any of
the rights granted to Company herein.
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(b) BREACH UNDER OTHER AGREEMENT OR ARRANGEMENT.
Neither the execution and delivery of this Agreement nor the
performance by Executive of any of his obligations hereunder will constitute a
violation or breach of, or a default under, any agreement, arrangement or
understanding, or any other restriction of any kind, to which Executive is a
party or by which Executive is bound.
(c) SERVICES RENDERED DEEMED SPECIAL, ETC.
Executive acknowledges and agrees that the services to be
rendered by him hereunder are of a special, unique, extraordinary and
intellectual character which gives them peculiar value, the loss of which cannot
be adequately compensated for in an action at law and that a breach of any term,
condition or covenant hereof will cause irreparable harm and injury to the
Company and in addition to any other available remedy the Company will be
entitled to seek injunctive relief.
9. USE OF NAME:
The Company shall have the right during the Term hereof to use
Executive's name, biography and approved likenesses in connection with Company's
business, including advertising their products and services; and the Company may
grant such rights to others, but not for use as a direct endorsement.
10. ARBITRATION:
Any dispute whatsoever arising out of or referable to this
Agreement, including, without limitation, any dispute as to the rights and
entitlements and performance of the parties under this Agreement or
concerning the termination of Executive's employment or of this Agreement or
its construction or its validity or enforcement, or as to the arbitrator's
jurisdiction, or as to the ability to arbitrate any such dispute, shall be
submitted to final and binding arbitration in Los Angeles, California by and
pursuant to the Labor Arbitration Rules of the American Arbitration
Association with discovery proceedings pursuant to Section 1293.05 of the
California Code of Civil Procedure. The arbitrator shall be entitled to award
any relief which might be available at law or in equity, including that of a
provisional, permanent or injunctive nature. The prevailing party in such
arbitration as determined by the arbitrator, or in any proceedings in respect
thereof as determined by the person presiding, shall be entitled to receive
its or his reasonable attorneys' fees incurred in connection therewith.
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11. NOTICES:
(a) DELIVERY.
Any notice, consent or other communication under this Agreement shall
be in writing and shall be delivered personally, telexed, sent by facsimile
transmission or overnight courier (regularly providing proof of delivery) or
sent by registered, certified, or express mail and shall be deemed given when so
delivered personally, telexed, sent by facsimile transmission or overnight
courier, or if mailed two (2) days after the date of deposit in the United
States mail as follows: to the parties at the following addresses (or at such
other address as a party may specify by notice in accordance with the provisions
hereof to the other):
(i) If to Xxx Xxxxxxxxx, to his address at:
---------------------------------------------
---------------------------------------------
Fax (____)--------------------------
Fax (818)-------------------------
(ii) If to Company, to its address at:
Xxxxxx.xxx, Inc.
0000 Xxxxxxxx Xxxx.
Xxxxx 00X
Xxx Xxxxxxx, XX 00000
Attention: Chief Executive Officer
Fax (000) 000-0000
Copy to:
Christensen, Miller, Xxxx, Xxxxxx
Xxxxxx, Weil & Xxxxxxx, XX
2121 Avenue of the Stars, 00xx Xxxxx
Xxx Xxxxxxx, XX, 00000
Attention: Xxxx X. Xxxxxx
Fax (000) 000-0000
(b) CHANGE OF ADDRESS.
Either party may change its address for notice hereunder by
notice to the other party in accordance with this Section 11.
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12. COMPLETE AGREEMENT; MODIFICATION AND TERMINATION:
This Agreement contains a complete statement of all the arrangements
between the parties with respect to the matters covered hereby and, supersedes
all existing agreements between the parties concerning the subject matter
hereof, including that certain Employment Agreement dated as of May 1, 1998
between the Company and Executive. This Agreement may be amended, modified,
superseded or canceled, and the terms and conditions hereof may be waiver, by
the party waiving compliance. No delay on the part of any party in exercising
any shall operate as a waiver thereof, nor shall any waiver on the part of any
party of any such right or remedy, nor any single or partial exercise of any
such right or remedy preclude any other or further exercise thereof or the
exercise of any other right or remedy.
13. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of California applicable to agreements entered into and
performed entirely within such State.
14. HEADINGS:
The headings in this Agreement are solely for the convenience of
reference and shall not affect its interpretation.
15. INDEMNIFICATION:
The Company will indemnify, defend, and hold Executive harmless from
any costs, claims, causes of action, or liabilities (including reasonable
attorney's fees) arising out of: (i) any breach of the Company's covenants,
warranties, or representations; and (ii) any other matter relating to or arising
out of Executive's employment hereunder which does not arise from Executive's
gross negligence, willful misconduct, or a breach of Executive's covenants,
warranties, or representations hereunder.
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WHEREFORE, the parties hereto have executed this Agreement as of the
day and year first above written.
By: /s/ Xxx Xxxxxxxxx
---------------------
Xxx Xxxxxxxxx
Agreed to and Accepted:
Xxxxxx.xxx, Inc., a
Delaware corporation
By:[ILLEGIBLE]
----------------------
Its:---------------------
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