EXHIBIT 10.1
EMPLOYMENT AGREEMENT
WITH
XXX XXXXXXXXXX, XX.
This EMPLOYMENT AGREEMENT is entered into as of the 1st day of March
2006 (the "EFFECTIVE DATE") between XXX XXXXXXXXXX, XX. (the "EMPLOYEE") and RIM
SEMICONDUCTOR COMPANY, a Utah corporation with offices at 000 X.X. 000xx Xxxxxx,
Xxxxx 000, Xxxxxxxx, Xxxxxx 00000 (the "COMPANY"), each individually, a "PARTY"
and collectively, the "PARTIES".
W I T N E S S E T H
WHEREAS, Employee is presently engaged as the Company's Executive Vice
President under the Employment Agreement dated as of March 3, 2005 between
Employee and the Company (the "CURRENT EMPLOYMENT AGREEMENT"); and
WHEREAS, the Company and Employee wish to enter into this Agreement as
of the Effective Date, which shall supercede the Current Employment Agreement in
its entirety;
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter contained, the parties hereto agree as follows:
1. ENGAGEMENT AND DUTIES
1.1 The Company employs Employee and Employee accepts employment with
the Company as Executive Vice President. Additionally, the Company shall take
such action necessary to appoint the Employee as president of Company's wholly
owned subsidiary NV Entertainment, Inc. ("NVE"). Such appointment shall
automatically terminate upon expiration or termination of this Agreement and
Employee shall not be entitled to any benefits or remuneration for such position
with NVE.
The Employee shall perform faithfully and diligently the duties
customarily performed by persons in the position for which Employee is engaged.
Employee shall devote Employee's full business time and efforts to rendition of
such services and to the performance of such duties customarily associated with
Employee's position.
1.2 The Employee shall report directly to the Chief Executive Officer
of the Company.
1.3 The Employee's services under this Agreement will be performed at
San Diego, California and surrounding areas. The Parties acknowledge and agree,
however, that the nature of the Employee's duties hereunder will also require
substantial domestic travel.
Page 1 of 8
2. TERM
2.1 Employee's employment under this Agreement shall commence at 12:01
a.m. Pacific Time on the Effective Date and shall end on the earlier of: (i) the
death or disability (as defined herein) of the Employee, (ii) termination by
either party without cause upon written notice, (iii) termination of Employee
with cause, or (iv) March 3, 2008.
2.2 For the purpose of this paragraph 2, "DISABILITY" shall mean any
physical or mental illness or injury as a result of which Employee remains
absent from work for a period of six (6) successive months, or an aggregate of
six (6) months in any twelve (12) month period. Disability shall occur at the
end of any such period.
2.3 For purposes of this Agreement, Employer shall have "CAUSE" to
terminate the Employee's employment hereunder only upon:
(i) The failure or neglect by the Employee to substantially
perform his assigned duties to the Employer or any subsidiary (other than any
such refusal resulting from the Employee's disability or incapacity due to
physical or mental illness);
(ii) The engaging by the Employee in criminal conduct or
conduct constituting moral turpitude or which otherwise brings notoriety to
Company or has an adverse effect on the name or public image of the Company;
(iii) The willful insubordination of the Employee;
(iv) The embezzlement, theft or misappropriation by the
Employee of any property of Employer or its affiliates;
(v) Fraud, acts of dishonesty or misrepresentation, or other
acts (including any breach of the Employee's covenants contained in this
Agreement) that cause harm to Employer or substantial damage to its reputation
or that of its subsidiaries (other than as a consequence of good faith decisions
made by the Employee in the normal performance of the Employee's duties
hereunder);
(vi) A conviction for or plea of nolo contendere to a felony
which carries a minimum prison sentence upon conviction of one (1) year or
longer;
(vii) Employee commits a material breach of this Agreement or
any written policies of Employer;
(viii) breach of Employee's fiduciary obligations to the
Employer or any of its subsidiaries; and/or
Page 2 of 8
(ix) any chemical dependence which materially affects the
performance of Employee's duties and responsibilities to the Employer or any of
its subsidiaries.
PROVIDED, that in the case of the misconduct set forth in clauses (i)
and (ix) above, such misconduct shall continue for a period of thirty (30) days
following written notice thereof by Employer to Employee.
Notwithstanding the foregoing, Employee shall not be deemed to have
been terminated for Cause unless and until there shall be delivered to him a
copy of a duly adopted resolution of the Employer's Board of Directors finding
that the Employer has "Cause" to terminate Employee as contemplated in this
Section 4(a).
2.4 During the period following notice of termination until the
effective date of termination by either party for whatever reason, the Employee
shall cooperate with the Company and use his best efforts to assist the
integration into the Company of the person or persons who will assume the
Employee's responsibilities.
3. REMUNERATION
As the principal consideration for the services to be performed by
Employee, Employee shall receive an annual base salary of $250,000.00. Such
annual base salary shall be payable bi-weekly as it accrues, or at such
intervals as the Company and Employee may hereafter from time to time agree. All
amounts payable to Employee under this Agreement shall be subject to all
authorized withholding.
4. BOARD OF DIRECTORS
Company agrees that so long as this Agreement is in effect, Employee
will be nominated to the board as part of management's slate of directors and if
so elected will be appointed as chairman of the Board. Upon the termination of
this agreement for cause, the Employee shall be deemed to have resigned from the
Company's board of directors.
5. BONUS
During the term of this Agreement the Employee shall be paid an amount
equal to two percent (2%) of the total annual amount paid to Company by Top
Secret Productions in respect of the film "Step into Liquid". The said amount
shall be paid within forty-five (45) days of the end of each calendar year and
the Company shall provide an explanatory statement to the Employee with payment.
6. FRINGE BENEFITS
6.1 VACATION AND SICK LEAVE. Employee shall be entitled to take an
aggregate of twenty (20) business days of vacation, during the term hereof,
prorated for any portion of a year to date of termination. The timing and
duration of any vacation shall be as agreed upon by the parties. Company
acknowledges that Employee has earned 80 days that he has not taken and is
entitled to.
Page 3 of 8
6.2 OTHER FRINGE BENEFITS. Employee shall be eligible to participate,
on terms no less favorable than those afforded to other executives of the
Company, in any employee benefit plan, health insurance program, life insurance
plan, disability insurance plan, retirement plan, 401(k) and other compensation
plans that may hereafter be adopted by the Company for its executives and
management employees from time to time. Such participation shall be subject to
the terms of the applicable plan, generally applicable policies of the Company,
applicable law and the discretion of the Board of Directors. Nothing contained
in this Agreement shall be construed to create any obligation on the part of the
Company to establish any such plan or to maintain the effectiveness of any such
plan which may be in effect from time to time. Subject to review at the end of
each year of employment, commencing on the first anniversary of this Agreement,
or at any time at the Board's discretion, Employee may, at the discretion of the
Board be awarded a bonus based on performance and Employee shall have the option
if such bonus is awarded of receiving the same in cash or shares of common stock
of the Company equal to the amount of the bonus based on the closing price of
the shares on the day the bonus is awarded.
6.4 EXPENSES. Employee is authorized to incur reasonable and proper
expenses for promoting the business of the Company as specified in the Company's
travel and expense policy. The Company will reimburse Employee promptly for all
such expenses upon presentation by Employee of receipts or other appropriate
evidence of expenses.
6.5 OFFICE. The Company shall lease an office for Employee's use in
performing his duties under this Agreement.
6.6 CAR ALLOWANCE. The Employee is eligible for a $500.00 per month car
allowance. Employee is not eligible for reimbursement for mileage or other
auto-related expenses.
7. EMPLOYEE REPRESENTATIONS
The Employee represents and warrants to the Company that the execution
and delivery of this Agreement and the fulfillment of the terms hereof (i) will
not constitute a breach of any agreement or other instrument to which Employee
is party, (ii) does not require the consent of any person, and (iii) shall not
utilize during the term of his employment any proprietary information of any
third party, including prior employers of the Employee.
Page 4 of 8
8. CONFIDENTIALITY, NON-COMPETE; POACHING; DEVELOPMENT RIGHTS
The Company values the protection of its confidential information and
proprietary materials essential to the survival of the Company. Therefore, as a
mandatory condition of Employee's employment, Employee agrees to comply with the
following provisions.
a. CONFIDENTIALITY
(i) The term "INFORMATION" as used in this Section means any
and all confidential and proprietary information including but not limited to
any and all specifications, formulae, prototypes, software design plans,
computer programs, and any and all records, data, methods, techniques, processes
and projections, plans, marketing information, materials, financial statements,
memoranda, analyses, notes, and other data and information (in whatever form),
as well as improvements and know-how related thereto, relating to the Company or
its products. Information shall not include information that (a) was already
known to or independently developed by the Employee prior to its disclosure as
demonstrated by reasonable and tangible evidence satisfactory to the Company;
(b) shall have appeared in any printed publication or patent or shall have
become part of the public knowledge except as a result of breach of this
Agreement by the Employee or similar agreements by other Company employees (c)
shall have been received by the Employee from another person or entity having no
obligation of confidentiality to the Company or (d) is approved in writing by
the Company for release by the Employee.
(ii) Subject to the provisions of Section 8(a)(iii) below, the
Employee agrees to hold in trust and confidence all Information disclosed to
Employee and further agrees not to exploit or disclose the Information to any
other person or entity or use the Information directly or indirectly for any
purpose other than for Employee's work with the Company, unless otherwise
consented to in writing by the Company.
(iii) The Employee agrees to disclose the Information only to
persons necessary in connection with Employee's work with the Company or who
have undertaken the same confidentiality obligations set forth herein in favor
of the Company. The Employee agrees to assume full responsibility for the
confidentiality of the Information disclosed to Employee and to prevent its
unauthorized disclosure, and shall take appropriate measures to ensure that such
persons acting on his behalf are bound by a like covenant of secrecy.
(iv) The Employee acknowledges and agrees that the Information
furnished hereunder is and shall remain proprietary to the Company. Unless
otherwise required by statute or government rule or regulation, all copies of
the Information, shall be returned to the Company immediately upon request
without retaining copies thereof.
Page 5 of 8
b. NON-COMPETE; POACHING; DEVELOPMENT RIGHTS
(i) Unless otherwise expressly consented to in writing by the
Company, during the term of the Employee's employment hereunder, and for a
period of twelve (12) months following the date on which Employee's termination
of employment with the Company becomes effective, Employee will not, directly or
indirectly, for his own account or as an employee, officer, director,
consultant, joint venture, shareholder, investor, or otherwise (except as an
investor in a corporation whose stock is publicly traded and in which the
Employee holds less than five percent (5%) of the outstanding shares) interest
him/herself or engage, directly or indirectly, in the design, development,
production, sale or distribution of any product or component that directly or
indirectly competes with a product or component (i) being designed, produced,
sold or distributed by the Company or any of its affiliates, or (ii) to which
the Company or any of its affiliates shall then have proprietary rights.
(ii) HIRING OF COMPANY EMPLOYEES. During the term of the
Employee's employment hereunder, and for a period of twelve (12) months
following the date on which Employee's termination of employment with the
Company becomes effective, the Employee shall not, except in the course of the
performance of his duties hereunder or with the prior approval of the Board, in
any way directly or indirectly, with respect to any person who to the Employee's
knowledge was employed by the Company or its affiliates ("COMPANY EMPLOYEE") at
any time during the period commencing twelve (12) months prior to the date of
the hiring of such Company Employee, hire or cause to be hired any Company
Employee, or contract the services of any closely held private corporation or
other entity in which such Company Employee is an officer or director or holds a
twenty-five percent (25%) or greater equity ownership interest.
(iii) Employee's undertakings herein under this Section 8(b)
shall be binding upon Employee's successors, heirs or assigns, and shall
continue until the later of (i) the expiration of one year from the date of
execution of this Agreement or (ii) the expiration of one year from the date the
Employee last represented him/herself as an employee, agent or representative of
the Company or any of its affiliates, subsidiaries or successors.
(iv) Employee acknowledges that the restricted period of time
specified under this Section 8(b) are reasonable, in view of the nature of the
business in which the Company is engaged and Employee's knowledge of the
Company's business and products. If such a period of time or geographical
location should be determined to be unreasonable in any judicial proceeding,
then the period of time and area of restriction shall be reduced so that this
Agreement may be enforced in such an area and during such a period of time as
shall be determined to be reasonable by such judicial proceeding.
(v) DEVELOPMENT RIGHTS. The Employee agrees and declares that
all proprietary information including but not limited to trade secrets,
know-how, patents and other rights in connection therewith developed by or with
the contribution of Employee's efforts during his employment with the Company
shall be the sole property of the Company. Employee shall keep and maintain
Page 6 of 8
adequate and current records (in the form of notes, sketches, drawings and in
any other form that may be required by the Company) of all such proprietary
information developed by Employee. Employee shall at Company's request do all
things and execute all documents as Company may reasonably require to vest in
Company the rights and protection herein referred to. It is hereby acknowledged
and agreed that the Salary payable under this Agreement also constitutes
sufficient consideration for the Employee's obligation hereunder
9. RIGHT OF FIRST REFUSAL
9.1 NOTICE OF OUTSIDE OFFER. If at any time the Company (i) receives a
BONA FIDE written offer (the "OUTSIDE OFFER") from an arm's length person (the
"OUTSIDE PURCHASER") to purchase any of the Company's membership interest in Top
Secret Productions LLC, a Delaware limited liability company (the "ASSETS"),
which the Company wishes to accept, or (ii) if at any time the Company
determines to sell the Assets for a determined price (the "OFFER PRICE") then
the Company must give an irrevocable notice in writing (the "SALE NOTICE") to
the Employee (i) within five (5) Business Days of receipt of the Outside Offer
or (ii) of the Offer Price. The Sale Notice must set out the terms, conditions,
price and any other information relating to the Outside Offer or Offer Price
that would be reasonably relevant to the Employee.
9.2 EMPLOYEE'S RIGHT TO PURCHASE. The Employee has the right, to be
exercised by a notice in writing (the "EMPLOYEE NOTICE") given to the Company
within five (5) business days of receipt of the Sale Notice to purchase all of
the Assets on the terms and conditions set out in the Outside Offer or the Offer
Price.
9.3 CLOSING DATE. The transaction of purchase and sale contemplated by
Section 9.2 must be completed within thirty (30) business days of receipt of the
Sale Notice ("EMPLOYEE CLOSING DATE").
9.4 SALE TO OUTSIDE PURCHASER. If the Employee does not give an
Employee Notice within the time limited or if the Assets remain unsold after the
Employee Closing Date, the Company will be entitled to complete the transaction
contemplated by (i) the Outside Offer with the Outside Purchaser in accordance
with the terms and conditions set out in the Outside Offer or (ii) on terms at
least as favorable to Company as contained in the Offer Price. Notwithstanding
the above Employee's rights in this Section 9 are subject to the rights of other
members of Top Secret Productions LLC, including the rights of first refusal,
all as described in the Operating Agreement of Top Secret Productions LLC dated
May 2, 2000, as amended from time to time.
10. MISCELLANEOUS
10.1 BENEFIT AND ASSIGNMENT. This Agreement shall inure to the benefit
of and be binding upon the Company, its successors and assigns. The rights and
obligations of the Employee under this Agreement may not be assigned by the
Employee.
Page 7 of 8
10.2 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement between the parties, and supersedes any and all
prior discussions and agreements and correspondence, and may not be amended or
modified in any respect except by a subsequent writing executed by both parties.
10.3 NOTICES. All notices or other communications hereunder shall be in
writing and shall be sent to either party by hand or by Registered or Certified
mail, postage prepaid, return receipt requested, or sent by telegram or
facsimile to the address set forth in the Preamble to this Agreement or to such
other address as the recipient may designate by notice in accordance with the
provisions of this Section.
10.4 APPLICABLE LAW. This Agreement shall be interpreted, governed,
construed and enforced according to the laws of the State of Oregon.
10.5 COUNSEL. Each Party to this Agreement has had the opportunity to
obtain independent legal advice in connection with this Agreement
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
signed as of the date stated above.
RIM SEMICONDUCTOR COMPANY EMPLOYEE
By: /s/ Xxxx Xxxxx /s/ Xxx Xxxxxxxxxx, Xx.
---------------------------- -------------------------------
Xxxx Xxxxx Xxx Xxxxxxxxxx, Xx.
Chief Executive Officer
Page 8 of 8