EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into on this 1st day of May, 1996,
between NDS SOFTWARE, INC., a Nevada corporation, (hereinafter referred to as
"Employer") and XXXX XXXXXX (hereinafter referred to as "Employee"), to be
effective as of May 8, 1996.
W I T N E S S E T H:
WHEREAS, Employer and Employee (as "Stockholder") entered into a Plan and
Agreement of Reorganization dated May 1, 1996, whereby Employer exchanged all
the stock owned by Employee in Visual Listings, Inc., a California corporation,
and the parties agreed to retain the services of Employee as set forth therein:
and,
WHEREAS, Employer and Employee desire to enter into this Employment Agreement
to employ Employee and to set forth the rights and duties of the parties hereto.
NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties agree as follows:
1. Employment Agreement. The Employer hereby agrees to employ Employee, and
Employee hereby agrees to serve as such Employee upon the terms and conditions
hereinafter set forth.
2. Term of Employment. Subject to the provisions for termination as
hereinafter provided, the term of the employment shall commence as of the date
of this Agreement and shall end five (5) years from that date. At the end the
term hereof, this Agreement may be renewed by mutual agreement of the parties.
3. Employees's Position and Duties. The terms of the Plan and Agreement of
Reorganization dated May 1, 1996, is hereby incorporated herein by reference as
though set forth fully, to the extent that Employee is obligated for performance
of any of the terms therein. Employee's breach for any of the terms or
provisions thereof constitute a breach of this Agreement and will allow Employer
to terminate this
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Agreement as hereinafter set forth. In addition to the obligations set forth in
said agreement, Employee agrees as follows:
a. Employee shall assume responsibility as President of Visual Listings, Inc.
("VLI"), Employer's wholly owned subsidiary, and the management and supervision
thereof, and shall perform any other duties relating to Employer's operations
which may from time to time be assigned by Employer or necessary for the
successful operation of Employer's business. Employee shall be entitled to
employ Xxxxxxx Xxxxxx and other employees on terms approved by and as needed to
reach the goals set by the Board of Directors of NDS Software, Inc. ("NDS")
b. Employee shall also be elected to the Board of Directors of NDS during the
term of this Agreement, pursuant to the Articles of Incorporation and Bylaws of
NDS.
c. During the term of this Employment Agreement, Employee shall, in good
faith, devote his best efforts and full time to his employment and perform
diligently and in good faith such duties as are or may be from time to time
required by the Employer, which duties shall be consistent with his position as
set forth above; it being understood and acknowledged that, the terms "best
efforts" and "full time" mean such effort and time commitment as is necessary to
achieve the success of the business.
d. Employee shall not, without the prior written consent of Employer, directly
or indirectly, during the term of this Agreement, whether for compensation or
otherwise, render services of a business, professional or commercial nature to
any person or firm that is engaged in a business similar to that of the Employer
or VLI, in accordance with the terms of the Plan and Agreement for
Reorganization.
4. Compensation and Benefits.
During the term of employment hereunder, Employer shall compensate Employee as
follows:
a. Salary. For all services he may render to Employer during the term of this
Agreement, Employee shall receive from Employer a base annual salary while he is
employed hereunder of Seventy
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Thousand Dollars ($70,000). Salary will increase to $100,000 beginning September
1, 1996. Salary is to be paid in accordance with the policy of Employer
regarding payment of salary to its other officers and directors.
b. Signing Bonus. Employer shall pay a signing bonus to Employee in the amount
of Fifty Thousand Dollars ($50,000). The bonus shall be payable at such time as
the Employee shall direct.
c. Annual Bonus. At the end of each taxable year, Employer shall pay a cash
bonus to Employee equal to four percent (4%) of the pre-tax earnings of NDS as
stated in the annual audit. (Example: if NDS earned $800,000 pre-tax, Employee
would receive a cash bonus in the amount of $32,000). Additional compensation
will be determined by a compensation committee designated by the Board of
Directors.
d. Additional Stock Option. Employee shall also receive, on an annual basis,
stock options to purchase NDS Common Stock equal to four percent (4%) of the
pre-tax earnings of NDS as stated in the annual audit. (Example: if NDS earned
$800,000 pre-tax, Employee would receive stock options of $32,000). The price
payable by Employee for each share of stock purchased under the stock option
described in this paragraph shall be set at the bid at the time of grant of each
annual option. Additional compensation will be determined by a compensation
committee designated by the Board of Directors.
e. Director's Compensation. During the time which Employee is a sitting member
of the Board of Directors of NDS, and properly fulfills his duties therefor,
Employer hereby provides to Employee a five (5) year option to purchase a total
of two Hundred Seventy Five Thousand (275,000) shares of NDS Common Stock at a
price of Two Dollars ($2.00) per share. This option shall commence upon the
effective date hereof and terminate five (5) years from such date.
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f. Benefits. Employee shall be entitled to receive medical insurance
comparable to that offered to other employees of NDS. In addition, Employee
shall receive an automobile allowance sufficient to lease a Lincoln Continental.
5. Termination of Employment.
a. For Cause. The employment of Employee under this Employment Agreement, and
the term hereof, may be terminated by the Employer only upon a showing of cause,
upon thirty (30) days' written notice to Employee. The "effective date of
termination" shall be the date thirty (30) days after written notice of
termination is delivered to the Employee. Cause is defined as follows:
i. An act or omission in the course of Employee's duties which is
dishonest or fraudulent;
ii. An act or omission which constitutes willful misconduct or gross
negligence in the performance of duties or assignment;
iii. A breach of this Agreement by Employee;
iv. A breach of any term of the Plan and Agreement of
Reorganization, including without limitation, the non-competition
provision.
v. The continuous substandard performance and/or inattention to
duties required by this Agreement as determined in the sole discretion of
Employer; and
vi. Engaging in compensation with the Employer by Employee without
the prior express written consent of Employer.
b. Disability or Death. The employment of Employee under this Employment
Agreement, and the term hereof, shall be terminated by the death or partial or
total disability of Employee. For purposes hereof, the term "disability" is
hereby defined to mean any mental or physical disability which renders Employee
unable to perform his duties or assignment as determined by the Board of
Directors of
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Employer, in the sole judgment and discretion of said Board as determined by a
majority vote of the members thereof.
c. Resignation. The employment of Employee under this Employment Agreement,
and the term hereof, will be terminated by the voluntary resignation of
Employee.
6. Salary and Benefits Upon Termination. All salary and other benefits shall
terminate as of the effective date of termination if Employee resigns. If
involuntarily terminated for cause, the salary will continue for the initial
five year term of this Agreement. Unless precluded by law, any medical and
dental insurance coverage and life insurance coverage and benefits shall
continue for thirty (30) days after termination or until Employee is reemployed,
whichever shall first occur.
7. Reimbursable Expenses. The Employer shall pay directly or reimburse the
Employee for the following expenses:
a. License fees and membership dues in associations or organizations relative
to the business of the Employer;
b. Subscriptions to journals or monthly service publications relative to the
business of the Employer.
c. The Employee's necessary travel, hotel, and entertainment expenses incurred
in connection with the business of the Employer or other events that contribute
to the benefit of the Employer in amounts to be determined by the Board of
Directors.
8. Employee, as additional material consideration hereunder, agrees that
during the term hereof and for a period of five (5) years from termination of
this Agreement, he will not directly or indirectly solicit business from, engage
in business with, or divert business from any of NDS's or VLI's current or
future customers, and that they will not participate as a shareholder, partner,
employee, consultant, or otherwise in any enterprise engaging in activities that
would violate this provision if engaged
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in by them directly. This covenant shall be applicable to the entire United
States of America and Canada on the basis that NDS sells its products nationally
or internationally, and Employee acknowledges and agrees that the scope of this
covenant is reasonable given the special relationship of the parties as to the
various agreements executed by them. Employee acknowledges and confirms that
this covenant is made to induce NDS to enter into this Agreement, is considered
material to NDS, and is required by NDS for the purpose of preserving the
business and goodwill of VLI and NDS.
9. Confidentiality Provision. Employee agrees that, during the term of this
Agreement or any extensions and for a period of ten (10) years thereafter, he
will keep confidential any information which he obtains from NDS or VLI or any
of said entities' subsidiaries, sister corporations or concerns, now or
hereafter existing or created, concerning their properties, assets, proprietary
assets, source codes, copyrights, business methods, and trade secrets. Upon
termination hereof, Employee will return to Employer all written matter with
respect to such businesses obtained by him in connection with the negotiation,
consummation, or performance of this Agreement. Employee further agrees that any
work performed or created by Employee during the term hereof shall be owned
solely by Employer and shall be subject to the terms of this provision.
10. Modification. No change or modification of this Agreement shall be valid
unless the same be in writing and signed by all the parties hereto.
11. Binding Effect. The contract shall be binding upon the heirs, executors,
administrators, and assigns of the Employee and any successors in interest of
the Employer.
12. Notice. Except as expressly provided to the contrary herein, notices or
other communications required, permitted, or made necessary by the terms of this
Agreement may be given orally to the respective representatives of the Employer
and the Employee designed herein. Written notices shall be personally delivered
to the Employer's representative
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or the Employee's representative, as appropriate or sent by the United States
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party as designated below. Notices sent by mail shall be deemed
made, delivered and received on the date of the United States postmark thereon.
Either party may change its address or notice by giving notice of such change to
the other party in the manner specified in this section.
For purposes of notice the addresses of the parties shall be:
If to Employer:
NDS Software, Inc.
0000 Xxxx Xxxxx, Xxxxx X
Xxxxxx, XX 00000-0000.
If to Employee:
Xxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxx, XX 00000
13. No Waiver. No waiver of any breach or default in any of the terms and
provisions of this Agreement shall be deemed to constitute or be construed as a
waiver of the subsequent breach or default of the same, similar or dissimilar
nature.
14. Choice of Law and Invalidity. The validity, construction, performance and
effect of this Agreement shall be governed by the laws of the State of Nevada
and jurisdiction shall vest exclusively in the Ninth Judicial District Court in
and for the State of Nevada, located in Xxxxxxx County. The parties acknowledge
and agree that this Agreement is executed and performance hereof is due in
Xxxxxxx County, State of Nevada. In case any one or more of the provisions
contained herein shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Agreement, but this Agreement
shall be construed as if such invalid, illegal, or unenforceable provisions
contained herein shall, for any reason, be held to be excessively broad as to
time, duration, geographical scope, activity or subject, said provision shall be
construed by limiting
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and reducing it so as to be enforceable to the extent compatible with the then
applicable law, it being the intent of the parties hereto to give the maximum
permitted effect to the restrictions set forth herein.
15. Assignment. This Agreement is one for personal services and the Employee
shall not have a right to assign any part or all of his respective rights,
duties or obligations hereunder.
16. Interpretation. If necessary to give effect to the terms and provisions
hereof, the masculine, feminine, and neuter gender in the singular and plural
number shall each be deemed to include the other whenever the context so
indicates.
17. Headings. Headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the scope, extent or intent of this Agreement or any provision hereof.
18. Counterparts. This Agreement may be executed in any number of
counterparts, any of which may be constituted in the agreement between the
parties hereto.
19. Authority. The Employer warrants and represents that it is a corporation
organized and existing under the laws of the State of Nevada, that the
undersigned is authorized to execute this Agreement on behalf of the Employer;
that the employment of the Employee under the terms of this Agreement has been
duly authorized by the Employer.
20. Inurement. Each covenant and condition in this Agreement shall be binding
on, and shall insure solely to the benefit of the parties to it, their
respective heirs, legal representatives successors and assigns.
21. Entire Agreement. Except as otherwise provided herein, this Agreement
supersedes any and all other agreements, either oral or in writing, between the
parties hereto and contains all of the covenants and agreements between the
parties with respect to this matter. Each party to this Agreement acknowledges
that no representations, inducements, promises, or agreements, orally or
otherwise, have
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been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement or promise not contained
in this Agreement shall be binding
IN WITNESS WHEREOF, the parties to this Employment Agreement have duly executed
it on the day and year first above written.
EMPLOYEE: EMPLOYER:
Xxxx Xxxxxx NDS SOFTWARE, INC.,
A Nevada Corporation,
/s/ Xxxx Xxxxxx
-------------------
Date: 7/15/96 By: /s/ Xxxx Xxxxxxx
-----------------------
President/CEO
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AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
THIS AMENDMENT, effective as of March 4, 1997, hereby modifies and amends that
certain Employment Agreement entered into the 1st day of May 1996 between NDS
SOFTWARE, INC., a Nevada corporation, (hereinafter referred to as "Employer")
and XXXX XXXXXX (hereinafter referred to as "Employee").
The parties hereby agree that the following changes, modifications or
amendments shall be incorporated into the Employment Agreement:
1. Paragraph 4(a) shall be changed to read that the Employee shall be entitled
to a base annual salary in the amount of $144,000 beginning March 4, 1997.
2. Paragraph 6 shall be deleted and replaced with the following:
"6. Salary and Benefits Upon Termination. All salary and other
benefits shall terminate as of the effective date of
termination if Employee resigns. If involuntarily terminated
and in consideration for the obligations of Employee pursuant
to paragraphs 8 and 9 of the Employment Agreement, Employee
shall been titled to a termination or severance salary equal to
five (5) years of the annual base salary earned by Employee
immediately prior to termination. Employee shall have the
option to accelerate payments of the severance salary and
receive the full amount upon termination, in Employee's sole
discretion. Employer agrees that all unregistered stock
received or to be received by the Employee under any stock
option plan provided by Employer shall be registered as soon
after the termination date as possible, and in no event later
than six (6) months from the date of termination. Employee
shall have the right to exercise any stock option within
five
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(5) business days of the date of termination of Employee.
Unless precluded by law any medical and dental insurance
coverage and life insurance coverage and benefits shall
continue for thirty (30) days after termination or until
Employee is re-employed, whichever shall first occur."
3. A new subparagraph is added to Article 3 as follows:
e. The parties agree that during the performance of this Agreement
Employee shall remain located in Brea, California and Employer shall not require
Employee to change his principal place of residence for any reason.
IN WITNESS WHEREOF, the parties to this Amendment No. I to Employment Agreement
have duly executed it on the day and year first above written.
EMPLOYEE: EMPLOYER:
Xxxx Xxxxxx NDS SOFTWARE, INC.,
A Nevada Corporation,
/s/ Xxxx Xxxxxx
--------------------
By: /s/ Dr. Xxxx Xxxxx
---------------------------
Dr. Xxxx Xxxxx, Director
By: /s/ Xxxx Xxxxxxx
---------------------------
Xxxx Xxxxxxx, CEO
By: /s/ Xxxx Xxxxxxx
---------------------------
Xxxx Xxxxxxx, Vice Chairman
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