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EXHIBIT 10.19
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT ("AGREEMENT") is made and entered
into effective as of the 21st day of September, 1999 ("THE EFFECTIVE DATE"), by
and between Novo Media Group, a California corporation d/b/a/ Novo Interactive
(the "COMPANY"), and Diana Wilson Todd, an individual resident of California
("EXECUTIVE").
In consideration of the promises herein made and on the terms and
subject to the conditions herein contained, the Company and Executive hereby
agree as follows:
1. Employment. The Company hereby employs Executive on the terms set
forth herein and Executive hereby accepts such employment for an indefinite term
beginning on the Effective Date, subject to termination as provided under
Section 5 below.
2. Duties.
(a) Executive shall be the Executive Vice President, Delivery,
shall report to the Chief Operation Officer ("COO") and shall have input in the
management and direction of the Company as well as such other duties and
responsibilities commensurate with such title as the COO may assign to
Executive. Initial responsibilities will include overall day-to-day
responsibilities of the engineering, development and production departments.
(b) Executive shall faithfully and diligently perform
Executive's duties in conformity with the reasonable and appropriate directions
of the COO to the best of Executive's ability. Executive shall devote
substantially all of Executive's entire working time, attention and energies to
the business and affairs of the Company, subject to vacations and sick leave as
provided herein and in accordance with Company policy. Notwithstanding the
foregoing, Executive's devotion of time to personal investments and other
business and personal matters will not be deemed a breach of this Agreement
unless such activity substantially interferes with the performance of
Executive's duties hereunder.
(c) Executive shall, subject to travel requirements on behalf of
the Company, be based at the Company's offices in San Francisco, in this regard,
Executive shall maintain Executive's personal residence at a location within
reasonable access to Executive's place of employment.
3. Compensation and Benefits.
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(a) Base Salary. The Company agrees to pay to Executive for employment
hereunder a base salary ("Base Salary") at the annual rate of $160,000.
Executive's Base Salary may be increased (but shall not be required to increase)
in such amount as shall be determined at the discretion of the Company on an
annual basis. Base Salary shall be payable in installments consistent with the
Company's payroll practices then in effect and the Company shall withhold from
such compensation all applicable federal and state income, social security, and
disability and other taxes as required by applicable laws.
(b) Bonus. Executive will be considered for any company bonus programs
appropriate for Executive Vice Presidents. In 1999, Executive will be considered
for a 25% performance based bonus with parameters established by the COO.
Performance based bonuses will be pro-rated based on start date. Performance
based bonuses shall be reconciled in January of the following year end and, if
applicable, paid out in three equal monthly installments on February 1, March 1
and April 1, provided however that Executive must be employed at the time of
distribution of said bonus.
(c) Grant of Option. The Company will grant Executive an option to
acquire 320,000 shares of Common Stock in the Company pursuant to the Stock
Option Agreement, a copy of which is attached hereto as EXHIBIT A, and the
Company's 1999 Stock Option Plan ("OPTION PLAN").
(d) Benefits and Perquisites. Executive shall be entitled to participate
in such equity, compensation and other incentive plans, benefit plans and
programs, including health insurance, and receive the benefits and perquisites,
as are made available to any of the management executives of the Company. In
addition to normal holidays recognized by the Company, Executive shall be
entitled to 3 weeks paid vacation per year accrued in accordance with the terms
of the Company's vacation policy, provided however that any determination of
amounts owed as accrued vacation upon termination of employment will be based on
the Company's vacation policy then in effect at the time of termination and
based solely upon Executive's Base Salary, as described in Section 3(a), above.
(e) Travel and Business Expenses. Upon submission of itemized expense
statements in the manner reasonably specified by the Company, Executive shall be
entitled to reimbursement for reasonable travel and other reasonable business
expenses duly incurred by Executive in the performance of Executive's duties
under this Agreement in accordance with the policies and procedures established
by the Company from time to time for the Company's management executives.
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4. No Conflict; No Other Employment. During Executive's employment with
the Company, Executive shall not: (i) engage in any activity which conflicts or
interferes with or derogates from the performance of Executive's duties
hereunder nor shall Executive engage in any other business activity, whether or
not such business activity is pursued for gain or profit, except as approved in
advance in writing by the Board of Directors of the Company, such approval not
to be unreasonably withheld; or (1i) accept any other full-time or substantially
full-time employment, whether as an executive or consultant or in any other
capacity, and whether or not compensated therefor.
5. Termination of Employment.
(a) Termination At Will By Either Party. Subject to the payment
of Executive of the applicable severance payment as provided in Section 5(d)
below, if any, either party may terminate this Agreement, for any reason, with
or without Cause (as defined at Section 5(c) below), upon written notice to the
other.
(b) Death or Permanent Disability of Executive. This Agreement
will terminate automatically upon the death or permanent disability of
Executive. Executive will be deemed permanently disabled for the purpose of this
Agreement if, in the good faith determination of the Board, based on sound
media[ advice, Executive has become physically or mentally incapable of
performing her duties hereunder for a continuous period of 120 days, in which
event Executive will be deemed permanently disabled upon the expiration of such
120-day period. In the event of a termination of this Agreement due to the death
or permanent disability of Executive, Executive or her estate will be entitled
only to the Base Salary and bonuses earned through the date of such death or
disability, in accordance with Section 3(a) and (b) above, and will receive in
addition severance payment as outlined with Section 5(d)(ii). During any period
that Executive fails to perform Executive's duties hereunder as a result of
incapacity due to physical or mental illness (a "Disability Period"), Executive
shall continue to receive the compensation and benefits provided by Section 3
hereof until Executive's employment hereunder is terminated; provided, however,
that the amount of compensation and benefits received by Executive during the
Disability Period shall be reduced by the aggregate amounts, if any, payable to
Executive under disability benefit plans and programs of the Company or under
the Social Security disability insurance program.
(c) Executive's Termination for Cause. The Company will have the
right to terminate Executive's employment hereunder for "Cause" at any time
effective upon its giving notice to Executive of the facts and circumstances
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constituting such Cause. For such purposes, "CAUSE" means the occurrence of one
or more of the following: (i) conviction of or plea of nolo contendere to any
crime (whether or not involving the Company) constituting a felony or involving
an act of embezzlement, fraud or theft with respect to the property of the
Company; (ii) habitual alcohol or drug abuse on the job or in a manner affecting
Executive's job performance; (iii) the intentional breach of fiduciary duty to
the Company; (iv) gross neglect or misconduct in the performance of Executive's
duties hereunder which causes material loss, damage or injury to or otherwise
materially endangers the property, reputation or employees of the Company; (vi)
incompetence or repeated failure or refusal to perform the duties required by
this Agreement and as may be assigned to Executive; provided such duties are
commensurate with Executive's position; (vii) commission of any other action
with the intent to materially harm or injure the Company; or (viii) the material
breach of any material provision of this Agreement by Executive.
(d) Compensation Upon Termination.
(i) In the event the Company terminates Executive's
employment for Cause pursuant to Section 5(c) above or Executive voluntarily
resigns her employment, Executive will be entitled to only: (A) the compensation
provided for in Section 3(a) hereof for the period of time ending with the date
of termination; (B) compensation for any unused vacation that Executive may have
accrued, as well as all earned benefits, up to and including the date of
termination; (C) "COBRA" benefits as the extend required by applicable law; and
(D) reimbursement for such expenses as Executive may have properly incurred on
behalf of the Company as provided in Section 3(e) above prior to the date of
termination.
(ii) In the event the Company terminates Executive's
employment without Cause, in addition to the amounts payable pursuant to Section
3(a) above, Executive will be entitled to receive a severance payment equal to
the Base Salary that Executive would have otherwise received during the period
of six (6) months from the effective date of such termination, commencing with
such date of termination, payable in one lump sum within thirty (30) days of the
date of termination and payment for three months outplacement service, provided
however that in any case the Company's obligation to pay any severance or
outplacement service payment to Executive will be expressly conditioned upon the
execution by Executive and delivery by him to the Company of a general release
and waiver of all claims (employment-related and otherwise) against the Company
and its affiliates and their respective officers, directors, employees and
agents, and covenant not to sue any such party in connection with such released
claims, in reasonable form provided by the Company.
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(iii) The payments set forth in this Section 5(d) will
fully discharge all responsibilities of the Company and its directors,
officers, employees, subsidiaries, affiliates, stockholders, successors,
assigns, agents and representatives to Executive under this Agreement or
relating to or arising out of the termination of Executive's employment.
6. Assignment and Transfer.
(a) Company. This Agreement shall inure to the benefit of and be
enforceable by, and may be assigned by the Company to, any purchaser of all or
substantially all of the Company's business or assets, any successor to the
Company or any assignee thereof (whether direct or indirect, by purchase,
merger, consolidation or otherwise). The Company will require any such
purchaser, successor or assignee to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such purchase, succession or assignment had taken
place.
(b) Executive. Executive's rights and obligations under this
Agreement shall not be transferable by Executive by assignment or otherwise, and
any purported assignment, transfer or delegation thereof shall be void;
provided, however, that if Executive shall die, all amounts then payable to
Executive hereunder shall be paid in accordance with the terms of this Agreement
to Executive's devisee, legatee or other designee or, if there be no such
designee, to Executive's estate.
7. Unfair Competition by Executive
(a) Executive agrees that all trade secrets, confidential or
proprietary information with respect to the activities and businesses of the
Company including, without limitation, personnel information, secret processes,
know-how, customer lists, data bases, ideas, techniques, processes, inventions
(whether patentable or not), and other technical plans, business plans,
marketing plans, product plans, forecasts, contacts, strategies and information
(collectively "Proprietary Information") which were learned by Executive in the
course of her employment by the Company and any other Proprietary Information
received, developed or learned by Executive hereafter in the course of her
future employment by or in association with the Company are confidential and
will be kept and held in confidence and trust as a fiduciary by Executive.
Executive will not use or disclose Proprietary Information except as necessary
in the normal course of the business of the Company for its sole and exclusive
benefit, unless Executive is compelled so to disclose under process of law, in
which case Executive will first
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notify the Company promptly after receipt of a demand to so disclose. Upon
termination of Executive's employment with the Company for any reason, she will
immediately deliver to the Company all tangible, written, graphical, machine
readable and other materials (including all copies) in her possession or under
her control containing or disclosing Proprietary Information. Executive will not
disclose to the Company or use in connection with her employment on behalf of
the Company any confidential information of any third party. Executive
represents to the Company that her employment with the Company, and her
activities on its behalf, will not violate any obligation or commitment that
Executive has to any third party.
(b) For a period of two (2) years following the termination of
her employment with the Company for any reason, Executive will not, without the
Company's express written consent, either on her own behalf or on behalf of
another, solicit employees of the Company for the purpose of hiring them.
(c) Executive and the Company acknowledge that: (i) each
covenant and restriction contained in Sections 7 and 8 of this Agreement is
necessary, fundamental, and required for the protection of the Company's
business; (ii) such relate to matters which are of a special, unique, and
extraordinary character that gives each of them a special, unique, and
extraordinary value; and (iii) a breach of any such covenant or restriction will
result in irreparable harm and damage to the Company which cannot be compensated
adequately by a monetary award. Accordingly, it is expressly agreed that, in
addition to all other remedies available at law or in equity, and
notwithstanding anything to the contrary in Section 10 below, the Company will
be entitled to the immediate remedy of a temporary restraining order,
preliminary injunction, or such other form of injunctive or equitable relief as
may be used by any court of competent jurisdiction to restrain or enjoin any of
the parties hereto from breaching any such covenant or restriction, or otherwise
specifically to enforce the provisions contained in Sections 7 and 8 of this
Agreement.
8. Proprietary Matters. Executive expressly understands and agrees that
any and all improvements, inventions, discoveries, processes, or know-how that
are generated or conceived by Executive during the term of this Agreement,
whether so generated or conceived during Executive's regular working hours or
otherwise, will be the sole and exclusive property of the Company, and Executive
will, whenever requested to do so by the Company (either during the term of this
Agreement or thereafter), execute and assign any and all applications,
assignments and/or other instruments and do all things which the Company may
deem necessary or appropriate in order to apply for, obtain, maintain, enforce
and defend patents, copyrights, trade names or trademarks of the United States
or of foreign
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countries for said improvements, inventions, discoveries, processes, or
know-how, or in order to assign and convey or otherwise make available to the
Company the sole and exclusive right, title, and interest in and to said
improvements, inventions, discoveries, processes, know-how, applications,
patents, copyrights, trade names or trademarks, subject to California Labor Code
section 2870, which reads as follows:
"(a) Any provision in an employment agreement which provides
that an employee shall assign, or offer to assign, any of his or her
rights in an invention to his or her employer shall not apply to an
invention that the employee developed entirely on his or her own time
without using the employer's equipment, supplies, facilities, or trade
secret information except for those inventions that either:
(1) Relate at the time of conception or reduction to
practice of the invention to the employer's business, or actual
or demonstrably anticipated research or development of the
employer; or
(2) Result from any work performed by the employee for
the employer.
(b) To the extent a provision in an employment agreement
purports to require an employee to assign an invention otherwise
excluded from being required to be assigned under subdivision (a), the
provision is against the public policy of this state and is
unenforceable."
9. Key-Man Insurance. Executive agrees to make himself available and to
undergo, at the Company's request and expense, any physical examination or other
procedure necessary to allow the Company to obtain a key-man insurance policy on
Executive. If the Company obtains such policy, it will maintain the policy at
its expense and all proceeds will be the sole property of the Company.
10. Arbitration. The parties will attempt in good faith promptly by
negotiations to resolve any dispute or controversy arising out of or relating to
this Agreement or to the employment or termination of Executive by the Company.
If a party intends to be accompanied at a negotiation meeting by an attorney,
the other party will be given at least three working days' notice of such
intention and may also be accompanied by an attorney. All negotiations pursuant
to this clause are confidential and will be treated as compromise and settlement
negotiations for purposes of the Federal Rules of Evidence and state rules of
evidence.
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In the event the parties are unable to settle such controversy amicably
through negotiations, the dispute will be submitted to binding arbitration
before a single arbitrator in accordance with the Employment Dispute Resolution
Rules of the American Arbitration Association provided that: (i) the arbitrator
will be instructed and empowered to take whatever steps to expedite the
arbitration as he or she deems reasonable; (ii) each party will bear its own
costs in connection with the arbitration; (iii) the arbitrator's judgment will
be final and binding upon the parties, except that it may be challenged on the
grounds of fraud or gross misconduct; and (iv) the arbitration will be held in
San Francisco, California. Judgment upon any verdict in arbitration may be
entered in any court of competent jurisdiction. The parties hereby consent to
the jurisdiction of, and proper venue in, the federal and state courts located
in San Francisco, California.
Unless otherwise expressly set forth in this Agreement, the procedures
specified in this Section 10 will be the sole and exclusive procedures for the
resolution of disputes and controversies between the parties arising out of or
relating to this Agreement; provided, however, that a party may seek a
preliminary injunction or other provisional judicial relief if in its judgment
such action is necessary to avoid irreparable damage or to preserve the status
quo. Despite such action the parties will continue to participate in good faith
in the procedures specified in this Section 10.
11. Miscellaneous.
(a) Governing Law; Interpretation. This Agreement and its
EXHIBIT A will be governed by the substantive laws of the State of California
applicable to contracts entered into and fully performed in such jurisdiction.
The headings and captions of the Sections of this Agreement are for convenience
only and in no way define,, limit or extend the scope or intent of this
Agreement or any provision hereof. This Agreement will be construed as a whole,
according to its fair meaning, and not in favor of or against any party,
regardless of which party may have initially drafted certain provisions set
forth herein.
(b) Assignment. This Agreement is personal to Executive and she
may not assign any of her rights or delegate any of her obligations hereunder
without first obtaining the prior written consent of the Board of Directors of
the Company.
(c) Notices. Any notice, request, claim or other communication
required or permitted hereunder will be in writing and will be deemed to have
been duly given if delivered by hand or if sent by certified mail, postage and
certification prepaid, to Executive at her residence (as noted in the Company's
records), or to the Company at its address as set forth below its signature on
the
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signature page of this Agreement, or to such other address or addresses as
either party may have furnished to the other in writing in accordance herewith.
(d) Severability. In the event any provision of this Agreement
or the application of any such provision to either of the parties is held by a
court of competent jurisdiction to be contrary to law, such provision will be
deemed amended to the extent necessary to comply with such law, and the
remaining provisions of this Agreement will remain in full force and effect.
(e) Entire Agreement; Amendments. This Agreement together with
EXHIBIT A constitutes the final and complete expression of all of the terms of
the understanding and agreement between the parties hereto with respect to the
subject matter hereof, and this Agreement replaces and supersedes any and all
prior or contemporaneous negotiations, communications, understandings,
obligations, commitments, agreements or contracts, whether written or oral,
between the parties respecting the subject matter hereof. Except as provided in
Section 11(d) above, this Agreement may not be modified, amended, altered or
supplemented except by means of the execution and delivery of a written
instrument mutually executed by both parties.
(f) Attorneys' Fees. In the event it becomes necessary for any
party to initiate legal action or any other proceeding to enforce, defend or
construe such party's rights or obligations under this Agreement, the prevailing
party will be entitled to its reasonable costs and expenses, including
attorneys' fees, incurred in connection with such action or proceeding.
12. Executive Acknowledgment. Executive acknowledges that she has been
given the opportunity to consult with legal counsel concerning the rights and
obligations arising under this Agreement (including for purposes of this Section
12, the Stock Option Agreement and the related Stock Option Plan), that she has
read and understands each and every provision of this Agreement, and that she is
fully aware of the legal effect and implications of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
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NOVO MEDIA GROUP, INC.. Executive:
By: /s/ KIMBERLEY VOGEL
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/s/ DIANA WILSON TODD
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Its: CFO Diana Wilson Todd
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Address: Address: 1083 Vine St. PMB 242
Healdsburg, CA 95448
Fax: Fax: (707) 857-1751
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Exhibit A
Stock Option Agreement
[form to be attached]