Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into on this the 4th
day of February, 2004, with an effective date of April 15, 2003 ("Effective
Date"), by and between Dwango North America Corp. ("DNA"), a Nevada corporation
with a principal place of business at 5847 San Felipe St., Suite 3220, Houston,
Texas 77057-3000, and [employee name], an individual residing at [employee
address] ("Employee").
WHEREAS DNA desires to engage Employee to perform [description of
services to be performed by employee] relating to DNA's wireless content
development and publishing business, and to develop certain Intellectual
Property (as defined below) for the exclusive use and benefit of DNA
(hereinafter collectively the "Services");
WHEREAS Employee desires to perform the Services for DNA, and to
receive the compensation to be paid by DNA in connection therewith;
WHEREAS DNA shall provide Employee with various kinds of proprietary
information and training, including but not limited to business contacts,
business plans, technical information and other valuable business information
which is of a secret or confidential nature;
NOW, THEREFORE, for and in consideration of the mutual promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, DNA and Employee (hereinafter
collectively "the Parties" and each a "Party") do hereby agree as follows:
1. DEFINITIONS
a. "Competitor of DNA" shall mean any individual or entity in the
business of developing or distributing software applications
that enable mobile telephones to download, organize or play
games, ring tones or media. An individual or entity shall be
regarded as a Competitor of DNA if it is in the business of
developing or distributing such applications either during the
term of this Agreement or at any time during the twelve (12)
month period after the expiration or termination of this
Agreement.
b. "Confidential Information" shall mean all nonpublic
information that the Party disclosing such information
("Disclosing Party") designates as being confidential, or
information that, under the circumstances surrounding
disclosure ought to be treated as confidential. Confidential
Information includes, without limitation, information related
to released or unreleased Disclosing Party software products,
the marketing or promotion of any Disclosing Party product,
Disclosing Party's business policies or practices, and
information received from others that Disclosing Party is
obligated to treat as confidential. Confidential Information
disclosed to another party ("Receiving Party") by any
Disclosing Party agent is also deemed to be covered by this
Agreement. Confidential Information does not include any of
the foregoing items which (i) have become publicly and widely
known and made generally available through no wrongful act of
the Receiving Party or of others who were under
confidentiality obligations as to the item or items involved,
(ii) was known to the Receiving Party, without restriction, at
the time of disclosure, as demonstrated by files in existence
at the time of disclosure; or (iii) becomes known to the
Receiving Party, without restriction, from a source other than
the Disclosing Party without breach of this Agreement by the
Receiving Party and otherwise not in violation of the
Disclosing Party's rights.
c. "Confidential Materials" shall mean all tangible materials
containing Confidential Information, including without
limitation written or printed documents and computer disks or
tapes, whether machine or user readable.
d. "Customer of DNA" shall mean any individual or entity with
whom DNA has or has had any business relationship and any
individual or entity with whom DNA is having or has had any
discussions concerning a potential business relationship. An
individual or entity shall be regarded as a Customer of DNA if
it had a business relationship with DNA or DNA has had any
discussions concerning a potential business relationship
during the term of this Agreement.
e. "Intellectual Property" shall mean any and all of the
following made or otherwise arising out of the efforts of
Employee in connection with Employee's employment with DNA:
all copyrights (including, without limitation, the exclusive
right to reproduce, distribute copies of, display and
thereupon perform the copyrighted work and to prepare
derivative works); all copyright registrations and
applications; all moral rights; all author's rights; all
trademark rights (including, without limitation, registrations
and applications); all right, title and interest in and to any
patent, letters patent, industrial model, design patent, petty
patent, patent of importation, utility model, certificate of
invention, and/or other indicia of inventorship and/or
invention ownership, and any application for any of the
foregoing, and including any such rights granted upon any
reissue, division, continuation or continuation-in-part
applications now or hereafter filed, related to any such
application; all trade names; all mask work rights; all right,
title and interest in and to all trade secret rights arising
under the common law, state law, federal law or the laws of
any foreign country; all algorithms; all rights in packaging,
goodwill and other intellectual property rights; and all
divisions, continuations, reissues, renewals and extensions
thereof, regardless of whether any such rights arise under the
laws of the United States or any other state, country or
jurisdiction, and all derivative works thereof.
f. "Option" shall mean the option to purchase [number of shares]
of DNA common stock with a per share exercise price equal to
the lower of $ 1.45 or the exercise price at which DNA is
granting options to other optionees as of the date of this
Agreement. The Option shall be adjusted for stock splits,
stock dividends, recapitalization and the like which may occur
between the date of this Agreement and the grant of the
Option.
g. "Vesting Commencement Date" is April 15, 2003.
2. COMPENSATION, BENEFITS AND TERM OF EMPLOYMENT
a. COMPENSATION
DNA hereby agrees to employ Employee at a minimum salary of [monthly
salary], or at such other increased salary as may be subsequently
agreed to by the Parties. Payment of the salary shall be made in
accordance with DNA's regular payroll practices.
As additional compensation, Employee shall be granted the Option by the
board of directors of DNA. Subject to the terms of this Agreement, one
twenty-fourth (1/24th) of the shares subject to the Option shall vest
each month on the monthly anniversary of the Vesting Commencement Date
so long as Employee remains employed by DNA. The Option shall be
subject to the terms and conditions of this Agreement, the Merger
Agreement, and DNA's Stock Option Plan and Stock Option Agreement. The
DNA Stock Option Plan and the form of DNA Stock Option Agreement are
each attached hereto as Exhibit A. The Option shall be an incentive
stock option to the
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maximum extent permitted by law. To the extent DNA's Stock Option Plan
accelerates the vesting of options held by executive officers of DNA in
the event of a merger, acquisition, asset sale or other change of
control transaction, then Employee's Option shall also be accelerated.
b. EMPLOYEE BENEFITS
Employee shall be eligible to participate in the standard benefit plans
currently available to other similarly situated employees, including
medical, dental and vision insurance policies as soon as Employee
becomes eligible for such coverage pursuant to the requirements of
those individual insurance policies.
c. VACATION AND HOLIDAY PAY
Employee shall receive a total of ten (10) days of paid vacation per
calendar year. Employee must provide DNA at least 5 business days
notice of his intent to use paid vacation days and must receive consent
from DNA for the requested vacation day (which consent shall not be
unreasonably withheld by DNA). Paid vacation days shall accrue for the
benefit of Employee, may be rolled over to subsequent calendar years,
and, to the extent accrued as of the termination of Employee's
employment, paid out in cash to the Employee promptly after termination
of employment.
The following are scheduled paid holidays for DNA employees: Memorial
Day, Independence Day, Labor Day, Martin Luther King Jr. Day,
Thanksgiving, Christmas, and New Years.
d. TERM OF EMPLOYMENT
Subject to the terms and conditions of the "Agreement and Plan of
Merger" by and between DNA and Over-The-Air Wireless, Inc., and certain
other parties, of date even herewith, the Parties acknowledge that
Employee's period of employment with DNA may be terminated by either
Party, with or without cause, after thirty (30) days written notice to
the other Party.
3. OWNERSHIP OF INTELLECTUAL PROPERTY
Employee hereby agrees to promptly disclose to DNA any and all
Intellectual Property made or developed by Employee in connection with
Employee's employment with DNA.
All elements of all Intellectual Property shall be exclusively owned by
DNA and shall be considered "Work Made for Hire" by Employee for DNA.
DNA shall exclusively own all United States and international
copyrights and all other intellectual property rights in the
Intellectual Property. Employee agrees to assign, and upon creation of
each element of the Intellectual Property automatically assigns to DNA,
its successors and assigns, ownership of all United States and
international copyrights and all other intellectual property rights in
each element of the Intellectual Property.
Employee agrees that any and all such Intellectual Property shall be
the absolute property of DNA or DNA's designees and, at the request of
DNA, Employee shall provide any reasonably necessary assistance to DNA
in making application in due form for United States letters patent and
foreign letters patent on such Intellectual Property. In the event that
DNA requests that Employee provide such application assistance after
termination of Employee's employment with DNA, DNA agrees to compensate
Employee for time spent providing the requested assistance at a rate
equal to Employee's most recent hourly rate. In calculating such hourly
rate, it shall be assumed that Employee works forty (40) hours per week
to earn the salary identified in Section
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2(a) of the Agreement, as such salary may be adjusted in the future
from time to time. Employee shall execute any and all instruments and
do any acts necessary or desirable in connection with any such
application for letters patent in order to establish and perfect in DNA
the entire right, title, and interest in such Intellectual Property,
and also to execute any instruments desirable in connection with any
continuations, renewals, or reissues thereof or in the conduct of any
related proceedings or litigation. DNA shall bear all reasonably
necessary out of pocket expenses incurred by Employee as a result of
the performance of the obligations provided for in this paragraph 3.
Except as authorized by DNA (in writing if after termination of
Employee's Term of Employment), Employee shall not disclose, directly
or indirectly, any information relating to any such Invention or patent
application.
If Employee has any intellectual property rights to any Intellectual
Property that cannot be assigned to DNA, Employee unconditionally and
irrevocably waives the enforcement of such rights, and all claims and
causes of action of any kind against DNA with respect to such
Intellectual Property, and agrees, at DNA's request and expense, to
consent to and join in any action to enforce the rights such
Intellectual Property. If Employee has any intellectual property rights
in any Intellectual Property that cannot be assigned to DNA or waived
by Employee, the Employee, to the extent Employee has the legal right
to do so, unconditionally and irrevocably grants to DNA during the term
of such rights, an exclusive, irrevocable, perpetual, worldwide, fully
paid and royalty-free license, with rights to sublicense through
multiple levels of sublicensees, to reproduce, create derivative works
of, distribute, publicly perform and publicly display by all means now
known or later developed, such Intellectual Property.
The Parties understand that the provisions of this Agreement requiring
assignment of Intellectual Property to DNA and the waiver of the
enforcement of such rights against DNA do not apply to any invention
for which no equipment, supplies, facility or trade secret information
of DNA was used and which was developed entirely on Employee's own
time, unless (a) the invention relates (i) directly to the business of
DNA or (ii) to DNA's actual or demonstrably anticipated research or
development or (b) the invention results from any work performed by
Employee for DNA. In addition, the Parties understand that the
provisions of this Agreement do not apply to any of the inventions,
original works of authorship, developments, improvements, and trade
secrets which were made by Employee prior to the date of this
Agreement, all of which are set forth on the list attached hereto as
EXHIBIT B (collectively referred to as "PRIOR INVENTIONS"), which
belong solely to Employee or belong to Employee jointly with another
and which are not assigned to DNA hereunder; or, if no such list is
attached, Employee represents that there are no such Prior Inventions.
If, in the course of Employee's employment with DNA, Employee
incorporates into a DNA product, process or machine a Prior Invention
owned by Employee or in which Employee has an interest, DNA is hereby
granted and shall have a non-exclusive, royalty-free, irrevocable,
perpetual, worldwide license (with the right to sublicense) to make,
have made, copy, modify, make derivative works of, use, sell and
otherwise distribute such Prior Invention as part of or in connection
with such product, process or machine.
4. CONFIDENTIAL INFORMATION
Except as authorized by DNA (in writing if after termination of
Employee's employment with DNA), Employee shall not disclose or use,
directly or indirectly, either during or subsequent to Employee's
employment with DNA, any Confidential Information or Confidential
Materials obtained during the course of Employee's employment with DNA.
This provision shall apply regardless of whether or not such
Confidential Information or Confidential Materials were acquired,
originated or developed in whole or in part by Employee. Additionally,
excluding disclosures made in the proper course and scope of his
employment by DNA, Employee shall not
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distribute or otherwise disclose to any third party any Confidential
Materials, except as authorized in writing by DNA.
Employee agrees to deliver to DNA promptly upon request or on the date
of the termination of Employee's employment with DNA, all documents,
copies thereof, and any other materials in Employee's possession or
control concerning or relating to any Confidential Information or
Confidential Materials obtained during the course of Employee's
employment with DNA.
5. NON-SOLICITATION OF DNA EMPLOYEES
Employee hereby recognizes the substantial investment of DNA in the
hiring and training of its personnel and employees. Therefore, while
employed by DNA and for a period of twelve (12) months thereafter
Employee will not either directly or on behalf of others solicit or
recruit employees of DNA or any affiliate or subsidiary of DNA, to
leave the employment of DNA or to join a Competitor of DNA or a
Customer of DNA.
6. MISCELLANEOUS
a. The Parties agree that the obligations incurred under the
terms of Sections 3, 4 and 5 of this Agreement shall continue
after the termination of Employee's employment with DNA, and
that each Party shall only be released from these obligations
by the specific written agreement of the other Party or upon
the expiration of the time period specified in such Section.
b. The Parties hereby acknowledge and agree that breach of the
covenants and agreements contained in Paragraphs 3, 4 and 5 of
this Agreement shall cause immediate and irreparable damage to
DNA and that DNA's remedy at law for any such breach would be
inadequate. Employee agrees that DNA shall be entitled to have
temporary or permanent injunctive relief without the necessity
of proof of actual damage or bond. Such injunctive relief
shall not be exclusive, but shall be in addition to any other
rights or remedies to which DNA shall be entitled. In any
dispute under this Agreement, the parties agree that the
prevailing party shall be entitled to recover the costs and
expenses of such dispute, including reasonable attorneys' fees
and costs.
c. The Parties agree that any failure by DNA to exercise any of
its rights under this Agreement or at law, or to insist on the
complete performance of all obligations by Employee under the
terms of this Agreement shall not constitute or be construed
as a waiver by DNA of any of its rights, privileges,
obligations or duties, or as creating any contrary custom or
course of conduct.
d. The Parties agree that this Agreement shall be construed under
and in accordance with the laws of the State of Texas
(excluding its conflicts of law provisions) and that all of
the obligations of the Parties are performable in Harris
County, Texas.
e. The Parties agree that this Agreement shall be binding on and
inure to the benefit of the Parties to this Agreement and
their respective heirs, executors, administrators, legal
representatives, successors, and assigns.
f. The Parties agree that if any provision of this Agreement is
for any reason held to be invalid, illegal or unenforceable in
any respect, the remaining provisions will remain in full
force and effect. If any provision of this Agreement is, for
any reason, determined by a court of competent jurisdiction to
be excessively broad or unreasonable as to scope or
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subject, such provision must be enforced to the extent
necessary to be reasonable under the circumstances and
consistent with applicable law while reflecting as closely as
possible the intent of the parties as expressed herein.
g. The Parties agree that this Agreement constitutes the sole and
only agreement of the Parties to this Agreement concerning the
subject matter of this Agreement, and supersedes any prior
understanding or written or oral agreements between the
Parties to this Agreement.
h. This Agreement may be transmitted by facsimile, and it is the
intent of the Parties for the facsimile of any autograph
printed by a receiving facsimile machine to be an original
signature and for the facsimile and any complete photocopy of
the Agreement to be deemed an original.
i. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which
together shall constitute one instrument.
[signature page follows]
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DWANGO NORTH AMERICA CORP.
By:
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Robert E. Huntley, Chairman
[Employee]
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[Employee]
EXHIBIT A
FORM OF DWANGO STOCK OPTION PLAN AND
STOCK OPTION AGREEMENT
EXHIBIT B
PRIOR INVENTIONS