Exhibit 10.1
EMPLOYMENT AGREEMENT
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This
Employment Agreement (the "Agreement") is entered into as of
September 1, 2005 by and between Lee Kasper
(the "Executive") and NuTech
Digital, Inc., a California corporation
(the "Company").
WHEREAS,
the Company believes that Executive's service, experience, and
knowledge are valuable to the Company in
connection with its business; and
WHEREAS,
the Company desires to employ Executive, and Executive desires
to
be employed by the Company, as the Chief
Executive Officer and President of the
Company.
NOW,
THEREFORE, in consideration of the mutual promises and
covenants
herein contained, the parties hereto agree
as follows:
1.
Employment. The Company hereby employs Executive as its Chief
Executive
Officer and President and Executive accepts
such employment upon the terms and
conditions hereinafter set forth.
2. Term of
Employment.
(a) Term. Subject to the provisions of Section 6, the term of
Executive's employment pursuant to this
Agreement shall commence on and as of
the date hereof and shall terminate on July
31, 2012 (the "Term").
(b) Automatic Renewal. Subject to the provisions of Section 6,
this
Agreement will be automatically renewed for
successive periods of one year (each
a "Renewal Period") after the expiration of
the Term, unless either party gives
notice to the other, at least 180 days
prior to the expiration of any Renewal
Period, that the party desires to terminate
this Agreement.
3. Duties;
Extent of Service. During Executive's employment under this
Agreement, Executive (i) shall serve as an
employee of the Company with the
titles and positions of Chief Executive
Officer and President, reporting to the
Board of Directors of the Company, shall
have such executive responsibilities as
the Board of Directors of the Company shall
from time to time designate,
provided that, in all cases Executive shall
be subject to the oversight and
supervision of the Board of Directors of
the Company in the performance of his
duties, and (ii) shall render all services
reasonably incident to the foregoing.
Executive hereby accepts such employment,
agrees to serve the Company in the
capacities indicated, and agrees to use
Executive's best efforts in, and shall
devote Executive's full working time,
attention, skill and energies to, the
advancement of the interests of the Company
and its subsidiaries and the
performance of Executive's duties and
responsibilities hereunder.
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4. Salary,
Bonus and Stock Option.
(a) Salary. During Executive's employment under this Agreement,
the
Company shall pay Executive a salary at the
rate of $600,000 per annum (the
"Base Salary"). The Base Salary shall be
subject to withholding under applicable
law, shall be prorated for partial years
and shall be payable in periodic
installments not less frequently than
monthly in accordance with the Company's
usual practice for its executive officers
as in effect from time to time.
(b) Bonus. Executive shall receive a performance bonus if the
financial
targets set established by the Board of
Directors are satisfied (the
"Performance Bonus"). Executive and the
Board shall meet no later than 90 days
from the start of each of the Company's
fiscal years to establish performance
standards and goals to be met by Executive,
which standards and goals shall be
based upon earnings, cash flows, and other
objectives that are mutually agreed
to by Executive and the Board. These
financial targets or performance goals
shall be set forth in a memorandum from the
Board of Directors to Executive.
During the Term and each Renewal Period,
the Company shall pay to Executive, no
later than 30 days after the completion of
each fiscal year, a bonus that shall
be computed as follows:
(i) for each
year in which the Company's net profits (which for
this Agreement shall be defined as net
profits before taxes) are equal to the
performance standards and goals, Executive
shall receive as a Performance Bonus
50% of the Base Salary, as set forth in
Section 4(a) of this Agreement;
(ii) for each year in
which the Company's net profits are equal to
105% of the performance standards and
goals, Executive shall receive as a
Performance Bonus 75% of the Base Salary,
as set forth in Section 4(a) of this
Agreement; and
(iii) for each year in which the Company's net profits are equal
to
115% of the performance standards and
goals, Executive shall receive as a
Performance Bonus 100% of the Base Salary,
as set forth in Section 4(a) of this
Agreement.
Nothing in this section shall prevent Executive and the Company
from
mutually agreeing to an alternative
computation of the Performance Bonus, which
may be implemented and paid to Executive in
place of the Performance Bonus
described herein.
(c) Stock Options. As an incentive to enter into this Agreement
and
perform the services required under it,
Executive shall receive an option to
purchase 6,000,000 shares of the Company's
common stock, no par value, at a
price of $0.121 per share. The option shall
have a term of five years. Executive
shall also receive an option to purchase
2,000,000 shares of the Company's
common stock, which grant shall be tied to
performance. The terms of the options
shall be memorialized in a separate
agreement.
5.
Benefits.
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(a) Regular Benefits. During Executive's employment under this
Agreement, Executive shall be entitled to
participate in any and all medical,
pension, dental and life insurance plans
and disability income plans, retirement
arrangements and other employment benefits
as in effect from time to time for
executive officers of the Company
generally. Such participation shall be subject
to (i) the terms of the applicable plan
documents (including, as applicable,
provisions granting discretion to the Board
of Directors of the Company or any
administrative or other committee provided
for therein or contemplated thereby)
and (ii) generally applicable policies of
the Company.
(b) Vacation. During Executive's employment under this
Agreement,
Executive shall receive paid vacation
annually in accordance with the Company's
practices for executive officers, as in
effect from time to time, but in any
event not less than four weeks per calendar
year.
(c) Expenses. The Company shall reimburse Executive for all
reasonable
business expenses incurred by Executive
during Executive's employment hereunder
to the extent in compliance with the
Company's business expense reimbursement
policies in effect from time to time and
upon presentation by Executive of such
documentation and records as the Company
shall from time to time require.
(d) Taxation of Payments and Benefits. The Company shall undertake
to
make deductions, withholdings and tax
reports with respect to payments and
benefits under this Agreement to the extent
that it reasonably and in good faith
believes that it is required to make such
deductions, withholdings and tax
reports. Payments under this Agreement
shall be in amounts net of any such
deductions or withholdings. Nothing in this
Agreement shall be construed to
require the Company to make any payments to
compensate Executive for any adverse
tax effect associated with any payments or
benefits or for any deduction or
withholding from any payment or
benefit.
6.
Termination and Termination Benefits. Notwithstanding the
provisions of
Section 2, Executive's employment under
this Agreement shall terminate under the
following circumstances set forth in this
Section 6.
(a) Termination by the Company for Cause. Executive's employment
under
this Agreement may be terminated for Cause
without further liability on the part
of the Company other than for accrued but
unpaid Base Salary through the date of
termination effective immediately upon
written notice to Executive. "Cause"
shall mean the following:
(i) the
conviction of Executive of any act of embezzlement,
raud, larceny or theft on or from the Company or an affiliate of
the
Company;
(ii) the conviction of
Executive for a felony or any
misdemeanor, which misdemeanor involves moral turpitude,
deceit,
dishonesty or fraud;
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(iii) any material misconduct or violation of the Company's
policies, in either case, which continues for a period of 90 days
after
written notice given to Executive; or
(iv) a material breach
by Executive of any of the covenants,
terms or provisions of this Agreement or any agreement between
the
Company and Executive regarding confidentiality or assignment
of
inventions.
(b) Termination by Executive. Executive's employment under this
Agreement may be terminated by Executive by
written notice to the Board of
Directors at least 180 days prior to such
termination.
(c) Termination by the Company Without Cause or upon Death or
Disability. Subject to the payment of
Termination Benefits pursuant to Section
6(d), Executive's employment under this
Agreement may be terminated without
Cause by the Company upon 90 days written
notice to Executive or upon
Executive's death or disability. As used
herein, the term "disability" shall
mean the inability of Executive, by reason
of injury, illness or other similar
cause, to perform a major part of his
duties and responsibilities in connection
with the conduct of the business and
affairs of the Company for a period of 180
days.
(d) Certain Termination Benefits. Unless otherwise specifically
provided in this Agreement or otherwise
required by law, all compensation and
benefits payable to Executive under this
Agreement shall terminate on the date
of termination of Executive's employment
under this Agreement. Notwithstanding
the foregoing, in the event of termination
of Executive's employment with the
Company pursuant to Section 6(c) above
during the Term or any Renewal Period,
the Company shall pay to Executive in a
lump sum (a) the Base Salary for the
remainder of the Term or the Renewal
Period, (b) three years' Base Salary, (c)
any Performance Bonus to which Executive
may be entitled, (d) an amount equal to
the average of any discretionary bonus paid
to Executive during the three years
prior to his termination and (e) the
Company shall immediately repay in full,
irrespective of the terms of the promissory
notes or other agreements evidencing
the indebtedness, any loans made by the
Executive to the Company or personally
guaranteed by the Executive on behalf of
the Company (the "Severance Benefits").
In the event of termination of Executive's
employment with the Company
