Sample Business Contracts

Employment Agreement - Knowledge Kids Enterprises Inc. and Timothy Bender

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                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT, effective as of November 10, 1997
("Agreement"), is made between Knowledge Kids Enterprises, Inc., a Delaware
corporation (the "Company"), and Timothy Bender ("Employee").


         NOW, THEREFORE, in consideration of the mutual promises and subject to
the terms and conditions set forth herein, the parties hereto agree as follows:


employs Employee as the Vice President, World Wide Sales of the LeapFrog
division of the Company (the "LeapFrog Division") on the terms and conditions
hereinafter set forth. In such capacity, Employee shall have such dunes and
authority as are customary for, and commensurate with such position, including
establishing sales targets policies and procedures, managing sales personnel,
and such duties as the Board of Directors may prescribe. Employee shall, to the
best of Employee's ability, carry out such responsibilities and duties in an
efficient trustworthy, effective and businesslike manner. Employee's performance
of services under this Agreement shall be rendered in the San Francisco/Oakland
Bay Area or at any location or locations other than the aforesaid as Employee
shall agree to and as the Company's Board of Directors may designate from time
to time. Employee shall perform Employee's responsibilities hereunder for the
Company and/or such affiliates of the Company as the Board of Directors of the
Company may designate from time to time.

         1.2 EXCLUSIVE EMPLOYMENT. While Employee is employed with the Company,
Employee shall devote his full business time to his duties and responsibilities
set forth in this Section 1. Without limiting the generality of the foregoing,
Employee shall not, without the prior written approval of the Company's Board of
Directors, render services of a business, professional or commercial nature to
any other person, firm or corporation, whether for compensation or otherwise,
except that Employee may engage in civic, philanthropic and community service
activities so long as such activities do not interfere with Employee's ability
to comply with this Agreement and are not otherwise in conflict with the
policies or interests of the Company.


         In consideration of Employee's employment, and except as otherwise
provided herein, Employee shall receive from the Company the compensation and
benefits described in this Section 2, in full and complete satisfaction of all
of the Company's obligations to Employee arising from Employee's employment. The
compensation and employee benefits payable to Employee pursuant to this
Agreement may be changed only by the written agreement of the parties. Employee
authorizes the Company to deduct and withhold from all compensation to be paid
to him any and all sums required to be deducted or withheld by the Company
pursuant to

the provisions of any federal, state, or local law, regulation, ruling, or
ordinance, including, but not limited to, income tax withholding and payroll

         2.1 BASE COMPENSATION. While Employee is employed with the Company, the
Company shall pay to Employee, and Employee shall be entitled to receive from
the Company, as a fixed salary for the full time employment referred to in
Section 1 hereof, compensation ("Compensation") from the effective date of this
Agreement through December 31, 1998 at the rate of Twelve Thousand Five Hundred
Dollars ($12,500.00) per calendar month (a rate equivalent to One Hundred Fifty
Thousand Dollars ($150,000) per annum). Said Compensation shall be payable in
intervals not less than twice a month in accordance with Company payment policy
for executives in effect from time to time. In the event that Employee's
Compensation is not otherwise increased by the Board of Directors (or the
Compensation Committee) of the Company, effective as of January 1, 1999 and each
January 1 thereafter during the Employment Term, Employee's Compensation shall
be increased by an amount equal to the percentage increase, if any, in the
consumer price index from January 1 of the prior year. The consumer price index
to be used shall be the U.S. Department of Labor, Bureau of Labor Statistics
Consumer Price Index of Urban Wage Earners and Clerical Workers (Revised Series
Subgroup "All Items") San Francisco Bay Area Average.

         2.2 BONUS. For the calendar year ending December 31, 1998, Employee
shall be eligible to receive a bonus ("Bonus"), not to exceed Thirty Thousand
Dollars ($30,000) in the aggregate, based upon LeapFrog's 1998 Executive Bonus
Plan. In order for Employee to be eligible to receive the target maximum Bonus
for Calendar Year 1998, the Company's net sales and profit far Calendar Year
1998 must exceed the Company's net sales and profit for the calendar year ended
December 31, 1997 by at least thirty percent (30%), excluding any increases in
net sales or profit resulting from acquisitions by the Company. For purposes of
this Section 2.2, net sales shall mean the dollar amount of net sales invoiced
in the calendar year and net profits shall mean earnings before interest, taxes,
depreciation and amortization. The Company's Board of Directors shall determine
for each calendar year after Calendar Year 1998 in its sole and absolute
discretion (i) whether any Bonus shall be paid to Employee, and (ii) if a Bonus
is to be paid, the specific amount of such Bonus to be paid. Such determination
shall be based upon certain net sales, profits or other performance targets for
the Company to be determined by the Company's Board of Directors, and the
Employee's satisfactory performance of his assigned dudes, in each case for the
applicable calendar year.

         2.3 SARs. The Company is in the process of establishing a stock
appreciation right ("SAR") or similar equity participation plan. Employee shall
be granted SARs or other rights under said plan entitling him to rights
corresponding to an aggregate of 152,440 shares of the Company's common stock
(subject to the vesting schedule set forth below). Such SARs or other rights
shall have a stated or strike price ("Exercise Price") equal to $2.37 per share.
So long as Employee is employed with the Company, such SARs or other rights
shall vest as follows: 38,104 shares shall vest on January 1, 1999 and an
additional 3,176 shares shall vest on the first day of each calendar month
thereafter until all such SARs or other rights have become vested. Such SARs or
other rights shall contain such other terms and conditions as shall be
determined by the Company's Board of Directors, or Compensation Committee, as

         2.4 VACATION: LEAVE. Employee shall be entitled to paid vacation in any
fiscal year during the Employment Term in accordance with Company vacation and
leave policies. Said vacation time shall be planned consistent with Employee's
duties and obligations hereunder.

         2.5 OTHER BENEFITS. Employee shall be entitled to receive an automobile
allowance of $400 per month and such other specific and applicable employee
benefits, such as group medical and dental for Employee, Employee's spouse and
dependent children, life and disability insurance coverage, and sick leave all
as granted to the Company's executive employees in accordance with the Company's
policies and guidelines, including but not limited to contribution requirements
for dependent coverage, as approved by the Company's Board of Directors from
time to time.


         3.1 TERM AND TERMINATION. Employee's employment with Company is for
unspecified duration and constitutes at-will employment within the meaning of
California Labor Code Section 2922. Accordingly, the employment relationship may
be terminated at any time with or without cause, by Company or by Employee, by
delivery of written notice. Except as otherwise specifically provided in Section
3.2 below, upon termination of employment Employee shall not be entitled to
receive any compensation or benefits other than Compensation due through the
date of termination of Employment.

event the Company terminates the Employee's employment for any reason other than
the death or disability of Employee, or Cause, the Company shall pay Employee:
(i) in a lump sum within thirty (30) days of the effective date of termination,
any Compensation due through the date of termination, (ii) the balance of
Employee's Compensation, as and when otherwise payable hereunder, which he would
have been entitled to receive through the end of the Severance Period (as
defined below), (iii) a pro rata portion of Employee's Bonus, as and when
otherwise payable hereunder, which he would have been entitled to receive
through the effective date of termination, and (iv) continuation of benefits
upon substantially the same terms and conditions then in effect on the date of
termination under all medical. dental and life insurance plans through the end
of the Severance Period, provided that Employee at his own expense shall be
entitled to continue appropriate benefits under any applicable Cobra program
thereafter. In no event will Employee vest in any SAR's or other similar rights
during the Severance Period. As used in this Section 3.2, the Severance Period
shall mean the period beginning on the date of termination of employment and
ending on the earliest of: (a) the date that Employee is employed with another
employer, or (b) the date that Employee is engaged in any independent contractor
or consulting relationship, or (c) the date that is six (6) months after the
date of termination of Employee's employment with the Company.

         For purposes of this Section 3.2, the following definitions shall

         The term "disability" shall mean a physical or mental disability that
renders Employee unable to perform his normal duties for the Company for a
period of 120 consecutive days as determined by the Board of Directors of the

         The term "Cause" shall mean if the Employee shall (i) commit an act of
fraud, embezzlement or misappropriation involving the Company, (ii) be convicted
by a court of competent jurisdiction of, or enter a plea of guilty or no contest
to, any felony involving moral turpitude or dishonesty, (iii) commit an act, or
fail to commit an act, involving the Company which amounts to, or with the
passage of time would amount to, willful misconduct, wanton misconduct, gross
negligence or a breach of this Agreement and which results or will result in
significant harm to the Company, or (iv) willfully fail to perform the
responsibilities and duties specified herein.


         The Company shall pay for or reimburse Employee for all reasonable
business expenses incurred by Employee in the performance of his duties
hereunder, upon submission to the Company in accordance with Company policy of a
written accounting of such expenses, which accounting shall include an itemized
list of all expenses incurred, the business purposes for which such expenses
were incurred, and such receipts as Employee reasonably has been able to obtain.


         5.1 ACKNOWLEDGMENTS. Employee acknowledges the following:

                  5.1.1 ACCESS TO CONFIDENTIAL INFORMATION. Employee's services
to be rendered hereunder shall place him in a position of confidence and trust
which shall allow him access to "Confidential Information" (as hereinafter

                  5.1.2 FAIR AND REASONABLE COVENANT. The type and period of
restrictions imposed by the covenants in this Section 5 are fair and reasonable
and such restrictions will not prevent Employee from earning a livelihood.

Employee agrees as follows:

                  5.2.1 Employee shall not at any time during or after
Employee's employment, disclose to anyone outside of the Company or use for any
purpose that is not expressly authorized by the Company any Confidential
Information. Employee shall not deliver, reproduce or in any way allow any
Confidential Information to be delivered to or used by any third parties without
specific written consent of the president of the Company.

                  5.2.2 The Company's agreements with other persons or with the
U.S. government, or its agencies, may include agreements that impose obligations
or restrictions regarding inventions that occur in connection with work relating
to such an agreement, or regarding the confidential nature of work pursuant to
such an agreement. Employee agrees to be bound by all such lawful obligations
and restrictions, and to do whatever is necessary to satisfy the obligations of
the Company.

                  5.2.3 If this Agreement is terminated for any reason, Employee
shall promptly surrender and deliver to the Company all Confidential
Information. Employee will not retain any

description or other document that contains or relates to any Confidential
Information that Employee may produce, obtain or otherwise learn about during
employment with the Company.

         5.3 ASSIGNMENT OF INVENTIONS. Employee assigns and transfers to the
Company Employee's entire right, title and interest in and to all inventions
including, but not limited to, ideas, improvements, designs and discoveries
("Inventions"), whether or not patentable and whether or not reduced to
practice, made or conceived by Employee (whether made solely by Employee or
jointly with others) during Employee's employment with the Company which relate
in any manner to the actual or demonstrably anticipated business, work or
research and development of the Company or its subsidiaries, or result from or
are suggested by any task assigned to Employee or any work performed by Employee
for or on behalf of the Company or its subsidiaries. All Inventions are the sole
property of the Company; provided, however, that this Agreement does not require
assignment of an Invention which qualifies fully for protection under Section
2870 of the California Labor Code ("Section 2870"), which provides as follows:

                  5.3.1 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 am invention that the
employee developed entirely on his or her own time and without using the
employer's equipment, suppliers, facilities or trade secrets information except
for those inventions that either:

                           (a) 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

                           (b) result from any work performed by the employee
for the employer.

                  5.3.2 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 Section 5.3.1, the provision is against the
public policy of this state and is unenforceable.

Employee agrees that in connection with any Invention:

                  5.4.1 To keep and maintain adequate and current written
records of all Inventions made by Employee (in the form of notes, sketches,
drawings and other forms specified by the Company) while employed by the
Company. These records shall be available to the Company and shall be and remain
the sole property of the Company at all times. Employee will disclose such
Inventions promptly in writing to Employee's immediate supervisor at the
Company, with a copy to the Company President, whether or not Employee believes
the invention is protected by Section 2870. Such disclosure shall be received in
confidence by the Company. Within thirty (30) days after receipt of such
disclosure, the Company shall respond to Employee specifying that the Company
either (i) claims that the Invention is an assignable invention (as defined
below in Section 5.4.2), (ii) relinquishes any claim to the Invention or (iii)
requires further or more detailed disclosure to assess its rights to the
Invention under this Agreement. In the case of clause (iii) above, the Company
shall permit Employee time during normal business hours reasonably necessary to
prepare a more detailed disclosure; and the

Company shall provide an additional response as described in this Section 5.4.1
within thirty (30) days after receipt by the Company of such further or more
detailed disclosure.

                  5.4.2 Upon request, to promptly execute a written assignment
of title to the Company for any Invention required to be assigned by Section 5.3
("assignable invention") and Employee will preserve any such assignable
invention as Confidential Information.

                  5.4.3 Upon request, to assist the Company or its nominee (at
its expense) during and at any time subsequent to Employee's employment in every
reasonable way to obtain for the Company's or its nominee's benefit, patents,
copyrights, mask work rights and other statutory rights ("Statutory Rights") for
such assignable inventions in any and all countries, which inventions shall be
and remain the sole and exclusive property of the Company or its nominee whether
or not patented, copyrighted or the subject of a mask work right. Employee shall
execute such papers and perform such lawful acts as the Company deems necessary
to exercise all rights, title and interest in such Statutory Rights.

                  5.4.4 To execute and deliver to the Company or its nominee
upon request and at its expense all documents, including applications for and
assignments of Statutory Rights to be issued therefor, as the Company determines
are necessary or desirable to apply for and obtain Statutory Rights on such
assignable inventions in any and all countries and/or to protect the interest of
the Company or its nominee in Statutory Rights and to vest title thereto in the
Company or its nominee.

         5.5 RETURN OF BUSINESS RECORDS AND EQUIPMENT. Upon termination of
Employee's employment hereunder, Employee shall promptly return to the Company
(i) all documents, records, procedures, books, notebooks, and any outer
documentation in any form whatsoever, including but not limited to written,
audio, video or electronic, containing any information pertaining to the Company
which includes Confidential Information, including any and all copies of such
documentation then in Employee's possession or control regardless of whether
such documentation was prepared or compiled by Employee, Company, other
employees of the Company, representatives, agents, or independent contractors
and (ii) all equipment or tangible personal property entrusted to Employee by
the Company. Employee acknowledges that all such documentation, copies of such
documentation, equipment, and tangible personal property are and shall at all
times remain the sole and exclusive property of the Company.

Employee agrees that at all times during his employment hereunder, he shall
comply with the Company's employee manual and other policies and procedures
reasonably established by the Company from time to time concerning matters such
as management, supervision, recruiting, diversity, and sexual harassment.

         5.7 POST-EMPLOYMENT COOPERATION. Employee agrees that, for a period of
three years following his termination of employment under this Agreement, he
shall, upon Company's reasonable request and in good faith and with his best
efforts, subject to his reasonable availability, cooperate and assist Company in
any dispute, controversy, or litigation in which Company may be involved and
with respect to which Employee obtained knowledge while employed by the Company
or any of its affiliates, successors, or assigns, including, but not

limited to, his participation in any court or arbitration proceedings, giving of
testimony, signing of affidavits, or such other personal cooperation as counsel
for the Company shall request. Any such activities shall be scheduled, to the
extent reasonably possible, to accommodate Employee's business and personal
obligations at the time. The Company shall pay Employee's reasonable travel and
incidental out-of-pocket expenses incurred in connection with any such

         5.8 CERTAIN DEFINITIONS. For purposes of this Section 5, "Confidential
Information" shall mean information compilations of information relating to the
business and the owners of the Company and/or Knowledge Kids, L.L.C. and/or
their affiliates provided to Employee in connection with his employment with the
Company and/or any affiliate of the Company or to which Employee had access or
which he compiled while an employee of the Company and/or an affiliate of the
Company, including, but not limited to, information regarding any trade secrets,
proprietary knowledge, operating procedures, finances, financial condition,
organization, employees, customers, clients, agents, other personnel, business
activities, budgets, strategic or financial plans, objectives, marketing plans,
prices and price lists, operating and training materials, data bases and
analyses, designs, formulae, test data and all other documents relating thereto
or strategies of the Company; provided, however, the term "Confidential
Information" as used herein shall not include information (i) which has become
public, published or is otherwise in the public domain through no fault of
Employee prior to any disclosure thereof by Employee, (ii) which was known to
Employee prior to his employment or affiliation with the Company, (iii) which is
required to be disclosed by statute, regulation or court order, or (iv) which is
known generally to the public.

                  5.8.1 THE COMPANY. As used throughout this Section 5, the term
"Company" shall be deemed to include and refer to any company or person
affiliated with the Company.

         5.9 REMEDIES. In view of the position of confidence which Employee will
enjoy with the Company and the anticipated relationship with the clients,
customers, and employees of the Company and its affiliates pursuant to his
employment hereunder, and recognizing both the access to confidential financial
and other information which Employee will have pursuant to his employment,
Employee expressly acknowledges that the restrictive covenants set forth in this
Section 5 are reasonable and necessary in order to protect and maintain the
proprietary interests and other legitimate business interests of the Company and
its affiliates. Employee further acknowledges that (i) it would be difficult to
calculate damages to the Company and its affiliates from any breach of his
obligations under this Section 5, (ii) that injury to the Company and its
affiliates from any such breach would be irreparable and impossible to measure,
and (iii) that the remedy at law for any breach or threatened breach of this
Section 5 would theretofore be an inadequate remedy and, accordingly, the
Company shall, in addition to all other available remedies (including without
limitation seeking such damages as it can show it and its affiliates has
sustained by reason of such breach and/or the exercise of all other rights it
has under this Agreement), be entitled to injunctive and other similar equitable
remedies without the necessity of showing actual damages or posting bond.


         Employee represents and warrants that he is free to enter into and
perform each of the terms and conditions of this Agreement; and that his
execution and/or performance of all his

obligations under this Agreement does not and will not violate or breach any
other agreement between Employee and any other person or entity. Employee
acknowledges that but for this representation and warranty, the Company would
not agree to enter into this Agreement.


         This Agreement is binding upon and inures to the benefit of the parties
and their respective heirs, executors, administrators, personal representatives,
successors and assigns. The Company may assign its rights or delegate its duties
under this Agreement at any time and from time to time. However, the parties
acknowledge that the availability of Employee to perform services and the
covenants provided by Employee hereunder are personal to Employee and have been
a material consideration for the Company to enter into this Agreement.
Accordingly, Employee may not assign any of his rights or delegate any of his
duties under this Agreement, either voluntarily or by operation of law, without
the prior written consent of the Company, which may be given or withheld by the
Company in its sole and absolute discretion.


         Notices under this Agreement shall be sufficient only if mailed by
certified or registered United States mail, return receipt requested, or
personally delivered, to the parties at their addresses set forth on the
signature page hereof or as amended by notice pursuant to this subsection.
Notice by mail shall be deemed received two (2) days after deposit.


         9.1 ENTIRE AGREEMENT. This Agreement contains the full, complete, and
exclusive embodiment of the entire agreement of the parties with regard to the
subject matter hereof and supersedes all proposals, oral or written, all
negotiations, conversations or discussions between or among the parties relating
to this Agreement and all past course of dealing or industry custom. Employee
has not entered into this Agreement or employment relationship in reliance on
any representations, written or oral, other than those contained herein. This
Agreement may be modified only by a writing signed by Employee and the President
of Company.

         9.2 AMENDMENT. This Agreement may not be amended except by an
instrument in writing duly executed by the parties hereto.

         9.3 APPLICABLE LAW: CHOICE OF FORUM. This Agreement has been made and
executed under, and will be construed and interpreted in accordance with, the
laws of the State of California.

         9.4 ATTORNEYS' FEES. In any action or proceeding to enforce or
interpret this Agreement, or arising out of this Agreement, the prevailing party
or parties are entitled to recover a reasonable allowance for fees and
disbursements of counsel and costs of arbitration or suit, to be determined by
the arbitrator or the court in which the action or proceeding is brought.

         9.5 PROVISIONS SEVERABLE. Every provision of this Agreement is intended
to be severable from every other provision of this Agreement. If any provision
of this Agreement is held to be void or unenforceable, in whole or in part, the
remaining provisions will remain in full

force and effect, unless the remaining provisions are so eviscerated by such
holding that they do not reflect the intent of the parties in entering into this
Agreement. If any provision of this Agreement is held to be unreasonable or
excessive in scope or duration, that provision will be enforced to the maximum
extent permitted by law.

         9.6 NON-WAIVER OF RIGHTS AND BREACHES. Any waiver by a party of any
breach of any provision of this Agreement will not be deemed to be a waiver of
any subsequent breach of that provision, or of any breach of any other provision
of this Agreement. No failure or delay in exercising any right, power, or
privilege granted to a party under any provision of this Agreement will be
deemed a waiver of that or any other right, power or privilege. No single or
partial exercise of any right, power or privilege granted to a party under any
provision of this Agreement will preclude any other or further exercise of that
or any other right, power or privilege.

         9.7 GENDER AND NUMBER. Concerning the words used in this Agreement, the
singular form shall include the plural form, the masculine gender shall include
the feminine or neuter gender, and vice versa, as the context requires, and the
word "person" shall include any natural person, partnership, corporation,
association, trust, estate or other legal entity.

         9.8 HEADINGS. The headings of the Sections and Paragraphs of this
Agreement are inserted for ease of reference only, and will have no effect in
the construction or interpretation of this Agreement.

         9.9 COUNTERPARTS. This Agreement and any amendment or supplement to
this Agreement may be executed in two or more counterparts, each of which will
constitute an original but all of which will together constitute a single
instrument. Transmission by facsimile of an executed counterpart signature page
hereof by a party hereto shall constitute due execution and delivery of this
Agreement by such party.

         9.10 ARBITRATION. Any and all disputes or controversies whether at law
or in equity arising from or in connection with this Agreement or the employment
of Employee hereunder, shall, at the option of the Company or Employee, be
submitted to final and binding arbitration in San Francisco, California. Such
arbitration shall comply with and be governed by the provisions of the
Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award tendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. The cost of arbitration including but not
limited to attorneys' fees shall be borne by the losing party or in such
proportion as the arbitrator(s) shall determine.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.


                                     /s/ Timothy M. Bender
                                     TIMOTHY M. BENDER

                                     165 Canyon Lakes Way
                                     San Ramon, CA 94523


                                     KNOWLEDGE KIDS ENTERPRISES, INC.
                                     LEAPFROG DIVISION

                                     By: /s/ Michael C. Wood
                                     Name: Michael C. Wood
                                     Title: President

                                     5741 Doyle Street
                                     Emeryville, CA 94608