Document:

Exhibit 10.50

 

Managing Director Agreement

 

between

 

COMO Computer & Motion GmbH,
Lise-Meitner-Str.15, 24223 Raisdorf/ Germany, represented by its sole
shareholder, FOCUS Enhancements Inc., 1370 Dell Ave., Campbell CA 95008 USA,
who is represented by Mr Brett Moyer, President and Chief Executive Officer

 

-
hereinafter referred to as „Company” -

 

and

 

Mr Norman Schlomka

 

-
hereinafter referred to as „Managing Director” -

 

Preamble

 

The shareholders at the shareholder’s meeting
of the Company have resolved:

 

The individual appointed as Managing Director
shall be Mr Norman Schlomka, born on [omitted], 1964 in [omitted], residing in [omitted].

 

He is entitled to exercise
sole decision-making authority, subject to the terms of this Agreement, whether
or not other managing directors are appointed. He shall be entitled to use the
title: “Managing Director and Senior Vice President of COMO Computer and
Motions GmbH; a Focus Enhancements Company”.

 

The parties to this employment contract resolve
the following which shall replace the existing version of the Managing Director
Agreement between the parties dated February 27, 2004 (including all
Addendums to this Agreement) and become effective between the parties as of January 1,
2006:

 

 

§ 1

Duties and Responsibilities

 

1.                             The Managing Director is justified
and required to exercise sole authority to represent the Company and to direct
the affairs of the Company, as stipulated in this Agreement, the Articles of
Association and Bylaws of the Company and under German law. He is also required
to follow the directions and decisions arrived at by the shareholders’ meeting.

 

2.                             Within the
scope of management duties, the Managing Director is responsible for carrying
out the economic, financial, and organizational interests of the Company to the
best of his ability.

 

3.                             It is incumbent upon the Managing
Director to exercise due care of a reasonable and responsible businessperson.

 

4.                             The Managing Director shall be present at
shareholder’s meetings if requested, he shall present a business report at such
shareholder’s meeting, and, if requested, shall provide interim reports orally
and/or in writing.

 

§ 2

Duty of Loyalty, Trade Secrets

 

1.                             The
Managing Director has the duty of the strictest confidentiality vis-à-vis third
parties with regard to all matters entrusted to him and any business, Company,
or technical information and undertakings of an internal or confidential nature
that affect the Company that he has knowledge of. This duty exists beyond
termination of the employment relationship, including resignation or retirement

 

2.                             Business
and Company related materials and information of all kinds (i.e., oral
information, documents, contracts, notes, correspondence, reports, recipes,
proceedings, calculations, among other materials, whether or not in their
original, carbon, duplicate, or in draft form) including personal business
notes may be used only in business matters for business purposes. In
particular, it is prohibited, outside of the Company, to

 

2

 

manufacture, to use,
or to transfer to third parties calculations of costs, statistics, drafts,
among other items, in the form of duplicates, copies, or excerpts.

 

3.                            Documents
and other information referred to in Par. 2, which the Managing Director possesses
within the scope of his working relationship with the Company, shall be stored
with care, and shall be available at the request of the shareholders at any
time, but shall in any case be returned to the Company no later than the termination
of the employment relationship. The same principle applies for other objects in
the possession or ownership of the Company.

 

4.                             The
Managing Director does not have the authority to validate any rights of
retention concerning the aforementioned materials and information.

 

§ 3

Legal Transactions Requiring Official Approval

 

1.                             The Managing Director must obtain
approval from the shareholders at the shareholder’s meeting for the following
activities:

 

a)                            Purchase, sale and/or mortgaging of
any real property or buildings

 

b)                           Opening or closing of any branch
offices

 

c)                            Participation in other enterprises,
sale or lease of the Company or essential parts of the Company to third parties

 

d)                           Entering into a loan agreement or extension
of credit

 

e)                            Entering into any rental or lease
agreement for a term of more than one year or with a price term of more than
EUR 15,000.00 per year.

 

f)                              Appointment of holders of general
powers of attorney or authorized agents

 

3

 

g)                           Entering into employment contracts
with employees that provide for monthly wages exceeding EUR 6,000.00 or that
guarantee a percentage of company profits

 

h)                           For all activities that exceed the
boundaries of the normal course of business of the company, pursuant to the
parameters laid out by § 116 HGB

 

i)                               Entering into any agreement purchase
services or purchase inventory that exceeds EUR 25,000.00.

 

2.                             The shareholders may at any time
eliminate or reduce the above-mentioned restrictions or restrict the Managing
Director further.

 

§ 4

Performance, Secondary Occupations

 

1.                             Managing Director shall devote the
full extent of his capacity for work, his knowledge, and his experiences to the
Company.

 

2.                             The Managing Director is not bound by
certain working hours; however, he should devote a minimum number of 8 working
hours per day to the business of the Company. The Managing Director is
obligated, at any time, and whenever and to what extent the best interests of
the Company require it, to be available to fulfil his role as Managing Director.

 

3.                             The assumption of secondary roles in the
employment field, whether compensated or uncompensated, of honorary posts,
supervisory board membership, or other authorized seats requires the
pre-approval of the shareholders at the shareholders’ meeting.

 

The
same principle applies to publications and lectures which are related to the
field of activity of the shareholders.

 

4

 

4.                             The Managing Director, throughout the
term of his employment contract, may not participate in any other venture that
competes with the Company or engage in any business relationship with such
competitor, whether self-employed or in the employment of another, whether
directly or indirectly, nor on a foreign account, whether occasionally or
professionally. The above principles apply also to participation or
under-participation in an enterprise, a silent partnership, a consulting
relationship, a favour or accommodation, a supervisory board (committee) involvement,
or honorary post that competes with the Company. The non-compete provision
shall not apply in the event of the Managing Director’s participation in
securities ventures which are publicly traded and are obtained for the purpose
of capital investment.

 

§ 5

Post-employment Non-Competition Agreement

 

1.                             The
Managing Director is obligated, for a period of one year after the termination
of the employment relationship to refrain from participating in any enterprise
which is a competitor of the Company or any enterprise that is connected to
such competitor, whether self-employed or in the employment of another, whether
directly or indirectly, nor on a foreign account, whether occasionally or
professionally. The above principles apply also to participation or under-participation
in an enterprise, a silent partnership, a consulting relationship, a favour or
accommodation, a supervisory board (committee) involvement, or honorary post
that competes with the Company.

 

2.                             This
non-compete provision shall not apply if this Agreement terminates upon
extraordinary termination by the Managing Director caused by the Company or
Focus Enhancements Inc. The non-compete provision shall also not apply in the
event of the Managing Director’s participation in securities ventures which are
publicly traded and are obtained for the purpose of capital investment.

 

5

 

3.                             During the
non-competition period stipulated in Par. 1 the Company shall pay compensation
to the Managing Director in an amount equal to 50% of his average annual income
over the previous year. This compensation shall be paid during the one year
term of the non-compete agreement in monthly instalments. The amount of
compensation shall be reduced by an amount equal gained by the Managing
Director from the provision of his services to third parties during such
non-compete period to the extent stipulated in Sec. 74c HGB. The card
indicating the income tax/ social security contributions made by the Company
must be presented by the Managing Director. If it is not presented, the aforementioned
compensation of the Managing Director can not be claimed from the Company.

 

4.                             The
Company is entitled to waive its non-compete rights stipulated in this § 5
in accordance with Sec. 75a HGB.

 

5.                             For each
violation of the non-compete agreement, the Managing Director must pay a
penalty for breach of contract in an amount equal to two times his earnings
over the previous month. If no longer employed by the Company, the last monthly
payment he received will serve the same purpose. In the event of a continuous
breach of the non-compete agreement, each prohibited activity during a month
will count as a separate breach of contract within the meaning of Par. 1.

 

§ 6

Earnings

 

1.                             The
Managing Director shall receive as compensation for services rendered an annual
gross salary of EUR 85,000.00 the net amount of which shall be paid in 12 equal
monthly instalments. The annual salary includes Christmas and vacation bonuses.

 

2.                             Managing
Director shall be eligible to earn bonus compensation in each fiscal year
ending each December 31 during the Term as defined in § 10. This
bonus is subject to the achievement of the goals determined by the

 

6

 

shareholders’ meeting
in its reasonable discretion which will take place in each January of a
respective calendar year during the Term of this Agreement. Managing Director’s
maximum target bonus compensation shall be 30% of Managing Director’s annual
base salary in proportion of Managing Director’s period of employment during
the applicable year (measured on a 365 day/year basis). This bonus shall be
revised by the Company for each such fiscal year during the Term of this
Agreement. The parties expressly contemplate that the bonus will change from
year to year.

 

If Managing Director
is not employed on the date the commission or bonus payment is due because of (i) Managing
Director’s voluntary termination, or (ii) Managing Director’s involuntary
termination by the Company for cause, then no commission or bonus payment shall
be due. In addition, for purposes of this provision, termination of employment
due to Managing Director’s death shall be deemed an involuntary termination
without cause.

 

3.                             All
payments stipulated in this § 6 will be paid only in proportion to
Managing Director’s period of employment during the applicable year in relation
to a 365 day year.

 

4.                             The
Managing Director is not entitled to receive compensation for hours worked, on
Sundays, holidays, or any other time beyond normal working hours (overtime).

 

§ 7

Vacation

 

1.                             The Managing Director is entitled to
an annual vacation of 30 working days, where Saturdays are not considered
working days. The Managing shall take vacation with consideration of the
Company’s business interests.

 

7

 

2.                             Vacation
not taken in any calendar year may only be carried forward to the next calendar
year with the approval of the shareholders’ meeting, or if the vacation could
not be taken in the preceding year due to the business of the Company requiring
the presence of the Managing Director. Vacation carried forward must be taken by
March 31 of the following calendar year. If vacation carried forward is
not taken by March 31 of the aforementioned following calendar year, up to
a maximum of 2 weeks (=10 working days) of such unused vacation will be paid
out by the Company to the Managing Director based on his daily equivalent salary
stipulated in § 6 Par.1.

 

§ 8

Other Benefits

 

1.                             The Company shall provide the Managing Director with a
company car, chosen by the shareholders’ meeting, the make and model of which
shall be, respectively, medium-sized, which also is intended for personal use.
Any taxes, i.e. personal income taxes related to the convenience of operating
the company car for personal use are the responsibility of the Managing Director.

 

2.                             Should the Managing Director be recalled from his
position and/or is released from his duties as Managing Director or his
employment relationship is terminated by expiration of the employment term, the
Company is entitled to demand the return of the company car, without the
obligation of compensating the Managing Director for any monetary expenses he
incurred as a result of retaining the benefit of using the company car for
personal purposes. The Managing Director does not have any legal right of
retention in relation to the Company.

 

8

 

§ 9

Expenses

 

1.                             The Company shall reimburse the Managing Director for
travel expenses at the maximum rate permitted by taxes.

 

2.                             The Managing Director must be able to verify his
expenses, in a manner and to the extent that expenses are usually verified.

 

§ 10

Term of Agreement

 

1.                           The term of this Agreement shall be two years after
the Commencement Date (“Term”) unless earlier terminated by either party,
giving a three-month written notice until the end of each calendar month;
notwithstanding each party’s right to terminate this Agreement for cause.

 

2.                             Notice of termination must be given in writing. A
revocation of appointment as Managing Director shall at the same time be deemed
as termination of this Contract with notice period, provided that no
termination for cause is made.

 

3.                             If Managing Director’s employment terminates due to
Managing Director’s death, the Company will pay the Managing Director’s
compensation to his legal heirs for a period of six months. Such compensation
shall be calculated and paid in the manner described in § 6 of this Agreement.

 

4.                             In case of a termination of this Agreement by the
Company without cause or in the event the Agreement is not renewed at its Term,
the Managing Director will in addition to any other payments stipulated in this
Agreement receive a severance payment in a total amount equivalent to 3 months
basic salary as stipulated in § 6 Par. 1 of this Agreement which is to be
paid by the Company in 3 equal monthly instalments each of them falling due on
the last working day of each respective month following the termination.

 

9

 

§ 11

Final Provisions

 

1.                             This
Agreement, and any other agreement specifically referenced herein, constitutes
the entire agreement between the parties with respect to its subject matter,
and supersedes, merges and voids all previous agreements, representations and
warranties, written or oral, between the parties with respect to such subject
matter. It replaces the Managing Director Agreement entered into on February 27,
2004 between the parties.

 

2.                             This
Agreement may only be modified in writing. Any changes to this Agreement
require the written and express consent of the shareholders at a shareholder’s
meeting.

 

3.                             If one of the provisions of this
Agreement is held to be invalid, the remaining provisions shall remain valid,
and the invalid provision shall be replaced by such valid one which has the
closest admissible economic effect. The same shall apply in the event that the
Contract is found to be incomplete.

 

4.                             In the event of disputes in connection
with this Agreement the place of jurisdiction shall be the corporate seat of
the Company.

 

5.                             This Agreement shall be governed and
construed in accordance with the laws of the Federal Republic of Germany.

 

 

	
  Campbell,
  CA, December 28, 2005

  	
  Raisdorf, 28.12.2005

  
	
  (Place
  and Date)

  	
  (Place
  and Date)

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Brett Moyer

  	
   

  	
  /s/
  Norman Schlomka

  	
   

  
	
  Company,

  	
  Managing
  Director

  
	
  - represented by

  	
   

  
	
  Shareholders -

  	
   

  
				

 

10EXHIBIT 10.51

 

BASE
SALARIES OF NAMED EXECUTIVE OFFICERS OF THE REGISTRANT

 

As of February 1, 2006, the Compensation
Committee of Focus Enhancements Inc. (Focus) set the following base salaries
(on an annual basis) for our named executive officers: 

 

	
  Brett Moyer

  President and Chief Executive Officer

  	
   

  	
  $

  	
  326,025

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael Conway

  Senior Vice President of Strategy and Business Development

  	
   

  	
  $

  	
  171,250

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thomas Hamilton

  Executive Vice President and GM of Semiconductor Group

  	
   

  	
  $

  	
  185,000

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Peter Mor

  Senior Vice President of Engineering and Operations

  	
   

  	
  $

  	
  210,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gary Williams

  Executive Vice President of Finance & CFO

  	
   

  	
  $

  	
  215,250

  	
   

  

 

* Mr. Hamilton’s base salary was not adjusted. Mr. Hamilton’s
salary is scheduled to be reviewed in July 2006.

 

Each of the named executive officers will be
eligible to receive a discretionary bonus for 2006 between 25% and 50% of their
base salary.

 

Like all employees of Focus, each of the named
executive officers is also eligible to receive an allocation pursuant to Focus’
401(k) Plan.

 

Each of the named executive officers is also
eligible to participate in Focus’ Stock Incentive Plans.

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