EMPLOYMENT AGREEMENT
Exhibit
10.3
Form
8-K
aVinci
Media Corporation
File No.
000-17288
This
Employment Agreement (the “Agreement”) is made and entered into effective as of
April 1, 2008 (the “Effective Date”), by and between Sequoia Media Group, LC, a
Utah limited liability company (the “Company”), and Xxxxxx X. Xxxxxxx, an
individual (the “Executive”).
In
consideration of the mutual promises and covenants contained in, and the mutual
benefits to be derived from, this Agreement, the parties hereto agree as
follows:
1. EMPLOYMENT. The
Company hereby employs the Executive, and the Executive hereby accepts such
employment, upon the terms and conditions set forth herein.
2. DUTIES. The
Executive be shall employed in the position of Chief Operating Officer of the
Company and shall perform the duties described in Exhibit “A” attached hereto
and such other duties as shall be assigned by the Chief Executive Officer or by
the Company’s Board of Managers (the “Board”) from time to time. The
Executive shall diligently and faithfully execute and perform such duties,
subject to the general supervision and control of the Company’s
President. The Executive shall devote substantially all of his
business time, attention, skill and efforts to the faithful performance of his duties
hereunder to the business of the Company and shall not, during the Employment
Term (as the term is defined in Section 5.1 below) be actively engaged in any
other business activity, except with the prior written consent of the Company’s
Board of Managers, and provided that such activity will not: (i) adversely
affect or materially interfere with the performance of the Executive’s duties
hereunder; (ii) involve a conflict of interest with the Company; or (iii)
involve activities competitive with the business or proposed business of the
Company.
3. COMPENSATION
AND BENEFITS. As the entire consideration for the services to
be performed and the obligations incurred by the Executive hereunder, and
subject to the terms and conditions hereof, during the Employment Term the
Executive shall be entitled to the following:
3.1 Base
Salary. Subject to Section 5 below, commencing on the date
hereof, the Company shall pay the Executive an annual base salary of $195,000 on
an annual basis, subject to increase(s), if any, as determined from time to time
by the Company’s Board of Managers.
3.2 Payment
of Base Salary. The Company will pay the Executive his annual
base salary in equal, semi-monthly installments or at more frequent intervals in
accordance with the Company’s customary pay schedule.
3.3 Additional
Benefits. The Executive shall be entitled to participate, to
the extent of his eligibility in any employee benefit plans made available by
the Company to its employees during the Employment Term, including, without
limitation, such bonus plans, pension or profit sharing plans, incentive stock
option plans, retirement plans and health, life, hospitalization, dental,
disability or other insurance plans as may be in effect from time to
time. Such participation shall be in accordance with the terms
established from time to time by the Company for individual participation in any
such plans. Notwithstanding the foregoing, the Company may terminate or reduce
benefits under any benefit plans and programs to the extent such reductions
apply uniformly to all
senior executives enabled to participate therein, and the Employee's benefits
shall be reduced or terminated accordingly.
3.4 Vacation,
Sick Leave and Holidays. The Executive shall be entitled to
vacation, sick leave and holidays at full pay in accordance with the Company’s
policies established and in effect from time to time, but in no event shall the
Executive receive less than four weeks of paid vacation
annually.
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3.5 Deductions. The
Company shall have the right to deduct and withhold from the compensation due to
the Executive hereunder, including salary and bonus, such taxes and other
amounts as may be customary or required by applicable state or federal
law.
3.6 Bonus
Program. The Executive will be permitted to participate in and
receive payments under the annual bonus program targeted for approximately 40%
of the Executive’s annual base salary as described in the Company’s bonus
program. The Executive shall also be entitled to receive any
additional bonus as declared by the Company’s Board of Managers.
4. BUSINESS
EXPENSES. The Company shall promptly reimburse the Executive
for all reasonable out-of-pocket business expenses incurred in performing the
Executive’s duties and responsibilities hereunder in accordance with the
Company’s policies with respect thereto in effect form time to time, provided
that the Executive promptly furnishes to the Company adequate records and other
documentary evidence required by all applicable federal and state laws, rules
and regulations issued by the appropriate taxing authorities for the
substantiation of each such business expense as a deduction on the federal and
state income tax returns of the Company.
5. TERM AND
TERMINATION.
5.1 Employment
Term. Subject to earlier termination as provided in Sections
5.2, 5.3 and 5.4 below (and except for the provisions of this Agreement and the
Exhibits attached hereto that, by their terms, continue in force beyond the
termination thereof), the term of this Agreement shall commence on the Effective
Date and end on March 30, 2011 (the “Employment Term”). Unless
earlier terminated or unless either the Executive or the Company provides
written notice to the other party of their desire to terminate this Agreement at
least 180 days prior to the end of the Employment Term (or any renewal thereof),
the Employment Term will automatically renew for additional one year periods on
the same terms as provided herein. If the Employment Term is renewed
or extended as set forth in Section 5.7, the term “Employment Term” will be
interpreted herein to include such renewal or extended term. If at
the completion of the Employment Term, the Company and the Executive determine
not to renew or extend the Executive’s employment, the Executive shall be paid
by the Company the Severance compensation set forth under Section 5.6
hereunder.
5.2 Termination
Without Cause. Subject to Section 5.5.1 below, either the
Company or the Employee may terminate this Agreement and the Executive’s
employment hereunder without cause, and for any or no reason, at any time during
the Employment Term effective upon at least 30 days written notice by the
terminating party to the non-terminating party. The Executive’s
employment shall be deemed to have been terminated by the Company without cause
if (i) the Executive’s authority, responsibility or position are materially
changed or reduced for any reason including in conjunction with a sale or merger
of the Company; (ii) the Executive is required to relocate his principle place
of employment more than 50 miles from his principle residence; or (iii) the
Executive’s salary, available bonus or benefits are reduced other than as part
of a proportional reduction for all Company officers.
5.3 Termination
For Cause. This Agreement and the Executive’s employment
hereunder shall terminate upon the Executive’s disability or death and is
otherwise immediately terminable for cause (as that term is defined below) upon
written notice by the Company to the Executive providing 15 days to cure any
deficiency. As used in this Agreement, “cause” shall include: (i)
habitual neglect of or deliberate or intentional refusal to perform the
Executive’s duties or responsibilities under this Agreement or to follow the
Company’s policies or procedures or directives of the Company’s Board of
Managers; (ii) fraudulent or criminal activity negatively impacting the Company;
(iii) any grossly negligent or intentionally dishonest or unethical activity
negatively impacting the Company; (iv) any deliberate breach of fiduciary duty
or intended unauthorized disclosure of the Company’s trade secrets, confidential
information or any of the Company’s Proprietary Information (as that term is
defined in Section 6.3 below); or (v) fraudulent conduct in connection with the
business or affairs of the Company, regardless of whether said conduct is
designed to defraud the Company or others.
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5.4 Termination
for Disability. The Company’s Chairman may terminate this
Agreement and the Executive’s employment hereunder, upon written notice to the
Executive, for the “disability” (as that term is defined below) of the Executive
for 90 days in any 120 day period during the Employment Term if the Company’s
Board of Managers (with the Executive abstaining) determines in its sole
discretion that the Executive’s disability will prevent the Executive from
substantially performing his duties and responsibilities
hereunder. As used in this Agreement, “disability” shall be defined
as (i) the Executive’s inability, by reason of physical or mental illness or
other cause, to substantially perform his duties and responsibilities hereunder,
or (ii) in the discretion of the Company’s Board of Managers (with the Executive
abstaining), disability as that term is defined in any disability insurance
policy of the Company in effect at the time in question. The
Executive shall receive full compensation, benefits and reimbursement of
expenses pursuant to the terms of this Agreement as outlined in Section
5.5.2.
5.5 Effect of
Termination.
5.5.1 Termination
Without Cause; Severance Compensation. Subject to the
Severance Compensation set forth in Section 5.6, the Company may, without cause,
terminate this Agreement at any time upon notice to the Executive as provided in
Section 5.2. Notwithstanding anything herein to contrary, the
Company’s obligations to the Executive in the event the Company terminates the
employment under Section 5.2 and this Section 5.5.1, shall be to pay the
Executive the Severance compensation set forth under Section 5.6, offer to buy
within 30 days a total of 20% of the Executive’s beneficially held equity
holdings in the Company, which offer the Executive shall have the right to
accept or reject in whole or in part within 30 days of his termination, for a
price equal to the prior 30 day average market price per equivalent equity unit
if the Company’s securities are publicly traded, or if the Company’s securities
are not publicly traded, for the greater of (i) 1.50 times the price per
equivalent equity unit received for the last equity units issued by the Company
through a private or public placement of its securities or in conjunction with
any merger or acquisition of the Company, and (ii) a price per equity unit
determined by calculating the Company’s value at 10 times annual revenues
divided by the total number of equity units outstanding.
5.5.2 Termination
for Death or Disability. In the event the Executive’s
employment is terminated for reason of disability, as described herein, the
Executive shall receive full compensation, benefits and reimbursement of
expenses through the 180 day period following the effective date of termination
for such disability. In the event the Executive’s employment is
terminated for reason of death, the Executive’s heirs or estate shall receive
the equivalent of full compensation through the 180 day period following the
date of death and reimbursement of all outstanding.
5.5.3 Termination
for Cause. In the event the Executive’s employment is
terminated for cause hereunder, all obligations of the Company and all duties
and responsibilities of the Executive shall cease except as otherwise expressly
provided herein or in the exhibits attached hereto. Upon such
termination, the Executive or the Executive’s representative or estate shall be
entitled to receive only the compensation, benefits and reimbursement earned by
or accrued to the Executive under the terms of this Agreement prior to the date
of termination computed pro rata up to and included the date of termination, but
shall not be entitled to any further compensation, benefits or reimbursement
from such date.
5.6 Severance
Compensation. Upon the termination of the Executive’s
employment by the Company without cause, the Company shall pay any salary and
prorata annual bonus (calculated at 100%) due through the end of the then
current term, but in no event less than the equivalent of 12 months salary and
bonus payable in three equal monthly installments beginning the month of
termination.
5.7 New
Term. The term of this Agreement shall automatically be set
for a two year period, regardless of the time remaining under the then existing
Term, upon and from the occurrence of any of the following “Trigger
Events:”
(a) a
merger or acquisition in which the Company is not the surviving entity (defined
as a corporation in which the Company’s stockholders do not hold a controlling
interest), except for a transaction the principal purpose of which is to change
the state in which the Company is incorporated;
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(b) the
sale, transfer, or other disposition of all or substantially all of the assets
of the Company (“substantially all” means for this section a sale of assets the
value of which exceeds 50% of the total book value of all of the assets of the
Company);
(c) any
reverse merger in which the Company is the surviving entity but in which 50% or
more of the Company’s outstanding voting stock is transferred to holders
different from those holding such stock immediately prior to such merger;
or
(d) a
firm commitment underwritten public offering pursuant to an effective
registration statement filed under the Securities Act of 1933, as amended,
covering the offer and sale of the Company’s common stock resulting in more than
a 30% increase in the number of shares to be issued and
outstanding.
6. PROPRIETARY
INFORMATION.
6.1 Return of
Proprietary Information. Upon the termination of this
Agreement and the Executive’s employment hereunder for any reason whatsoever
(whether such termination shall be with or without cause), the Executive shall
immediately return and turn over to the Company any and all Proprietary
Information (as that term is defined in Section 6.3 below) in his possession or
under his control. The Executive shall have no right to retain any
copies of any material qualifying as Proprietary Information for any reason
whatsoever after the termination of his employment hereunder without the express
written consent of the Company, except such information that is relevant to the
Executive’s equity holdings in the Company and generally available to Company
equity holders.
6.2 Non-disclosure. It
is understood and agreed that, in the course of the Executive’s employment
hereunder and through his activities for an on behalf of the Company, as
provided in this Agreement, the Executive will receive, deal with and have
access to Proprietary Information and that the Executive holds and will hold the
Company’s Proprietary Information in trust and confidence for the Company and
for its benefit only. The Executive agrees that he will not, during
the Employment Term or thereafter, in any fashion, form or manner, directly or
indirectly, retain, make copies of, divulge, disclose or communicate to any
person, company, corporation, firm, partnership or entity, in any manner
whatsoever (except when necessary or required in the normal course of the
Executive’s employment hereunder and for the benefit of the Company or with the
express written consent of the Company), any of the Company’s Proprietary
Information or any information of any kind, nature or description whatsoever
concerning any matters affecting or relating to the Company’s
business or proposed business operations.
6.3 Proprietary
Information Defined. For purposes of this Agreement,
“Proprietary Information” means and includes the following: (i) the
identity of Business Contacts (as that term is defined below) in, of or to the
Company; (ii) any written, typed or printed lists or other materials identifying
Business Contacts or potential Business Contacts of the Company; (iii) any
financial or other information supplied to the Company by Business Contacts;
(iv) any and all data or information involving the techniques, programs,
methods, formulas, data, information, or contacts employed by the Company in the
conduct of its business or proposed business operations; (v) any lists,
documents, manuals, records, forms or other documents, instruments, forms or
materials used by the company in the conduct of its business or proposed
business operations; (vi) any descriptive materials describing the methods and
procedures employed by the Company in the conduct of its business or proposed
business operations; and (vii) any other secret, proprietary or confidential
information (including, but not limited to, Proprietary Information) or data
concerning or related to the Company or the Company’s business or proposed
business operations. The terms “list,” “document” or their
equivalent, as used in this Section 6.3, are not limited to a physical writing
or compilation, but rather include any and all information or data whatsoever
regarding the subject matter of the term “Business Contacts” shall mean any of
the Company’s clients, customers, suppliers, joint venture partners and
investors. For purposes of this Agreement, “Proprietary Information”
shall not include information that is available in the public domain through no
fault of or violation of this Agreement by the Executive.
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6.4 Patent or
Copyright Rights. Any new patents, or other proprietary rights including,
but not limited to, trademarks, copyrights and trade secrets relating to or
constituting new products or processes developed by the Employee during the term
of the Employee's employment hereunder shall be the property of the
Company.
6.5 Violation. If
any of the covenants or agreements contained in this Section 6 are violated, the
Executive agrees and acknowledges that any such violation or threatened
violation will cause irreparable injury to the Company and that the remedy at
law for any such violation or threatened violation will be inadequate and that
the Company will be entitled to injunctive relief and other equitable remedies
without the necessity of proving actual damages.
6.6 Enforceability. Employee
agrees that the covenants in this Section shall be construed as an agreement
independent of any other provision of this Agreement so that the existence of
any claim or cause of action by either the Employee or the Company against the
other, whether predicated on this Section or otherwise, shall not
relieve Employee of his or her obligations under this Section
6.
7. TERMINATION
OF PRIOR AGREEMENTS. This Agreement terminates and supersedes
any and all prior agreements and understandings between the parties hereto
(whether written or oral) with respect to employment or with respect to the
compensation of the Executive by the Company.
8. ASSIGNMENT. This
Agreement is for the unique personal services of the Executive and is not
assignable or delegable in whole or in part by the Executive without the prior
written consent of the Company. This Agreement may be assigned or
delegated in whole or in part by the Company and, in such case, shall be assumed
by and become binding upon the person or entity to which this Agreement is
assigned. The Company shall remain liable for its obligations
hereunder in the event of any assignment unless the assignee of the Company
shall have a net worth equal to or greater than the net worth of the Company on
the date of such assignment.
9. WAIVER OR
MODIFICATION. Any waiver, change, modification, extension
(other than an automatic extension of the Employment Term pursuant to Section
5.1 above), discharge or amendment of any provision of this Agreement shall be
effective only if in writing in a document that specifically refers to this
Agreement and such document is signed by the party against whom enforcement of
any waiver, change, modification, extension, discharge or amendment is
sought. The waiver by either party of any provision of this Agreement
by the other party shall not operate or be construed as a waiver of any other
provision hereof or any subsequent breach of the same provision
hereof.
10. SEVERABILITY;
INTERPRETATION. In the event that any term or provision,
including any part of a Section or subsection, of this Agreement is invalid or
unenforceable for any reason, such invalid or unenforceable term or provision
shall be severed herefrom, and the remaining terms or provisions of this
Agreement, including the remaining Sections and subsections, shall remain in
full force and effect. The parties to this Agreement agree that the
court making a determination that any term or provision of this Agreement is
invalid or unenforceable shall modify the time, duration, geographic scope or
area and/or application of the term or provision so that the term or provision
is enforceable to the maximum extent permitted by applicable
law. Notwithstanding any rule or maxim of construction to the
contrary, any ambiguity or uncertainty in this Agreement shall not be construed
against either of the parties hereto based upon authorship or any of the terms
or provisions hereof.
11. NOTICES. Any
notice required or permitted hereunder to be given by either party shall be in
writing and shall be delivered personally or sent by certified or registered
mail, postage prepaid, or by private courier to the other party to the address
set forth below or to such other address as either party may designate from time
to time according to the terms of this Section 11:
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• To
the Executive at:
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00000
Xxxx Xxxx Xxxxxxx, Xxxxx 000
Xxxxxx,
Xxxx 00000
|
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• To
the Company at:
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Sequoia
Media Group, LC
Attn:
Corporate Secretary
00000
Xxxx Xxxx Xxxxxxx, Xxxxx 000
Xxxxxx,
Xxxx 00000
|
A notice
delivered personally or by private courier shall be effective upon
receipt. A notice delivered by mail shall be effective on the third
day after the day of mailing.
12. GOVERNING
LAW; JURISDICTION AND VENUE. This Agreement shall be governed
by and construed in accordance with the laws of the State of Utah without giving
effect to any applicable conflicts of law provisions. The parties
consent to the exclusive jurisdiction and venue of the appropriate federal or
state court in Salt Lake County, State of Utah.
13. DISPUTE
RESOLUTION. In
the event of any dispute (each, a “Dispute”) between the Parties in connection
with the performance of this Agreement, each party agrees to negotiate in good
faith to attempt to resolve such Dispute. (Notwithstanding the
forgoing, this obligation to negotiate does not apply to termination pursuant to
Section 5.3.) The parties must complete the foregoing dispute
resolution process before serving written notice on the other party alleging a
material breach of this Agreement in accordance with Section 14 provided
however; the parties acknowledge and agree that not every Dispute will rise to
the level of a material breach.
14. ARBITRATION. In
the event a Dispute cannot be resolved through good faith negotiations, the
parties agree that any dispute arising out of this Agreement shall be resolved
through arbitration in accordance with the then current Rules of Commercial
Arbitration of the American Arbitration Association or any successor
organization (the "AAA"). The party desiring to initiate the
arbitration process shall give written notice to that effect to the other party
and shall, in such written notice, include a brief statement of its
claims. Within ten (10) days of the note of intent to arbitrate, the
parties shall meet for the purpose of attempting to jointly select a single
arbitrator to serve in the matter. If they are unable to agree on the
designation of the arbitrator, either party may apply to the AAA for the
appointment of a single arbitrator in accordance with the rules of the AAA then
in effect. The arbitration proceeding shall be held within 60 days of
the appointment of the arbitrator and the arbitrator shall render his or her
decision within 30 days after the conclusion of the arbitration
proceeding. The decision of the arbitrator shall be final and binding
upon, and non-appealable by, the parties and any judgment may be had on the
decision and award so rendered in any court of competent
jurisdiction. The prevailing party shall be entitled to all costs
incurred in connection with the arbitration proceeding, including the fees of
the arbitrator, its reasonable attorneys' fees, witness fees and other costs as
determined by the arbitrator.
15. TAXES. Any
payments provided for hereunder shall be paid net of any applicable withholding or other
employment taxes required under federal, state or local law.
17. SUPERSEDE. This
Agreement supersedes and replaces in its entirety any existing employment
agreement by and between the Employee and the Company as of the date of this
Agreement. Both parties acknowledge and agree that this provision
does not trigger any termination, expiration or other rights that might be
available to Employee under any prior existing employment
agreement.
18. ENTIRE
AGREEMENT. This Agreement embodies the entire agreement of the
parties hereto respecting the matters within its scope. All Exhibits
attached hereto are deemed to be incorporated herein by reference.
IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first set forth above.
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THE
COMPANY:
SEQUOIA
MEDIA GROUP, LC,
a
Utah limited liability company
By:
________________________________________
Its:
________________________________________
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THE
EXECUTIVE:
By: _________________________________________
Xxxxxx
X. Xxxxxxx
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Exhibit
“A”
EMPLOYMENT
DUTIES
Subject to the direction of the
Company’s Board of Managers, during the Employment Term the Executive shall
perform the following duties, and such other duties and responsibilities as may
be determined and assigned to the Executive from time to time by the Company’s
Board of Managers:
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▪
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Shall
serve as COO of Sequoia Media Group, LC and assume the normal and
customary duties of such position.
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|
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▪
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Shall
be responsible for overseeing business operations the
Company.
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▪
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Shall
be responsible to make sure the Company and its subsidiaries, if any,
remain in compliance with all applicable state and federal tax
laws.
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▪
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Shall
perform any reasonable duty or service as may be requested by the
Company’s Board of Managers.
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The
Executive shall report directly to the President.
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Exhibit
“B”
BONUS
PLAN
Pursuant
to a resolution of the Board of Managers dated December 7, 2007, a Bonus Pool
was established and will be funded from which executives and employees of the
Company will be paid bonuses as described therein.
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