AMENDED AND RESTATED DEFERRED COMPENSATION PAYMENT AGREEMENT
AMENDED
AND RESTATED
Deferred
Compensation Payment Agreement made as of 22 day of November, 2010 between POW!
Entertainment, Inc. (the “Company”) and Xxxx Xxx (“Xxx”) and Xxxxxx Xxxxxxxxx
(“Xxxxxxxxx”).
Introduction. The
Company, Xxx and Xxxxxxxxx previously entered into an agreement restricting
payments of $1,132,500 to Xxx and $1,195,416 to Xxxxxxxxx in deferred
compensation (the “Deferred Compensation”) because it believed and had been
advised by a financial advisor that in the absence of such limitation it would
hinder the Company’s ability to obtain investments in the
Company. The Company, Xxx and Xxxxxxxxx now wish to amend and
restate such agreement to delete unnecessary and confusing references as follows
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Payments. Notwithstanding
anything previously agreed to the
contrary:
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1.1 Deferred
Compensation will be paid in the following amounts and installments to each of
Xxx and Xxxxxxxxx until the entire Deferred Compensation owed each has been
paid:
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(a)
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The
fixed amount of $50,000 per annum in monthly installments during each year
commencing January 1, 2010, plus
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(b)
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10%
of “Adjusted Net Pretax Income” (as defined in Section 1.3 (a) below) of
the Company, subject to the Caps provided in Section 1.3(b) below for any
“Qualified Calendar Year” (as defined in Section 1.3(c)) on or after 2011,
payable on March 15 of the year following such Qualified Calendar
Year.
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1.2 The
payments provided for in Section 1.2 above shall be subject to the following
definitions, provisions and qualifications:
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(a)
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As
used in Section 1.2(b), “Adjusted Net Pretax Income” shall mean the pretax
income of the Company calculated according to GAAP (“GAAP Income”), as in
effect from time to time, adjusted by: (i) adding to GAAP Income any
payments made by the Company to Xxx and Xxxxxxxxx under Section 1.2 (to
the extent such payments had reduced GAAP Income); and (ii) adding to GAAP
Income any advances or other payments made to the Company by Silver Creek
Pictures, Inc. or any successor or assignee thereof (“Silver Creek”),
during the year in question that were excluded from GAAP Income and (iii)
subtracting from GAAP Income amounts received in previous years from
Silver Creek that were included in GAAP Income during the year in
question.
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(b)
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The
payments provided for in Section 1.2(b) are subject to the following
maximums (the “Caps”): (i) $125,000 to each of Xxx and Xxxxxxxxx in any
year for which the preferred dividend for the Series A Shareholders (the
“Dividend”) is not declared and paid in full; and (i) $250,000 to each of
Xxx and Xxxxxxxxx in any year for which the Dividend is declared and paid
in full. However, the maximums provided in the previous sentence shall not
apply (a) if no share of Series A Preferred Stock is sold by the Company
pursuant to the Offering or (b) at any time when none of the shares of
Series A Preferred Stock sold by the Company pursuant to the Offering are
outstanding
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(c)
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As
used in Section 1.2(b), a “Qualified Calendar Year”, shall mean a calendar
year for which Adjusted Net Pretax Income equals or exceeds
$1,000,000.
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(d)
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The
death or incapacity of either Xxx or Xxxxxxxxx shall not delay or
accelerate any payments due
hereunder.
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2. Warrants. In
consideration for Xxx and Xxxxxxxxx agreeing to defer receipt of the Deferred
Compensation as provided above, the Company agrees to grant each of Xxx and
Xxxxxxxxx warrants to purchase 650,000 shares of the Company’s common stock
until March 15, 2015, at a price of $0.40 per share. The
foregoing warrants will be governed by a Warrant Agreement with terms similar to
the Warrant Agreement between the Company and Xxxxxxx Xxxxxxx.
3 Miscellaneous. This
Agreement shall be governed by the laws of the state of
California. This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof and shall not be orally
amended. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Agreement may also be
executed and delivered by facsimile signature and in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
In
Witness Whereof, the Parties have caused this Agreement to Executed as of the
day and date first set forth above.
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BY
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Xxxx
Xxx
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Xxxxxx
Xxxxxxxxx
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