1
EXHIBIT 10.10
EMPLOYMENT AGREEMENT
This Agreement is made and entered into at Phoenix, Arizona, on the
____ day of January, 1998, by and between Pacific Rim Entertainment, Inc., a
Delaware corporation (hereinafter referred to as "Employer") and Xxxx X.
Xxxxxxx, a resident of Maricopa County, Arizona (hereinafter referred to as
"Employee"), whose respective addresses appear below.
IN CONSIDERATION of the mutual promises of the parties, and other
valuable consideration, the parties agree as follows:
1. Term.
The Employer does hereby employ and retain the services of
Employee for a term of one (1) year commencing February 16, 1998 and ending
February 15, 1999 (hereinafter "Initial Term"). The Initial Term shall be
automatically extended and renewed for successive one-year periods (each year
beyond the Initial Term referred to as an "Extended Term") upon such terms and
conditions as are set forth within this Agreement, however, the Agreement may be
terminated by either party hereto provided no less than ninety (90) days notice
is given prior to the scheduled expiration of the Initial Term or Extended Term,
whichever the case may be.
2. Duties.
During the term of employment, Employee shall be employed as
Chief Financial Officer of Employer and shall in that capacity undertake
whatever tasks as shall in good faith be assigned to him by the Employer's Chief
Executive Officer, Chief Operating Officer or by Employer's Board of Directors.
Employee shall devote his full productive time, energies and abilities to the
proper and efficient operation of the business of Employer under and in
accordance with the direction of the Employer's Chief Executive Officer, Chief
Operating Officer and Board of Directors.
3. Compensation.
The full compensation and remuneration of Employee for the
services provided for herein during each year of employment hereunder, shall be
as follows:
a) an annual base salary in the sum of One Hundred
Thousand Dollars ($100,000), payable in monthly installments of Eight Thousand
Three Hundred and Thirty Three Dollars and 33/100 ($8,333.33), which salary if
unpaid for any reason shall accrue cumulatively from month to month plus 10%
interest per annum on the unpaid portion;
b) interim and annual bonuses (of cash, stock and/or
options), if at all, in such amounts and upon such terms and conditions as may
be determined solely within the discretion of the Employer's Board of Directors;
2
c) an annual cost of living increase of five percent
(5%) of the preceding year's annual base salary; and
d) Common Stock Options (the "Employment Options") to
purchase an aggregate of One Hundred Thousand (100,000) Options at an exercise
price of $5.00, one-half (1/2) of which (50,000 Options) shall be subject to
vesting pursuant to the provisions of section 2.3(i), and one-half (1/2) (50,000
Options) shall be subject to vesting pursuant to the provisions of 2.3(ii) of
that certain Option to Purchase Common Stock of Pacific Rim Entertainment, Inc.
No. 1998-1 ("Option Agreement"), a true copy of which Option Agreement has been
delivered to Employee, and a true copy of which is attached hereto as Exhibit
"A"; and Employee is subject to and agrees to be bound by all of the terms,
conditions and provisions of said Option Agreement as though Employee were named
therein as "Holder", and the issuance of options to Employee is fully
conditioned upon the issuance thereof to the Holder subject to all contingencies
stated in said Option Agreement.
4. Fringe Benefits.
a) Employee shall be entitled, subject to the terms and
conditions of particular plans and programs adopted by the Board of Directors,
to all fringe benefits generally afforded to other senior executives of the
Employer, including but not by way of limitation, the right to participate in
any pension, stock option, retirement, major medical, group health, disability,
accident and life insurance, and other employee benefit programs made generally
available, from time to time, by the Employer.
b) During the term of this Agreement, Employer shall
include Employee and his family in family health insurance coverage provided for
executive level employees of Employer, and shall pay one hundred percent (100%)
of all health insurance premiums.
c) As additional salary, Employer shall reimburse
Employee for Employee's entire monthly premium cost to purchase a disability
insurance policy, if available on terms deemed by Employer to be commercially
reasonable, that shall pay to Employee the sum of $5,000 per month until age
sixty-five (65), in the event of Employee's disability as defined in said
policy.
5. Termination.
Employer shall have the right to terminate this Agreement by
thirty (30) days written notice after which such termination, Employer shall
have no further obligations hereunder other than the payment of accrued base
salary and reimbursement of accrued expenses, upon the occurrence of any of the
following events or circumstances:
a) death of Employee;
b) if Employee is unable, for reasons of illness,
disability or similar causes, to carry out or perform the duties required of him
hereunder continuously for thirty (30) days or intermittently for sixty (60)
days in a calendar year during the term of this Agreement; or
2
3
c) if Employee is terminated for "cause" for any of the
following events: (i) any act or omission perpetrated as the result of gross
negligence or with intent to harm the Employer or Osage or any of its
affiliates, or the business of either; (ii) commission of a felony for which
Employee is convicted by a court of law; (iii) perpetration of a dishonest act
or a common law fraud against the Employer or Osage, or any of its affiliates,
found by a court of law; (iv) the continued refusal to follow the directives of
the Board of Directors Employer or Osage which are made in good faith and not
contrary to law; (v) if Employee has so conducted himself (whether in connection
with his employment or otherwise) in a manner in which it appears, in the sole
discretion of Employer's Board of Directors, Chief Executive Officer or Chief
Operating Officer, that his continued employment under the terms of this
Agreement is no longer in the best interests of the Employer; or (vi) if
Employee has violated or broken any of the covenants or obligations imposed on
Employee by this Agreement.
d) Notwithstanding the above, a termination for "cause"
pursuant to subparagraph 5(c)(v) above may only be effected if pursuant to one
hundred twenty (120) days written notice.
6. Discoveries and Inventions.
Employee, in partial consideration of his employment and
salary to be paid to him, hereby agrees to disclose promptly to Employer, or any
subsidiary, parent, or affiliated company or its nominees, each and every
discovery, improvement and/or invention made, conceived and/or developed by him
whether during working hours or otherwise, during the entire period of his said
employment, which discoveries, improvements and/or inventions are capable of use
in any way in connection with the business of the Employer and for the same
consideration, Employee does hereby grant and convey to Employer or its nominee,
the entire right, title and interest, domestic and foreign, or such lesser
interests as such Employer at its option in any particular case may choose to
accept, in and to each or all of said discoveries, improvements and/or
inventions; and he does further agree to sign all applications for patents or
copyrights, and to execute and deliver all assignments and other documents, and
to perform all acts and do all things necessary to make this Agreement and the
said grant and conveyance effective with respect to particular discoveries,
improvements and/or inventions.
7. Expenses.
Employer agrees to reimburse Employee for all ordinary and
necessary out-of-pocket expenses incurred in connection with his employment
hereunder upon the presentation by Employee, from time to time, of an itemized
account of such expenditures; but only to the extent that such expenses are
deductible to Employer pursuant to the U.S. Internal Revenue Code.
8. Vacation.
Employee shall be entitled each year to a vacation of up to
four (4) weeks, during which time his compensation shall be paid in full.
Employee shall use his best efforts, however, not to schedule any such vacations
at a time when either the Chief Executive Officer or Chief Operating Officer of
Employer is also on vacation or is otherwise out of the office. Furthermore,
3
4
Employee shall not, without the consent of Employer, schedule a vacation of more
than two (2) weeks in any three (3) month period.
9. Confidential Information.
a) Employee acknowledges and agrees that all
confidential information, trade secrets, names of customers, suppliers,
financial, accounting or administrative information, business procedures or
other information or knowledge which is made known to Employee during the course
of his employment by Employer or any of its subsidiaries is confidential and the
property of the Employer;
b) Employee agrees that during the term of his
employment by Employer, and at all times thereafter forever, except in the
ordinary course of fulfilling Employee's assigned duties and obligations,
Employee shall not, without the prior express, written consent of the Employer,
publish, disclose or make known to anyone, or make any use of or authorize,
assist, or enable anyone else to publish or disclose or make use of, any
confidential information or Employer property, including, but not limited to,
trade secrets, names of customers, suppliers, financial, accounting or
administrative information, business procedures or any other information or
knowledge which becomes known to Employee as the result of or during his
employment by the Employer.
10. Other Termination Provisions.
Notwithstanding anything herein contained to the contrary,
Employer may terminate this Agreement upon thirty (30) days' written notice to
Employee upon the happening of any of the following events:
a) the sale by Employer of substantially all of its
assets;
b) a bona fide decision by Employer to terminate its
business and liquidate its assets; or
c) the merger or consolidation of Employer in a
transaction in which the shareholders of Employer receive less than fifty
percent (50%) of the outstanding voting shares of the new or continuing
corporation.
11. Negative Covenant.
For a period of one (1) year following: (i) termination of
this Agreement either due to expiration of the Term, or for any other reason
identified in this Agreement, or (ii) the voluntary resignation of employee,
Employee will not, on his own behalf or as partner, officer, director, employee,
consultant, or stockholder (holding more than ten percent (10%) of the issued
and outstanding stock of any firm or company) of any other business, either
directly or indirectly, solicit any "active customers" of Employer, or any
affiliates or subsidiaries of Employer (for the purposes of this Paragraph 11,
defined in the aggregate as the "Company"), or perform any work, services, or
labor for or on behalf of any firm or company engaged in any business
competitive
4
5
with or similar to the business of the Company in any state or foreign country
where the Company does business. Accordingly, the Company is granted the right
by Employee to apply to any court of competent jurisdiction for one or more
temporary or permanent injunctions enjoining Employee, his agents and employees,
from violating the provisions of this Agreement and/or from continuing to breach
such provisions. For the purposes of this paragraph 11, the term "active
customer" shall mean any current customers of the Company, or any customers of
the Company within the twelve preceding months.
12. Miscellaneous.
a) Entire Agreement. This Agreement embodies the entire
agreement between the parties hereto relative to the subject matter hereof and
shall not be modified, changed or altered in any respect except in writing
signed by both parties to this Agreement.
b) Benefits. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective next of kin,
legatees, administrators, executors, legal representatives, successors and
permitted assigns.
c) Attorneys Fees. In the event either party is required
to obtain the services of any attorney to enforce the provisions of this
Agreement, the prevailing party shall be entitled to its reasonable costs and
attorney's fees including expert witness fees, and costs of investigation.
d) Illegal Contract. In case any provision of this
Agreement shall be held invalid, illegal or unenforceable, in whole or in part,
neither the validity of the remaining part of such provision, nor the validity
of any other provision of this Agreement shall in any way be affected thereby.
e) Waiver. A waiver of any breach of this Agreement, or
of any of the terms or conditions by either party thereto, shall not be deemed a
waiver of any repetition of such breach or in any way affect any other terms or
conditions hereof. No waiver shall be valid or binding unless it shall be in
writing signed by the parties.
f) Binding Effect. This Agreement, when executed by one
duly authorized officer of the corporation, shall bind the corporation and its
successors and assigns.
g) Successors and Assigns. Unless otherwise provided
for, this Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors in interest and assigns, but in
no event shall any party be relieved of its obligations hereunder without the
express written consent of each other party.
h) Governing Law. This Agreement shall be governed by,
the laws of the State of Arizona. Each party hereby expressly and irrevocably
consents to the jurisdiction of the Arizona courts, and any action hereunder may
be commenced and tried only in a court of competent jurisdiction located in
Maricopa County, Arizona.
5
6
i) Time. Time is of the essence of this Agreement and
each and every provision hereof. Any extension of time granted for the
performance of any duty under this Agreement shall not be considered an
extension of time for the performance of any other duty under this Agreement.
j) Notices. Any notice to any party under this Agreement
shall be in writing, shall be effective on the earlier of (i) the date when
received by such party, or (ii) the date which is three (3) days after mailing
(postage prepaid) by certified or registered mail, return receipt requested, to
the address of such party set forth as follows:
To: EMPLOYER
President
Pacific Rim Entertainment, Inc.
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
With a copy to:
Xxxxxx X. Xxxxxxx, Esq.
0000 X. 00xx Xxxxxx, Xxxxx #000
Xxxxxxx, XX 00000
To: EMPLOYEE
Xxxx X. Xxxxxxx
0000 Xxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
k) Additional Acts and Documents. Each party hereto
agrees to do all such things and take all such actions, and to make, execute and
deliver such other documents and instruments, as shall be reasonably requested
to carry out the provisions, intent and purpose of this Agreement.
6
7
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement
the day and year first above written.
EMPLOYER:
PACIFIC RIM ENTERTAINMENT, INC.
By: Xxxx Xxxxxxxxxx
_______________________________
Its: President
EMPLOYEE:
Xxxx Xxxxxxx
___________________________________
Xxxx Xxxxxxx
7
