IWERKS ENTERTAINMENT, INC.
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made and entered into
effective as of February 15, 2000, by and between IWERKS ENTERTAINMENT, INC., a
Delaware corporation (the "Company"), and XXXX X. XXXXX ("Consultant").
THE PARTIES AGREE AS FOLLOWS:
1. RETENTION OF CONSULTANT. Consultant is hereby retained by the Company as
its acting Chief Executive Officer, for a term (the "Term") commencing as of
February 15, 2000 and continuing until such date as the consultancy may be
terminated by no less than 15 days prior written notice from one party to the
other. It is recognized that Consultant is not able to dedicate his full time to
this engagement but, recognizing the critically important contribution of the
acting CEO during this period, Consultant will endeavor to provide as close to
full time services to the Company as possible.
2. CONSULTING FEE. The fee for Consultant's services to be paid by the Company
shall equal Ten Thousand Dollars ($10,000) per month, prorated for any partial
month during the Term of this Agreement. Fifty percent (50%) of the monthly fee
shall be paid in advance on the first day of the month during the Term of this
Agreement. The remaining fifty percent (50%) shall be paid on the first to occur
of (i) a Change in Control (as defined below), or (ii) July 31,2000.
3. STOCK OPTION. The Company hereby grants to Consultant a fully vested option
to acquire 100,000 shares of the Company's common stock at an exercise price of
$1.625 per share, exercisable at any time by Consultant within ten (10) years
after the date of this Agreement after the occurrence of an event that triggers
the payment of a bonus pursuant to Paragraph 4.
4. BONUS. The Company shall pay to consultant a one-time cash bonus of One
Hundred Thousand Dollars ($100,000) if either (or both) of the following occurs:
(i) a Change in Control, or (ii) the Company engages in an equity financing
transaction (or series of related transactions) whereby the Company issues
Company common stock, preferred stock or other equity securities, or options,
warrants or other rights to acquire the same and receives gross proceeds from
the financing of not less than Three Million Dollars ($3,000,000). Any payment
owing under this Section shall be made by the Company within 10 business days
after the occurrence of the triggering event specified in clause (i) or (ii), as
applicable.
5. EXPENSE REIMBURSEMENT. The Company shall promptly reimburse reasonable
business expenses incurred by Consultant in performance of his duties hereunder,
subject to Consultant's submission of expense reports and documentation as may
be reasonably required by the Company.
6. "CHANGE IN CONTROL" DEFINED. As used in this Agreement, the term "Change
in Control" shall mean:
(i) The consummation of a merger or consolidation of the Company with or
into another entity or any other corporate reorganization of stock
sale, if more that 50% of the combined voting power of the continuing
or surviving entity's securities outstanding immediately after such
merger, consolidation or other reorganization or
sale is owned by persons who were not stockholders of the Company
immediately prior to such merger, consolidation, or other
reorganization or sale; or
(ii) The sale, transfer or other disposition of all or substantially all of
the Company's assets.
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
7. In the event that a transaction does not occur before July 31, 2000 that
triggers the payment of a bonus pursuant to Paragraph 4, it is understood that
this agreement will be re-negotiated or, at the option of Consultant, retained
in effect.
8. INDEPENDENT CONTRACTOR. Consultant enters into this Agreement as, and shall
continue to be, an independent contractor. Consultant shall pay all federal,
state and other income taxes due and properly file appropriate tax returns.
Consultant shall not be entitled to any Company employee benefits. All payments
owning to Consultant under this Agreement shall be paid by the Company without
withholding, deduction or offset of any kind.
9. GENERAL PROVISIONS. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
entered into in California between California residents. If any provision of
this Agreement is for any reason found by a court of competent jurisdiction to
be unenforceable, the remainder of this Agreement shall continue in full force
and effect. This Agreement embodies the entire agreement between the parties and
supercedes all prior agreements and understandings between the parties with
respect to its subject matter. The Agreement may not be changed unless mutually
agreed upon in writing by both parties.
IN WITNESS WHEREOF, the parties have executed this Consulting Agreement
as of the date first set forth above.
COMPANY: IWERKS Entertainment, INC., a Delaware corporation
By: /S/ XXX XXXXXX
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Title: CHAIRMAN, INTERIM CEO
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CONSULTANT: /S/ XXXX X. XXXXX
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Xxxx X. Xxxxx
IWERKS
ENTERTAINMENT
July 5, 2000
Xxxx X. Xxxxx
Consultant
Iwerks Entertainment Inc.
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Re: Consulting Agreement dated 2/15/2000 (see attached)
Dear Xxxx:
Given the continuing needs of the Company and the unexpected delays in
consummating a merger transaction, Iwerks has elected to extend the Consulting
Agreement between yourself and Iwerks Entertainment through 12/31/00.
All the terms and conditions of the original agreement remain the same.
Best regards,
/s/ Xxx Xxxxxx
Xxx Xxxxxx
Chairman of the Board
