EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into by and between Xxxx Xxxxx Productions,
Inc., a Delaware corporation, and Xxxx Xxxxx Productions Holdings, Inc., a
Nevada corporation ("JKPH"), whose principal place of business is 0000 Xxxxxx
Xxxx., Xxx Xxxxxxx, Xxxxxxxxxx 00000, on the one hand (collectively,
"EMPLOYER"), and Xxxxxx X. Xxxxx ("EMPLOYEE") on the other hand, effective as of
September 1, 2003 ("Effective Date"), with reference to the following facts:
R E C I T AL S
A. EMPLOYEE presently serves as an executive of EMPLOYER.
B. EMPLOYER seeks to further engage EMPLOYEE as its Chief
Financial Officer and Chief Operating Officer, and EMPLOYEE desires to accept
such employment on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and premises
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. EMPLOYMENT. EMPLOYER hereby employs EMPLOYEE and EMPLOYEE
accepts employment upon the terms and conditions of this Agreement. In addition
to his other duties, EMPLOYEE shall at the request of EMPLOYER serve as an
officer or director of any subsidiary of EMPLOYER without additional
compensation.
2. TERM. EMPLOYER hereby employs EMPLOYEE and EMPLOYEE hereby
accepts employment for a term commencing on the Effective Date and expiring on
the fifth anniversary of the Effective Date, unless sooner terminated as
hereinafter provided (the "Employment Period"). Except as otherwise provided
herein, EMPLOYEE may unilaterally terminate this Agreement at any time, upon
providing EMPLOYER with sixty (60) days' prior written notice.
3. EMPLOYMENT AND DUTIES.
3.1 Title. EMPLOYEE is employed in the capacity of Chief
Financial Officer and Chief Operating Officer for EMPLOYER.
3.2 Duties and Responsibilities. The services to be
rendered by EMPLOYEE pursuant to this Agreement shall consist of such services
as defined and directed by EMPLOYER's board of directors, including, but not
limited to, hiring and firing of all employees and supervision of all
accounting, financial and legal matters affecting the EMPLOYER. EMPLOYEE agrees
to perform such services with great diligence and care.
3.3 Observance of Rules and Regulations. EMPLOYEE agrees
to observe and comply with the rules and regulations of EMPLOYER with respect to
the performance of his duties.
4. COMPENSATION; BENEFITS AND EXPENSES.
4.1 Base Salary. As compensation for the services to be
rendered hereunder, EMPLOYER shall pay to EMPLOYEE a base annual salary (the
"Base Salary") of Two Hundred Forty Thousand Dollars ($240,000.00) for the first
year, payable in equal semi-monthly installments. On each anniversary of the
Effective Date ("Adjustment Date"), EMPLOYEE's Base Salary shall automatically
be increased by the greater of five percent (5%) or the percentage increase
shown by the United States Department of Labor, Bureau of Labor Statistics
Index, Los Angeles-Long Beach-Anaheim area (all items) for all urban consumers
for the United States (1982-1984=100) (the "Index") for the Adjustment Date, as
compared with Index for the same month in the immediately preceding calendar
year.
4.2 Other Benefits. EMPLOYEE shall also be eligible to
participate in any life and health insurance programs that EMPLOYER makes
available to all its employees. EMPLOYER shall pay medical deductible expenses
and co-payments for EMPLOYEE and his immediate family. EMPLOYEE shall also be
eligible to receive discretionary performance-based bonuses as approved and
authorized by EMPLOYER's board of directors, including any incentive stock
programs approved by EMPLOYER's shareholders. EMPLOYEE shall be given such other
benefits as may be given to senior management of EMPLOYER, including retirement
and pension benefits.
4.3 Business Expenses. EMPLOYEE will be reimbursed for
business expenses that have been approved by the Board of Directors or President
of EMPLOYER upon presentation of vouchers or other documents reasonably
necessary to verify the expenditures and sufficient, in form and substance, to
satisfy Internal Revenue Service and any relevant state requirements for such
expenses. EMPLOYER shall pay all EMPLOYEE's professional license and association
fees, and continuing education expenses.
4.4 Vacation. EMPLOYEE shall be entitled to twenty (20)
vacation days each year with full pay. "Vacation day" is hereby defined as one
day of absence by EMPLOYEE from his/her daily duties on a weekday other than a
legal or EMPLOYER holiday, not as a result of sickness or injury. Vacation days
shall not accrue from year to year. In the event of termination hereof, unused
vacation days shall be compensated for at EMPLOYEE's then rate of compensation.
4.5 Sick Leave. EMPLOYEE may be absent from his/her daily
duties as a result of sickness or accident for reasonable periods of time
without loss of compensation; however, any such absence in excess of ninety (90)
days during any twelve month period, other than a legal or EMPLOYER holiday,
shall not be compensated, nor shall unused sick leave be converted into
additional compensation under any circumstances.
4.6 Stock Options. EMPLOYER hereby grants to EMPLOYEE an
option to purchase one million five hundred thousand (1,500,000) shares of JKPH
common stock upon the terms and conditions set forth in the Stock Option
Agreement annexed hereto as Exhibit A.
4.7 Life and Disability Insurance. EMPLOYER shall
purchase a twenty (20) year term life insurance policy insuring the life of
EMPLOYEE, with benefits in the amount of one million dollars ($1,000,000.00)
payable to a beneficiary designated by EMPLOYEE ("Life Insurance"). The policy
shall be owned by EMPLOYEE. EMPLOYER shall purchase a
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disability policy on behalf of EMPLOYEE which provides benefits based on
EMPLOYEE's then current salary ("Disability Policy"). Disability insurance shall
be adjusted as EMPLOYEE's salary is adjusted. At EMPLOYER's option, EMPLOYER may
increase EMPLOYEE's compensation to cover the cost of disability insurance
(including any taxes associated therewith) and EMPLOYEE will pay for his
disability insurance. EMPLOYER shall have the right to purchase key-man life
insurance insuring the life of EMPLOYEE.
5. NO COMPETITIVE ACTIVITIES; CONFIDENTIALITY; INVENTION
5.1 General Restriction. During the Employment Period and
for a period of one (1) year after termination of EMPLOYEE's employment,
EMPLOYEE covenants and agrees that he will not, except on behalf of EMPLOYER,
directly or indirectly, on his own behalf or as a partner, officer, director,
stockholder, member, employee, agent, consultant, or otherwise on behalf of any
other person take any of the following actions or do any of the following
things:
(a) Competing Business. Own, manage, operate,
control, be employed by, provide services as a consultant to or participate in
the ownership, management, operation or control of, any person that is engaged
in a business which is competitive with the business of EMPLOYER in the markets
EMPLOYER serves (it being acknowledged that EMPLOYER's business is national in
scope). The ownership of less than one percent (1%) of the outstanding stock of
any public corporation shall not be deemed a violation of this provision.
(b) Soliciting Customers. Attempt in any manner
to solicit from any customer of EMPLOYER, with whom EMPLOYER had significant
contact during the Employment Period, business of the kind or competitive with
the business done by EMPLOYER with such customer or to persuade or attempt to
persuade any such customer to cease to do business or to reduce the amount of
business which such customer has customarily done or is reasonably expected to
do with EMPLOYER, or if any such customer elects to move its business to a
person other than EMPLOYER, provide any services for, or have any discussions
with, such customer, on behalf of such other person.
(c) Persuading Customers. Persuade or attempt to
persude any customer of EMPLOYER to cease to do business or reduce its business
with EMPLOYER or to do business of the kind or competitive with the business
done by EMPLOYER with such customer with any other person.
(d) Interfering with Other Relations. Persuade
or attempt to persuade any supplier or licensor of EMPLOYER to discontinue or
reduce its business with EMPLOYER or otherwise interfere in any way with the
business of EMPLOYER.
(e) Employees. Attempt in any manner to solicit
for employment, as an employee or for retainer as a consultant, or so employ or
retain, any person who is then or at any time during the preceding six (6)
months was an employee of or consultant to EMPLOYER or persuade, entice or aid,
or cooperate with any other person in persuading, enticing or aiding, or
attempting to persuade, entice or aid, any employee of or consultant to EMPLOYER
to leave the employ of EMPLOYER or to become employed as an employee or retained
as a consultant by any person other than EMPLOYER.
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Notwithstanding the foregoing, in the event that EMPLOYER fails to pay
EMPLOYEE any portion of the Severance as required by paragraph 7 hereunder,
EMPLOYEE shall not be bound by any of the restrictions in paragraph 5.1 hereof.
5.2 Confidentiality Agreement. EMPLOYEE shall not, either
during the Employment Period or at any time thereafter, use or disclose to any
third person any "Confidential Information" of EMPLOYER, its subsidiaries or
affiliates, other than at the direction of EMPLOYER or such other entity, or
pursuant to a court order or subpoena, provided that EMPLOYEE will give notice
such court order or subpoena to EMPLOYER prior to such disclosure. Upon the
termination of EMPLOYEE's employment with EMPLOYER for any reason, EMPLOYEE
shall return any notes, records, charts, formulate or other materials (whether
in hard copy or computer readable form) containing EMPLOYER's confidential
information, and will not make or retain any copies of such materials. Without
limiting the generality of the foregoing, the parties acknowledge that EMPLOYER
from time to time may be subject to agreements with its customers, suppliers or
licensors to maintain the confidence of such other persons' confidential
information. The terms of such agreements may require that EMPLOYER's employees,
including EMPLOYEE, be bound by such agreements, and EMPLOYEE shall be deemed so
bound upon notice to him of the terms of such agreements. The term "Confidential
Information" as used herein shall include all data, details and information of
EMPLOYER's business, whether of a technical, engineering, operational, financial
or economic nature, including customers names, requirements and pricing
proposals. Confidential Information shall not include information which can be
proven by EMPLOYEE to have been developed by his own work as of the date hereof
completely independent of its disclosure by EMPLOYER or which is in the public
domain.
5.3 Disclosure of Innovations. EMPLOYEE shall disclose to
the EMPLOYER all inventions, improvements and other innovations of any kind that
EMPLOYEE may make, develop or reduce to practice, alone or jointly with others,
during the term of employment with EMPLOYER, which are directly related to
EMPLOYEE's work for the EMPLOYER and whether or not they are eligible for
patent, copyright, trademark, trade secret or other legal protection
("Innovations"). Examples of Innovations shall include, but are not limited to,
discoveries, research, inventions, formulas, techniques, processes, tools,
know-how, marketing plans, new product plans, production processes, advertising,
packaging and marketing techniques and improvements to computer hardware or
software.
5.4 Assignment of Ownership of Innovations. All
Innovations shall be the sole exclusive property of the EMPLOYER. EMPLOYEE
hereby assigns all rights, title or interest in the Innovations to EMPLOYER. At
the EMPLOYER 's request and expense, during and after the period of EMPLOYEE's
employment with EMPLOYER, EMPLOYEE will assist and cooperate with Employer in
all respects and will execute documents and give testimony to obtain, maintain,
perfect and enforce for EMPLOYER patent, copyright, trademark, trade secret and
other legal protection for the Innovations.
5.5 Remedies. The parties acknowledge that the legal
remedies for a breach of any of the provisions of this section 5 will be
inadequate and that such provisions may be enforced by retraining order,
injunction, specific performance or other equitable relief. Such equitable
remedies shall be cumulative and in addition to any other remedies which the
injured party or parties may have under applicable law, equity, this Agreement
or otherwise. The
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prevailing party shall be entitled to recover its legal fees and expenses in any
action or proceeding for breach of this section 5.
5.6 Public Policy/Severability. The parties do not wish
to impose any undue or unnecessary hardship upon EMPLOYEE following his
departure from EMPLOYER`s employment. The parties have attempted to limit the
provisions of this section 5 to achieve such a result, and the parties expressly
intend that all provisions of this section 5 be construed to achieve this
result. If, contrary to the effort and intent of the parties, any covenant or
other obligation contained in this section 5 is found not to be reasonably
necessary for the protection of EMPLOYER, to be unreasonable as to duration,
scope or nature of restrictions, or to impose an undue hardship on EMPLOYEE,
then it is the desire of the parties that such covenant or obligation not to be
rendered invalid thereby, but rather that the duration, scope or nature of the
restrictions be deemed reduced or modified, with retroactive effect, to render
such covenant or obligation reasonable, valid and enforceable. The parties
further agree that in the event a court, despite the efforts and intent of the
parties, declares any portion of the covenants or obligations in this section 5
invalid, the remaining provisions of this section 5 shall nonetheless remain
valid and enforceable.
6. TERMINATION.
6.1 Termination By EMPLOYER For Cause. Notwithstanding
anything to the contrary in this Agreement, EMPLOYER shall have the right,
subject to this Section 6, to terminate this Agreement "for cause" by giving
EMPLOYEE seven (7) days' prior written notice to that effect, and EMPLOYEE's
right to further compensation and benefits hereunder, shall then immediately
cease. Any termination by EMPLOYER under this paragraph "for cause" shall be
without prejudice to EMPLOYEE's right to receive all compensation and benefits
owed to him through the effective date of termination. As used herein and
throughout this Agreement, the term "for cause" shall mean the willful engaging
by EMPLOYEE in illegal conduct or gross misconduct which is demonstrably and
materially injurious to Employer.
6.2 Termination upon EMPLOYEE's Death or Permanent
Disability. EMPLOYER shall have the right to terminate this Agreement upon the
death or Permanent Disability of EMPLOYEE. A termination of this Agreement shall
be treated as a termination by reason of "Permanent Disability" only if, due to
a mental or physical disability, EMPLOYEE is absent from the full time
performance of duties for EMPLOYER for a period of at least one hundred eighty
(180) consecutive days and fails to return to the full time performance of
duties within 30 days after receipt of a demand by EMPLOYER to do so. Upon
termination of EMPLOYEE's employment hereunder for either Permanent Disability
or death, EMPLOYEE or his estate (as the case may be) shall be entitled to
receive (i) any accrued but unpaid Base Salary through the end of the month in
which such termination occurs, (ii) the proceeds of the Life Insurance or
Disability Policy, and (iii) all other current cash obligation of EMPLOYER to
EMPLOYEE (e.g. unused vacation).
6.3 Termination by EMPLOYEE for Good Reason or by
EMPLOYER without Cause. The Employment Period and EMPLOYEE's employment
hereunder may be terminated by EMPLOYEE for "Good Reason" as defined below, upon
not less than sixty (60) days' written notice to EMPLOYER. For purposes of this
Agreement "Good Reason" shall mean EMPLOYER (i) reducing EMPLOYEE's position,
duties, or authority, (ii) failing to secure the
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agreement of any successor entity to EMPLOYER that EMPLOYEE shall continue in
his position without reduction in position, duties or authority, or (iii)
committing any other material breach of this Agreement which is not remedied by
EMPLOYER (if capable of remedy) within thirty (30) days after receiving notice
thereof from EMPLOYEE.
7. SEVERANCE. If EMPLOYEE'S employment is terminated by EMPLOYER
other than for cause, or if EMPLOYEE terminates this Agreement for Good Reason,
EMPLOYEE shall receive within three (3) days of such termination, payment as
follows: (i) any accrued but unpaid Base Salary through the date of such
termination, (ii) all other current cash obligations of EMPLOYER to EMPLOYEE
(e.g. unused vacation); and (iii) a prorata portion of the incentive
compensation due EMPLOYEE ("Accrued Compensation"). In addition, EMPLOYEE shall
be entitled to receive as a severance payment ("Severance") his Base Salary and
incentive compensation through the later of (i) the balance of the Employment
Period (e.g., through the fifth anniversary of the Effective Date) or (ii)
twenty-four months from the date of such termination (the "Severance Period").
Such Severance shall be paid in a lump sum within thirty (30) days following the
termination date. Employer shall provide, at its expense, continued health
coverage and other benefits in effect on the date of termination for the
Severance Period.
8. MITIGATION. EMPLOYEE shall not be required to mitigate the
amount of any payment provided for in this Agreement, including Severance, by
seeking other employment or otherwise. EMPLOYER shall not be entitled to set off
against the amounts payable to the EMPLOYEE under this Agreement any amounts
owed to the EMPLOYER by the EMPOYEE, any amounts earned by the EMPLOYEE in other
employment after EMPLOYEE's termination of employment with the EMPLOYER, or any
amounts which might have been earned by the EMPLOYEE in other employment had
EMPLOYEE sought such other employment.
9. INDEMNIFICATION. EMPLOYER shall indemnify, defend and hold
EMPLOYEE harmless for any losses, damages, liabilities, judgments, claims,
costs, penalties and expenses incurred by EMPLOYEE in connection his employment
by EMPLOYER or in connection with any proceeding to which EMPLOYEE is made a
party as the result of his performing his duties hereunder, unless such
liability results from EMPLOYEE's gross negligence or misconduct in the
performance of such duties.
10. GOVERNING LAW. This Agreement shall be governed by the
internal laws of the State of California. Any action to enforce any term hereof
shall be brought exclusively within the state or federal courts of Los Angeles,
California to which jurisdiction and venue all parties hereby submit themselves.
11. BINDING EFFECT. Except as otherwise herein expressly provided,
this Agreement shall be binding upon, and shall inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors and
assigns.
12. NOTICES. All notices, designations, consents, offers,
acceptances, waivers or any other communication provided for herein, or required
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, overnight courier, or delivered by hand.
The notices shall be addressed as follows:
If to EMPLOYEE: ___________________________
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___________________________
If to EMPLOYER: to the address set forth above
or to such other address as a party hereto may notify the other pursuant to this
Section.
13. ARBITRATION. Any controversy between EMPLOYEE and EMPLOYER
involving the construction or application of any of the terms, provisions or
conditions of this Agreement shall, on the written request of either party
served on the other in accordance with this Agreement, be submitted to
arbitration. Arbitration shall comply with and be governed by the provisions and
rules of the American Arbitration Association. EMPLOYEE and EMPLOYER shall each
appoint one person to hear and determine the dispute. The two persons so
appointed shall select a third impartial arbitrator, and a decision of the
majority shall be final and conclusive upon both parties. The cost of the
arbitration, including attorneys' fees, shall be determined and allocated by the
arbitrators under this Agreement.
14. ATTORNEYS' FEES. In the event that any party hereto should
bring any action, suit or other proceeding, including arbitration, against any
other party hereto, contesting the validity of this Agreement, or attempting to
enforce, remedy, prevent or obtain relief from any breach of this Agreement, or
to rescind, negate, modify, or reform this Agreement, any of the terms or
provisions hereof, or any of the matters referred to herein, the prevailing
party shall recover all of such party's attorneys' fees and costs incurred in
such proceeding.
15. ADDITIONAL DOCUMENTS. Each of the parties hereto agrees to
execute and deliver, without cost or expense to any other party, any and all
such further instruments or documents and to take any and all such further
action reasonably requested by such other of the parties hereto as may be
necessary or convenient in order to effectuate this Agreement and the intents
and purposes thereof.
16. COUNTERPARTS. This Agreement and any amendments hereto may be
executed in two (2) or more counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same instrument, binding
on the parties and the signature of any party to any counterpart shall be deemed
a signature to, and may be appended to, any other counterpart.
17. ENTIRE AGREEMENT. This Agreement contains the sole and entire
agreement and understanding of the parties and supersedes any and all prior
agreements, discussions, negotiations, commitments and understandings among the
parties hereto with respect to the subject matter hereof. There are no
representations, agreements, arrangements or understandings, oral or written,
between or among the parties concerning the subject matter hereto, which are not
fully expressed herein or in any supplemental written agreements of even or
subsequent date hereof.
18. SEVERABILITY. If any provision of this Agreement, or the
application thereof to any person or circumstances, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted
by law.
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19. MODIFICATION. This Agreement cannot be changed, modified or
discharged orally, but only if consented to in writing by both parties.
20. CONTRACT HEADINGS. All headings of the Sections of this
Agreement have been inserted for convenience of reference only, are not to be
considered a part of this Agreement, and shall in no way affect the
interpretation of any of the provisions of this Agreement.
21. WAIVER. Failure to insist upon strict compliance with any of
the terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
22. REPRESENTATION OF EMPLOYEE. EMPLOYEE, with the full knowledge
that EMPLOYER is relying thereon, represents and warrants that he has not made
any commitment inconsistent with the provisions hereof and that he is not under
any disability which would prevent him from entering into this Agreement and
performing all of his obligations hereunder.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the day and year first above written.
"EMPLOYER"
Xxxx Xxxxx Productions Holding, Inc.
A Nevada corporation
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------------
Xxxxxx Xxxxxxxxx, CEO
Xxxx Xxxxx Productions, Inc.
A Delaware corporation
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------------
Xxxxxx Xxxxxxxxx, CEO
"EMPLOYEE"
/s/ Xxxxxx Xxxxx
-----------------------------------------
Xxxxxx X. Xxxxx
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AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this "Amendment") effective
as of September 2, 2003, is entered into by and between the parties to that
certain Employment Agreement, dated as of September 1, 2003 (the "Agreement"),
by and between Xxxx Xxxxx Productions Holding, Inc., a Nevada corporation (the
"JKPH"), and Xxxxxx X. Xxxxx ("EMPLOYEE").
RECITALS
JKPH and EMPLOYEE desire to amend the Agreement to delete the provision
regarding JKPH's issuance of options to EMPLOYEE to purchase shares of JKPH's
common stock since the parties have agreed that all option grants will be issued
pursuant to a Stock Option Plan in a form to be adopted by JKPH after the date
hereof.
NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, intending to be legally bound hereby, the parties agree as
follows:
1. Section 4.6. Section 4.6 ("Stock Options") of the Agreement is hereby
amended by deleting it in its entirety.
2. Waiver. EMPLOYEE hereby waives any and all rights which he may have had
with respect to the stock options referenced in Section 4.6 of the Agreement.
3. Counterparts. This Amendment may be executed in counterparts, each of
which shall constitute an original and together shall constitute one and the
same document.
4. Effectiveness of Agreement. Except as expressly amended hereby, all
provisions of the Agreement shall remain in full force and effect.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned have executed and delivered this
counterpart signature page to this Amendment No. 1 to Employment Agreement.
XXXX XXXXX PRODUCTIONS HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Date: June 30, 2004 Title: Chief Executive Officer
/s/ Xxxxxx X. Xxxxx
-------------------------------------------
Date: June 30, 2004
