EMPLOYMENT, NON-COMPETITION AND
CONFIDENTIALITY AGREEMENT
THIS AGREEMENT is made as of the 1st day of October, 1996 by and
between, BEACHPORT ENTERTAINMENT CORPORATION, a Utah corporation, with its
principal office at 000 Xxxxx Xxxxxxxxx Xxxx., Xxx Xxxxxxx, XX 00000 (the
"Company"); and, XXXXXX X. XXXXXXXX, an individual residing at 0000 Xxx Xxx Xx.,
Xxx Xxx, Xxxxxxxxxx 00000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (the "Executive").
RECITAL
WHEREAS, the Company desires to retain the services of the Executive as
an employee of the Company on the terms and conditions as hereinafter set forth;
and
WHEREAS, the Executive is desirous and willing to accept such
employment on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and promises,
the receipt and sufficiency of such mutual consideration which is hereby
acknowledged and confessed by the Company and the Executive, and in order to
induce Company to hire the Executive on the terms and conditions hereinafter set
forth, the Company and the Executive hereby agree as follows:
I.
EMPLOYMENT
The Company shall employ the Executive as a full time employee, as
Chairman of the Board and Chief Executive Officer of the Company. The Executive
hereby accepts such employment with the Company, upon the terms and conditions
hereinafter set forth.
II.
DUTIES DURING EMPLOYMENT PERIOD
During the Employment Period, the Executive shall act as the Chairman
of the Board and Chief Executive Officer and have the responsibility for
day-to-day management of its business. Should the Executive be required to
relocate his residence, the Company shall pay any and all relocation expenses
for the Executive and his family during the term of this Agreement and any
renewals and extensions thereof. If the Executive is elected as a director of
the Company or any subsidiary of the Company, he will serve in such capacity
without additional compensation. The Executive shall devote his full time,
skill, labor and attention to the business of the Company and shall promptly and
faithfully, perform all services pertaining thereto that are or may hereafter be
required of him by the Company, provided that such services shall be consistent
with his position as Chairman of the Board and Chief Executive Officer. Nothing
in this agreement shall preclude the Executive from investing his personal
assets and time in his personal investments, provided that such investments are
not in competition with the business of the Company and that such activities do
not unreasonably
interfere with the performance of his duties hereunder and where the form or
manner of such investments will not require services on the part of the
Executive in the operation of the affairs of the business in which such
investments are made and which participation is solely that of a passive
investor.
III.
TERM OF EMPLOYMENT
The employment under Section II of this Agreement shall be for a period
of five years (5) commencing on the date hereof and ending at the termination
of this Agreement (the "Employment Agreement"), unless sooner terminated in
accordance with one of the following alternatives:
A. The Executive's employment under Section II, if not already
terminated under clause B of this Section III, may be terminated at any time
during the Employment Period for Cause (as hereinafter defined) by action of the
Board of Directors of the Company upon giving the Executive notice of such
termination at least thirty (30) days prior to the date upon which such
termination shall take effect. As used herein, the term "Cause" shall mean any
of the following events:
1. The Executive's conviction of or plea of guilty or nolo
contendere to a crime involving breach of trust or fraud;
2. The Executive's failure to follow the good faith instructions,
with respect to the Company, or any of its subsidiaries and their respective
operations, of the Executive Committee or the Board of Directors of the Company
referred to in Section II following written notice thereof; or
3. The Executive's gross negligence or willful misconduct, or,
neglect of duties or failure to act with respect to duties or actions previously
communicated to the Executive in writing by the Executive Committee or the Board
of Directors of the Company referred to in Section II.
If the Executive's employment is terminated under the provisions
of this Clause A, all rights of the Executive pursuant to Section IV hereof
shall cease as of the effective date of such termination.
B. The Executive's employment under Section II may be terminated at any
time following the date which is five (5) years after the date hereof, by action
of the Board of Directors of the Company, upon giving the Executive notice of
such termination at least ninety (90) days prior to the date on which such
termination shall take effect. This Employment Agreement will automatically
renew for successive one (1) year periods upon the terms and conditions
contained herein unless terminated as provided herein. If the Executive's
employment is terminated under the provisions of this clause B, his rights
pursuant to Section IV shall cease as of the effective date of such termination.
IV.
EMOLUMENT
A. As base compensation for the services rendered by the Executive
hereunder, the Company shall pay him a salary during this Employment Agreement
in an amount as set by the Board of Directors of the Company. The Executive
shall not receive any salary the first year of this Agreement, but shall
thereafter receive an annual salary. The aforesaid salary shall initially be
payable in 26 equal payments commencing two (2) weeks from the date hereof, or
on such other basis, such as weekly or monthly as determined by the Board of
Directors of the Company. The Board of Directors of the Company may, from time
to time, increase the Executive's salary or pay such discretionary bonuses as it
deems appropriate, but such increases shall neither affect nor alter the fixed
obligation of the Company as herein provided or referred to.
B. Bonuses and Additional Benefits. The Executive may be awarded
bonuses as agreed and set by the Board of Directors of the Company. Executive
shall also be entitled to, and shall be accorded, all rights and benefits under
any executive incentive plan (including the Company's Stock Option Plan),
monetary bonus plan, participation or extra compensation plan, pension plan,
profit sharing plan, disability insurance, health and major medical insurance
policy or policies, and any other plans or benefits that the Company may from
time to time provide for executives or for any senior officer generally during
the Employment Period. The Company shall accord the Executive such rights and
benefits on a basis no less favorable than any other officer or executive
of the Company or its subsidiaries or affiliates.
C. Vacation and Sick Leave. For each year during which this Agreement
is in effect, Executive shall be entitled to a vacation and sick leave benefits,
without a deduction of salary or other compensation in accordance with the
Company's standard policies, but in no event shall the vacation be less than
three (3) weeks. The Executive shall have up to three (3) weeks vacation per
year, provided the Executive works full time each year for the Company and under
the terms of this Agreement. Such vacation shall be taken at such time or times
during such year as may be mutually agreed upon by the Company and the
Executive.
D. Business Expenses. The Executive shall be authorized to incur
reasonable business expenses for promoting the business of the Company,
including expenditures for entertainment, gifts and travel, within the
guidelines as are set by the Board of Directors of the Company and which are
consistent with the Internal Revenue Service guidelines, provided that the
Executive submits vouchers therefore in the form reasonably satisfactory to the
Company.
E. Insurance. The Company shall include Executive under the Company's
group health and life insurance programs, with the same coverage and options
that are available under said policies to all executives of the Company.
F. Other Benefits. The Company will provide the Executive with fringe
benefits in the aggregate not less favorable than those received generally by
other executives of the Company.
G. Life Insurance. The Company, in its discretion may apply for and
procure as owner and for its own benefit, insurance on the life of the
Executive, in such amounts and in such form or forms as the Company may choose.
V.
DISABILITY & DEATH
A. Disability. Notwithstanding any failure or inability of Executive
during the Employment Period, because of illness, injury or similar incapacity,
whether physical or mental ("Disability"), to perform the obligations as
contemplated by this Agreement, the Company, nevertheless shall continue to pay
Executive the compensation and benefits provided for in Section IV hereof and
all other benefits provided by this Agreement, except as provided otherwise in
this Section V.
1. Obligations of the Company. In the event a Disability of the
Executive continues for a period of more than six (6) consecutive months or six
(6) months in the aggregate out of any period of twelve (12) consecutive months,
the Company may, at its option, at any time on or after the last day of the
aforesaid six month Disability period, by written notice to such Executive (the
"Disability Notice"), declare such Executive "disabled" and this Agreement shall
terminate with no further liability on the part of the Company; however such
notice shall be of no force and effect if such Executive has resumed the duties
and responsibilities provided hereunder prior to the delivery of the Disability
Notice.
2. Continuing Obligations. Notwithstanding the delivery of a
Disability Notice to the Executive, the Company shall continue to pay the
Executive his normal monthly compensation as set forth hereinabove, for a period
of six (6) months following delivery of the Liability Notice (the "Additional
Payment Period"), provided however, that any income received by the "disabled"
Executive during the Employment Period from any disability insurance provided to
such Executive by the Company shall reduce the Company's obligations hereunder.
In addition, during the Additional Payment Period, the Company shall be
obligated to continue the benefits set forth in Section IV herein.
B. Death. In the event of death during the Employment Period of the
Executive, the normal monthly compensation of the Executive shall be paid to the
Executive's estate for a period of one (1) year.
VI.
COVENANT NOT TO COMPETE
A. The Executive hereby acknowledges and recognizes the highly
competitive and confidential nature of the Company's business of developing,
producing and distributing live
family entertainment and made-for-television features, and for the consideration
stated above, accordingly agrees that during the entire period commencing with
the date hereof, the Executive's employment by the Company, to include (18)
months after the termination of the Executive's employment with the Company,
Executive will not directly or indirectly, in any capacity:
1. Engage in any capacity in any business endeavor which has among
its purposes and/or endeavors to develop, produce or distribute live family
entertainment and/or made-for-television features, to include those which,
during the employment period of Executive, have been developed, marketed or
conceived by the Company, any of its personnel and/or any of its subsidiaries,
within 100 miles in any geographic area, city and/or state in which the
Company's products are operating.
2. Induce employees of the Company, or any of its respective
subsidiaries, to terminate their employment or to engage in any activities
hereby prohibited to the Executive;
3. Contact, communicate or solicit any customer and/or any contact
of the Company derived from any customer list, customer lead, mail, printed
material or other information secured from any association with the Company;
4. Discuss any activities, methods of operation, finances,
confidential practices and private business information of the Company with any
other party.
B. It is expressly understood and agreed that although the Executive
and the Company consider the restrictions contained in clause A above reasonable
for the purpose of reserving for the Company or any of its subsidiaries, their
good will and other proprietary rights, if a final judicial determination is
made by a court having jurisdiction at that time or territory or any other
restriction contained in clause A above is an unreasonable or otherwise
unenforceable restriction against the Executive, the provisions of such clause
shall not be rendered void, but shall be deemed amended to apply as to such
maximum time and territory and to such other extent as such Court may judicially
determine or indicate to be reasonable.
C. As to the reasonableness of the non-competition and restrictive
covenants contained herein, Executive further acknowledges and confesses that he
is capable of making a living in employment areas other than developing,
producing and distributing live family entertainment and made-for-television
features engaged in by the Company, and, that the non-competition and
restrictive covenants contained herein will not in the least manner impair or
interfere with Executive from earning a living after the Executive terminates
relations with the Company.
VII.
DISCLOSURE OF INFORMATION
The Executive acknowledges that the Company's trade secrets, private or
secret processes as they may exist from time to time, and confidential
information concerning their products, development, all technical information,
procurement and sales activities and procedures, promotion and pricing
techniques and credit and financial data concerning customers are valuable,
special and unique assets of the Company and its subsidiaries, access to and
knowledge of which are essential to the performance of the Executive's duties
hereunder. In light of the highly competitive nature of the industry in which
the Company and
its subsidiaries' business is conducted, the Executive further agrees that all
knowledge and information described in the preceding sentence not in the public
domain and heretofore or in the future obtained by him as a result of this
employment by the Company or its subsidiaries shall be considered confidential
information. In recognition of this fact, the Executive agrees that he will not,
during or after the Employment Period, disclose any of such secrets, processes
or information to any person or entity for any reason or purpose whatsoever,
except as is necessary in the performance of his duties as an employee of the
Company or its subsidiaries and then only upon a written confidentiality
agreement in such form and content as requested by the Company from time to
time; nor shall the Executive make use of any such secrets, processes or
information (other than information in the public domain) for his own purposes
or for the benefit of any person or other entity (except the Company and its
subsidiaries) under any circumstances during or after the Employment Period.
VIII.
COMPANY RIGHT TO COPYRIGHTS, TITLES AND SCRIPTS
A. The Executive shall promptly disclose, grant and assign to the
Company for its sole use and benefit any and all scripts, copyrights, movie
titles, sitcom scripts and ideas, improvements, technical information and
suggestions relating in any way to the products of the Company or capable of
beneficial use by customers of the Company either past conceived, developed or
acquired, or which he may conceive, develop or acquire during the Employment
Period (whether or not during usual working hours), together with all patent
applications, letters patent, copyrights and reissues thereof that may at any
time be granted for or upon any such invention, improvement or technical
information. In connection therewith, the Executive shall promptly at all times
during and after the Employment Period:
1. Execute and deliver such applications, assignments,
descriptions and other instruments as may be necessary or proper in the opinion
of the Company to vest in the Company title to such inventions, improvements,
technical information, patent applications and to enable it to obtain and
maintain the entire right and title thereto throughout the world; and
2. Render to the Company, at its expense, all such assistance as
it may require in the prosecution of applications for said patents or reissues
thereof, in the prosecution or defense of interferences which may be declared
involving any said application or patents, and in any litigation in which the
Company or its subsidiaries may be involved relating to any such patents,
inventions, improvements or technical information.
IX.
REMEDIES
The Executive acknowledges and agrees that Company's remedy at law for
a breach of any of the provisions of Sections VI, VII or VIII would be
inadequate and, in recognition of this fact, in the event of a breach by the
Executive of any of the provisions of the Sections VI, VII or VIII it is agreed
that, in addition to its remedy at law, the Company shall be entitled to, and
the Executive agrees not to oppose the Company's request for, equitable relief
in the form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available.
In the event of any such breach, at the election of the Company, all rights of
the Executive under Section IV shall thereupon terminate. The Executive
acknowledges that the granting of a temporary injunction, temporary restraining
order or permanent injunction merely prohibiting the use of trade secrets and
like proprietary information would not be an adequate remedy upon breach, and
consequently agrees, upon any such breach, to the granting of injunctive relief
prohibiting the developing, producing or distributing of products and services
of the kind developed, produced, distributed or provided by the Company or any
of its subsidiaries during the Executive's employment. Nothing herein contained
shall be construed as prohibiting the Company from pursuing any other remedies
available to it for such breach.
X.
NOTICES
Any notice required or permitted to be given under this Agreement shall
be deemed properly given if in writing and if mailed by registered or certified
mail, postage prepaid with return receipt requested, to his residence in the
case of notices to the Executive, or to the principal office of the Company, to
the attention of its President (with a copy to the Chairman of the Board and
General Counsel) in the case of notice to the Company.
XI.
WAIVER OF BREACH
The waiver by the Company or Executive of a breach of any provision of
this Agreement by the Company or the Executive shall not operate or be construed
as a waiver of any subsequent breach by the Company or the Executive.
XII.
ASSIGNMENT
This Agreement is assignable by the Company and/or any of its
subsidiaries to any successor in interest of the Company's or its subsidiaries'
business.
XIII.
ENTIRE AGREEMENT
This instrument contains the entire agreement between the Company and
Executive relating to the subject matter hereof, and supersedes and replaces in
its entirety any existing Agreement between Company and the Executive. This
Agreement may not be waived, changed, modified, extended or discharged orally,
but, may be amended and/or changed only by a written instrument duly executed by
an authorized representative of the Company and the Executive hereto and
designated on its face as an "Amendment".
XIV.
FAILURE TO ENFORCE
It is expressly agreed and understood that the waiver by a party of its
rights, or any portion of its rights, under this Agreement in any particular
instance or instances, whether intentional or otherwise, shall not be considered
as a continuing waiver which would prevent the subsequent enforcement of such
rights.
XV.
APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of California, the principal place of business of the
Company.
XVI.
HEADINGS
The headings of the Sections hereof are for convenience only and shall
not control or affect the meaning, or construction, or limit the scope or intent
of any of the provisions of this Agreement.
XVII.
MISCELLANEOUS
It is anticipated that variances and deviations from certain provisions
of this Agreement may be necessary and may be allowed or tolerated, but it is
agreed that such variances or deviations, regardless of number, shall not be
reason for altering or modifying the interpretation of any portion of this
Agreement.
This Agreement shall be binding on the assignees, heirs,
administrators, executors, spouses, successors and legal representatives of both
parties hereto.
XVIII.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be an original, and all of which shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Employment Agreement as of the date and year first above written.
BEACHPORT ENTERTAINMENT CORPORATION
/s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxxx X. Xxxxxxx
--------------------------------- ------------------------------------------
XXXXXX X. XXXXXXXX, Executive By: Xxxxxx X. Xxxxxxx, Secretary/Treasurer
