EMPLOYMENT AGREEMENT
EXHIBIT 10.1
July
20, 2020
This
EMPLOYMENT AGREEMENT
(“Agreement”) is made in
the State of Arizona by and between Xxxxxxx X. Xxxxxxxxx
(“Executive”) and Rivulet
Media, Inc., a Delaware corporation (the “Company”).
WHEREAS, the Company is engaged in the
film and music business producing full-length films, documentaries,
musicals and popular music for distribution nationally and
internationally (the “Business”);
and
WHEREAS, the parties desire that the
Company retain Executive under the terms and conditions set forth
in this Agreement; and
WHEREAS, the parties desire to express
their mutual agreements, covenants, promises, and understandings in
a written agreement.
NOW THEREFORE, in consideration of the
premises and the agreements, promises, covenants, and provisions
contained in this Agreement, the parties agree and declare as
follows:
1. Employment. The Company hereby
employs Executive and Executive accepts employment under the terms
and conditions of this Agreement.
(a) Executive will
faithfully and diligently serve the Company to the best of his
ability in his positions as President, Chief Financial Officer and
Principal Accounting Officer and as a member of the Board of
Directors (the “Board”) and in the
performance of such other duties and responsibilities as the
Company may assign to him.
(b) Executive will
devote his full professional time, attention, and energies to the
performance of his duties for the Company, and will not, during his
employment under this Agreement, engage in any other business
activity, whether or not for profit, except for passive investments
in firms or businesses that do not compete with the Company,
without the advance written and signed consent of the Company.
Notwithstanding this Section 2(b), Executive will be
permitted to serve as a director of not for profit and for profit
businesses that do not compete with the Company.
(c) Executive warrants
that during the term of his employment under this Agreement, he
will not do any act or engage in any conduct, or permit, condone,
or acquiesce in any act or conduct of other persons, that he knew
or should have known could cause the Company to be in violation of
any law or statute, and Executive agrees to indemnify and hold the
Company harmless against any and all liabilities, claims, damages,
fees, losses, and expenses of any kind or nature whatsoever
attributable directly or indirectly to a violation of this
warranty.
(d) Executive agrees to
comply with the policies and procedures of the Company as may be
adopted and changed from time to time, including without
limitation, those described in the Company’s employee
handbook and Code of Conduct and Ethics. If this Agreement
conflicts with such policies or procedures, this Agreement will
control.
(e) As an officer of
the Company, Executive owes a duty of care and loyalty to the
Company as well as a duty to perform such duties in a manner that
is in the best interests of the Company.
3. Compensation and Benefits. For
and in consideration of all services rendered under this Agreement,
the Company will compensate Executive as follows:
(a) Salary. During the term of
Executive’s employment under this Agreement, Executive will
be compensated on the basis of an annual salary of $360,000 which
may be periodically deferred as determined by the Executive or
Board as needed to cover other expenses effective April 1, 2020,
payable in accord with the Company’s standard payroll
practices.
(b) Bonus. In addition to
Executive’s base salary (Section 3(a)), throughout his
employment, Executive will be eligible for a quarterly and an
annual discretionary bonus as periodically established by the Board
(the “Bonus”), based upon
metrics that will be established by the Board in its sole
discretion paid at the time periods determined by the
Board.
(c) Stock Options. Executive shall
be eligible to participate in the Company’s 2020 Equity
Incentive Plan (“Plan”) and receive stock options
granted pursuant to the Plan.
(d) Expenses. The Company will
reimburse Executive for all reasonable and necessary expenses that
Executive incurs in carrying out his duties under this Agreement in
accordance with the Company reimbursement policies as in effect
from time to time, provided that Executive presents to the Company
from time to time an itemized account of such expenses in such form
as the Company may require.
(e) Participation in Benefit Plans.
As of the Effective Date, Executive shall be included in any and
all plans of the Company providing general benefits for the
Company’s employees, including, without limitation, medical,
dental, vision, disability, life insurance, 401(k) plan, vacation,
and holidays.
(a) Initial Term. Executive’s
employment under this Agreement commenced effective April 1, 2020
(“Effective
Date”), and will continue for a period of two (2)
years (the “Initial
Term”). Thereafter, this Agreement shall renew only
upon thirty (30) days written notice as provided in Section 4(b).
(b) Renewal. Upon at least thirty
(30) days written notice prior to the end of the Initial Term, and
subject to the provisions for termination set forth below, the term
of Executive’s employment under this Agreement will extend
thereafter for a period of one year (the “Renewal Term”). Upon the
expiration of such subsequent term and any term renewed hereunder,
and subject to the provisions for termination set forth below, the
term of Executive’s employment under this Agreement will
require thirty (30) days written notice of renewal for each
successive Renewal Term of one-year.
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(c) Employment at Will.
Notwithstanding Sections 4(b) and 4(b), Executive understands and
agrees that this Agreement does not create an obligation on the
part of the Company or any other person or entity to continue
Executive’s employment. Executive acknowledges and agrees
that he is an at-will employee of the Company, which means that
either party to this Agreement may terminate Executive’s
employment with or without cause, for any or no reason and at any
time. Executive’s employment shall also be deemed terminated
upon Executive’s death or becoming disabled. Executive shall
not be entitled to any salary, bonus, benefits or other
compensation with respect to any period subsequent to the
termination of his employment.
(d) Set-Off. If Executive has any
outstanding obligations to the Company upon the termination of
Executive’s employment for any reason, Executive hereby
authorizes the Company to deduct any amounts owed to the Company
from Executive’s final paycheck and/or any amounts that would
otherwise be due to Executive. No other set-off shall be permitted
under this Agreement.
5. Works; Developments. Executive
acknowledges that the Company owns all Intellectual Property Rights
(defined below) in any material developed, sourced and
optioned/purchased by Company in connection with Executive’s
employment by the Company. Executive agrees that any and all
written materials and writings (“Work”) that are optioned
or greenlit for development by Company for the Company’s use
during the term of Executive’s employment shall be deemed a
“work made for hire” within the meaning of the United
States Copyright Act, Title 17, United States Code, which vests all
copyright interest in and to the Work in the Company. Executive
agrees to notify the Company of any Work conceived or developed by
Executive during the term of Executive’s employment. In
exchange for the covenants in this Agreement and other good and
valuable consideration, Executive acknowledges and agrees that all
of the Work (and all rights therein, including, without limitation,
copyright) belongs to and shall be the sole and exclusive property
of the Company. Executive further acknowledges and agrees to the
Acknowledgement Regarding Confidential Information and Original
Work attached hereto as Exhibit B.
6. [Intentionally
Omitted].
7. Employment and Post-Employment
Restrictions.
(a) During
Executive’s employment and following the termination of
Executive’s employment, for whatever reason and by whatever
party, and during any Restrictive Period, Executive will not,
directly or indirectly, on his own behalf or on behalf of any other
person or entity:
(i)
enter into or
engage in any business that provides Competitive Services within
the Restricted Areas;
(ii)
solicit or accept
orders for Competitive Services from any person or entity upon whom
he called or with whom he had direct or indirect contact on behalf
of the Company and who at the time of such conduct is a customer or
client of the Company;
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(iii)
solicit or accept
orders for Competitive Services from any person or entity who was a
customer or client of the Company during his engagement and who at
the time of such conduct is a customer or client of the
Company;
(iv)
encourage, entice,
induce, or influence, directly or indirectly, any person or entity
not to do business with the Company;
(v)
encourage, entice,
induce, or influence, directly or indirectly, any person to
terminate his or his employment with the Company; or
(vi)
hire, retain, or
offer to hire or retain for the performance of any service in
connection with the marketing, distribution, or sale of any
Competitive Services to any person who at the time of such conduct
is an employee of the Company or who was an employee of the Company
within the 180-day prior to such conduct.
(b) The Restrictive
Periods are: (a) the 90-day period commencing on the
termination of Executive’s employment with the Company (the
“First Restrictive
Period”); and (b) the 90-day period commencing on
the expiration of the First Restrictive Period (the
“Second Restrictive
Period”); and (c) the 90-day period commencing on the
expiration of the Second Restrictive Period (the
“Third Restrictive
Period”); and (d) the 90-day period commencing on
the expiration of the Third Restrictive Period (the
“Fourth Restrictive
Period”).
(c) The term of any
Restrictive Period set forth in this Agreement will be tolled for
any time during which Executive is in violation of any provision of
this Agreement and for any time during which there is pending any
action or arbitration (including any appeal from any final
judgment) brought by any person, whether or not a party to this
Agreement, in which action the Company seeks to enforce this
Agreement or in which any person contests the validity of such
agreements and covenants or their enforceability, or seeks to avoid
their performance or enforcement.
(d) “Competitive Services”
means any services that are similar to any services that Executive
performed for the Company during Executive’s employment with
the Company.
(e) The Restrictive
Areas are: (1) the area within a 10 air-mile radius of
any location of the Company at which Executive performed services
during his employment under this Agreement; and (2) Maricopa
County, Arizona; and (3) the state of Arizona; and (5) the
Mountain Time Zone and the Pacific Time Zone of the United States;
and (6) that portion of the United States west of the
Mississippi River; (7) the United States; and (8) any country
in which the Company is conducting business at the time of
Executive’s separation from employment.
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8. Non-Disparagement. Executive
agrees that during the term of Executive’s services to the
Company, and at any time thereafter, not to make or communicate any
comments or other remarks which are negative or derogatory to the
Company or which would tend to disparage, slander, ridicule,
degrade, harm or injure the Company (or any business relationship
of the Company) or any officer, partnership member, or other
employee of the Company or its affiliates.
9. Remedies.
(a) The parties
expressly agree that, in the event of any failure by the Company to
pay any wages to which Executive may become entitled in connection
with his employment in violation of RCW 49.48 et seq., the amount of
Executive’s recovery will be limited to the amount of actual
wages that the court or arbitrator determines to have been unpaid,
and, notwithstanding the provisions of RCW 49.48.125, no greater
amount. Executive hereby expressly waives any remedy that he may
have or that may later become available to his under RCW 49.48
et seq. for any additional
amounts.
(b) Any breach of the
duties and obligations imposed upon Executive by this Agreement
would cause irreparable harm to the Company, and the Company could
not be fully compensated for any such breach with money damages.
Therefore, injunctive relief is an appropriate remedy for any such
breach. Such injunctive relief will be in addition to and not in
limitation of or substitution for any other remedies or rights to
which the Company may be entitled at law or in equity, including
without limitation liquidated damages under this
Agreement.
10. Change of Control.
Notwithstanding anything to the contrary in the Company’s
existing or future incentive plans or any award agreement granted
to Executive thereunder, upon a Change of Control, all of
Executive’s outstanding unvested equity-based awards granted
pursuant to the incentive plans, at Executive’s option, shall
vest and become immediately exercisable and unrestricted, without
any action by the Board or any committee thereof.
“Change of
Control” shall mean the first of the following events
to occur after the Effective Date:
(a) a Person or one or
more Persons acting as a group acquires ownership of stock of the
Company that, together with the Company stock held by such person
or group, constitutes more than fifty percent (50%) of the total
fair market value or total voting power of the stock of the
Company;
(b) the following
individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the Effective
Date, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited
to a consent solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board or
nomination for election by the Company’s stockholders was
approved or recommended by a majority of the directors then still
in office who either were directors on the Effective Date or whose
appointment, election or nomination for election was previously so
approved or recommended; and
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(c) a Person or one or
more Persons acting as a group acquires (or has acquired during the
twelve (12) month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company
equal to or more than sixty percent (60%) of the total gross fair
market value of all of the assets of the Company determined
immediately prior to such acquisition.
For
purposes of this Section 10,
(i) “Person”
shall mean a “person” as defined in Section 7701(a)(1)
of the Code, except that such term shall not include (A) the
Company (or any Subsidiary thereof), (B) a trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, (C) an underwriter temporarily holding securities pursuant
to an offering of such securities, or (D) a corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of
the Company.
(ii) Stock
ownership shall be determined in accordance with the attribution
rules of Section 318(a) of the Code.
(iii) The
gross fair market value of an asset shall be determined without
regard to any liabilities associated with that asset.
(iv) A
“Change of Control” shall not be deemed to occur (A) by
virtue of the consummation of any transaction or series of
integrated transactions immediately following which the holders of
the common stock of the Company immediately prior to such
transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which
owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions,
and (B) as a result of any primary or secondary offering of Company
common stock to the general public through a registration statement
filed with the Securities and Exchange Commission.
11. Prevailing Party’s Litigation
Expenses. In the event of litigation between the Company and
Executive related to this Agreement, the non-prevailing party shall
reimburse the prevailing party for any costs and expenses
(including, without limitation, attorneys’ fees) reasonably
incurred by the prevailing party in connection
therewith.
12. Withholding. All amounts
payable to Executive hereunder shall be subject to required payroll
deductions and tax withholdings.
13. Adjudication of
Agreement.
(a) If any court or
arbitrator of competent jurisdiction holds that any restriction
imposed upon Executive by this Agreement exceeds the limit of
restrictions that are enforceable under applicable law, the parties
desire and agree that the restriction will apply to the maximum
extent that is enforceable under applicable law, agree that the
court or arbitrator so holding may reform and enforce the
restriction to the maximum extent that is enforceable under
applicable law, and desire and request that the court or arbitrator
do so.
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(b) If any court or
arbitrator of competent jurisdiction holds that any provision of
this Agreement is invalid or unenforceable, the parties desire and
agree that the remaining parts of this Agreement will nevertheless
continue to be valid and enforceable.
14. Modification or Waiver of
Agreement. No modification or waiver of this Agreement will
be valid unless the modification or waiver is in writing and signed
by both of the parties. The failure of either party at any time to
insist upon the strict performance of any provision of this
Agreement will not be construed as a waiver of the right to insist
upon the strict performance of the same provision at any future
time.
15. Notices. Any notices required
or permitted under this Agreement will be sufficient if in writing
and sent by certified mail to, in the case of Executive, the last
address he has filed in writing with the Company or, in the case of
the Company, its principal office.
16. Opportunity to Consider Agreement;
Legal Representation. Executive acknowledges that he has had
a full opportunity to consider this Agreement, to offer suggested
modifications to its terms and conditions, and to consult with an
attorney of his own choosing before deciding whether to sign
it.
17. No Rule of Strict Construction.
The language of this Agreement has been approved by both parties,
and no rule of strict construction will be applied against either
party.
18. Entire Agreement. This
Agreement contains all of the agreements between the parties
relating to Executive’s employment with the Company. The
parties have no other agreements relating to Executive’s
employment, written or oral. This Agreement supersedes all other
agreements, arrangements, and understandings relating to
Executive’s employment, and no such agreements, arrangements,
or understandings are of any force or effect. The parties will
execute and deliver to each other any and all such further
documents and instruments, and will perform any and all such other
acts, as reasonably may be necessary or proper to carry out or
effect the purposes of this Agreement.
19. Assignment of Agreement.
Executive has no right to transfer or assign any or all of his
rights or interests under this Agreement. The Company may assign
its rights and interests under this Agreement to any successor
entity as part of any sale, transfer, or other disposition of all
or substantially all of the assets of the Company.
20. Headings. The descriptive
headings of the paragraphs and subparagraphs of this Agreement are
intended for convenience only, and do not constitute parts of this
Agreement.
21. Counterparts. This Agreement
may be executed simultaneously in two or more counterparts, each of
which will be deemed an original, but all of which together will
constitute one and the same instrument.
22. Choice of Forum. The parties
agree that the proper and exclusive forum for any action or
arbitration arising out of or relating to this Agreement or arising
out of or relating to Executive’s employment by the Company
will be Maricopa County, Arizona, and that any such action or
arbitration will be brought only in Maricopa County, Arizona.
Executive consents to the exercise of personal jurisdiction in any
such action or arbitration by the courts or arbitrators of Maricopa
County, Arizona.
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23. Governing Law. This Agreement
will be construed in accord with and any dispute or controversy
arising from any breach or asserted breach of this Agreement will
be governed by the laws of the State of Arizona, without reference
to the choice of law principles thereof.
[Signatures Page Follows]
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IN WITNESS WHEREOF, the parties have
executed this Agreement on the dates indicated at their respective
signatures below.
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DATED this 12th day of August,
2020.
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/s/ Xxxxxxx X. Xxxxxxxxx |
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Xxxxxxx X.
Xxxxxxxxx
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DATED this 12th day of August,
2020.
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Rivulet Media, Inc., a Delaware corporation |
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By:
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/s/ Xxxxxxx X. Xxxxxxxxx |
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Xxxxxxx X.
Xxxxxxxxx, President & CFO
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EXHIBIT A
Acknowledgement Regarding Confidential Information and Works
Subject to the
Agreement. In the event of a conflict between this acknowledgement
and the
Agreement, the Agreement shall control.
1. Confidential Information.
A. Company Information. I agree at all
times during the term of my employment and thereafter, to hold in
strictest confidence, and not to use, except for the benefit of the
Company to fulfill my employment obligations, or to disclose to any
person, firm or corporation without written authorization of the
President, any Confidential Information of the Company. I
understand that “Confidential
Information” means any non-public information that
relates to the actual or anticipated business or research and
development of the Company, technical data, trade secrets or
know-how, including, but not limited to, research, product plans or
other information regarding the Company's products or services and
markets therefor, customer lists and customers (including, but not
limited to, customers of the Company on whom I called or with whom
I became acquainted during the term of my employment),
developments, inventions, processes, formulas, technology, designs,
drawings, engineering, marketing, finances, ideas, artwork, plans,
documents, concepts, inventions, trademark and copyright
applications, improvements, specifications, drawings, cost data,
process flow diagrams, customer and supplier lists, bills, other
business information and/or any other written material referring to
same. I further understand that Confidential Information does not
include any of the foregoing items which have become publicly known
and made generally available through no wrongful act of mine or of
others who were under confidentiality obligations as to the item or
items involved or improvements or new versions
thereof.
B. Former Employer Information. I agree
that I will not, during my employment with the Company, improperly
use or disclose any proprietary information or trade secrets of any
former or concurrent employer or other person or entity and that I
will not bring onto the premises of the Company any unpublished
document or proprietary information belonging to any such employer,
person or entity unless consented to in writing by such employer,
person or entity.
C. Third Party Information. I recognize
that the Company has received and in the future will receive from
third parties their confidential or proprietary information subject
to a duty on the Company's part to maintain the confidentiality of
such information and to use it only for certain limited purposes. I
agree to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm
or corporation or to use it except as necessary in carrying out my
work for the Company consistent with the Company's agreement with
such third party.
2. Works.
A. Prior Works. If in the course of my
employment with the Company, I incorporate into a Company product,
process or service a prior work owned by me or in which I have an
interest, I hereby grant to the Company a nonexclusive,
royalty-free, fully paid-up, irrevocable, perpetual, worldwide
license to make, have made, modify, use and sell such prior work as
part of or in connection with such product, process or service, and
to practice any method related thereto.
B. Assignment of Works. I agree that I
will promptly make full written disclosure to the Company, will
hold in trust for the sole right and benefit of the Company, and
hereby assign to the Company, or its designee, all my right, title,
and interest in and to any and all inventions, original works of
authorship, developments, ideas, concepts, improvements, designs,
discoveries, ideas, trademarks or trade secrets, whether or not
patentable or registrable under copyright or similar laws, which I
may solely or jointly conceive or develop or reduce to practice, or
cause to be conceived or developed or reduced to practice, during
the period of time I am in the employ of the Company (collectively
referred to as “Works”). I further acknowledge
that all original works of authorship which are made by me (solely
or jointly with others) within the scope of and during the period
of my employment with the Company and which are protectable by
copyright are “works made for hire,” as that term is
defined in the United States Copyright Act. I understand and agree
that the decision whether or not to commercialize or market any
invention developed by me solely or jointly with others is within
the Company's sole discretion and for the Company's sole benefit
and that no royalty will be due to me as a result of the Company's
efforts to commercialize or market any such invention.
C. Works Assigned to the United States. I
agree to assign to the United States government all my right,
title, and interest in and to any and all Works whenever such full
title is required to be in the United States by a contract between
the Company and the United States or any of its
agencies.
D. Maintenance of Records. I agree to keep
and maintain adequate and current written records of all Works made
by me (solely or jointly with others) during the term of my
employment with the Company. The records will be in the form of
notes, sketches, drawings, and any other format that may be
specified by the Company. The records will be available to and
remain the sole property of the Company at all times.
E. Patent and Copyright Registrations. I
agree to assist the Company, or its designee, at the Company's
expense, in every proper way to secure the Company's rights in the
Works and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto in any and all
countries, including the disclosure to the Company of all pertinent
information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments and all other
instruments which the Company shall deem necessary in order to
apply for and obtain such rights and in order to assign and convey
to the Company, its successors, assigns, and nominees the sole and
exclusive rights, title and interest in and to such Works, and any
copyrights, patents, mask work rights or other intellectual
property rights relating thereto. I further agree that my
obligation to execute or cause to be executed, when it is in my
power to do so, any such instrument or papers shall continue after
the termination of this Agreement. If the Company is unable because
of my mental or physical incapacity or for any other reason to
secure my signature to apply for or to pursue any application for
any United States or foreign patents or copyright registrations
covering Works or original works of authorship assigned to the
Company as above, then I hereby irrevocably designate and appoint
the Company and its duly authorized officers and agents as my agent
and attorney in fact, to act for and in my behalf and stead to
execute and file any such applications and to do all other lawfully
permitted acts to further the prosecution and issuance of letters
patent or copyright registrations thereon with the same legal force
and effect as if executed by me.
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