EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT,
dated as
of June 4, 2007, by and Green Screen Interactive Software, LLC, formerly Green
Screen, LLC, a Delaware limited liability company with its offices at 000
Xxxxxxxx - 0xx
Xxxxx,
Xxx Xxxx, XX 00000 (“Employer”),
and
Xxxxx X. Xxxxxx, an individual having an address at 000 Xxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxx, Xxx Xxxx 00000 (“Senior
Executive”
or
“Executive”).
In
consideration of the premises and the mutual promises and covenants herein
contained and for other good and valuable consideration, the parties agree
as
follows:
1.
Term
of Employment.
Executive’s employment under this Employment Agreement shall commence on August
16, 2007 (the “Commencement
Date”)
and
will expire on June 15, 2010 (the “Employment
Term”).
2.
Position.
(a) Executive
shall serve as the Chief Financial Officer of Employer.
(b)
The
Executive shall have such management and oversight responsibilities and
authority as are necessary to efficiently administer the general financial
affairs of the Employer and such other further reasonably related duties, powers
and prerogatives as Employer management may delegate to Executive from time
to
time. The Executive shall report to the President of Employer, currently Xxxx
Xxxxxxx.
(c) During
the Employment Term, Executive shall devote substantially all of his business
time and efforts to the performance of his duties hereunder.
3. Base
Salary.
During
the first 12 months of the Employment Term, Employer shall pay Executive a
base
salary at the annual rate of not less than $250,000. During the second 12 months
of the Employment Term, Employer shall pay Executive a base salary of not less
than $265,000. After the first 24 months of the Employment Term, Employer shall
pay Executive a base salary of not less than $285,000. Base salary shall be
payable in each case in accordance with the usual payroll practices of Employer
and shall be subject to review from time to time by Employer for increases.
The
base salary as determined as aforesaid from time to time shall constitute
“Base
Salary”
for
purposes of this Employment Agreement.
4. Other
Compensation.
(a) Bonus.
In
addition to his Base Salary Executive shall receive a bonus of at least $50,000
per 12 month period, starting on the date of this Employment Agreement, paid
$12,500 per quarter (paid with the payroll following September 4, December
4,
March 4 and June 4) based on milestones to be agreed upon by Executive and
Employer’s President. In addition, Executive shall receive a one time bonus of
$35,000 upon the closing of the second round of financing of the Employer if
the
amount of such round of financing is at least $40,000,000 (the “Financing
Bonus”).
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(b) Equity.
Equity
grants to Executive are as described in the 2nd
Amended
and Restated Limited Liability Company Agreement of Green Screen Interactive
Software, LLC, effective as of April 1, 2007, as may be amended from time to
time (the “LLC
Agreement”),
namely 24,000 Incentive Units, subject to Board approval and Executive executing
the LLC Agreement. After such events occur, vesting shall be deemed to have
started as of June 4, 2007 in accordance with the LLC Agreement..
(c) Car
Allowance. Employer
shall reimburse Executive up to $500 per month for expenses associated with
his
automobile, exclusive of parking. Company shall also reimburse Executive for
parking when Executive drives to Employer’s headquarters in New York City.
5.
Employee
Benefits and Vacation.
(a) During
the Employment Term, beginning with the Commencement Date, Executive shall
be
entitled to participate in all pension, retirement, savings, welfare and other
employee benefit plans and arrangements, such as medical insurance and a 401(k)
program, in the event Employer establishes such program and fringe benefits
and
perquisites generally maintained by Employer from time to time for the benefit
of the senior executives of Employer.
(b) During
the Employment Term, Executive shall be entitled to vacation each year in
accordance with Employer’s policies as may be in effect from time to time, but
in no event less than four (4) weeks paid vacation per calendar year. Executive
shall also be entitled to such periods of sick leave as is customarily provided
by Employer for its senior executive employees.
6. Business
Expenses.
Employer shall reimburse Executive for the travel, entertainment, professional
dues and fees and other business expenses incurred by Executive in the
performance of his duties hereunder, in accordance with Employer’s policies as
may be in effect from time to time.
7. Termination.
(a) Notwithstanding
anything to the contrary which may be contained in this Employment Agreement,
Executive’s employment is at will, subject to the terms and conditions of this
Employment Agreement. Employer may terminate the Executive’s employment at any
time for any reason or no reason. If the Executive’s employment is terminated by
Employer without Cause, but not in connection with a Change of Control event,
the Executive will receive an amount equal to the last six months of Base Salary
paid (or owing) to him prior to such termination plus the amount of bonuses
paid
to Executive during such six month period (excluding the Financing Bonus) and
full benefits for such six month period that existed at the time of termination.
Such amount shall be paid to Executive in equal installments over six months,
paid in accordance with Employer’s then current payroll schedule. “Cause”
is
defined as, during the Employment Term,
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(i)
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the
refusal of Executive to follow the proper written direction of the
Board
of Managers of Employer (the “Board”),
provided that the foregoing refusal shall not be “Cause” if Executive in
good faith believes that such direction is illegal, unethical or
immoral
and promptly so notifies the Board;
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(ii)
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substantial
and continuing willful refusal by Executive to perform the duties
required
of him hereunder (other than any such failure resulting from incapacity
due to physical or mental illness) after a written demand for substantial
performance is delivered to Executive by the Board or its the Chairman,
specifically identifying the manner in which it is believed that
Executive
has substantially and continually refused to attempt to perform his
duties
hereunder;
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(iii)
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Executive
being convicted of a felony (other than a felony involving a motor
vehicle);
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(iv)
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the
substantial breach by Executive of any material fiduciary duty owed
by
Executive to Employer, as determined by Employer, in its reasonable
discretion, or
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(v)
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Executive’s
misappropriation or fraud with regard to Employer (other than good
faith
expense account disputes).
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(b) During
the Employment Term, in the event Executive is terminated as a result of Change
of Control of Employer, or if, in connection with any Change of Control,
Executive’s duties are diminished below those of the Chief Financial Officer or
materially diminished below those that he had in the month prior to the Change
of Control and Executive resigns due to such diminution of duties, Executive
shall receive severance equal to his Base Salary for the 12 months preceding
such termination plus the amount of bonuses paid to Executive during such 12
month period, plus full benefits for one year from the date of his termination.
“Change
of Control”
is
defined as (i) the acquisition by any person, entity or group of beneficial
ownership of more than fifty percent of either the outstanding membership units
of Employer or the combined voting power of the then outstanding voting
securities of Employer entitled to vote generally in the election of directors;
(ii) upon a merger or consolidation of Employer with any other corporation
or
company, which results in the equity holders of Employer prior thereto
continuing to represent less than 50 percent of the combined voting power of
the
voting securities of the Employer or the surviving entity after the merger;
or
(iii) upon the sale of all, or substantially all, of the assets of Employer.
8.
Confidentiality/Noncompetition.
(a)
Employer and Executive acknowledge and agree that the services to be provided
by
Executive pursuant to this Employment Agreement are unique and extraordinary
and, as a result of such employment, Executive will be in possession of
confidential information relating to the business practices of Employer. The
term “confidential
information”
shall
mean any and all information (verbal and written) relating to the Employer
or
any of its affiliates, or any of their respective activities, other than general
business practices not unique to the Employer but commonly practiced in the
interactive entertainment industry and such information which can be shown
by
the Executive to be in the public domain or otherwise know to the public other
than as a result of a breach of this Section 8, including but not limited to
information relating to trade secrets, personnel lists, financial information,
research projects, services used, pricing, customers, customer lists and
prospects, product sourcing, marketing, selling and servicing. Employee agrees
that he will not, during or after the termination of employment, directly or
indirectly, use, communicate, disclose or disseminate to any person, firm or
corporation any confidential information of the Employer acquired by Executive
during his employment by Employer, except by court order or judicial mandate.
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(b)
Executive agrees that he shall not, during the period of his employment and
for
one year thereafter, knowingly directly or indirectly take any action which
constitutes an interference with or a disruption of any of Employer’s business
activities, including without limitation, solicitations of Employer’s customers
or employees. For purposes of clarification, but not of limitation, Executive
acknowledges and agrees that the provisions of this Section 8 shall prohibit
him
from knowingly directly or indirectly hiring, offering to hire, enticing,
soliciting or in any manner persuading or attempting to persuade any officer,
employee, agent, lessor, lessee, licensor, licensee or customer who has been
previously contacted by a representative of the Employer known by the Executive,
including the Executive, to discontinue or alter his, her or its relationship
with the Employer.
(c)
Executive
agrees that he shall not, during the period of his employment and for one year
thereafter following such employment, directly or indirectly, engage, have
an
interest in or render any services to any business (whether as an owner,
manager, operator, licensor, licensee, lender, partner, stockholder, joint
venturer, employee, consultant or otherwise) knowingly competitive with
Employer’s business activities. This provision shall not apply in the event
Executive is no longer receiving a least his Base Salary from
Employer.
9. Developments.
If at
any time or times during Executive’s employment or during his, if Executive
shall (either alone or with others) make, conceive, create, discover, invent
or
reduce to practice any development, including any invention, modification,
discovery, design, development, improvement, process, software program, work
of
authorship, documentation, formula, data, technique, know-how, trade secret
or
intellectual property right whatsoever or any interest therein, whether or
not
patentable or registrable under copyright, trademark or similar statutes
(including but not limited to the Semiconductor Chip Protection Act) or subject
to analogous protection that: (a) relates to the actual or anticipated business
of the Employer or any customer of or supplier to the Employer or any of the
existing or future products or services being developed, manufactured or sold
by
the Employer or which may be used in relation therewith; or (b) results
from tasks assigned to Executive by the Employer; or (c) results from the
use of premises or personal property (whether tangible or intangible) owned,
leased or contracted for by the Employer, then all such developments and the
benefits thereof, including any moral rights related thereto, are and shall
immediately become the sole and absolute property of the Employer and its
assigns, as works made for hire or otherwise. Executive shall promptly disclose
to the Board of Mangers of the Employer (or any persons designated by it) each
such development. Executive hereby assigns all rights (including, but not
limited to, rights to inventions, patentable subject matter, copyrights and
trademarks) Executive may acquire in the developments and all benefits and/or
rights resulting therefrom to the Employer and its assigns without further
compensation and shall communicate, without cost or delay, and without
disclosing to others the same, all available information relating thereto (with
all necessary plans and models) to the Employer.
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10. Miscellaneous. (a) Governing
Law/Venue. This
Employment Agreement shall be governed by and construed in accordance with
the
laws of the State of New York without reference to principles of conflict of
laws. Executive agrees to and does hereby submit to the exclusive jurisdiction
before any state or federal court located in New York County, New York in
connection with any claims, disputes or disagreements regarding this Employment
Agreement.
(b)
Entire
Agreement and Amendment. This
Employment Agreement and the instruments contemplated or referred to herein
(including the LLC Agreement), contain the entire understanding of the parties
with respect to the employment of Executive by Employer from and after the
date
hereof and supersede any prior employment agreements between Employer and
Executive. For clarity, the LLC Agreement is not superseded by this Employment
Agreement. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein and therein. This Employment
Agreement may not be altered, modified, or amended except by written instrument
signed by the parties hereto.
(c) No
Waiver. The
failure of a party to insist upon strict adherence to any term of this
Employment Agreement on any occasion shall not be considered a waiver of such
party’s rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Employment Agreement.
Any such waiver must be in writing and signed by Executive or an authorized
officer of Employer, as the case may be.
(d) Assignment. This
Employment Agreement shall not be assignable by Executive. This Employment
Agreement shall be assignable by Employer only to an acquiror of all or
substantially all of the assets of Employer, provided such acquiror promptly
assumes all of the obligations hereunder of Employer in a writing delivered
to
Executive and otherwise complies with the provisions hereof with regard to
such
assumption.
(e) Successors;
Binding Agreement; Third Party Beneficiaries.
This
Employment Agreement shall inure to the benefit of and be binding upon the
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees legatees and permitted assignees of the parties hereto.
(f)
Communications. For
the
purpose of this Employment Agreement, notices and all other communications
provided for in this Employment Agreement shall be in writing and shall be
deemed to have been duly given (i) when hand delivered, or (ii) two business
days after being mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth on the initial page of this Employment Agreement, provided that all
notices to Employer shall be directed to the attention of the General Counsel
of
Employer, or to such other address as any party may have furnished to the other
in writing in accordance herewith. Notice of change of address shall be
effective only upon receipt.
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(g)
Withholding
Taxes. Employer
may withhold from any and all amounts payable under this Employment Agreement
such federal, state and local taxes as may be required to be withheld pursuant
to any applicable law or regulation.
(h) Survivorship. The
respective rights and obligations of the parties hereunder shall survive any
termination of Executive’s employment to the extent necessary to the agreed
preservation of such rights and obligations.
(i) Counterparts. This
Employment Agreement may be signed in counterparts, each of which shall be
an
original, with the same effect as if the signatures thereto and hereto were
upon
the same instrument.
(j) Headings.
The
headings of the sections contained in this Employment Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Employment Agreement.
(k) Mutual
Representation. Both
parties represent and warrant to each other that there is no legal impediment
to
them performing their obligations under this Employment Agreement and neither
entering into this Employment Agreement nor performing their contemplated
service hereunder will violate any agreement to which they are a party or any
other legal restriction.
(l) Independent
Contractor. Executive
and Employer acknowledge and agree that for the period from June 4, 2007 through
August 15, 2007 (the “Independent
Contractor Period”),
Executive will act as an independent contractor for Employer, performing various
financial functions for Employer. During this period, Executive shall devote
not
less than 30 hours per week to Employer and Employer shall pay Executive at
the
weekly rate of $2,884.62. No withholdings shall be taken from such amount and
Employer shall file a 1099 with the Internal Revenue Service in connection
with
Executive’s consulting work for Employer during such period. All references to
Executive’s employment period in Sections 8 and 9 of this Employment Agreement
shall be deemed to include the Independent Contractor Period.
ACCEPTED
AND AGREED.
GREEN
SCREEN INTERACTIVE
SOFTWARE,
LLC
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By:
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/s/
Xxxx Xxxxx
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Xxxx
Xxxxx
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Chairman
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Xxxxx
X. Xxxxxx
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