EXHIBIT 10.18
Xxxxx Dead, Inc.
0000 Xxxxxxx Xx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Employment Agreement dated as of October 15, 2002, between Xxxxx Dead, INC., a
Delaware corporation (with its successors and assigns, referred to as the
"Corporation"), and XXXXX X. XXXXXXX (hereinafter referred to as "Xxxxxxx").
XXXXXXX and the Corporation therefore agree as follows:
1. Term of Employment. The Corporation hereby employs XXXXXXX and XXXXXXX
hereby accepts employment with the Corporation for the period (the "Term")
commencing on the date hereof (the "Commencement Date"), and ending on the third
anniversary of the successful completion of the Corporation's initial public
offering (the "IPO") or upon the earlier termination of the Term pursuant to
this Agreement. The Term may be extended upon mutual agreement by the parties.
The termination of the Term for any reason shall end XXXXXXX'x employment under
this Agreement, but, except as otherwise set forth herein, shall not terminate
XXXXXXX'x or the Corporation's other agreements in this Agreement.
2. Position and Duties. During the Term, XXXXXXX shall serve as Chairman
of the Board, Chief Executive Officer and Chief Financial Officer of the
Corporation. XXXXXXX shall also hold such additional positions and titles as the
Board of Directors of the Corporation and XXXXXXX mutually determine from time
to time. XXXXXXX shall report to the Board of Directors. During the Term,
XXXXXXX shall not be required to devote his full time and attention to
performing his duties as an employee of the Corporation, but shall devote such
time as is reasonably necessary for him to perform his duties hereunder.
3. Compensation. The Corporation shall pay XXXXXXX cash compensation of
$150,000 per Term, such compensation to be paid ratably over the Term. Subject
to the provisions of Section 7, in the event the Term ends prior to its
full-length, all remaining cash compensation shall be accelerated and paid.
4. Credit. Subject to XXXXXXX completing all material services hereunder,
XXXXXXX will receive a screen credit as "Chief Executive Officer, Xxxxx Dead
Inc.", or other such credit as deemed appropriate by the producers acting in
good faith. Placement of such credit will be determined at the discretion of the
producers.
5. Employee Benefits. The Corporation will not pay or make available any
employee benefits to XXXXXXX, including vacation, pension or retirement plan
contributions or health or life insurance plans.
6. Expenses. During the Term, the Corporation shall reimburse XXXXXXX for
actual out-of-pocket expenses incurred by him in the performance of his services
for the Corporation upon the receipt of appropriate documentation of such
expenses.
7. Termination.
(a) General. The Term shall end immediately upon XXXXXXX'x
resignation, his death or Disability, as defined in Section 8, or
termination by the Corporation for Cause. Upon termination of the Term due
to XXXXXXX'x resignation, death, Disability or for Cause, all
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compensation due under this Agreement will cease. Upon the Corporation's
termination of the Term for Cause, XXXXXXX shall have ten (10) days to
cure said Cause, if curable.
(b) Notice of Termination. The Corporation shall notify XXXXXXX in
writing of its termination of his employment hereunder. The Corporation's
failure to give notice under this Section 7(b) shall not, however, affect
the validity of the Corporation's termination of the Term.
(c) Termination by the Corporation for Cause. If terminated by the
Corporation for Cause, the Corporation shall describe to XXXXXXX the
grounds for his termination. Upon the Corporation's termination of the
Term for Cause, all compensation due XXXXXXX under this Agreement will
cease.
(d) Termination by the Corporation other than upon Death, Disability
or Cause. In the event that the Corporation terminates its relationship
with XXXXXXX prior to the end of the Term in circumstances other than
Death, Disability or Cause, XXXXXXX shall promptly receive all
compensation payable to him under Section 3.
8. Definitions.
(a) "Cause" Defined. "Cause" means (i) willful malfeasance or
willful misconduct by XXXXXXX in connection with his employment; (ii) XXXXXXX'x
gross negligence in performing any of his duties under this Agreement; (iii)
XXXXXXX'x conviction of, or entry of a plea of guilty to, or entry of a plea of
nolo contendere with respect to, any felony; (iv) XXXXXXX'x habitual drunkenness
or excessive absenteeism not related to illness; (iv) XXXXXXX'x material breach
of any written policy applicable to all employees adopted by the Corporation; or
(i) material breach by XXXXXXX of any of his agreements in this Agreement.
(b) "Disability" Defined. "Disability" shall mean XXXXXXX'x
incapacity due to physical or mental illness that results in his being unable to
substantially perform his duties hereunder for six consecutive months (or for
six months out of any nine-month period). Upon termination, after the end of the
period of Disability, all compensation due XXXXXXX under this Agreement shall
cease.
9. Stock Purchase. Simultaneously herewith, XXXXXXX has purchased 144,000
shares of the Corporation's Common Stock from the Corporation's former Chief
Executive Officer, Xxxxxxx Xxxx, for the sum of $144 (the "Shares"). The
Corporation will have the right to repurchase all of the Shares for fair market
value, to be determined by the board of directors and ratified by a majority of
outside directors ("FMV"), if XXXXXXX'x employment is terminated prior to the
consummation of the IPO, provided that such right is exercised by the Company
prior to the completion of the IPO. If XXXXXXX'x employment is terminated on or
prior to the first anniversary of the completion of the IPO, the Corporation
will have the right to repurchase 75% of the Shares at FMV, provided that such
right is exercised by the Company prior to such first anniversary. If XXXXXXX'x
employment is terminated prior to the second anniversary of the completion of
the IPO, the Corporation will have the right to repurchase 50% of the Shares at
FMV, provided that such right is exercised by the Company prior to such second
anniversary. If XXXXXXX'x employment is terminated prior to the third
anniversary of the completion of the IPO, the Corporation will have the right to
repurchase 25% of the Shares at FMV, provided that such right is exercised by
the Company prior to such third anniversary. The Corporation shall not have any
repurchase rights if XXXXXXX remains employed by the Corporation as of the third
anniversary of the IPO or if his employment is terminated by the Corporation at
any time prior thereto without Cause.
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10. Director's Shares. The Corporation also has issued shares of the
Company's Common Stock to XXXXXXX for cash consideration. Such shares are
subject to certain repurchase rights of the Corporation under a Director's
Agreement between the Corporation and XXXXXXX relating to his service on the
Corporation's Board of Directors.
11. Restrictions on Selling the Corporation's Securities. XXXXXXX agrees
to execute and deliver a share escrow agreement reasonably requested by any
underwriter for the IPO and agrees that a restriction on selling the
Corporation's securities required by any such escrow agreement shall be deemed
reasonable.
12. Confidentiality.
(a) "Corporation Information" Defined. "Corporation Information"
means all information, knowledge or data of or pertaining to (i) the
Corporation, its employees and all work undertaken on behalf of the Corporation,
and (ii) any other person, firm, corporation or business organization with which
the Corporation may do business during the Term, that is not in the public
domain (and whether relating to methods, processes, techniques, discoveries,
pricing, marketing or any other matters).
(b) Confidentiality. XXXXXXX hereby recognizes that the value of all
trade secrets and other proprietary data and all other information of the
Corporation not in the public domain disclosed by the Corporation in the course
of his employment with the Corporation is attributable substantially to the fact
that such confidential information is maintained by the Corporation in strict
confidentiality and secrecy and would be unavailable to others without the
expenditure of substantial time, effort or money. XXXXXXX therefore, except as
provided in the next two sentences, covenants and agrees that all Corporation
Information shall be kept secret and confidential at all times during and after
the end of the Term and shall not be used or divulged by him outside the scope
of his employment as contemplated by this Agreement, except as the Corporation
may otherwise expressly authorize by action of the Board. In the event that
XXXXXXX is requested in a judicial, administrative or governmental proceeding to
disclose any of the Corporation Information, XXXXXXX will promptly so notify the
Corporation so that the Corporation may seek a protective order or other
appropriate remedy and/or waive compliance with this Agreement. If disclosure of
any of the Corporation Information is required, XXXXXXX may furnish the material
so required to be furnished, but XXXXXXX will furnish only that portion of the
Corporation Information that legally is required.
13. Restrictive Covenants. XXXXXXX hereby confirms that since it is
reasonably necessary to protect the Corporation's goodwill, agrees that he will
not directly or indirectly (except where authorized by the Board for the benefit
of the Corporation), for or on behalf of himself or any Person (hereinafter
defined):
(i) at any time during his tenure as an officer, director, employee or
consultant of the Corporation act as or be an officer, director, stockholder,
consultant or advisor, partner or employee of, or render any service for, or
have any profit-sharing or other interest in, or lend money or make any other
financial accommodation for or on behalf of, or undertake any business
transaction with, any Person that engages in or is planning or preparing to
engage, directly or indirectly, in competition with the Corporation or any
corporate affiliate of the Corporation, where "competition" shall mean only the
production or distribution of the Picture (a "Competitive Activity"), except
that he may hold securities that are part of a publicly traded class of
securities (not in excess of 5% of the outstanding total of any class of such
securities) in competitive concerns so long as he discloses such holding to the
Corporation; or
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(ii) at any time during his tenure as an officer, director, employee or
consultant of the Corporation and for a period of two years after he is no
longer any of an officer, director, employee or consultant for any reason,
engage in or plan or prepare to engage in any Competitive Activity;
(iii) at any time during his tenure as an officer, director, employee or
consultant of the Corporation and for a period of two years after he is no
longer any of an officer, director, employee or consultant for any reason,
employ or otherwise obtain services from, or solicit or otherwise attempt to
employ or otherwise obtain services from, or assist any person in employing or
otherwise obtaining services from, or soliciting or otherwise attempting to
employ or otherwise obtain services from, any person who is then, or at any time
during the preceding twelve months shall have been, in the employ of or retained
by the Corporation and/or its affiliates; or
(ivi) at any time during his tenure as an officer, director, employee or
consultant of the Corporation and for the applicable period thereafter specified
in each of the clauses above, negotiate for or enter into an agreement,
understanding or arrangement, or otherwise cause or authorize any person, to
take any of the actions prohibited by such clause.
As used herein, the term "Person" means any person, corporation, partnership or
other entity.
14. Enforcement. XXXXXXX agrees that any breach or threatened breach by
him of any provision of Sections 12 and 13 will, because of the unique nature of
such services rendered by him to the Corporation and the Corporation Information
entrusted to him as aforesaid, cause irreparable harm to the Corporation, and
shall entitle the Corporation, in addition to any other legal remedies available
to it, to apply to any court of competent jurisdiction to enjoin such breach or
threatened breach, without the need to show irreparable injury or to post any
bond, which are hereby waived by XXXXXXX in any such case. The parties hereto
understand and intend that each restriction agreed to by XXXXXXX hereinabove
shall be construed as separable and divisible from every other restriction, and
the unenforceability, in whole or in part, of any such restriction, shall not
affect the enforceability of the remaining restrictions and that one or more or
all of such restrictions may be enforced in whole or in part as the
circumstances warrant. XXXXXXX further acknowledges that the Corporation is
relying upon such covenants as an inducement to enter into this Agreement.
15. Successors and Assigns.
(a) XXXXXXX. This Agreement is a personal contract, and the rights
and interests that the Agreement accords to XXXXXXX may not be sold,
transferred, assigned, pledged, encumbered, or hypothecated by him. All rights
and benefits of XXXXXXX shall be for the sole personal benefit of XXXXXXX, and
no other person shall acquire any right, title or interest under this Agreement
by reason of any sale, assignment, transfer, claim or judgment or bankruptcy
proceedings against XXXXXXX. Except as so provided, this Agreement shall inure
to the benefit of and be binding upon XXXXXXX and his personal representatives,
distributees and legatees.
(b) The Corporation. This Agreement shall be binding upon the
Corporation and inure to the benefit of the Corporation and of its successors
and assigns.
16. Entire Agreement. This Agreement represents the entire agreement
between the parties concerning XXXXXXX'x employment with the Corporation and
supersedes all prior negotiations, discussions, understandings and agreements,
whether written or oral, between XXXXXXX and the Corporation relating to the
subject matter of this Agreement.
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17. Amendment or Modification; Waiver. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing
signed by XXXXXXX and by a duly authorized officer of the Corporation. No waiver
by any party to this Agreement of any breach by another party of any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of a similar or dissimilar condition or provision at the same
time, any prior time or any subsequent time.
18. Notices. Any notice to be given under this Agreement shall be in
writing and delivered personally or sent by overnight courier or registered or
certified mail, postage prepaid, return receipt requested, addressed to the
party concerned at the address indicated below, or to such other address of
which such party subsequently may give notice in writing:
If to XXXXXXX: Xxxxx X. Xxxxxxx
00000 Xxxxxxxx Xxxxxxxxx, #000
Xxx Xxxxxxx, XX 00000
If to the Corporation: Xxxxx Dead, Inc.
2312 Xxxxxxx Dr. 90068
Attention: Board of Directors
Any notice delivered personally or by overnight courier shall be deemed
given on the date delivered and any notice sent by registered or certified mail,
postage prepaid, return receipt requested, shall be deemed given on the date
mailed.
19. Severability. If any provision of this Agreement or the application of
any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect; instead, it is the intention and desire of both the Corporation and
XXXXXXX that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a restriction
having the maximum enforceable area, time period and such other constraints or
conditions (although not greater than those contained currently contained in
this Agreement) as shall be valid and enforceable under the applicable law.
20. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
21. Headings. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference, and no provision of
this Agreement is to be construed by reference to the heading of any section or
paragraph.
22. Withholding Taxes. All salary, benefits, reimbursements and any other
payments to under this Agreement shall be subject to all applicable payroll and
withholding taxes and deductions required by any law, rule or regulation of and
federal, state or local authority.
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23. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together constitute one and same instrument.
24. Applicable Law; Jurisdiction. The laws of the State of California
shall govern the interpretation, validity and performance of the terms of this
Agreement, without reference to rules relating to conflicts of law. Any suit,
action or proceeding against XXXXXXX with respect to this Agreement, or any
judgment entered by any court in respect thereof, may be brought in any court of
competent jurisdiction in the State of California, as the Corporation may elect
in its sole discretion, and XXXXXXX hereby submits to the exclusive jurisdiction
of such courts for the purpose of any such suit, action, proceeding or judgment.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
/s/ XXXXX X. XXXXXXX
--------------------
(Xxxxx X. Xxxxxxx)
Xxxxx Dead, INC.
By: /s/ XXXXX XXXX
------------------
(Xxxxx Xxxx)
Vice President and Secretary
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