EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this “Agreement”), effective as of July 1, 2010 (“Effective Date”),
between Lions Gate Lighting Corp., a Nevada corporation (the “Company”), and Xxx
Xxxx (the “Employee”).
WHEREAS,
the Board of Directors of the Company (the “Board”) has determined that it is in
the best interests of the Company and its shareholders to employ the Employee in
the position set forth below, and the Employee desires to serve in that
capacity.
NOW,
THEREFORE, in consideration of the foregoing premises, the Company and Employee
hereby agree as follows:
1. Employment Period. The Company
shall employ the Employee, and the Employee shall serve the Company, on the
terms and conditions set forth in this Agreement, for the period commencing on
the date of the Shell Merger and ending three years after such date (the
“Initial Term” and, together with any subsequent term of Employment, the
“Employment Period”). The term of employment hereunder will automatically be
renewed for successive one-year terms (each such term a “Renewal Term”) unless
either party shall, at least 90 days before the last day of the Employment
Period, provide written notice to the other party that the Employment Period
will not be extended.
2. Position,
Duties and Location.
(a) The
Employee shall serve as Chief Financial Officer of the Company, reporting to the
Board, with such duties and responsibilities as are customarily assigned to such
position and such other duties and responsibilities not inconsistent therewith
as may be assigned to him from time to time by the Board.
(b) During
the Employment Period, and excluding any periods of vacation and sick leave to
which the Employee is entitled, the Employee shall devote his full-time efforts
to the business and affairs of the Company and use his best efforts to carry out
such responsibilities faithfully and efficiently. It shall not be considered a
violation of the foregoing for the Employee to (i) serve on corporate, civic or
charitable boards or committees, (ii) deliver lectures or fulfill speaking
engagements, (iii) manage personal investments, or (iv) engage in other business
activities, so long as such activities do not materially interfere with the
performance of his responsibilities as an employee of the Company in accordance
with this Agreement.
(c) Employee
will initially be based at the Company’s U.S. headquarters in or around New
York, New York (the “Initial Headquarters”); provided that the Company
anticipates that its headquarters may be relocated to San Diego, California at
which time Employee will be expected to move to that location.
3.
Compensation.
(a) Base Salary. During the first
contract year of the Initial Term, the Employee shall receive an annual base
salary (the “Annual Base Salary”) of US$179,000, which will be subject to review
and change by the Board at the six month anniversary of the Effective
Date. Thereafter, Employee will receive an annual salary review by
the Board, or an authorized committee thereof, on or before each
anniversary of the Effective Date. The Annual Base Salary shall be
payable in accordance with the Company’s payroll practices as in effect from
time to time. As part of the referenced annual salary review, the Board or an
authorized committee thereof may increase the Annual Base Salary above the
foregoing amounts at its discretion. It is understood that the Annual
Base Salary includes an amount of $9,000 to cover the cost of health insurance
for Employee until the Company offers its employees a Company sponsored
health plan at which time the Annual Base Salary will be reduced by said
amount. On the date hereof, the Employee will be granted five-year
options to purchase 300,000 shares of common stock of the Company at $1.00 per
share. Of these, options to purchase 50,000 shares will vest
immediately. Options to purchase an additional 50,000 shares will
vest on the first anniversary of the Effective Date. The balance will
vest in two equal installments on the second and third anniversary of the
Effective Date.
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(b) Bonus and Other Compensation.
In addition to the Annual Base Salary, the Board (or its designated compensation
committee) may award Employee an annual bonus at its
discretion. Employee will also be eligible to participate in the
Company’s equity compensation plan, if and when adopted. Awards
thereunder will be made to Employee from time to time at the discretion of the
Board (or relevant committee thereof).
(c) Benefits. During the
Employment Period, the Employee and the Employee’s direct family shall be
entitled to participate in all benefit programs of the Company (if and when
available), including, but not limited to, health insurance coverage, as well as
all welfare benefit plans, practices, policies and programs provided by the
Company, including, but not limited to any comprehensive dental plan, retirement
plans and profit sharing programs the Company may provide to other employees
from time to time.
(d) Expenses. During the
Employment Period, the Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Employee in carrying
out the Employee’s duties under this Agreement, provided that the Employee
complies with the policies, practices and procedures of the Company for
submission of expense reports, receipts and similar documentation of such
expenses.
(e) Housing and Relocation
Expenses. The Company will
reimburse Employee for reasonable rent paid for suitable accommodations during
Employee’s work at the Initial Headquarters for a period of up to twelve (12)
months. The Company will also reimburse Employee for reasonable
expenses incurred in relocating to the Initial Headquarters and any subsequent
relocations at the request of the Company. All reimbursable expenses
set forth in this paragraph will be subject to the Company’s prior
approval.
(f) Vacation. During the
Employment Period, the Employee shall be entitled to a paid annual vacation of
four weeks and other fringe benefits on such terms and conditions as may be
determined by the Board or authorized committee thereof from time to
time.
4. Termination
of Employment.
(a) Death or Disability. The
Employee’s employment shall terminate automatically upon the Employee’s death
during the Employment Period. The Company shall be entitled to terminate the
Employee’s employment because of the Employee’s Disability during the Employment
Period. “Disability” means that (i) the Employee has been unable, for a period
of two (2) consecutive months in any given twelve (12) month period, to perform
the Employee’s duties under this Agreement, as a result of physical or mental
illness or injury, and (ii) a physician selected by the Company or its insurers,
and acceptable to the Employee or the Employee’s guardian or legal
representative, has determined that the Employee’s incapacity is total and
permanent. A termination of the Employee’s employment by the Company for
Disability shall be communicated to the Employee by written notice, and shall be
effective on the 60th day after receipt of such notice by the Employee (the
“Disability Effective Date”), unless the Employee is able to, and does, return
to full-time performance of the Employee’s duties before the Disability
Effective Date.
(b) By
the Company.
(A) The
Company may terminate the Employee’s employment during the Employment Period for
Cause or without Cause. “Cause” means:
(i) Employee
having, in the reasonable judgment of the Company, committed an act which if
prosecuted and resulting in a conviction would constitute a fraud, embezzlement,
or any felonious offense (specifically excepting simple misdemeanors not
involving acts of dishonesty and all traffic violations);
(ii)
the Employee’s theft, embezzlement, misappropriation of or intentional and
malicious infliction of damage to the Company’s property or business
opportunity;
(iii)
the Employee’s repeated abuse of alcohol, drugs or other substances as
determined by an independent medical physician; or
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(iv)
the Employee’s engagement in dereliction of duties, refusal to perform
assigned duties consistent with his position, his knowing and willful breach of
any material provision of this Agreement continuing after written notice from
the Company or repeated violation of the Company’s written policies after
written notice.
(B) A
termination of the Employee’s employment by the Company for Cause shall be
effectuated by giving the Employee written notice (“Notice of Termination for
Cause”) of the termination, setting forth the conduct of the Employee that
constitutes Cause. Termination of employment by the Company for Cause shall be
effective on the date when the Notice of Termination for Cause is given, unless
the notice sets forth a later date (which date shall in no event be later than
60 days after the notice is given). Employee will be immediately advised of
any allegations of conduct covered by clause (A) above and will be provided a
period of fifteen (15) days from the date of the written notice to defend
himself against such allegations and to take any appropriate remedial action. If
Employee shows that the allegations are untrue or takes appropriate remedial
action to address the allegations, the Company will not terminate the Employee’s
employment for Cause.
(C) A
termination of the Employee’s employment by the Company without Cause shall be
effected by giving the Employee written notice of the termination at least 3
months (90 days) prior to the termination date.
(c) By
the Employee.
(A) The
Employee may terminate employment with or without Good Reason. “Good Reason”
means:
(i) the
assignment to the Employee of any duties inconsistent in any respect with
paragraph (a) of Section 2 of this Agreement, other than actions that are not
taken in bad faith and are remedied by the Company within thirty (30) days after
receipt of notice thereof from the Employee;
(ii) any
failure by the Company to comply with any provision of Section 3 of this
Agreement, other than failures that are not taken in bad faith and are remedied
by the Company within thirty (30) days after receipt of notice thereof from the
Employee;
(iii) the
occurrence of a Non-Negotiated Change in Control of the Company (as defined
below); or
(iii) the
Company’s material breach of this Agreement.
For
purposes of this Agreement, “Non-Negotiated Change in Control” means any one or
more of the following occurrences:
(x) Any
individual, corporation (other than the Company, any trustees or other
beneficiary holding securities under any employee benefit plan of the Company,
or any company owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of stock of the
Company), partnership, trust, association, pool, syndicate, or any other entity
or any group of persons acting in concert becomes the beneficial owner (within
the meaning of Rule 1 3d-3 under the Securities Exchange Act of 1934) of
securities of the Company possessing more than fifty percent (50%) of the voting
power for the election of directors of the Company;
(y) There
shall be consummated any consolidation, merger, or other business combination
involving the Company or the securities of the Company in which holders of
voting securities of the Company immediately prior to such consummation own, as
a group, immediately after such consummation, voting securities of the Company
(or, if the Company does not survive such transaction, voting securities of the
entity surviving such transaction) having less than fifty percent (50%) of the
total voting power in an election of directors of the Company (or such other
surviving corporation); or
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(z) There
shall be consummated any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company (on a consolidated basis) to a party which is not
controlled by or under common control with the Company.
(d) A
termination of employment by the Employee for Good Reason shall be effectuated
by giving the Company written notice (“Notice of Termination for Good Reason”)
of the termination, setting forth the event that constitutes Good Reason. A
termination of employment by the Employee for Good Reason shall be effective on
the fifth business day following the date when the Notice of Termination
for Good Reason is given, unless the notice sets forth a later date (which date
shall in no event be later than 30 days after the notice is given).
(e) A
termination of the Employee’s employment by the Employee without Good Reason
shall be effected by giving the Company written notice of the termination at
least thirty (30) days prior to the termination date.
(f) Notwithstanding
anything in this Agreement to the contrary, in no event will any amount which
otherwise would be payable under or pursuant to this Agreement be payable to
Employee to the extent such amount, together with all other amounts payable and
benefits provided to Employee under or pursuant to this Agreement and/or under
any other plan(s), agreements and/or arrangement(s) arising out of Employee’s
employment relationship with Company and/or any direct or indirect subsidiary of
Company (including without limitation any such amounts payable by any affiliate
of Company or any acquirer of any of the stock or assets of Company or any
affiliate of such acquirer), if paid to Employee, would result in Employee
receiving an “excess parachute payment” for purposes of Section 280G of the
Internal Revenue Code of 1986, as amended. The determination of whether a
payment under or pursuant to this Agreement would result in Employee receiving
an excess parachute payment (but for the provisions of this Section 4) shall be
made by counsel for the Company.
(g) No Waiver. The failure to set
forth any fact or circumstance in a Notice of Termination for Cause or a Notice
of Termination for Good Reason shall not constitute a waiver of the right to
assert, and shall not preclude the party giving notice from asserting, such fact
or circumstance in an attempt to enforce any right under or provision of this
Agreement.
(h) Date of Termination. The “Date
of Termination” means the date of the Employee’s death, the Disability Effective
Date, the date on which the termination of the Employee’s employment by the
Company for Cause or by the Employee for Good Reason is effective, or the date
described in Section 4(b)(C) above in the event the Company gives the Employee
notice of a termination of employment without Cause or the date described in
Section 4(e) above in the event the Employee gives the Company notice of a
termination of employment without Good Reason, as the case may be.
5. Obligations
of the Company upon Termination.
(a) Termination for Reasons Other Than
for Cause, Death or Disability, or Good Reason. If, during the Employment
Period, the Company terminates the Employee’s employment, for any reason other
than for Cause, Death or Disability, or the Employee terminates his employment
for Good Reason, the Company shall (i) pay Employee’s accrued but unpaid portion
of the Annual Base Salary (the “Accrued Obligations”) to the Employee in a lump
sum in cash within twenty (20) days after the Date of Termination, (ii) continue
to pay (in periodic intervals consistent with Company’s regular payroll
practices) pay the Annual Base Salary for the remainder of the Employment
Period, and (iii) if the termination takes place for Good Reason as a result of
a Non-Negotiated Change in Control, the Company will pay the Employee two (2)
times the Annual Base Salary in a lump sum in cash within thirty (30) days after
the Date of Termination and permit all unvested options granted hereunder to be
vested immediately.
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(b) Termination as a Result of
Employee’s Death or Disability. If the
Employee’s employment is terminated by reason of the Employee’s death or
Disability during the Employment Period, (i) the Company shall pay the Accrued
Obligations to the Employee or the Employee’s estate or legal representative, as
applicable, in a lump sum in cash within thirty (30) days after the Date of
Termination, and (ii) the Company shall pay when originally due any Bonus due to
the Employee, pro rated for the period until the Date of Termination, to the
Employee or the Employee’s estate or legal representative.
(c) Termination for Cause or Other than
for Good Reason.
If the Employee’s employment is terminated by the Company for Cause during the
Employment Period, or if the Employee terminates his employment during the
Employment Period other than for Good Reason, the Company shall pay Employee the
Accrued Obligations.
6. Non-exclusivity
of Rights. Nothing in this Agreement shall prevent or limit the
Employee’s continuing or future participation in any plan, program, policy or
practice provided by the Company or any of its affiliated companies for which
the Employee may qualify, nor, subject to paragraph (f) of Section 4, shall
anything in this Agreement limit or otherwise affect such rights as the Employee
may have under any contract or agreement with the Company or any of its
affiliated companies. Vested benefits and other amounts that the Employee is
otherwise entitled to receive under any plan, policy, practice or program of, or
any contract or agreement with, the Company or any of its affiliated companies
on or after the Date of Termination shall be payable in accordance with such
plan, policy, practice, program, contract or agreement, as the case may be,
except as explicitly modified by Section 4(f) of this Agreement, if
applicable.
7.
Confidentiality; Return of Property
(a)
The Employee acknowledges that during the Employment Period he will receive
confidential information from the Company and affiliates of the Company (each a
“Relevant Entity”). Accordingly, the Employee agrees that during the Employment
Period and thereafter, the Employee and his affiliates shall not, except in the
performance of his obligations to the Company hereunder or as may otherwise be
approved in advance by the Company, directly or indirectly, disclose or use
(except for the direct benefit of the Company) any confidential information that
he may learn or has learned by reason of his association with any Relevant
Entity. Upon termination of this Agreement, the Employee shall promptly return
to the Company any and all properties, records or papers of any Relevant
Entity that may have been in his possession at the time of termination,
whether prepared by the Employee or others, including, but not limited to,
confidential information and keys. For purposes of this Agreement,
“confidential information” includes all data, analyses, reports,
interpretations, forecasts, documents and information concerning a Relevant
Entity and its affairs, including, without limitation with respect to clients,
products, policies, procedures, methodologies, trade secrets and other
intellectual property, systems, personnel, confidential reports, technical
information, financial information, business transactions, business plans,
prospects or opportunities, (i) that the Company reasonably believes are
confidential or (ii) the disclosure of which could be injurious to a Relevant
Entity or beneficial to competitors of a Relevant Entity, but shall exclude any
information that (x) the Employee is required to disclose under any applicable
laws, regulations or directives of any government agency, tribunal or authority
having jurisdiction in the matter or under subpoena or other process of law, (y)
is or becomes publicly available prior to the Employee’s disclosure or use of
the information in a manner violative of the second sentence of this Section
7(a), or (z) is rightfully received by Employee without restriction or
disclosure from a third party legally entitled to possess and to disclose such
information without restriction (other than information that he may learn or has
learned by reason of his association with any Relevant Entity). For purposes of
this Agreement, “affiliate” means any person or entity that, directly or
indirectly, is controlled by, or under common control with another
person. For purposes of this definition, the terms
“controlled” and “under common control with” means the possession, direct
or indirect, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting stock, by
contract or otherwise.
(b)
Injunction.
Notwithstanding any other provisions of this Agreement, Employee acknowledges
and agrees that in the event of a violation or threatened violation of any of
the provisions of this Section 7, Employer shall have no adequate remedy at law
and shall therefore be entitled to enforce each such provision by temporary or
permanent injunctive or mandatory relief obtained in any court of competent
jurisdiction without the necessity of proving damage or posting any bond or
other security, and without prejudice to any other remedies that may be
available at law or in equity.
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8. Successors.
(a) This Agreement
is personal to the Employee and, without the prior written consent of the
Company, shall not be assignable by the Employee otherwise than by will or the
laws of descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Employee’s legal representatives.
(b) This Agreement
shall inure to the benefit of and be binding upon the Company and its successors
and assigns.
9. Miscellaneous.
(a)
This 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.
The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or modified except by
a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) All notices and
other communications under this Agreement shall be in writing and shall be given
by hand delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the
Employee:
________________
________________
If to the
Company:
000
Xxxxxxxxx Xxxxxx
00xx Xxxxx,
Xxxxx 0000
Xxx Xxxx,
XX 00000
Fax: 000-000-0000
or to
such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 9. Notices and communications
shall be effective when actually received by the addressee.
(c) The invalidity
or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement. If any
provision of this Agreement shall be held invalid or unenforceable in part, the
remaining portion of such provision, together with all other provisions of this
Agreement, shall remain valid and enforceable and continue in full force and
effect to the fullest extent consistent with law.
(d) Notwithstanding
any other provision of this Agreement, the Company may withhold from amounts
payable under this Agreement all federal, state, local and foreign taxes that
are required to be withheld by applicable laws or regulations.
(e) The failure of
the Employee or the Company to insist upon strict compliance with any provision
of, or to assert any right under, this Agreement shall not be deemed to be a
waiver of such provision or right or of any other provision of or right under
this Agreement.
(f) The
Employee and the Company acknowledge that this Agreement supersedes any other
agreement between them concerning the subject matter hereof.
(g) This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, and which together shall constitute one instrument.
[signature
page follows]
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IN
WITNESS WHEREOF, the Employee has hereunto set the Employee's hand and, pursuant
to the authorization of its Board, the Company has caused this Agreement to be
executed in its name on its behalf, all as of the day and year first above
written.
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By:
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/s/
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Name:
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Title:
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EMPLOYEE:
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/s/
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