EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT, dated
as
of May 22, 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
Xxxx
Xxxxx,
an
individual having an address do Xxxxxxx Law Office, 000 Xxxxxx xx xxx Xxxxxxxx,
Xxxxx
0X,
Xxx Xxxx, XX 00000 ("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 commenced on May 22, 2007 (the
"Commencement
Date") and
will
expire on May 21, 2009 (the "Employment
Term").
2. Position.
(a) Executive
shall serve as the Chief Operating Officer and General Counsel of Employer.
Employer and Executive acknowledge and agree that they shall, from time to
time,
evaluate
Executive's duties and responsibilities to determine whether Executive should
relinquish
one of the two foregoing titles and corresponding responsibilities. In the
event
after such
review, Employer and Executive determine that Executive should relinquish
one
title and corresponding responsibilities (subject to the mutual agreement
of
Executive and Employer), this Employment Agreement shall be deemed amended
solely to remove one of Executive's titles and corresponding
responsibilities.
(b) Executive
shall have such management and oversight responsibilities and authority as
are
necessary to efficiently administer the general operating and legal 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.
Executive shall report to both the Chairman
of the Board of Managers of the Employer (the "Board"),
currently
Xxxx Xxxxx, and 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 Employment Term, Employer shall pay Executive a base
salary at the annual rate of not less than $225,000 (the "Base
Salary"). The
Base
Salary shall
be
payable in each case in accordance with the usual payroll practices of Employer
and shall
be
subject to review for increase from time to time (but by no later than May
22,
2008) by Employer.
4. Other
Compensation.
(a) Bonus.
In
addition to his Base Salary, Executive shall receive a signing payment
of $25,000 upon his signing of this Employment Agreement and an additional
$25,000 payment
on May 22, 2008. In addition, Executive shall receive a bonus of at least
$40,000 for each
12
month period during the Employment Term (such amount to be reevaluated no
later
than May
22,
2008), paid $10,000 per quarter (paid on August 21, November 21, February
21 and
May
21)
based on milestones to be agreed upon by Executive and Employer's
President.
(b) Equity.
Executive
is granted by Employer, (i) as of the date of this Employment
Agreement, 10,200 Incentive Units, as described in the Limited Liability
Operating Agreement
of the Employer dated April 1, 2007, as may be amended from time to time
(the
"LLC
Agreement") and
(ii)
2,000 Incentive Units granted to Executive during May of 2007 pursuant
to Employer's Equity Incentive Program of 2007.
5. Employee
Benefits and Vacation.
(a) During
the Employment Term, Executive shall be entitled to participate in all
pension,
retirement, savings, welfare and other employee benefit plans and arrangements
and fringe
benefits and perquisites generally maintained by Employer from time to time
for
the benefit
of Employer employees, including without limitation, to 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,
as well as Employer holidays.
6. Business
Expenses. Employer
shall pay for or reimburse Executive for the travel, entertainment
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. The
Executive will not incur any unusual or major expenditures without the
Employer's prior written
approval, including incurring any travel expenses (including the cost of
transportation, meals, and lodging) in excess of $4,000 in the aggregate
for any
one trip. All travel and lodging arrangements shall be made in accordance
with
Employer's regular policies.
7. Termination.
(a)
Employer and Executive may terminate Executive's employment
at any time for any reason or no reason. If the Executive's employment is
terminated
by Executive for Good Reason (as defined below) or by Employer for any reason
other
than Cause (as defined below), the Executive will continue to receive his
Base
Salary and unpaid portion of the Bonuses and full benefits for the duration
of
the Employment Term with no obligation
of mitigation or offset. Vesting of equity in Employer shall be as described
in
the LLC
Agreement.
(b) Termination
for Good Reason. A
Termination for Good Reason means a termination
of the Employment Term by Executive by written notice given within ninety
(90)
days
after the occurrence of the Good Reason event. For purposes of this Employment
Agreement,
"Good
Reason" shall
mean the occurrence or failure to cause the occurrence, as the case may be,
without Executive's express written consent, of any of the following
circumstances, unless
such circumstances are fully corrected prior to the date of termination
specified in the Notice
of
Termination for Good Reason (as defined in Section 7(c) hereof):
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(i)
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Any
change of Executive from his position as Chief Operating Office
and
General Counsel or any material diminution of Executive's duties
or
responsibilities hereunder (except in each case in connection with
the
termination of Executive's employment for Cause, or as a result
of
Executive's death, or as a result of Executive's long term illness
or
other absence, or in connection with the election of Executive's
title as
set forth in Section 2(a) above) or, the assignment to Executive
of duties
or responsibilities that are inconsistent with Executive's position,
or in
the event Executive reports to someone other than the Employer's
Chairman
or President;
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(ii)
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If
the Executive is required to regularly render services required
pursuant
to this Employment Agreement at a location which is outside
of the Borough of Manhattan, New
York;
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(iii)
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Any
breach by Employer of any material provision of this Employment
Agreement; or
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(iv)
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Failure
of any successor to Employer to assume in a writing delivered
to Executive upon the assignee becoming such, the obligations
of Employer hereunder.
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(c) Notice
of Termination for Good Reason. A
Notice
of Termination for Good Reason shall mean a notice that shall indicate the
specific termination provision in Section 7(b) relied upon and shall set
forth
in reasonable detail the facts and circumstances claimed to provide a basis
for
Termination for Good Reason. The failure by Executive to set forth in the
Notice
of Termination
for Good Reason any facts or circumstances which contribute to the showing
of
Good
Reason shall not waive any right of Executive hereunder or preclude Executive
from asserting
such fact or circumstance in enforcing his rights hereunder. The Notice of
Termination for Good Reason shall provide for a date of termination not less
than ten (10) nor more than sixty (60) days after the date such Notice of
Termination for Good Reason is given.
(d) Cause.
Subject
to the notification provisions of Section 7(e) below, Executive's
employment (including the Employment Term) hereunder may be terminated by
Employer
for Cause. For purposes of this Employment Agreement, the term "Cause"
shall
be
limited
to:
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(i)
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the
refusal of Executive to follow the proper written direction of
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 or for reasons
set forth in subsection 7(b)(i) above) 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
breach by Executive of any material fiduciary duty owed by Executive
to
Employer, 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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(e) Notice
of Termination for Cause. A
Notice
of Termination for Cause shall mean
a
notice that shall indicate the specific termination provision in Section
7(d)
relied upon and
shall
set forth in reasonable detail the facts and circumstances that provide for
a
basis for Termination
for Cause. A Notification for Cause shall include a copy of a resolution
duly
adopted
by at least two-thirds of the membership of the Board finding that, in the
good
faith opinion
of the Board, Executive engaged in conduct set forth in the definition of
Cause
herein and
specifying the particulars thereof in reasonable detail. Such resolution
shall
be of no force or effect unless it was adopted at a meeting which was called
for
the purpose of considering such termination and which Executive and his
representative had the right to attend and address the concerns of the Board,
and such Cause event is not cured within 10 business days of Executive's
receipt
of notice thereof. The date of termination for a Termination for Cause shall
be
the date indicated in the Notice of Termination.
(f) Termination
with Cause or Voluntary Resignation without Good Reason. If
Executive's
employment (including the Employment Term) hereunder is terminated (i) by
Employer
for Cause, or (ii) by Executive without Good Reason, Executive shall be entitled
to receive only his Base Salary through the date of such termination, any
earned
but unpaid bonus, and
any
unreimbursed business expenses payable pursuant to Section 6. Subject to
Section
4 hereof,
all other benefits (including without limitation restricted stock and options)
due Executive
following such termination of employment shall be determined in accordance
with
the plans, policies and practices of Employer and the LLC Agreement, as
applicable.
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,
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 as may be required by a court or in connection with any administrative
proceeding.
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(b) Executive
agrees that he shall not, during the period of his employment and for
one
year thereafter, 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
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, 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) competitive with Employer's business activities. This provision
shall
only apply in the event Executive
is receiving at least his Base Salary and Bonus amounts from Employer for
the
one year
period following the end of his employment period.
9. Developments.
If
at any
time or times during Executive's employment, 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 registerable
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 have
or 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.
(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.
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(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) Executive's
Representation. Executive
represents and warrants to Employer
that there is no legal impediment to him performing his obligations under
this
Employment
Agreement and neither entering into this Employment Agreement nor performing
his
contemplated service hereunder will violate any agreement to which he is
a party
or any other legal
restriction.
ACCEPTED
AND AGREED.
GREEN
SCREEN INTERACTIVE SOFTWARE,
LLC
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/s/
Xxxx Xxxxxxx
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Xxxx
Xxxxxxx
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President
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/s/
Xxxx Xxxxx
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Xxxx
Xxxxx
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