EMPLOYMENT AGREEMENT
EXHIBIT 10.2
July 20, 2020
This EMPLOYMENT AGREEMENT
(“Agreement”)
is made in the State of Arizona by and between Xxxxx Xxxxxxx
(“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.
2. Position
and Duties.
(a) Executive
will faithfully and diligently serve the Company to the best of his
ability in his positions as Chief Executive 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 as much professional time, attention, and energies to
the performance of his duties for the Company as are necessary, 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 purchase, sell, oversee, manage, and develop real
estate properties and projects; and 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.
4.
Term/Termination of
Employment.
(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.
-7-
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 14th
day of August,
2020.
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/s/ Xxxxx
Xxxxxxx
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Xxxxx
Xxxxxxx
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DATED this 14th
day of August,
2020.
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Rivulet Media,
Inc., a Delaware corporation
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By:
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/s/ Xxxxx
Xxxxxxx
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Xxxxx Xxxxxxx,
CEO
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-9-
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.
