EMPLOYMENT, NON-COMPETITION AND
CONFIDENTIALITY AGREEMENT
THIS AGREEMENT is made as of the 1st day of October, 1996 by and between
BEACHPORT ENTERTAINMENT CORPORATION, a Utah corporation, with its principal
office at 000 Xxxxx Xxxxxxxxx Xxxx., Xxx Xxxxxxx, XX 00000 (the "Company"); and
XXXXXX X. XXXXXXX, an individual residing at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxx
Xxxx, Xxxxxx, 00000 (the "Executive").
RECITAL
WHEREAS, the Company desires to retain the services of the Executive as an
employee of the Company on the terms and conditions as hereinafter set forth;
and
WHEREAS, the Executive is desirous and willing to accept such employment on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and promises, the
receipt and sufficiency of such mutual consideration is hereby acknowledged and
confessed by the Company and the Executive, and to induce Company to hire the
Executive on the terms and conditions hereinafter set forth, the Company and the
Executive hereby agree as follows:
I.
EMPLOYMENT
The Company shall employ the Executive as a full time employee, as
Executive Vice President of The Company. The Executive hereby accepts such
employment with the Company, upon the terms and conditions hereinafter set
forth.
II.
DUTIES DURING EMPLOYMENT PERIOD
During the Employment Period, the Executive shall act as the Executive Vice
President and Chief Financial Officer and have the responsibility for day-to-day
management of the business. Should the Executive be required to relocate his
residence, the Company shall pay any and all relocation expenses for the
Executive and his family during the term of this Agreement and any renewals and
extensions thereof. If the Executive is elected as a director the Company or any
subsidiary of the Company, he will serve in such capacity without additional
compensation. The Executive shall devote his full time, skill, labor and
attention to the business of the Company and shall promptly and faithfully,
perform all services pertaining thereto that are or may hereafter be required of
him by the Company, provided that such services shall be consistent with his
position as Executive Vice President and Chief Financial Officer. Nothing in
this agreement shall preclude the Executive from investing his personal assets
and time in his personal investments, provided that such investments are not in
competition with the business of the Company and that such activities do not
unreasonably
interfere with the performance of his duties hereunder and where
the form or manner of such investments will not require services on the part of
the Executive in the operation of the affairs of the business in which such
investments are made and which participation is solely that of a passive
investor.
III.
TERM OF EMPLOYMENT
The employment under Section II of this Agreement shall be for a period of
one (1) year commencing on the date hereof and ending at the termination of this
Agreement, unless sooner terminated in accordance with one of the following
alternatives:
A. The Executive's employment under Section II, if not already terminated
under clause B of this Section III, may be terminated at any time during the
Employment Period for Cause (as hereinafter defined) by action of the Board of
Directors of the Company upon giving the Executive notice of such termination at
least thirty (30) days prior to the date upon which termination shall take
effect. As used herein, the term "Cause" shall mean any of the following events:
1. The Executive's conviction of or plea of guilty or nolo contendere
to a crime involving moral turpitude;
2. The Executive's failure to follow the good faith instructions, with
respect to the Company, or any of its subsidiaries and their respective
operations, of the Executive Committee or the Board of Directors of the Company
referred to in Section II following written notice thereof; or
3. The Executive's willful misconduct, or, neglect of duties or
failure to act with respect to duties or actions previously communicated to the
Executive in writing by the Executive Committee or the Board of Directors of the
Company referred to in Section II.
If the Executive's employment is terminated under the provisions of this
Clause A, all rights of the Executive pursuant to Section IV hereof shall cease
as of the effective date of such termination.
B. The Executive's employment under Section II may be terminated at any
time following the date which is one (1) year after the date hereof, by action
of the Board of Directors of the Company, upon giving the Executive notice of
such termination at least ninety (90) days prior to the date on which such
termination shall take effect. This Employment Agreement will automatically
renew for successive one (1) year periods upon the terms and conditions
contained herein unless terminated at provided herein. If the Executive's
employment is terminated under the provisions of this clause B, his rights
pursuant to Section IV shall cease as of the effective date of such termination.
IV.
EMOLUMENT
A. As base compensation for the services rendered by the Executive
hereunder, the Company shall pay him a salary of $120,000 per annum. The
aforesaid salary shall initially be payable in 26 equal payments commencing two
(2) weeks from the date hereof, or on such other basis, such as weekly or
monthly as determined by the Board of Directors of the Company. The Board of
Directors of the Company may, from time to time, increase the Executive's salary
or pay such discretionary bonuses as it deems appropriate, but such increases
shall neither affect nor alter the fixed obligation of the Company as herein
provided or referred to.
B. Bonuses and Additional Benefits. The Executive may be awarded bonuses as
agreed and satisfy the Board of Directors of the Company. Executive shall also
be entitled to, and shall be accorded, all rights and benefits under any
executive incentive plan (including the Company's Stock Option Plan), monetary
bonus plan, participation or extra compensation plan, pension plan, profit
sharing plan, disability insurance, health and major compensation plan,
pension plan, profit sharing plan, disability insurance, health and major
medical insurance policy or policies, and any other plans or benefits that the
Company may from time to time provide for executives or for any senior officer
generally during the Employment Period. The Company shall accord the Executive
such rights and benefits on a basis no less favorable than any other officer
or executive of the Company or its subsidiaries or affiliates.
C. Vacation and Sick Leave. For each year during which this Agreement is
in effect, Executive shall be entitled to a vacation and sick leave benefits,
without a deduction of salary or other compensation in accordance with the
Company's standard policies, but in no event shall the vacation be less than
four (4) weeks. The Executive shall have up to four (4) weeks vacation per year,
provided the Executive works full time each year for the Company and under the
terms of this Agreement. Such vacation shall be taken at such time or times
during such year as may mutually be agreed upon by the Company and the
Executive.
D. Business Expenses. The Executive shall be authorized to incur reasonable
business expenses for promoting the business of the Company, including
expenditures for entertainment, gifts and travel, within the guidelines as are
set by the Board of Directors of the Company and which are consistent with the
Internal Revenue Service guidelines, provided that the Executive submits
vouchers therefor in the form reasonably satisfactory to the Company.
E. Insurance. The Company shall include Executive under the Company's group
health and life insurance programs, with the same coverage and options that are
available under said policies to all executives of the Company.
F. Other Benefits. The Company will provide the Executive with fringe
benefits in the aggregate not less favorable than those received generally by
other executives of the Company.
G. Life Insurance. The Company, in its discretion may apply for and procure
as owner and for its own benefit insurance on the life of the Executive, in such
amounts and in such form or forms as the Company may choose.
V.
DISABILITY & DEATH
A. Disability. Notwithstanding any failure or inability of Executive during
the Employment period, because of illness, injury or similar incapacity, whether
physical or mental ("Disability"), to perform the obligations as contemplated by
this Agreement, the Company, nevertheless shall continue to pay Executive the
compensation and benefits provided for in Section IV hereof and all other
benefits provided by this Agreement, except as provided otherwise in this
Section V.
1. Obligations of the Company. In the event a Disability of the Executive
continues for a period of more than six (6) consecutive months or six (6) months
in the aggregate out of any period of twelve (12) consecutive months, the
Company may, at its option, at any time on or after the last day of the
aforesaid six month Disability period, by written notice to such Executive (the
"Disability Notice"), declare such Executive "disabled" and this Agreement shall
terminate with no further liability on the part of the Company; however such
notice shall be of no force and effect if such Executive has resumed the duties
and responsibilities provided hereunder prior to the delivery of the Disability
Notice.
2. Continuing Obligations. Notwithstanding the delivery of a
Disability Notice to the Executive, the Company shall continue to pay the
Executive his normal monthly compensation as set forth hereinabove, provided
however, that any income received by the "disabled" Executive during the
Employment Period from any disability insurance provided to such Executive by
the Company shall reduce the Company's obligations hereunder. If the Company
shall deliver a Disability Notice to Executive, the Company shall continue to
pay Executive, when otherwise due, for a period of six (6) months following
delivery of the Disability Notice. In addition, the Company's obligations to
provide those benefits and payments which are intended to remain in effect
including, without limitation, those benefits and payments provided in Section
IV hereof, shall continue for the six (6) month period following delivery of the
Disability Notice.
B. Death. In the event of death during the Employment Period of the
Executive, the normal monthly compensation of the Executive shall be paid to his
survivors for a period of one (1) year. In addition, the Company's obligations
to provide those benefits and payments which are intended to remain in effect
regardless of the termination of this Agreement, including, without limitation,
those benefits and payments provided in Section IV hereof shall survive the
death of the Executive and shall inure to the benefit of the Executive's estate.
In all other respects, this Agreement shall be deemed to terminate upon the
death of the Executive.
VI.
COVENANT NOT TO COMPETE
A. The Executive hereby acknowledges and recognizes the highly competitive
and confidential nature of the Company's business of developing, producing and
distributing live family entertainment and made-for-television features, and for
the consideration stated above, accordingly agrees that, during the entire
period, commencing with the date hereof, the Executive's employment by the
Company, to include twelve (12) months after termination of the Executive's
employment with the Company, Executive will not directly or indirectly, in any
capacity:
1. Engage in any capacity in any business endeavor which has among its
purposes and/or endeavors to develop, produce or distribute live family
entertainment and/or made-for-television features, to include those which,
during the employment period of Executive, have been developed, marketed or
conceived by the Company, any of its personnel and/or any of its
subsidiaries, within 100 miles in any geographic area, city and/or state in
which the Company's products are operating.
2. Induce employees of the Company, or any of its respective
subsidiaries, to terminate their employment or to engage in any activities
hereby prohibited to the Executive.
3. Contact, communicate or solicit any customer and/or any contact of
the Company derived from any customer list, customer lead, mail, printed
material or other information secured from any association with the
Company;
4. Discuss any activities, methods of operation, finances,
confidential practices and private business information of the Company
with any other party.
B. It is expressly understood and agreed that although the Executive and
the Company consider the restrictions contained in clause A above reasonable for
the purpose of reserving for the Company or any of its subsidiaries, their good
will and other proprietary rights, if a final judicial determination is made by
a Court having jurisdiction at the time or territory or any other restriction
contained in clause A above is an unreasonable or otherwise unenforceable
restriction against the Executive, the provisions of such clause shall not be
rendered void, but shall be deemed amended to apply as to such maximum time and
territory and to such other extent as such Court may judicially determine or
indicate to be reasonable.
C. As to the reasonableness of the non-competition and restrictive
covenants contained herein, Executive further acknowledges and confesses that he
is capable of making a living in employment areas other than developing,
producing and distributing live family entertainment and made-for-television
features engaged in by the Company, and, that the non-competition and
restrictive covenants contained herein will not in the least manner impair or
interfere with Executive from earning a living after the Executive terminates
relations with the Company.
VII.
DISCLOSURE OF INFORMATION
The Executive acknowledges that the Company's trade secrets, private or
secret processes as they may exist from time to time, and confidential
information concerning their products, development, all technical information,
procurement and sales activities and procedures, promotion and pricing
techniques
and credit and financial data concerning customers are valuable, special and
unique assets of the Company and its subsidiaries, access to and knowledge of
which are essential to the performance of the Executive's duties hereunder. In
light of the highly competitive nature of the industry in which the Company and
its subsidiaries' business is conducted, the Executive further agrees that all
knowledge and information described in the preceding sentence not in the
public domain and heretofore or in the future obtained by him as a result of
this employment by the Company or its subsidiaries shall be considered
confidential information. In recognition of this fact, the Executive agrees that
he will not, during or after the Employment Period, disclose any of such
secrets, processes or information to any person or their entity for any reason
or purpose whatsoever, except as is necessary in the performance of his duties
as an employee of the Company or its subsidiaries and then only upon a written
confidentiality agreement in such form and content as requested by the Company
from time to time; nor shall the Executive make use of any such secrets,
processes or information (other than information in the public domain) for his
own purposes or for the benefit of any person or other entity (except the
Company and its subsidiaries) under any circumstances during or after the
Employment Period.
VIII.
COMPANY RIGHT TO COPYRIGHTS, TITLES AND SCRIPTS
A. The Executive shall promptly disclose, grant and assign to the Company
for its sole use and benefit any and all scripts, copyrights, movie titles,
sitcom scripts and ideas, improvements, technical information and suggestions
relating in any way to the products of the Company or capable of beneficial use
by customers of the Company either past conceived, developed or acquired, or may
conceive, develop or acquire during the Employment Period (whether or not during
usual working hours), together with all patent applications, letters patent,
copyrights and reissues thereof that may at any time be granted for or upon any
such invention, improvement or technical information. In connection therewith,
the Executive shall promptly at all times during and after the Employment
Period:
1. Execute and deliver such applications, descriptions and other
instruments as may be necessary or proper in the opinion of the Company to
vest in the Company title to such inventions, improvements, technical
information, patent applications and to enable it to obtain and maintain
the entire right and title thereto throughout the world; and
2. Render to the Company, at its expense, all such assistance as it
may require in the prosecution of applications for said patents or reissues
thereof, in the prosecution or defense of interferences which may be
declared involving any said application or
patents, and in any litigation in which the Company or its subsidiaries may
be involved relating to any such patents, inventions, improvements or
technical information.
IX.
REMEDIES
The Executive acknowledges and agrees that the Company's remedy at law for
a breach of any of the provisions of Sections VI, VII or VIII would be
inadequate and, in recognition of this fact, in the event of a breach by the
Executive or any of the provisions of the Sections VI, VII or VIII it is agreed
that, in addition to its remedy at law, the Company shall be entitled to, and
the Executive agrees not to oppose the Company's request for, equitable relief
in the form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available.
In the event of any such breach, at the election of the Company, all rights of
the Executive under Section IV shall thereupon terminate. The Executive
acknowledges that the granting of a temporary injunction, temporary restraining
order or permanent injunction merely prohibiting the use of trade secrets and
like proprietary information would not be an adequate remedy upon breach, and
consequently agrees, upon any such breach, to the granting of injunctive relief
prohibiting the developing, producing or distributing of products and services
of the kind developed, produced, distributed or provided by the Company or any
of its subsidiaries during the Executive's employment. Nothing herein contained
shall be construed as prohibiting the Company from pursuing any other remedies
available to it for such breach.
X.
ARBITRATION
Any and all disputes between Executive and the Company arising with respect
to this employment by the Company or any of its subsidiaries, including any
dispute arising under this Agreement, shall be submitted to binding, expedited
arbitration in Los Angeles, California under the then-prevailing rules of the
American Arbitration Association.
XI.
NOTICES
Any notice required or permitted to be given under this Agreement shall be
deemed properly given if in writing and if mailed by registered or certified
mail, postage prepaid with return receipt requested, to his residence in the
case of notices to the Executive, or to the principal office of the Company, to
the attention of its President (with a copy to the Chairman of the Board and
General Counsel) in the case of notice to the Company.
XII.
WAIVER OF BREACH
The waiver by the Company or Executive of a breach of any provision of this
Agreement by the Company or the Executive shall not operate or be construed as a
waiver of any subsequent breach by the Company or the Executive.
XIII.
ASSIGNMENT
This Agreement shall not be assignable by the Executive without the written
consent of the Company; and, only after full disclosure of all terms and
ramifications of said assignment has been made by the Executive. This Agreement
is assignable by the Company and/or any of its subsidiaries to any successor in
interest of the Company's or its subsidiaries' business.
XIV.
ENTIRE AGREEMENT
This instrument contains the entire agreement between the Company and
Executive relating to the subject matter hereof, and supersedes and replaces in
its entirety any existing Agreement between Company and the Executive. This
Agreement may not be waived, changed, modified, extended or discharged orally;
but, may be amended and/or changed only by a written instrument duly executed by
an authorized representative of the Company and the Executive hereto and
designated on its face as an "Amendment."
XV.
FAILURE TO ENFORCE
It is expressly agreed and understood that the waiver by a party of its
rights, or any portion of its rights, under this Agreement in any particular
instance or instances, whether intentional or otherwise, shall not be considered
as a continuing waiver which would prevent the subsequent enforcement of such
rights.
XVI.
APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of California, the principal place of business of the Company.
XVII.
HEADINGS
The heading of the Sections hereof are for convenience only and shall not
control or affect the meaning, or construction, or limit the scope or intent of
any of the provisions of this Agreement.
XV.
MISCELLANEOUS
It is anticipated that variances and deviations from certain provisions of
this Agreement may be necessary and may be allowed or tolerated, but it is
agreed that such variances or deviations, regardless of number, shall not be
reason for altering or modifying the interpretation of any portion of this
Agreement.
This Agreement shall be binding on the assignees, heirs, administrators,
executors, spouses, successors and legal representatives of both parties hereto.
IX.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be an original, and all of which shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Employment
Agreement as of the date and year first above written.
BEACHPORT ENTERTAINMENT CORPORATION
/s/ XXXXXX X. XXXXXXXX
-----------------------------------
By XXXXXX X. XXXXXXXX
Chairman of the Board
/s/ XXXXXX X. XXXXXXX
-----------------------------------
XXXXXX X. XXXXXXX, Executive
