EXHIBIT 10.35
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 1st day of
September, 1997, by and between Cinema Ride, Inc., a Delaware corporation
(hereinafter the "Company"), and XXXXX XXXXXXX, an individual (hereinafter
"Employee").
WITNESSETH
WHEREAS, the Company desire to retain the services of Employee, and Employee is
willing to be an employee of the Company, on the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual promises herein
contained, the parties hereto hereby agree as follows;
1. ENGAGEMENT; NATURE OF DUTIES. The Company hereby engages
Employee, for the period hereinafter set forth, to serve as and hold the offices
of Chairman of the Board, President and Chief Executive Officer, and to perform
the duties of such offices as provided in the Bylaws of the Company and as
directed by the Board of Directors of the Company. Employee agrees to serve in
such capacity and to do and perform the service, acts, or things necessary to
carry out the duties of such offices, and such other duties, not inconsistent
with such offices and Employee's position as an executive officer of the
Company. Employee shall report only to the Board of Directors of the Company. It
is expressly agreed and acknowledged that employment in the capacity of the
aforementioned offices was a material inducement to Employee to enter into this
Agreement. The Company further agrees and acknowledges that election, and being
retained in office, as a director was a material inducement to Employee to enter
into this Agreement. The Company agrees to cause Employee to be nominated as a
director at any and all meetings, or any actions of the stockholders of the
Company for the purpose of electing directors, and to use the Company's best
efforts to cause Employee to be elected and retained in office as a director
throughout the term of this Agreement.
2. TERM. The term of employment pursuant to this Agreement shall
be for a period of three (3) years, commencing on September 1,
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1997 (the "Commencement Date"), unless sooner terminated in accordance with the
provisions hereof (the "Term").
3. PERFORMANCE OF DUTIES. Employee shall devote such time and
attention to Employee's duties as may be reasonably necessary to perform and
carry out such duties. Nothing herein contained shall be deemed to preclude
Employee from performing services to other businesses or entities not affiliated
with the Company or having personal investments and from devoting a reasonable
amount of time to the care and attention thereof, provided that the same shall
in no manner interfere with or derogate from Employee's work for the Company or
conflict with the Company's business. Without limiting the generality of the
foregoing, the Company, under separate agreement of the Board of Directors, has
assigned its ownership and all rights of "California Wave" to Employee, (with
certain compensation to the Company), and Employee shall be free to develop the
"California Wave" concept independently of the Company.
Employee shall perform his duties hereunder primarily in the Los
Angeles, California area, and shall not be required to perform such duties on a
regular basis at any other location except for site visits. Employee shall not
be required to relocate without his consent.
4. COMPENSATION.
(A) BASE SALARY. The Company shall pay to Employee a base salary
in the amount of One Hundred Ninety-five Thousand Dollars ($195,000) per year
(the "Base Salary"), retroactive to August 1, 1997, payable in periodic
installments in accordance with the Company's prevailing policy for compensating
personnel, but not less often than semi monthly. On each yearly anniversary of
the Commencement Date (September 1, 1997), the Base Salary shall be increased by
eight percent (8%).
(B) EARNINGS BONUS. In addition to the Base Salary, and any and
all other compensation, profit-sharing participating, benefits, bonuses or other
amounts due to or receivable by Employee pursuant to this Agreement, Employee
shall receive an annual bonus (the "Earnings Bonus") equal to six (6%) percent
of the Company's annual earnings before interest, taxes, depreciation and
amortization (ebitda) in excess of $500,000. A pro rata portion of the Earnings
Bonus (calculated by annualizing the year to date ebitda and taking into account
any Earnings Bonus paid for any prior periods) shall be due and payable within
forty-five (45) days of each calendar quarter and shall be adjusted within
ninety (90) days after the calendar (or the Company's fiscal) year end. In the
event that this Agreement terminates prior to a final accounting of the Earnings
Bonus, if any, for the applicable year, Employee shall repay any overpayment
within 45 days of the final accounting.
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(C) GRANT OF COMMON STOCK. Upon the funding of new capital or new
debt for borrowed money to the Company, the Company shall grant Employee a
number of shares of the Company's Common Stock equal to one (1%) percent of the
Company's outstanding common and preferred shares, (after such new capital or
debt and on a non-dilutive basis), for each One Million ($1,000,000) dollars of
such funding, or fraction thereof on a pro rata basis.
(D) OPTIONS. Effective on the Commencement Date, the Company
shall grant to Employee 300,000 options to purchase shares of the Company's
Common Stock at an exercise price of $.25 per share. Such options shall be
vested equally over three (3) years (100,000 options on 9/1/98, 100,000 options
on 9/1/99 and 100,000 options on (9/1/00) and shall be for a term of five years
from the Commencement Date. If Employee voluntarily leaves or is terminated by
the Company with cause, all unvested options shall automatically terminate. If
Employee is terminated without cause, the options shall not terminate. The
Company shall use its best efforts to register the resale of the underlying
shares of Common Stock on Form S-8.
(E) PERFORMANCE WARRANTS. During the Term hereof, the Company
shall grant to Employee options to purchase shares of the Company's Common Stock
upon the following occurrences and terms:
(1) Stock price for 20 consecutive trading days at $.75 per
share: 100,000 options exercisable @ $.75
(2) Stock price for 20 consecutive trading days at $1.00 per
share: 150,000 options exercisable @ $1.00
(3) Stock price for 20 consecutive trading days at $1.50 per
share: 200,000 options exercisable @ $1.50
(4) Stock price for 20 consecutive trading days at $2.00 per
share: 200,000 options exercisable @ $2.00
(5) Stock price for twenty consecutive trading days at $3.00
per share: 300,000 options exercisable @ $3.00
(6) Stock price for twenty consecutive trading days at $4.00
per share: 300,000 options exercisable @ $4.00
(7) Upon opening each new Company owned, or joint ventured
new facility, or Mobile system put into operation:
200,000 options exercisable at the price of the common
stock on the day of opening.
As used herein, the stock price shall be the closing bid price and
shall be appropriately adjusted for any stock splits, stock dividends,
recapitalizations etc. occurring after the Commencement Date.
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5. EXPENSES REIMBURSEMENT; AUTOMOBILE. The services required of
Employee by this Agreement shall include the responsibility and duty of
entertaining business associates and others with whom the Company is, desires to
be, or may become engaged in business or with whom it seeks, now or in the
future, to develop or expand business relationships, or with whom it is
otherwise to the benefit of the Company to establish or maintain communications.
It may also be necessary for Employee to travel from time to time on behalf of
and for the benefit of the Company, or in furtherance of the Company's business.
It is the Company's belief that the performance of Employee's duties in such
travel and entertainment activities will produce the maximum benefits which the
Company expects to derive from Employee's services. Accordingly, the Company
shall pay, or if Employee shall have paid, shall reimburse to Employee, any and
all expenses incurred by him or for his account in the performance of his duties
hereunder, including all expenses for business, entertainment, promotion and
travel by Employee, subject only to Employee providing appropriate documentation
for such expenses. It is expressly agreed, in connection therewith, that
Employee shall be provided or reimbursed for reasonable travel and
accommodations, but no first-class air travel will be deemed reasonable, (unless
under special price offering). The Company shall provide Employee with an
automobile, reasonably commensurate with Employee's office and position, for use
by Employee in performing Employee's, duties hereunder and the Company shall be
responsible for all expenses associated with ownership of such automobile,
including, but not limited to, costs of licensing or registration, maintenance
and gasoline; provided, however, that in no event shall the Company's total cost
in providing such automobile (excluding the cost of automobile insurance,
registration, maintenance, and gasoline) exceed $800 per month. The Company and
Employee may provide, by mutual agreement, that Employee may use an automobile
owned by Employee in connection with performing his duties hereunder, in which
case Employee shall be reimbursed by the Company for all costs associated with
ownership of such automobile (excluding the cost of automobile insurance,
registration, maintenance, and gasoline), subject to the $800 per month
limitation described above. In addition to the foregoing expenses, the Company
shall provide, or reimburse Employee for the cost of, automobile insurance,
registration, maintenance and gasoline and shall provide cellular telephone
service for such automobile. Employee shall maintain such records with respect
to the use of such automobile as the Company may reasonably request.
In the event that Employee shall be deemed to have received income,
for state or federal income tax purposes, by reason of Employee's receipt of or
reimbursement for any of the benefits or expenses set forth in this Paragraph 5,
the Company shall pay or reimburse Employee for all taxes required to be paid by
Employee with respect to such income.
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6. MEDICAL AND LIFE INSURANCE; PENSION BENEFITS. The Company
shall provide or reimburse Employee for health, life (premiums up to $3,000 per
year), and disability income (up to $12,000 per month coverage) insurance.
Coverage under any group health insurance shall also cover Employee's spouse.
Employee shall also have the right to participate in any and all employee
retirement benefits plan or profit-sharing plan which the Company maintains for
its personnel, and in effect at any time during the period of Employee's
employment hereunder, subject only to any eligibility restrictions of such
plans.
7. VACATION. During each year of the Term, Employee shall be
entitled to a vacation of four (4) weeks, without deduction of salary. Such
vacation shall be taken at such time or times during the applicable year as may
be mutually determined by Employee and the Company. Any additional vacation
period shall be determined by the Company consistent with the general customs
and practices of the Company applicable to its personnel.
8. TERMINATION. This Agreement may be terminated by the Company
only for cause. As used herein, "cause" shall mean:
(A) Employee's willful breach of Employee's duties hereunder
which breach remains uncured for (30) days after written notice of such breach
to Employee; or
(B) Employee's conviction of a felony involving moral turpitude.
In addition, this Agreement shall automatically be terminated upon
Employee's death or permanent disability. As used herein, "permanent disability"
shall mean Employee's complete inability to perform Employee's duties hereunder,
as determined by Employee's physician, which inability continues for more than
one-hundred eighty (180) consecutive days.
In the event that this Agreement is terminated by the Company for
any reason other than for cause or for death or permanent disability as defined
above, the Company expressly agrees and acknowledges that Employee shall be
entitled to receive the base salary, bonuses and benefits described in Section 5
of this Agreement for the remainder of the term and shall have no duty or
obligation to and/or accept other employment, or otherwise mitigate Employee's
damage resulting from such termination. The Company further agrees and
acknowledges that, in the event Employee does obtain other employment following
the Company's termination of this Agreement other than for cause, the Company
shall not be entitled to any set off or reduction in the amounts payable to
Employee hereunder
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as a result of any compensation paid to Employee with respect to such new
employment.
9. INDEMNIFICATION. The Company shall indemnify, defend and hold
Employee harmless from and against and all claims, demands, suits, obligations,
liabilities, actions, losses, cost, expenses, fines or penalties which may now
or hereafter be pending, threatened or commenced against or incurred by Employee
relating to or in any way resulting from Employee's performance of his duties
hereunder, or any action or failure to act to Employee in connection with such
duties. Employee's rights under this Section 9 shall be in addition to, and not
in lieu of or, any and all other rights of Employee under applicable law or any
agreement with the Company regarding indemnification.
10. CONFIDENTIAL INFORMATION.
(A) As used in this Agreement "Confidential Information" means
any and all information disclosed to Employee or which Employee gains knowledge
of as a consequence or through Employee's employment by the Company (including
information conceived, originated, discovered or developed by Employee) about
the Company's products, processes, and services, including information relating
to research, development, inventions, manufacture, purchasing, accounting,
engineering, marketing, merchandising, selling trade secrets, or customer lists,
which information the Company maintains as confidential.
(B) Except as required in Employee's duties to the Company and
then only with the Company's prior written consent, Employee will not, directly
or indirectly, use for Employee's own benefit or the benefit of others, or
disseminate, disclose, comment upon or publish articles concerning, any
Confidential Information either during or at any time after the term of this
Agreement without the Company's consent.
(C) All documents, papers, notes, notebooks, memoranda, computer
files, and other written electronic records of the Company of any kind in the
possession or under the control of Employee, shall remain in the property of the
Company at all times. Upon the termination of Employee's employment with the
Company, all documents, papers, notes, notebooks, memoranda, computer files and
other written or electronic records in Employee's possession, whether prepared
by Employee or others will be left with Company.
11. NOTICES. Any and all notices which are required or permitted
to be given by any party to any other party hereunder shall be given in writing,
sent by registered or certified mail, electronic communications (including
telegram or facsimile) followed by a confirmation letter sent by registered or
certified
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mail, postage prepaid, return receipt requested, or delivered by hand or
messenger service with the charges therefor prepaid, addressed to such party as
follows:
(A) Notice to the Employee:
Xxxxx Xxxxxxx
00000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, XX 00000
Telecopy No. (000) 000-0000
(B) Notice to the Company:
Cinema Ride, Inc.
00000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, XX 00000
Telecopy No. (000) 000-0000
or to such other address as the parties shall from time to time give notice of
in accordance with this Section. Notices sent in accordance with this Section
shall be deemed effective on the date of dispatch, and an affidavit of mailing
or dispatch, executed under penalty of perjury, shall be deemed presumptive
evidence of the date of dispatch.
12. ENTIRE AGREEMENT AND MODIFICATION. This Agreement, including
the exhibits hereto and the agreements expressly referred to herein, constitutes
the entire understanding between the parties pertaining to the subject matter
hereof and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written. There are no warranties, representations
or other agreements between the parties, in connection with the subject matter
hereof, except as specifically set forth herein. No supplement, modification,
waiver or termination of this Agreement shall be binding unless made in writing
and executed by the party thereto to be bound.
13. WAIVERS. No term, condition or provision of this Agreement
may be waived except by an express written instrument to such effect signed by
the party to whom the benefit of such term condition or provision runs. No such
waiver of any term condition or provision of this Agreement shall be deemed a
waiver of any other term, condition or provision, irrespective of similarity, or
shall constitute a continuing waiver of the same term, condition or provision,
unless otherwise expressly provided. No failure or delay on the part of any
party in exercising any right, power or privilege under any term, condition or
provision of this agreement shall operate as a waiver thereof, nor shall a
single or partial
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exercise thereof preclude any other or further exercise of any other right,
power or privilege.
14. SEVERABILITY. In the event any one or more of the terms,
conditions or provisions contained in this Agreement should be found in a final
award or judgment rendered by any court or arbitrator or panel of arbitrators of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining terms, conditions and
provisions contained herein shall not in any way be affected or impaired
thereby, and this Agreement shall be interpreted and construed as if such term
condition or provision, to the extent the same shall have been held invalid,
illegal or unenforceable, had never been contained herein, provided that such
interpretation and construction is consistent with the intent of the parties as
expressed in this Agreement.
15. HEADINGS. The headings of the Articles and Sections contained
in this Agreement are included herein for reference purposes only, solely for
the convenience of the parties hereto, and shall not in any way be deemed to
affect the meaning, interpretation or applicability of this Agreement or any
term, condition or provision hereof.
16. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California,
notwithstanding the fact that one or more counterparts hereof may be executed
outside of the State, or one or more of the obligations of the parties hereunder
are to be performed outside of the state.
17. ATTORNEY'S FEES. In the event that any party to this
Agreement shall commence any suit, action, arbitration or other proceeding to
interpret this Agreement, or determine or enforce any right or obligation
created hereby, including but not limited to any action for rescission of this
Agreement or for a determination that this Agreement is void or ineffective
abinitio, the prevailing party in such action shall recover such party's costs
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and expenses incurred in connection therewith, including attorney's fees and
costs of appeal, if any. Any court, arbitrator or panel of arbitrators shall, in
entering any judgment or making any award in any such suit, action, arbitration
or other proceeding, in addition to any and all other relief awarded to such
prevailing party, include in such judgment or award such party's costs and
expenses as provided in this Section 17.
18. EXECUTION AND COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be deemed an original, and such counterparts together shall constitute only one
instrument. Any or all of such counterparts may be executed within or outside
the State of California. Any one of such counterparts shall be sufficient for
the purpose of proving the existence and terms of this Agreement, and
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no party shall be required to produce an original or all of such counterparts in
making such proof.
19. COVENANT OF FURTHER ASSURANCES. All parties to this Agreement
shall, upon request, perform any and all acts and execute and deliver any and
all certificates, instruments and other documents that may be necessary or
appropriate to carry out any of the terms, conditions and provisions hereof or
to carry out the intent of this Agreement.
20. REMEDIES CUMULATIVE. Each and all of the several right and
remedies provided for in this Agreement shall be construed as being cumulative
and no one of them shall be deemed to be exclusive of the others or of any right
or remedy allowed b law or equity, and pursuit of any one remedy, or a waiver of
any other remedy.
21. BINDING EFFECT. Subject to the restrictions in Section 25
hereof respecting assignments, this Agreement shall inure to the benefit of and
be binding upon all of the parties hereto and their respective executors,
administrators, successors and permitted assigns.
22. COMPLIANCE WITH LAWS. Nothing contained in this Agreement
shall be construed to require the commission of any act contrary to law and
whenever there is a conflict between any term, condition or provision of this
Agreement and any present or future statute, law, ordinance or regulation
contrary to which the parties have no legal right to contract, the latter shall
prevail, but in such event the term, condition or provision of this Agreement
affected shall be curtailed and limited only to the extent necessary to bring it
within the requirement of the law, provided that such construction is consistent
with the intent of the parties as expressed in this Agreement.
23. GENDER. As used in this Agreement, the masculine, feminine or
neuter gender, and the singular or plural number, shall be deemed to include the
others whenever the context so indicates.
24. NO THIRD PARTY BENEFIT. Nothing contained in this Agreement
shall be deemed to confer any right or benefit on any person who is not a party
to this Agreement.
25. ASSIGNMENT. Neither party may assign this Agreement, or any
rights hereunder, without the prior express consent of the other party.
26. ARBITRATION. Any claim arising out of or relating to this
Agreement, or the breach thereof, or Employee's employment by the Company, or
the termination of Employee's employment by the Company, shall be settled by
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binding arbitration in Los Angeles, California, in accordance with the
commercial Arbitration Rules of the American Arbitration Association then in
effect, and judgment upon the award entered by the arbitrator(s) may be entered
in any court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
"COMPANY"
CINEMA RIDE, INC.
A Delaware Corporation
By:____________________________________
Toufic Xxxxx Xxxxx, Vice President
"EMPLOYEE"
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XXXXX XXXXXXX
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COMPENSATION COMMITTEE APPROVAL
The Cinema Ride, Inc. Compensation Committee hereby confirms and approves the
EMPLOYMENT AGREEMENT for Xxxxx Xxxxxxx dated September 1, 1997.
__________________________________ _______________________
Xxx Xxxxxxx Date
__________________________________ ________________________
Xxx Xxxxxxx Date
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