EXHIBIT 6.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of 9-10,
1998, between Modern Film Effects, Inc., a California corporation, Digital
Research Corporation, a California corporation, (hereinafter collectively
referred to as the "Company") and Xxxxxx Xxxxxxxxx, an individual
("Executive"), with reference to the following.
RECITALS
A. The Company is an entertainment group in the business of pre and
post-production film optics and titles, as well as special digital and visual
effects development and title design for the television and motion picture
industries, and such other related businesses as the Company may from time
to time engage in.
B. The Company desires to retain and employ Executive as the Company's
Chief Executive Officer and President, and Executive desires to accept such
retention and employment, subject to the terms and conditions set forth in
this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises, the
provisions set forth below, and other good and valuable consideration, the
parties agree as follows.
1. EMPLOYMENT. The Company hereby retains and employs Executive as its
Chief Executive Officer and President and Executive hereby accepts such
retention and employment, for the term and subject to the provisions set forth
below.
2. TERM. Unless sooner terminated as set forth below, Executive shall
be retained for a period of five (5) years whereby Executive is an employee of
the Company and at the end of the five (5) year term, Executive will have an
option to remain as an employee for an additional five (5) years. The actual
period of time that Executive remains in the employ of the Company pursuant
to this Agreement is referred to herein as the "Employment Period."
3. DUTIES. Executive shall be retained and employed as Chief Executive
Officer and President and shall hold such other offices or positions with the
Company as may be reasonably requested by the Company from time to time.
Executive shall devote his full time and efforts to the performance of the
Executive's duties hereunder on a full time basis, five (5) business days per
week, in accordance with the normal business hours of the Company and work
exclusively for the Company unless otherwise requested by the Company.
Executive shall
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performance of the Executive's duties hereunder on a full time basis, five
(5) business days per week, in accordance with the normal business hours of
the Company and work exclusively for the Company unless otherwise requested
by the Company. Executive shall oversee all operations and growth of the
Company's business for the maximum benefit of the Company. Executive shall
report to the Company's Chairman of the Board, in addition to the normal
duties associated with the position of Chief Executive Officer of companies
of similar size, and provide the Company, and its Board of Directors, with
proposed business strategy and analysis, and such other duties established by
the Company's Board of Directors.
(b) Executive shall be named as a Director of the Company and as
long as this Agreement shall remain in full force and effect, Executive shall
have a seat on the Board of Directors of the Company.
4. COMPENSATION. Execution shall be entitled to the following forms of
compensation for the performance of his duties.
(a) ANNUAL SALARY. The Company shall pay or cause to be paid to
Executive an annual base salary during the first year in the amount of
Sixty-Five Thousand Dollars ($65,000.00), to be increased annually thereafter
at a rate of ten percent (10%).
(b) VACATION. Executive shall be entitled to two weeks paid
vacation for years one and two (1 and 2), three (3) weeks vacation for years
three and four (3 and 4), and four (4) weeks vacation for the fifth (5th)
year of employment. The time for such vacations shall be mutually agreed upon
between Company and Executive. Further, vacation pay can and will be accrued
from year to year and any amount accrued in excess of five (5) weeks shall be
paid to Executive as additional salary.
(c) MEDICAL INSURANCE. The Company shall provide, pay for or
reimburse Executive with or for reasonable insurance for Executive, spouse
and children. Insurance shall include health, dental and optical insurance in
accordance with the general Company practices, long-term disability insurance
and life insurance at a level in accordance with an executive in a similar
entertainment company.
(d) EXPENSES. Executive shall be entitled to the use of Company's
credit cards during the period of his employment for travel and other
out-of-pocket expenses incurred in the performance of his duties hereunder,
in a reasonable monthly amount, including, but not limited to, cell phone,
internet, cable and appropriate satellite feeds.
(e) AUTOMOBILE. Executive shall receive reimbursement of business
related automobile and gasoline expenses for one automobile. This shall
include an automobile lease, including the down payment, with a lease payment
not to exceed One Thousand Dollars ($1,000.00) per month, plus insurance,
gasoline, and maintenance.
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6. TERMINATION. The Employment Period shall be immediately and
automatically terminated upon Executive's death. The Employment Period shall
also terminate under the following conditions.
(a) TERMINATION FOR CAUSE. Notwithstanding anything in this Agreement
to the contrary, the Company may terminate Executive's employment hereunder
at any time if Executive:
(i) Is convicted of, or pleads guilty or nolo contendere to (i)
any felony, or (ii) misdemeanor involving moral turpitude;
(ii) Is adjudicated to be incompetent or, in the reasonable
opinion of a licensed physician or psychiatrist retained by the Company, is
unable by reason of mental or physical illness or incapacity;
(iii) Is unable to carry out Executive's duties hereunder for a
period of three months during any twelve-month period;
(iv) In the reasonable opinion of a licensed physician or
psychiatrist retained by the Company, is substantially unable by reason of
drug (including alcohol) abuse or addiction, to reasonably and effectively
carry out Executive's duties hereunder for any period of time in excess of
Executive's accrued vacation time or sick leave, if any;
(v) Fails or refuses to perform Executive's reasonable and
customary duties hereunder for a period of ten (10) days after written notice
describing the duty or duties which Executive has failed or refused to
perform is given to Executive by the Company;
(vi) Is in violation of any provisions of this Agreement;
provided, however, that if such violation can be cured in a manner that will
restore the Company to the position he would have enjoyed in the absence of
the violation, Executive shall have a period of ten (10) days after written
notice describing the violation is given to Executive by the Company to
completely cure such violation and, if completely cured, this Agreement shall
not be subject to termination of such violation.
Should Executive be terminated for cause, his severance shall be
equivalent to four (4) months salary and full benefits for a period of two
(2) years.
(b) BY PERMANENT DISABILITY. The Employment Period shall terminate
upon "Permanent Disability" of Executive. "Permanent Disability" shall mean,
with respect to Executive, (i) the suffering of any mental or physical
illness, disability or incapacity to the extent that Executive shall be
unable to perform his duties or (ii) the absence of Executive from his
employment by reason of any mental or physical illness, disability or
incapacity for a period of three (3) months during any six (6) month period;
provided, however, in either case, that such illness, disability or
incapacity shall be determined to be of a permanent nature by a licensed
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(b) BY PERMANENT DISABILITY. The Employment Period shall terminate
upon "Permanent Disability" of Executive. "Permanent Disability" shall mean,
with respect to Executive, (i) the suffering of any mental or physical
illness, disability or incapacity to the extent that Executive shall be
unable to perform his duties or (ii) the absence of Executive from his
employment by reason of any mental or physical illness, disability or
incapacity for a period of three (3) months during any six (6) month period;
provided, however, in either case, that such illness, disability or
incapacity shall be determined to be of a permanent nature by a licensed
physician selected by the Board of Directors. The termination date in the
event of a clause (i) of the immediately preceding sentence, shall be the
date of determination by the physician, and in the case of clause (ii) of the
immediately preceding sentence, the last day of such three (3) month period.
In the case of Permanent Disability, the Company shall promptly pay to
Executive (or his representative) the sum of (A) the unpaid Annual Base
Salary to which he is entitled pursuant to Section 4(a) through the
termination date and (B) any earned but unpaid commissions or profit
participation due to Executive pursuant to Section 5, and all benefits under
Executive's Disability Insurance Plan, if any.
(c) TERMINATION WITHOUT CAUSE. Notwithstanding anything in the
Agreement to the contrary, should the Executive be terminated from employment
without cause, Executive shall be entitled to a salary and full benefits
package, including automobile expenses, for one (1) year, or the balance of
this employment contract, whichever is greater.
7. AFFIRMATIVE COVENANTS. Executive makes the following promises and
covenants to the Company.
(a) NON-COMPETITION. Executive agrees that at all times during the
Term:
(i) For a period equal to two years severance from and after
the termination of Executive's employment with the Company, D-Rez or AIII,
whichever is later, Executive shall not, and shall cause Executive's
Affiliates not to, directly or indirectly, as a partner, joint venturer,
employer, employee, contractor, consultant, shareholder, director, officer,
trustee, principal or agent engage in, control, advise with respect to,
manage, act as a consultant to, receive any economic benefit from or exert
any influence upon the development, marketing, manufacture, sale,
distribution, offering or promoting for sale in the California counties
listed in EXHIBIT "A", any state of the United States, North America, the
European Union, Asia or Africa of titles, post-production services or high
definition conversion or work for any company that provides such services
(the "Competitive Services"); provided, however that Executive may, without
violating this covenant, own as a passive investment not in excess of five
percent (5%) of the securities of a corporation which engages in such
competition if such securities are traded on a national securities exchange
or traded publicly in the over-the-counter market.
(ii) Executive acknowledges that the foregoing territorial
and time limitations are reasonable and properly required for the adequate
protection of Buyer and that in the
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executive officers, director, shareholder, department managers at the Company
of the Company to invest in or to purchase, or to offer or subscribe to
purchase, any security or general or equity interest in any venture that is
competitive with or similar to the business of the Company. As used in this
Section the terms "employ" and "employment" are used in the broadcast sense
to encompass all associations, including and without limitation, that of
employee, agent, independent contractor, owner, officer, director,
shareholder, partner, associate, representative and consultant.
(iv) If the scope of any restrictions contained in
paragraph (i) and (ii) of this Section is too broad to permit enforcement of
such restrictions of their full extent, then such restrictions shall be
enforced to the maximum extent permitted by law, and Executive hereby
consents and agrees that such scope may be judicially modified accordingly in
any proceeding brought to enforce such restrictions.
(v) The ideas, developments, writings and designs developed
in whole or in part by the Executive during the Executive's employment with
the Company, D-Rez and EDII which relate to the business of the Company,
D-Rez or EDII (the "Work Product") are, and shall remain, the exclusive
property of the Company, D-Rez or EDII. To the extent that any of the Work
Product is capable of protection by copyright, the Executive acknowledges
that it is created within the scope of the Executive's employment with the
Company, D-Rez or EDII and is a "work-made-for-hire."
(b) REMEDIES FOR BREACH OF AFFIRMATIVE COVENANTS OF EXECUTIVE.
(i) Subject to the limitations provided by applicable law,
the covenants set forth in this Section 7 shall continue to be binding upon
Executive in accordance with their terms, notwithstanding the termination of
his employment with Company for any reason whatsoever. Such covenants shall
be deemed and construed as separate agreements independent of any other
provisions of this Agreement and any other agreement between the Company and
Executive. The existence of any claim or cause of action by Executive against
the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of any or all such
covenants in accordance with their terms.
(ii) The parties hereby agree that any breach or threatened
breach of Section 7 of this Agreement will cause substantial and irreparable
damage to the other in an amount and of a character difficult to ascertain.
Accordingly, for their mutual benefit and to prevent any such breach or
threatened breach, and in addition to any other relief to which a party may
otherwise be entitled, the non-breaching party shall be entitled to immediate
temporary, preliminary and permanent injunctive relief through appropriate
legal proceedings, without proof that actual damages have been incurred or
may be incurred by such a party with respect to such breach or threatened
breach. The parties expressly agree that the party seeking this relief shall
not be required to post any bond or other security as a condition to obtaining
any injunctive relief pursuant to this Section and each of the parties
expressly waive any rights to the contrary. The parties intend for the
covenants of this Agreement to be enforceable to the
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maximum extent permitted by law, and if any reviewing court deems any of such
covenants to be unenforceable or invalid, Sellers and Buyer authorize any
such court to reform (A) the unenforceable or invalid provisions and to
impose such restrictions as reformed, and (B) the remaining provisions as it
deems reasonable.
(c) FURTHER DUTIES. Executive shall perform such other duties and
work for, consult to, or assist such other entities as may be requested from
time to time by the Company.
8. REPRESENTATIONS AND WARRANTIES OF EXECUTIVE. Executive represents
and warrants to the Company that (i) Executive is under no contractual or
other restriction or obligation that is inconsistent with the execution of
this Agreement, the performance of Executive's duties hereunder or any of the
rights of the Company hereunder, (ii) Executive is under no physical or
mental disability that would impair the performance of Executive's duties
under this Agreement; and (iii) Executive has reviewed this Agreement with
Executive's legal counsel.
9. NOTICES. All notices, requests, demands or other communication
(collectively, "Notice") given to any party pursuant to this Agreement shall
not be effective unless given in writing and addressed to the parties at
their respective addresses as set forth below.
If to Executive:
Xxxxxx Xxxxxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If to the Company:
Notice shall be deemed duly given when delivered personally or by
telegram, telex or courier, or, if mailed, forty-eight (48) hours after
deposit in the United States mail, certified mail, postage pre-paid. The
addresses of the parties for the purpose of providing Notice pursuant to this
paragraph may be changed from time to time by Notice to the other party duly
given in the foregoing manner.
10. GOVERNING LAW; DISPUTES. This Agreement will be interpreted in
accordance with California law, including all matters of construction,
validity, performance and enforcement, without giving effect to any
principles of conflict of laws. Any dispute or proceeding concerning this
Agreement except an action pursuant to Section 7 hereof will be resolved by
binding arbitration to be held in Los Angeles County, California. Any party
may
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demand arbitration through written notice sent by certified mail to the other
(an "Arbitration Demand"). Within fifteen (15) days after the date that the
Arbitration Demand is first mailed, each of the parties will confer to select
a mutually acceptable arbitrator from JAMS/Endispute ("JAMS"). If the
arbitrator so selected is unavailable, the parties will confer to select
another arbitrator. If the parties cannot mutually agree to the selection of
an arbitrator, or if one party refuses to participate in the selection
process, JAMS will appoint an arbitrator. The arbitrator will be governed by
the provisions of this Agreement rather than the rules of JAMS.
If JAMS is unable or unwilling to select an arbitrator, the
Presiding Judge of the Los Angeles County Superior Court will select an
arbitrator upon the request of either party, and such selection will be
binding on the parties. The arbitrator so selected will schedule the
arbitration hearing within sixty (60) days after he or she is first selected.
The parties will be permitted written discovery and one deposition each. The
arbitrator will have authority to enter a binding judgment even if the
parties do not appear at the arbitration and may also grant any remedy or
relief that the arbitrator reasonably believes to be just and appropriate,
provided that such remedy or relief is within the scope of this Agreement.
All fees and expenses of the arbitration will be paid equally by the
parties participating in the arbitration. At the conclusion of the
arbitration, the arbitrator will award the prevailing party reasonable
attorneys' fees, including all arbitration costs. If the arbitration award is
made, the prevailing party may convert the award into a judgment and execute
upon that judgment.
11. ATTORNEYS' FEES. If any arbitration, litigation, action, suit or
other proceedings is instituted to remedy, prevent or obtain relief from a
breach of this Agreement, in relation to a breach of this Agreement or
pertaining to a declaration of rights under this Agreement, the prevailing
party will recover all such party's attorneys' fees incurred in each and
every such action, suit or other proceeding, including any and all appeals or
petitioner therefrom. As used in this Agreement, attorneys' fees will be
deemed to be the full and actual costs of any legal services actually
performed in connection with the matters involved, including those related to
any appeal or the enforcement of any judgment, calculated on the basis of the
usual fee charged by attorneys performing such services, and will not be
limited to "reasonable attorneys' fees" as defined in any statute or rule of
court.
12. AMENDMENTS/WAIVERS. This Agreement may be amended, supplemented,
modified, or rescinded only through an express written instrument signed by
all the parties or their respective successors and assigns; provided,
however, that this Agreement may only be amended or modified upon the express
written consent of EDII, which may be withheld by EDII in its sole and
absolute discretion. Either party may specifically and expressly waive in
writing any portion of this Agreement or any breach hereof, but no such
waiver shall constitute a further or continuing waiver of any preceding or
succeeding breach of the same or any other provision. The consent by one
party to any action for which such consent was required shall not be deemed
to imply consent or waiver of the necessity of obtaining such consent for the
same or similar acts in the future.
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13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument. All faxed
signatures shall be deemed originals.
14. SEVERABILITY. Each provision of this Agreement is intended to be
severable and if any term of provision herein is determined invalid or
unenforceable for any reason, such illegality or invalidity shall not affect
the validity of the remainder of this Agreement and, wherever possible,
intent shall be given to the invalid or unenforceable provision.
15. ENTIRE AGREEMENT. This Agreement contains the entire and complete
understanding between the parties concerning its subject matter and all
representations, agreements, arrangements and understandings between or among
the parties, whether oral or written, have been fully merged herein and
are superseded hereby.
16. REMEDIES. All rights, remedies, undertakings, obligations, options,
covenants, conditions and agreements contained in this Agreement shall be
cumulative and no one of them shall be exclusive of any other.
17. ASSIGNMENT. Neither this Agreement, nor any interest herein, shall
be assignable (voluntarily, involuntarily, by judicial process or otherwise)
Executive to any person or entity without the prior written consent of the
Company. Any attempt to assign this Agreement without such consent shall be
void and, at that option of the Company, shall be an incurable breach of this
Agreement resulting in the termination of this Agreement.
18. SUCCESSORS. Subject to the foregoing paragraph, this Agreement shall
be binding upon and inure to the benefit of the parties and their respective
heirs, legalees, legal representatives, successors and permitted assigns.
19. INTERPRETATION. The language in all parties of this Agreement shall
be in all cases construed simply according to its fair meaning and not
strictly for or against any party. Whenever the context requires, all words
used in the singular will be construed to have been used in the plural and
vice versa, and each gender will include any other gender. The captions of
the paragraphs of this Agreement are for convenience only and shall not
affect the construction or interpretation of any of the provisions herein.
20. BENEFIT OF AGREEMENT. This Agreement is for the sole and exclusive
benefit of the signators hereto and nothing in this Agreement shall be
construed to give any person or entity other than the parties hereto any
legal or equitable right, claim or remedy, except EDII, which is an intended
third party beneficiary of this Agreement.
21. LIMITATION ON ACTIONS. Any claim, dispute, controversy or action for
breach relative to this Agreement must be brought and legal process or
arbitration, as the case may be, initiated within one (1) year after the
cause of action for such claim first accrued or the breach first occurred,
whichever is sooner.
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22. MISCELLANEOUS. The recitals and all exhibits, attachments or other
documents referenced in this Agreement are fully incorporated into this
Agreement by reference. Unless expressly set forth otherwise herein, all
references herein to a "day," "month," or "year" shall be deemed to be a
reference to a calendar day, month or year, as the case may be. All
cross-references herein shall refer to provisions within this Agreement, and
shall not be deemed to be references to the overall transaction or to any
other agreement or document.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
"EXECUTIVE"
/s/ Xxxxxx Xxxxxxxxx
----------------------------------
XXXXXX XXXXXXXXX, an individual
"THE COMPANY"
MODERN FILM EFFECTS, INC.,
a California corporation
By:
------------------------------
Its:
---------------------------
Approved by American International
Industries, Inc.
Date: __________________, 1998 ----------------------------------
XXXXXX XXXX, Chairman of the Board
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