EXHIBIT 10.2
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FORM OF EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of January 1, 2002 (this "Agreement"),
by and between Tremor Entertainment, Inc., a Nevada corporation (the "Company"),
and Xxxxxx Xxxxxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive has heretofore performed services on behalf of the
Company for which the Company acknowledges and hereby confirms that remuneration
is past due and owing; and
WHEREAS, the Company wishes to memorialize employment of the Executive and
the Executive desires to continue in the employment of the Company, all upon the
terms and provisions, and subject to the conditions, set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual premises, covenants and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt, and legal adequacy of which is hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:
1. TERM. The Company hereby employs the Executive, and the Executive hereby
accepts employment hereunder, for an initial term of two (2) years commencing on
the date hereof, subject to earlier termination as provided in Section 9 hereof
(the "Employment Term").
2. POSITION AND DUTIES; REPRESENTATIONS OF EXECUTIVE.
(a) During the Employment Term, the Company shall employ the
Executive, and the Executive shall serve, as the Chairman and Chief Executive
Officer. The Executive shall report directly to the Board of Directors of the
Company (the "Board"). The parties agree that the Executive's title and such
reporting structure shall not be changed without the written approval of the
Executive.
(b) The Executive shall be responsible for overseeing the business of
the Company and shall supervise the Officers of the Company, and shall perform
such duties and have such responsibilities as are customarily performed and
enjoyed by persons employed in comparable positions, subject, however, in all
instances to the direction and control of the Board. The Executive shall perform
such other duties as may be assigned to him by the Board.
(c) Subject to Section 2(d) hereof, the Executive shall devote a
substantial portion of his business time, labor, skill and energy to conducting
the business and affairs of the Company and to performing his duties and
responsibilities to the Company as set forth in Section 2(b) hereof. The Company
acknowledges that the Executive is engaged in various other business activities.
(d) Notwithstanding anything set forth in Section 2(d) hereof, the
Executive shall be entitled to devote reasonable periods of time and effort to
the following: (i) charitable and community activities; (ii) the management of
the Executive's personal investment assets; (iii) serving as a director and
officer of other business entities; and (iv) various other business activities;
provided that performing any of the foregoing activities does not materially
interfere with the Executive's performance of his responsibilities and duties
hereunder.
(e) The Executive represents and warrants to the Company that the
Executive has the right to negotiate and enter into this Agreement, and the
Executive's execution, delivery and performance of this Agreement does not
breach, interfere with or conflict with any other contractual agreement,
covenant not to compete, option, right of first refusal or other existing
business relationship or any judgment or order, in each case, to which the
Executive is a party, or otherwise subject.
3. COMPENSATION.
(a) Base Salary. For the first year of the Employment Term, as full
consideration for the Executive's services hereunder, the Company shall pay to
the Executive a base salary at an annual rate of $125,000 (as the same may be
adjusted from time to time, the "Base Salary"). The Base Salary shall be payable
in equal installments in conformity with the Company's normal payroll practices.
Notwithstanding anything to the contrary contained herein, at any time during
the first year of the Employment Term, the Executive, at its sole option, may
elect in lieu of cash payment to receive the Base Salary in the form of an
aggregate of 500,000 shares of the Company's common stock, par value $.001 per
share (the "Common Stock"), issuable and accruing to the Executive in eleven
equal monthly installments of 41,666 shares of Common Stock and a final
installment in the twelfth month of 41,674 shares of Common Stock.
(b) Adjustment to Base Salary. After the first year of the Employment
Term, the Base Salary shall be subject to annual review and, if the Board deems
it appropriate, increased by the Board based on the financial performance of the
Company and such other criteria as the Board considers appropriate.
(c) Bonus. The Executive may receive bonus compensation with respect
to each fiscal year of the Company during which he is employed hereunder,
commencing with the fiscal year ending March 31, 2002, it being understood that
the determination of whether to pay any such bonus and the amount thereof shall
be made by the Board, in its sole and absolute discretion.
4. EMPLOYEE BENEFITS.
(a) During the period of the Executive's employment with the Company
hereunder, the Executive shall be entitled to receive such other perquisites and
fringe benefits generally made available by the Company to its senior executives
and key
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management employees as a group, in accordance with the plans and policies of
the Company from time to time in effect, including, without limitation medical
insurance, health and accident insurance, disability or similar plan or program
of the Company now existing or established hereafter available to other
employees of the Employer in similar positions as the Executive. The Company
unilaterally may implement changes to any such plans or programs (including
elimination of any such plan or program) in the Company's sole discretion.
(b) The Executive shall be entitled to paid vacation time and holidays
per annum in accordance with the Company's policies from time to time in effect
and as is consistent with his position with the Company and the performance of
his duties hereunder; provided that the Executive shall not take vacation time
at any time that would materially interfere with the business or operations of
the Company.
(c) The Company shall promptly reimburse the Executive for all
reasonable and necessary business expenses incurred by the Executive in
accordance with his duties and responsibilities hereunder, including, without
limitation, telephone and facsimile charges incurred by the Executive on behalf
of the Company in the performance of his duties hereunder, upon the presentation
by the Executive of appropriate evidence and documentation of the incurrence
thereof in accordance with the Company's policies from time to time in effect.
The Company shall reimburse the Executive for membership dues in professional
organizations, if such membership is reasonably necessary to conduct the
business of the Company. In addition, during the Employment Term, the Executive
shall receive $1,500 per month as an automobile allowance for the lease or
purchase of an automobile, and $300 per month to purchase health insurance
outside the Company's California policy.
(d) The Executive shall be entitled to first class travel and hotel
accommodations for all business-related travel necessitated by the Executive's
performance of his duties and responsibilities to the Company.
5. INSURANCE. The Company shall have the right to apply for and take out,
in the Company's own name or otherwise, at the Company's expense, life, health,
accident, or other insurance covering the Executive, in any amount the Company
deems necessary to protect the Company's interest hereunder, and the Executive
shall have no right, title or interest in or to any such insurance or the
proceeds thereof. The Executive shall assist the Company in obtaining such
insurance by submitting to usual and customary medical and other examinations
and by signing such applications, statements and other instruments as may be
reasonably required by any insurance company in connection with obtaining such
insurance coverage.
6. DEDUCTIONS AND WITHHOLDINGS. All amounts payable or which become payable
to the Executive under any provision of this Agreement shall be subject to such
deductions and withholdings as is required by applicable law.
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7. INDEMNIFICATION. The Company shall indemnify the Executive in his
capacity as an officer of the Company to the fullest extent permitted by
applicable law against all debts, judgments, costs, charges or expenses
whatsoever incurred or sustained by the Executive in connection with any action,
suit or proceeding to which the Executive may be made a party, directly or
indirectly, by reason of his being or having been a director or officer of the
Company, or because of actions taken by the Executive as a director or officer
of the Company which were believed by the Executive to be in the best interests
of the Company, and the Executive shall be entitled to be covered by any
directors' and officers' liability insurance policies which the Company
maintains for the benefit of its directors and officers, subject to the
limitations of any such policies. The Company shall have the right to assume,
with legal counsel of its choice, the defense of the Executive in any such
action, suit or proceeding for which the Company is providing indemnification to
the Executive. Should the Executive determine to employ separate legal counsel
in any such action, suit or proceeding, any costs and expenses of such separate
legal counsel shall be the sole responsibility of the Executive. If the Company
does not assume the defense of any such action, suit or other proceeding, the
Company shall, upon request of the Executive, promptly advance or pay any amount
for costs or expenses (including, without limitation, the reasonable legal fees
and expenses of counsel retained by the Executive) incurred by the Executive in
connection with any such action, suit or proceeding; provided that the Executive
provides the Company with reasonable assurances and/or security that the
Executive will be able to repay the amounts advanced if it is ultimately
determined by the Company that the Executive was not entitled to
indemnification.
8. TERMINATION.
(a) Termination by the Company Upon Death. The Executive's employment
under this Agreement shall terminate immediately upon the Executive's death,
subject to Section 9(a) hereof.
(b) Termination by the Company With Cause. The Company shall have the
right to terminate the Executive's employment hereunder for Cause, subject to
Section 9(a) hereof. For purposes of this Agreement, the term "Cause" shall mean
any of the following: (i) the Executive's knowing and willful breach of
Executive's material duties and responsibilities under this Agreement, which
such breach is not cured within thirty (30) days after receipt of written notice
thereof by the Executive from the Company; (ii) the Executive's conviction by,
or entry of a plea of guilty or nolo contendere in, a court of competent
jurisdiction of a crime constituting a felony against the Company; or (iii) an
act of fraud or embezzlement with respect to the Company or its assets or the
unauthorized usurpation of a corporate opportunity. For purposes of this
paragraph, no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission was in the best
interest of the Company. Notwithstanding anything contained in this Agreement to
the contrary, the Executive shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to the Executive,
together with a notice setting forth in reasonable detail the facts and
circumstances claimed to provide a
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basis for termination of the Executive's employment under clause (i), (ii) or
(iii) above, a copy of a resolution, duly adopted by the affirmative vote of the
entire membership of the Board (other than the Executive) at a meeting of the
Board called and held for such purpose (after reasonable written notice to the
Executive and an opportunity for him, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of the Board, the
Executive was guilty of conduct set forth above in clause (i), (ii) or (iii),
and specifying the particulars thereof in detail.
(c) Termination by the Company Without Cause. The Company may
terminate the Executive's employment hereunder Without Cause at any time during
the Employment Term of this Agreement, subject to Section 9(b) hereof. For
purposes of this Agreement, the term "Without Cause" shall mean the termination
of the Executive's employment hereunder for a reason or for no reason, which is
not pursuant to Sections 8(a), 8(b) or 8(d) hereof.
(d) Termination by the Company Upon Disability. If the Executive shall
be unable to perform his duties and responsibilities hereunder by reason of
illness or other incapacity, his failure so to perform his duties will not be
grounds for terminating his employment for Cause by the Company; provided,
however, should the period of such illness incapacity prevent the Executive from
performing his duties hereunder for six (6) consecutive months or more than
eight (8) months in any twelve (12) month period during the Employment Terms (a
"Disability Occurrence"), then the Company may terminate the Executive's
employment hereunder due to the Disability Occurrence, subject to Section 9(a)
hereof.
(e) Termination by the Executive With Good Reason. The Executive shall
have the right to terminate the Executive's employment hereunder for Good
Reason, subject to Section 9(b) hereof. For purposes of this Agreement, the term
"Good Reason" shall mean any one or more of the following actions taken by the
Company without the written consent of the Executive: (i) any failure by the
Company to pay, or any material reduction by the Company of the Base Salary, or
the breach by the Company of any of the material terms and provisions of this
Agreement or its part to be observed or performed hereof, which failure is not
cured within thirty (30) days after receipt of written notice thereof by the
Company from the Executive; or (ii) a material diminution in the Executive's
duties or the assignment to the Executive of duties which are materially
inconsistent with his position with the Company.
9. EFFECT OF TERMINATION.
(a) Upon termination of the Executive's employment hereunder pursuant
to Sections 8(a), 8(b) or 8(d) hereof, the Executive (or his estate or other
designated beneficiary, as applicable) shall be entitled to receive the
following: (i) all accrued but unpaid Base Salary through the date of such
termination; (ii) except in the case of termination of the Executive's
employment for Cause, any unpaid bonus compensation in respect of a fiscal year
ended prior to the date of termination, if and only if the Board has determined
that such a bonus was to be paid to the Executive; (iii)
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payment in respect of any accrued but unused vacation time; and (iv) any
payments under any applicable life (other than key man life insurance) or
disability insurance plans that are properly payable that have not been paid.
(b) Upon termination of the Executive's employment hereunder pursuant
to Sections 8(c) or 8(e) hereof, the Executive shall be entitled to receive the
following: (i) all accrued but unpaid Base Salary through the date of such
termination; (ii) any unpaid bonus compensation in respect of a fiscal year
ended prior to the date of termination, if and only if the Board has determined
that such a bonus was to be paid to the Executive; (iii) payment in respect of
accrued but unused vacation time; and (iv) a severance payment from the Company
equal to the product of Executive's Base Salary multiplied by either (A) one (1)
year or (B) the period of time remaining under the Employment Term, whichever is
greater. Any such severance payment shall be due regardless of whether or not
the Executive engages in or seeks other employment following the date of such
termination).
10. RESTRICTIONS RESPECTING CONFIDENTIAL INFORMATION, COMPETITION, ETC.
(a) The Executive acknowledges and agrees that by virtue of the
Executive's position and involvement with the business and affairs of the
Company, the Executive will develop substantial expertise and knowledge with
respect to all aspects of the business, affairs and operations of the Company
and will have access to all significant aspects of the business and operations
of the Company and to Confidential and Proprietary Information (as such term is
hereinafter defined). The Executive acknowledges and agrees that the Company
will be damaged if the Executive were to breach any of the provisions of this
Section 11 or if the Executive were to disclose or make unauthorized use of any
Confidential and Proprietary Information. Accordingly, the Executive expressly
acknowledges and agrees that the Executive is voluntarily entering into this
Agreement and that the terms, provisions and conditions of this Section 10 are
fair and reasonable and necessary to adequately protect the Company.
(b) For purposes of this Agreement, the term "Confidential and
Proprietary Information" shall mean any and all (i) confidential or proprietary
information or material not in the public domain about or relating to the
business, operations, assets or financial condition of the Company or any of its
subsidiaries or any of its trade secrets, including, without limitation,
research and development plans or projects; data and reports; computer materials
such as programs, instructions and printouts; formulas; product testing
information; business improvements, processes, marketing and selling strategies;
strategic business plans (whether pursued or not); budgets; unpublished
financial statements; licenses; pricing, pricing strategy and cost data;
information regarding the skills and compensation of executives; the identities
of clients and potential clients; intellectual property strategies and any work
on any patents, trademarks, tradenames or universal resource locators, prior to
any filing or the use thereof in commerce; pricing, timing, sales terms, service
plans, methods, practices, strategies, forecasts, know-how and other marketing
techniques, source codes, object codes, algorithms, the nature of any patents or
patent applications; and (ii) any other information,
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documentation or material not in the public domain by virtue of any action by or
on the part of the Executive, the knowledge of which gives or may give the
Company or any of its subsidiaries a material competitive advantage over any
entity not possessing such information. For purposes hereof, the term
Confidential and Proprietary Information shall not include any information or
material (1) that is known to the general public other than due to a breach of
this Agreement by the Executive or (2) was disclosed to the Executive by a
person or entity who the Executive did not reasonably believe was bound to a
confidentiality or similar agreement with the Company.
(c) The Executive hereby covenants and agrees that, while the
Executive is employed by the Company and thereafter, unless otherwise authorized
by the Company in writing, the Executive shall not, directly or indirectly,
under any circumstance: (i) disclose to any other person or entity (other than
in the regular course of business of the Company) any Confidential and
Proprietary Information, other than pursuant to applicable law, regulation or
subpoena or with the prior written consent of the Company; (ii) act or fail to
act so as to impair the confidential or proprietary nature of any Confidential
and Proprietary Information; (iii) use any Confidential and Proprietary
Information other than for the sole and exclusive benefit of the Company; or
(iv) offer or agree to, or cause or assist in the inception or continuation of,
any such disclosure, impairment or use of any Confidential and Proprietary
Information. Following the Employment Term, the Executive shall return all
documents, records and other items containing any Confidential and Proprietary
Information to the Company (regardless of the medium in which maintained or
stored), without retaining any copies, notes or excerpts thereof, or at the
request of the Company, shall destroy such documents, records and items (any
such destruction to be certified by the Executive to the Company in writing).
Following the Employment Term, the Executive shall return to the Company any
property or assets of the Company in the Executive's possession. The Executive
hereby irrevocably assigns and transfers to the Company and agrees to transfer
and assign to the Company any right, title and interest in and to the
Confidential and Proprietary Information, and to applications for patents and
patents granted thereupon and to all copyrightable material related thereto, all
of which shall constitute "work for hire."
(d) While the Executive is employed by the Company and for one (1)
year after the Executive ceases to be employed by the Company, the Executive
shall not, directly or indirectly, solicit to employ or employ for himself or
others any employee of the Company or any subsidiary of the Company who was an
employee of the Company or any subsidiary of the Company as of the date of the
termination of the Executive's employment with the Company or during the
preceding six (6) month period, or solicit any such employee to leave such
employee's employment or join the employ of another, then or at a later time.
(e) The parties agree that nothing in this Agreement shall be
construed to limit or negate the common law of torts, confidentiality, trade
secrets, fiduciary duty and obligations where such laws provide the Company with
any broader, further or other remedy or protection than those provided herein.
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(f) Because the breach of any of the provisions of this Section 10 may
result in immediate and irreparable injury to the Company for which the Company
may not have an adequate remedy at law, the Company shall be entitled, in
addition to all other rights and remedies available to it at law, in equity or
otherwise, to a decree of specific performance of the restrictive covenants
contained in this Section 10 and to a temporary and permanent injunction
enjoining such breach (without being required to post a bond or furnish other
security to show any damages).
(g) In the event the Executive challenges this Agreement and an
injunction is issued staying the implementation of any of the restrictions
imposed by this Section 10, the time remaining on the restrictions shall be
tolled until the challenge is resolved by final adjudication, settlement or
otherwise, except that the time remaining on the restrictions shall not be
tolled during any period in which the Executive is unemployed.
11. NOTICES. All notices, demands, consents, requests, instructions and
other communications to be given or delivered or permitted under or by reason of
the provisions of this Agreement or in connection with the transactions
contemplated hereby shall be in writing and shall be deemed to be delivered and
received by the intended recipient as follows: (i) if personally delivered, on
the Business Day of such delivery (as evidenced by the receipt of the personal
delivery service), (ii) if mailed certified or registered mail return receipt
requested, five (5) Business Days after being mailed, (iii) if delivered by
overnight courier (with all charges having been prepaid), on the Business Day of
such delivery (as evidenced by the receipt of the overnight courier service of
recognized standing), or (iv) if delivered by facsimile transmission, on the
Business Day of such delivery if sent by 5:00 p.m. in the time zone of the
recipient, or if sent after that time, on the next succeeding Business Day (as
evidenced by the printed confirmation of delivery generated by the sending
party's telecopier machine). If any notice, demand, consent, request,
instruction or other communication cannot be delivered because of a changed
address of which no notice was given (in accordance with this Section 11), or
the refusal to accept same, the notice, demand, consent, request, instruction or
other communication shall be deemed received on the second Business Day the
notice is sent (as evidenced by a sworn affidavit of the sender). All such
notices, demands, consents, requests, instructions and other communications will
be sent to the following addresses or facsimile numbers as applicable:
If to the Executive: Xx. Xxxxxx Xxxxxxxx
00000 Xxxxx Xxxxxx
Xxxx Xxxxx Xx 00000
FAX: (000) 000-0000
If to the Company: Tremor Entertainment, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
FAX: (000) 000-0000
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With a copy to: Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxx Xxxxxxxx, Esq.
FAX: (000) 000-0000
or to such other address as a party may have furnished to the other parties in
writing in accordance herewith. Any notice, consent, direction, approval,
instruction, request or other communication given in accordance with this
Section 11 shall be effective after it is received by the intended recipient.
12. GENERAL PROVISIONS.
(a) Benefit of Agreement and Assignment. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
executors, administrators, successors and permitted assigns; provided, however,
that the Executive may not assign any of his rights or duties hereunder except
upon the prior written consent of the Company. This Agreement shall be binding
on any successor to the Company whether by merger, consolidation, acquisition of
all or substantially all of the Company's assets or business or otherwise, as
fully as if such successor were a signatory hereto, and the Company shall cause
such successor to, and such successor shall, expressly assume the Company's
obligations hereunder. The term "Company" as used in this Agreement shall
include all such successors. Except as expressly permitted by this Section
13(a), nothing herein is intended to or shall be construed to confer upon or
give any Person, other than the parties hereto, any rights, privileges or
remedies under or by reason of this Agreement.
(B) Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THAT STATE, WITHOUT REGARD OR REFERENCE
TO ITS PRINCIPLES OF CONFLICTS OF LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
INTERPRETED WITHOUT REGARD TO ANY PRESUMPTION AGAINST THE PARTY CAUSING THIS
AGREEMENT TO BE DRAFTED. EACH OF THE PARTIES UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY RIGHT TO CONTEST THE VENUE OF SAID COURTS OR TO CLAIM THAT SAID
COURTS CONSTITUTE AN INCONVENIENT FORUM. EACH OF THE PARTIES UNCONDITIONALLY AND
IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(c) Severability. Each term and provision of this Agreement is
severable; the invalidity, illegality or unenforceability or modification of any
term or provision of this Agreement shall not affect the validity, legality and
enforceability of the other terms and provisions of this Agreement, which shall
remain in full force and effect. Since it is the desire and intent of the
parties that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in
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each jurisdiction in which enforcement is sought, should any particular
provision of this Agreement be deemed invalid, illegal or unenforceable, the
same shall be deemed reformed and amended to delete that portion that is
adjudicated to be invalid, illegal or unenforceable and the deletion shall apply
only with respect to the operation of such provision and to the extent of such
provision and, to the extent that a provision of this Agreement would be deemed
unenforceable by virtue of its scope, but may be made enforceable by limitation
thereon, each party agrees that this Agreement shall be reformed and amended so
that the same shall be enforceable to the fullest extent permissible under the
laws and public policies applied in the jurisdiction in which enforcement is
sought.
(d) Entire Agreement. This Agreement contains the entire understanding
and agreement of the parties, and supersedes any and all other prior and/or
contemporaneous understandings and agreements, either oral or in writing,
between the parties hereto with respect to the subject matter hereof, all of
which are merged herein. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, oral or otherwise, have
been made by either party, or anyone acting on behalf of either party, which are
not embody herein, and that no other agreement, statement or promise not
contained in this Agreement shall be valid or binding.
(e) Amendments; Waiver. This Agreement may be modified, amended or
waived only by an instrument in writing signed by the Company and the Executive.
No waiver of any provision hereof shall be valid unless made in writing and
signed by the party making the waiver. No waiver of any provision of this
Agreement shall constitute a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver.
(f) Headings; Counterparts. The headings contained in this Agreement
are inserted for reference purposes only and shall not in any way affect the
meaning, construction or interpretation of this Agreement. This Agreement may be
executed in counterparts, each of which, when executed, shall be deemed to be an
original, but both of which, when taken together, shall constitute one and the
same document.
[Signature Page To Follow]
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IN WITNESS WHEREOF, each of the Company and the Executive has executed this
Agreement as of the date first above written.
TREMOR ENTERTAINMENT, INC.
By:
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Xxxxx X. Xxxxxx
Vice President - Finance and
Administration
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Xxxxxx Xxxxxxxx
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