Exhibit 10.8
EMPLOYMENT AGREEMENT
Employment Agreement dated as of February 28, 2007, between Xxxx
Xxxxxx Productions, Inc., a Nevada corporation (the "Company"), and Xxxxx X.
Xxxxxxx, residing at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 ("Employee").
Whereas, Sibling Theatricals, Inc., a Delaware corporation and a
wholly owned subsidiary of Sibling Entertainment Group, Inc., a New York
corporation ("Sibling") has entered into a stock purchase agreement among the
Company, Sibling and others (as stockholders of the Company) pursuant to which
Sibling has acquired eighty (80%) percent of the Company's issued and
outstanding shares of common stock (the "Stock Purchase Agreement"); all
capitalized terms used herein and not otherwise defined shall have the meaning
ascribed thereto in the Stock Purchase Agreement;
Whereas the effective date for this Agreement shall be ninety (90) days
after the Closing Date of the Stock Purchase Agreement (the "Effective Date");
Whereas, Employee is currently engaged by the Company as an employee in
the capacity of the Company's Chief Operating Officer, and will continue as an
employee at the discretion of the Company until the Effective Date;
Whereas, the execution and delivery of this Agreement is a condition to
the consummation of the transactions contemplated by the Stock Purchase
Agreement;
Whereas, the capitalized terms used but not defined in this Agreement
shall have the meanings ascribed to them in the Stock Purchase Agreement; and
Whereas, the Company desires to continue to engage Employee under this
agreement for three (3) years commencing on the Effective Date to continue to
perform services for the Company (subject to Section 14), and Employee desires
to perform such services, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Term
-1-
The Company agrees to employ Employee, and Employee agrees to serve, on the
terms and conditions of this Agreement for a period commencing on the Effective
Date and ending three (3) years from the Effective Date, or such shorter period
as may be provided for herein. This period during which Employee is employed
hereunder is hereinafter referred to as the "Employment Period." However, if the
Closing under the Stock Purchase Agreement shall not take place by March 31,
2007, or such other date as may be permitted under the terms of the Stock
Purchase Agreement, then this Agreement and all obligations of each party
hereunder shall immediately terminate as of the date hereof and as if never
entered into. Six months prior to the end of the Employment Period, the Company
and the Employee shall enter into negotiations regarding the possible extension
of the Employment Period. However, if such negotiations are not concluded within
ninety days from the commencement of such negotiations, this Agreement shall
terminate in accordance with the terms of this Agreement.
2. Duties and Services
During the Employment Period, Employee shall be employed by the
Company as its Chief Operating Officer and shall continue to assume such duties
and responsibilities as are assigned to him by the Company consistent with such
position. Employee agrees to devote all his time and efforts and skills to the
performance of his duties under this Agreement and will use his best efforts to
promote the success of the Company's business, and will cooperate fully with the
Board of Directors in the advancement of the best interests of the Company.
Employee shall be available to travel as the reasonable needs of the business
require. Employee shall report to, and assume such duties and responsibilities
as are assigned to him by, the Board of Directors of the Company, or such other
person as shall be designated by the Board of Directors of the Company. If
elected a director of the Company, Employee will fulfill his duties as such
director or officer without additional compensation.
3. Compensation
(a) As full compensation for his services hereunder, the Company
shall pay Employee, (i) a base salary payable in accordance with the regular
payroll practices of the Company at the rate of two hundred fifty nine thousand
($259,000) dollars per annum (the "Base Salary"), and (ii) such Base Salary
shall increase annually at the rate of six (6%) per annum on the anniversary of
this Agreement, (iii) all payments of base salary are to be made in 24 equal
bi-monthly payments,
(b) The Employee shall be entitled to a quarterly bonus equal to the
following:
a. one (1%) percent of the Company's increase in gross
revenues reported by the Company for each calendar quarter as
compared with the same calendar quarter for the previous year.
b. two and one-half (2.5%) percent of the Company's increase
in net profits reported by the Company for each calendar quarter as
compared with the same calendar quarter for the previous year.
(c) Employee shall participate in the present and future employee
benefit
-2-
plans of the Company if he meets the eligibility requirements therefore.
Employee shall continue to have use of the car currently leased for his use by
the Company and upon termination of any lease of such car, the employee shall be
provided with a new leased car of equal quality, or an allowance of no less than
$1,000.00 per month during the balance of the Employment Period.
(d) The Employee will be entitled to four (4) weeks paid vacation
for each twelve month period ("Employment Year") during the Employment Period in
accordance with the vacation policies established by the Company for its
executive officers from time to time. The Employee will also be entitled to paid
holidays as set forth in the Company's policies. Vacation days and holidays
during any such Employment Year may not be used any subsequent Employment Year.
4. Expenses
Employee shall be entitled to reimbursement for reasonable travel
and other out-of-pocket expenses necessarily incurred in the performance of his
duties hereunder, upon submission and approval of written statements and bills
in accordance with the then regular procedures of the Company.
5. Representations and Warranties of Employee
Employee represents and warrants to the Company that (a) Employee is
under no contractual or other restriction or obligation which is inconsistent
with the execution of this Agreement, the performance of his duties hereunder,
or the other rights of the Company hereunder, and (b) Employee is under no
physical or mental disability that would hinder his performance of duties under
this Agreement.
6. Non-Competition
(a) As an inducement for Sibling to enter into the Stock Purchase
Agreement and as additional consideration for the consideration to be paid to
the Sellers under the Stock Purchase Agreement and the consideration to be paid
under this Agreement, Employee agrees that during the term of this Agreement and
for a period of one (1) year thereafter, or, if terminated without cause
pursuant to Section 9(c), through the Severance Period (the "Restriction
Period"):
(i) Employee will not, directly or indirectly, engage or invest in,
own, manage, operate, finance, control, or participate in the ownership,
management, operation, or control of, be employed by, associated with, or in any
manner connected with, lend Employee's name or any similar name to, lend
Employee's credit to, or render services or advice to, any business located in
Las Vegas whose products or activities compete in whole or in part with the
products or activities of the Company with which the Company currently has or
has had an agreement of any kind within the last three (3) years, or has been in
negotiations, offered, approached or considered to engage in a business
transaction of any kind during the Restriction Period (the "Restricted
Territory"), provided, however, that Employee may purchase or otherwise acquire
up to (but not more than) one percent of any class of securities of any
enterprise (but without otherwise participating in the activities of such
enterprise) if such securities are listed on any national or regional securities
exchange or have been registered under Section 12(g) of the Securities
-3-
Exchange Act of 1934. Employee agrees that this covenant is reasonable with
respect to its duration, geographical area, and scope. In addition, Employee
hereby acknowledges that Xxxxxx'x Entertainment, Inc. is presently an entity
that the Company does business with and Employee is subject to the restriction
set forth in this paragraph.
(ii) Employee will not, directly or indirectly, either for himself
or any other Person, (A) induce or attempt to induce any employee of an Acquired
Company to leave the employ of such Acquired Company, (B) in any way interfere
with the relationship between an Acquired Company and any employee of such
Acquired Company, (C) employ, or otherwise engage as an employee, independent
contractor, or otherwise, any employee of an Acquired Company, or (D) induce or
attempt to induce any customer, supplier, licensee, or business relation of an
Acquired Company to cease doing business with such Acquired Company, or in any
way interfere with the relationship between any customer, supplier, licensee, or
business relation of an Acquired Company.
(iii) Employee will not, directly or indirectly, either for himself
or any other Person, solicit the business of any Person known to Employee to be
a customer of an Acquired Company, whether or not Employee had personal contact
with such Person, with respect to products or activities which compete in whole
or in part with the products or activities of the Company in the Restricted
Territory;
(iv) In the event of a breach by Employee of any covenant set forth
in Subsection 6 (a) of this Agreement, the term of such covenant will be
extended by the period of the duration of such breach;
(v) Employee will not, at any time during or after the Restriction
Period, disparage Buyer or the Acquired Companies, or any of their shareholders,
directors, officers, employees, or agents; and
(vi) Employee will during the Restriction Period, within ten days
after accepting any employment, advise Buyer of the identity of any employer of
Employee. Buyer or an Acquired Company may serve notice upon each such employer
that Employee is bound by this Agreement and furnish each such employer with a
copy of this Agreement or relevant portions thereof.
(b) Notwithstanding paragraph (a) herein, Employee may continue in the
capacity of of Cutting Edge Creative Services, Inc. without violating paragraph
(a) provided that Employee in no way solicits, engages, contracts, or attempts
to solicit, engage, or contract with any existing or after-acquired clients of
the Company.
(c) If any restriction contained in this Section 6, or in Sections 8 or 9,
shall be deemed to be invalid, illegal, or unenforceable by reason of the
extent, duration, or geographical scope thereof, or otherwise, then the court
making such determination shall have the right to reduce such extent, duration
or geographical scope, or other provisions thereof, and in its reduced form such
restrictions shall be enforceable in the manner contemplated hereby.
(d) For purposes of this Section 6, and Sections 7 and 8 hereof, phrases
such as "during the period of Employee's employment by the Company," and similar
phrases, refer to
-4-
Employee's employment by the Company whether or not pursuant to this Employment
Agreement.
7. Intellectual Property
Any interest in patents, patent applications, inventions,
copyrights, developments, and processes ("Intellectual Property") which Employee
hereafter, during the period he is employed by the Company, may own or develop
relating to the fields in which the Company may then be engaged shall belong to
the Company; and forthwith upon request of the Company, Employee shall execute
all such assignments and other documents and take all such other action as the
Company may reasonably request in order to vest in the Company all his right,
title, and interest in and to such Intellectual Property free and clear of all
liens, charges, and encumbrances. Employee undertakes to disclose promptly to
the Company any and all Intellectual Property, business information and other
information obtained by Employee concerning the business or affairs of the
Company or Sibling during the course of Employee's employment by the Company,
including, without limitation, inquiries concerning, and potential orders for
products and services.
8. Confidential Information
All confidential information which Employee may now possess, or may
obtain or create prior to the end of the period he is employed by the Company,
relating to the business of the Company, or any customer or supplier of the
Company, or any agreements, arrangements, or understandings to which the Company
is a party, shall not be disclosed or made accessible by him to any other person
or entity either during or after the termination of his employment or used by
him except during his employment by the Company in the business and for the
benefit of the Company. Employee shall return all tangible evidence of such
confidential information to the Company prior to or at the termination of his
employment. The Employee will not remove from the Company's premises (except to
the extent such removal is for the purposes of the performance of Employee's
duties at home or while traveling, or except as otherwise specifically
authorized by the Company) any document, record, plan, notebook or computer
software whether embodied in a disk or any other form (the "Proprietary Items").
The Employee recognizes that, as between Employee and the Company, the
Proprietary Items, whether or not developed by Employee, are the exclusive
property of the Company. Upon termination of this Agreement for any reason, or
upon the request of the Company during the Employment Period, Employee will
return to the Company all of the Proprietary Items in Employee's possession or
subject to Employee's control, and Employee shall not retain any copies,
abstracts, sketches, or other physical embodiment of any of the Proprietary
Items.
-5-
For purposes hereof, "Confidential Information" includes, but is not
limited to: (i) any and all trade secrets concerning the business and affairs of
the Acquired Companies, product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current and planned research and
development, current and planned manufacturing and distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software and programs (including
object code and source code), computer software and database technologies,
systems, structures and architectures (and related processes, formulae,
compositions, improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information, of the Acquired Companies and
any other information, however documented, of the Acquired Companies that is a
trade secret; (ii) any and all information concerning the business and affairs
of the Acquired Companies (which includes historical financial statements,
financial projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials, however documented; and (iii)
any and all notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Acquired Companies containing or based, in whole
or in part, on any information included in the foregoing,
9. Termination
Notwithstanding anything herein contained, if on or after the date
hereof and prior to the end of the Employment Period,
(a) either (i) Employee shall be physically or mentally incapacitated or
disabled or otherwise unable fully to discharge his duties hereunder for a
period of 45 consecutive days, or 90 days, whether or not continuous, in any
period of 180 days during the Employment Period, (ii) Employee shall be
convicted of a crime, (iii) the Board of Directors of the Company shall have
determined Employee has committed any act or omitted to take any action in bad
faith and to the detriment of the Company, including, but not limited to the
appropriation (or attempted appropriation) of the Company's funds or property or
a material business opportunity of the Company, including attempting to secure
or securing any personal profit in connection with any transaction entered into
on behalf of the Company or has materially neglected the Company's business,
(iv) the Board of Directors of the Company shall have determined that Employee
has breached any term of this Agreement or failed to adhere to any written
Company policy if Employee has been given a reasonable opportunity to comply
with such policy and failed to correct such breach, if such breach is curable,
within five days after commission thereof, then, and in each such case, the
Company shall have the right to give notice of termination of Employee's
services hereunder as of a date (not earlier than ten days from such notice) to
be specified in such notice, and this Agreement shall terminate on the date so
specified, or (v) Employee is convicted of, the indictment for (or its
procedural equivalent), or the entering of a guilty plea or plea of no contest
with respect to a felony, the equivalent thereof, or any other crime with
respect to which imprisonment is a possible punishment; or
(b) Employee shall die, in which case this Agreement shall terminate on
the date of Employee's death; or
(c) the Company shall give Employee at least 60 days prior written notice
of
-6-
termination without cause, in which case this Agreement shall terminate on the
date specified in such notice ("Termination Date"), whereupon Employee or his
estate, as the case may be shall be entitled to receive such compensation as
provided in Section 3 from the Termination Date through the shorter of either
the end of the Employment Period or a period of one year from the Termination
Date (the "Severance Period").
(d) Upon any termination of this Agreement, the obligation of the Company
to make any further payments, or provided any benefits specified herein, other
than those payments and benefits as are expressly set forth herein, shall cease
and terminate.
10. Survival
The covenants, agreements, representations, and warranties contained
in this Agreement shall survive Employee's termination of employment,
irrespective of any investigation made by or on behalf of any party.
11. Entire Agreement; Modification
This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof, supersedes all prior agreements and
understandings between them concerning such subject matter, and may be modified
only by a written instrument duly executed by each party.
12. Notices
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
If to the Company:
c/o Sibling Theatricals, Inc.
000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxx, President and CEO
Facsimile No.: (000) 000-0000
With a courtesy copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxx, LLP
-7-
000 Xxxxx 0 Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile No.: (000) 000-0000
If to Employee:
Xxxxx Xxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
With a courtesy copy to:
Xxxx X. Xxx, Esq.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Facsimile No.: (000) 000-0000
13. Waiver
Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
14. Binding Effect
Employee's rights and obligations under this Agreement shall not be
transferable by assignment or otherwise, such rights shall not be subject to
commutation, encumbrance, or the claims of Employee's creditors, and any attempt
to do any of the foregoing shall be void. The provisions of this Agreement shall
be binding upon and inure to the benefit of Employee and his heirs and personal
representatives, and shall be binding upon and inure to the benefit of the
Company and its successors.
15. No Third Party Beneficiaries
This Agreement does not create, and shall not be construed as
creating, any rights enforceable by any person not a party to this Agreement
(except as provided in Section 14).
16. Headings
The headings in this Agreement are solely for the convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
-8-
17. Mitigation
Notwithstanding anything set forth in this Agreement to the
contrary, upon a breach of this Agreement by the Company prior to its stated
three (3) year term, or upon the Company's termination of employee's employment
hereunder at the end of this Agreement, Employee shall be obligated to seek
other employment, and the amount of any payments or benefits provided for in
this Agreement on account of such a breach shall be reduced by any compensation
earned or benefit provided to Employee by another employer or otherwise.
18. Life Insurance
If requested by the Company or Sibling, Employee shall submit to
such physical examinations and otherwise take such actions and execute and
deliver such documents as may be reasonably necessary to enable the Company or
Sibling at its expense and for its own benefit, to obtain life insurance on the
life of Employee. Employee has no reason to believe that his life is not
insurable with a reputable insurance company at rates now prevailing in the City
of Las Vegas, Nevada, for healthy men of his age.
19. Counterparts; Governing Law
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. It shall be governed by and construed in accordance
with the laws of the State of Nevada, without giving effect to the conflict of
laws principles thereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
/s/ Xxxxx X. Xxxxxxx
--------------------------------
Xxxxx X. Xxxxxxx
Xxxx Xxxxxx Productions, Inc.
By: /s/ Xxxx Xxxxxx
-----------------------------
Name: Xxxx Xxxxxx
Title:President
-9-
