Exhibit 10.5
AMENDED AND RESTATED LETTER AGREEMENT
This Amended and Restated Letter Agreement is entered into as of November
8, 2004, by and between CenterStaging Musical Productions, Inc. (the "Company")
and Xxxxxx Xxxxxxx (the "Executive").
The Company and Executive wish to amend and restate the Letter Agreement
dated as of November 8, 2004, by and between the Company and Executive. This
Amended and Restated Letter Agreement supersedes the original Letter Agreement
as of the date hereof.
In consideration of the promises and mutual covenants outlined herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, it is mutually covenanted and agreed by and among the
parties as follows:
1. Duties and Scope. Executive shall provide personal services to the
Company in such capacities and in such manner as follows (which services shall
be provided as an independent contractor/consultant until such time as Executive
advises the Company that he desires to become a full-time employee of the
Company, at which time such services shall be as an employee), as mutually
agreed upon from time to time by and between Executive and the Board. For
purposes of this Agreement, the term "employment" shall be deemed to mean
"engagement" as independent contractor/consultant until such time, if ever, that
Executive becomes an employee of the Company (at which time such term shall mean
employment).
(a) Positions and Duties. During the Term, Executive shall render
such business and professional services in the performance of his duties,
consistent with Executive's position within the Company.
(b) Obligations. During the Term, Executive shall perform his duties
faithfully and to the best of his ability and shall devote his business efforts
and time to the Company, to fulfill the objectives of the Company.
(c) Other Activities. Executive shall devote his full business time
to the business and affairs of the Company, provided, however, that Executive
may: (i) perform personal, civil and charitable activities; (ii) may serve on
the boards of directors (and committees of such Boards) of other corporations
not competitive with the Company's business; and (iii) may provide consulting
services from time to time to third parties not directly in competition with the
Company provided that such consulting services do not interfere with the
performance of Executive's services and responsibilities to the Company pursuant
to this Agreement. Executive shall notify the Company in advance of undertaking
any proposed services under subparagraphs (ii) and (iii) above.
2. Definitions. For purposes of this Agreement, the following terms shall
have the meanings set forth below:
(a) "Affiliate" shall mean, with respect to any specified Person,
(a) any other Person who, directly or indirectly, owns or controls, is under
common ownership or control with, or is owned or controlled by, such specified
Person, (b) any other Person who is a director, officer, partner or trustee of
the specified Person or a Person described in clause (a) of this definition or
any spouse of the specified Person or any such other Person, (c) any relative of
the specified Person or any other Person described in clause (b) of this
definition, or (d) any Person of which the Specified Person and/or any one or
more of the Persons specified in clause (a),(b) or (c) of this definition,
individually or in the aggregate, beneficially own 20% or more of any class of
voting securities or otherwise have a substantial beneficial interest.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Cause" shall mean, in the context of the termination of
Executive's employment by the Company, termination by vote of not less than 75%
of the members of the Board (excluding Executive if Executive is then a
Director) based on one or more of the following reasons:
(i) willful and repeated failure to comply with the lawful
directions of the Board;
(ii) gross negligence or willful misconduct in the performance
of Executive's duties to the Company;
(iii) commission of any act of fraud against the Company; or
(iv) participation in a fraud against the Company that
adversely affects the Company in a material way.
(d) "Change of Control" shall mean:
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), other than any
Existing Shareholder or Shareholders, is or becomes the "beneficial owner" (as
defined in Rule 3d-3 under said Act), directly or indirectly, of securities of
the Company representing 50% or more of the total voting power represented by
the Company's then outstanding voting securities; or
(ii) the date of the consummation of a merger or consolidation
of the Company with any other corporation that has been approved by the
stockholders of the Company, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or the parent
corporation of the surviving entity) more than 50% of the total voting power
represented by the voting securities of the Company, the surviving entity or the
parent of the surviving entity, as applicable, outstanding immediately after
such merger or consolidation; or
(iii) the date the stockholders of the Company approve a plan
of complete liquidation of the Company; or
(iv) the date of the consummation of the sale or disposition
by the Company of all or substantially all of the Company's assets other than to
a Person of which the Existing Shareholders own directly or indirectly more than
50% of the total voting power represented by the voting securities of such
Person.
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(e) "Company Group" shall mean the Company and each Person that is
consolidated with the Company for financial reporting purposes.
(f) "Confidential Information" shall mean any and all information
concerning the business of the Company that Executive may receive or develop
during his engagement pursuant to this Agreement including, without limitation,
all documents, procedures, policies, programs, reports, plans, proposals,
technical information, know-how, systems and other information unique to the
Company, its customers or principals, received or developed by Executive.
(g) "Executive Employment Agreements" shall mean the Amended and
Restated Letter Agreements, as further amended from time to time, between the
Company and each of Xxxxxx Xxxxxxx, Jan Parent, Xxxxx Xxxxxx and Xxxxxx
Xxxxxxxxxx.
(h) "Existing Shareholders" shall mean: (i) Xxxxxx Xxxxxxx, Jan
Parent, Xxxxx Xxxxxx and Xxxxxx Xxxxxxxxxx; (ii) Affiliates of the individuals
named in (i); and (iii) members of the immediate families of the individuals
named in (i).
(i) "Good Reason" shall mean the occurrence of one or more of the
following without the consent of Executive: (i) the Company or the Board assign
any duties to Executive substantially inconsistent with, or reflecting an
adverse change in, Executive's position, duties, responsibilities or status as a
senior executive officer of the Company; or (ii) the Company permanently
relocates its principal executive offices outside of Los Angeles County unless
such relocation was approved by either Executive in his capacity as director or
executive officer or by a majority of Xxxxxx Xxxxxxx, Jan Parent, Xxxxx Xxxxxx
and Xxxxxx Xxxxxxxxxx as directors (such majority determined based on which of
these individuals is then serving as a director); or (iii) the Company requires
that Executive perform his services other than at the Company's principal
executive offices, except for temporary assignments and ordinary business travel
consistent with Executive's duties and responsibilities.
(j) "Inventions" shall mean all discoveries, developments, designs,
improvements, inventions, formulas, software programs, processes, techniques,
know-how, negative know-how, data, research, techniques, and technical data
(whether or not patentable or registrable under patent, copyright or similar
statutes and including all rights to obtain, register, perfect, and enforce
those proprietary interests) that are related to or useful in the Company's
present or future business or result from use of property owned, leased, or
contracted for by the Company. "Inventions" shall also include anything that
derives actual or potential economic value from not being generally known to the
public or to other persons who can obtain economic value from its disclosure or
use.
(k) "Proprietary Information" shall mean information (i) that is not
known by actual or potential competitors of the Company or is generally
unavailable to the public; (ii) that has been created, discovered, developed, or
otherwise become known to the Company or in which property rights have been
assigned or otherwise conveyed to the Company; and (iii) that has material
economic value or potential material economic value to the Company's present or
future business. "Proprietary Information" shall include trade secrets (as
defined under California Civil Code section 3426.1) and all other discoveries,
developments, designs, improvements, inventions, formulas, software programs,
processes, techniques, know-how, negative know-how, data, research, techniques,
technical data, customer and supplier lists, and any modifications or
enhancements of any of the foregoing, and all program, marketing, sales, or
other financial or business information disclosed to Executive by the Company,
either directly or indirectly, in writing or orally or by drawings or
observation, which has actual or potential economic value to the Company.
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(l) "Person" shall mean an individual or a corporation, limited
liability company, limited liability partnership, partnership, association,
trust or other entity.
(m) "Reverse Merger" shall mean the merger of the Company with a
corporation (a "Reporting Corporation") obligated to file reports under Section
13 of the Securities Exchange Act of 1934, as amended, or the subsidiary of such
a corporation, pursuant to which the shareholders of the Company exchange their
shares for securities of the Reporting Corporation own, immediately following
the Reverse Merger, shares that would be entitled to cast a majority of the
outstanding votes in the general election of directors of the Reporting
Corporation.
(n) "Rights" shall mean all patents, trademarks, service marks and
copyrights, and other rights pertaining to Proprietary Information, Inventions,
or both.
(o) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(p) "Specified Termination Date" shall be June 30, 2009 or such
later date determined pursuant to this paragraph. The Specified Termination Date
shall be automatically extended for successive additional one year terms on each
June 30, beginning with June 30, 2005, each of which terms shall be added to the
end of the then existing term (taking into account any prior extensions or
failures to extend), unless either party notifies at least one month prior to
June 30 that he or it does not desire the additional one year term to be added
to the term of the Agreement. For example, unless either party notifies the
other to the contrary before June 1, 2005, the Specified Termination Date shall
be extended from June 30, 2009 to June 30, 2010. For further example, and
assuming the Specified Termination Date has been extended to June 30, 2010, if
one party notifies the other that it does not desire to extend the term of this
Agreement for an additional year and such notice is given before June 1, 2006,
the Specified Termination Date shall not be extended from June 30, 2010 to June
30, 2011.
(q) "Term" shall mean the period commencing on the date of this
Agreement and ending upon termination of Executive's engagement pursuant to
Section 3 of this Agreement.
(r) "Transfer" shall mean sell, transfer, assign, gift, create a
security interest in, or otherwise dispose of, with or without consideration.
(s) "Weighted Average Available Cash" shall mean, for any month, the
weighted average cash and cash equivalents of the Company Group for such month.
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3. Term and Termination. Executive's engagement by the Company shall
commence on the date of this Agreement and shall terminate upon the earliest to
occur of the following (such period being referred to in this Agreement as the
"Term"):
(a) the Specified Termination Date;
(b) upon the death of Executive;
(c) upon delivery to Executive of written notice of termination by
the Company if Executive shall suffer a physical or mental disability which
renders Executive, in the reasonable judgment of the Board, unable to perform
his duties and obligations under this Agreement for either 90 consecutive days
or 180 days in any 12-month period;
(d) upon not less than 90 days' prior written notice from Executive
to the Company (including notice of "retirement");
(e) upon delivery to Executive of written notice of termination by
the Company (i) for Cause, or (ii) without cause following receipt of written
notice of termination from Executive pursuant to Section 3(d) of this Agreement;
(f) upon delivery to Executive of written notice of termination by
the Company without cause;
(g) upon not less than 30 days' prior written notice from Executive
to the Company for Good Reason, provided that the Company does not cure or
correct the condition or circumstances constituting Good Reason in that 30-day
period; or
(h) upon a Change of Control, unless Executive elects to continue
his engagement pursuant to this Agreement by written notice to the Company prior
to the occurrence of the Change of Control.
4. Compensation
(a) Base Compensation. Until such time that Executive elects to
become a full time employee, Executive shall receive such fees as may be
mutually agreed to between the Company and Executive. During the Term and after
Executive elects to become a full-time employee, the Company shall pay Executive
as minimum compensation for his services a base salary at the annualized rate of
$425,000 through March 31, 2005, $467,500 from April 1, 2005 through June 30,
2006, and at the amount determined by the Board thereafter, but not less than an
increase of 10% per year (the "Base Salary"). The Base Salary shall be payable
in accordance with the Company's payroll practices but not less frequently than
monthly.
(b) Bonus. In addition to the Base Salary, Executive shall be
entitled to an annual bonus (the "Bonus") for each fiscal year of the Company,
commencing with the fiscal year ending June 30, 2005. The Bonus shall be
determined by the Board of Directors, and shall be not less than 25% of
Executive's Base Salary as of the end the fiscal year. The Company shall pay the
Bonus within 90 days following the end of the fiscal year, provided that for any
fiscal year after the fiscal year ending June 30, 2005, if as of the end of the
fiscal year the Company's Weighted Average Available Cash for the last month of
the fiscal year is less than $2,000,000, the Company may defer payment of the
Bonus until 30 days following the last day of the first month thereafter on
which the Company has Weighted Average Available Cash of at least $2,000,000.
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(c) Sign-on Bonus. The Company shall pay to Executive a sign-on
bonus of $50,000 no later than December 31, 2004.
5. Benefits. During the Term, the Company shall provide Executive with the
following benefits, at no cost or expense to the Executive: (a) medical, dental
and vision insurance (including reimbursement of co-pays); (b) reimbursement of
personal legal and accounting expenses relating to matters pertaining to the
Company's business up to a maximum of $5,000 per year; (c) if requested by
Executive, reimbursement for monthly or annual fees of one golf club membership
and the purchase price of an equity membership in such club, provided that such
membership shall be an asset of the Company and the Company shall receive all of
the proceeds from the sale of such membership (whether the sale is to a third
party or back to the club); and (d) term life insurance with a death benefit
equal up to $5,000,000 and a beneficiary(ies) of Executive's choice; provided
that the Company shall not be required to expend more than $15,000 per year for
the premiums for such term life insurance. Executive shall also have the right
to participate in such other benefit plans as the Company may from time to time
make available to its officers.
6. Expenses. The Company shall reimburse Executive for travel,
entertainment or other expenses incurred by Executive in the furtherance of or
in connection with the performance of Executive's duties hereunder. Executive
shall be entitled to first class travel and accommodations and the reimbursement
of all ordinary and routine costs related to use of one automobile (i.e.,
lease/insurance/gas).
7. Indemnification and Directors' and Officers' Liability Insurance. The
Company shall indemnify Executive with respect to matters relating to
Executive's services as an officer and/or director of the Company and other
members of the Company Group to the maximum extent permitted by law. The Company
shall also make certain that Executive is covered under any policy of officers'
and directors' liability insurance that the Company maintains for so long as
Executive is engaged as an officer and/or director of the Company and thereafter
(for services rendered prior to termination of Executive's engagement) to the
extent possible under the policy. The provisions of this Section 7 shall survive
the termination of Executive's relationship with the Company, regardless of the
reason of termination.
8. Vacations and Holidays. During the Term Executive will be entitled to
six weeks' (30 working days) paid vacation per year, with the timing and
duration of specific vacations mutually and reasonably agreed to by the Company
and Executive. In addition, Executive will be entitled to all enumerated Company
holidays and three floating holidays per year. All unused vacation in any given
year shall carry forward to subsequent years without cap.
9. Supplemental Retirement Benefits:
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(a) If Executive retires after the later to occur of age 55 and June
30, 2009, the Company shall, until the death of Executive: (i) pay a monthly
retirement benefit to Executive equal to 1/24th of Executive's highest
compensation (Base Salary and Bonus) earned by Executive in any fiscal year of
the Company during the Term, which payment shall be within 15 days following the
end of each calendar month; and (ii) continue to provide medical, dental,
vision, term life and other insurance as described in Section 5 of this
Agreement, provided that Executive shall be entitled to other insurance only to
the extent permitted under the terms of the Company's insurance policies (e.g.,
Executive would be entitled to be covered by disability insurance only if the
policy permitted coverage for non-employees or persons of Executive's age,
health, etc.).
(b) The Company may credit against supplemental retirement benefits
payable under Section 9(a)(i) any Social Security benefits to which Executive is
entitled and any other retirement benefits earned while retained and/or employed
by the Company.
(c) Notwithstanding any other provision of this Section 9, the
Company may defer, without interest, any supplemental retirement benefits under
Section 9(a)(i) for any month that the Company's Weighted Average Available Cash
for the month is less than $10 million, provided that such deferral for any
month shall be no longer than the earlier to occur of one year and the month in
which the Company's Weighted Average Available Cash exceeds $10 million.
10. Severance Payments/Benefits Following Termination of Employment.
Executive shall be entitled to the following severance benefits upon termination
of employment, and no other severance benefits (and for purposes of the
following, all pro-rations shall be based on the number of days in the year
during which Executive was employed by the Company):
(a) If Executive's employment with the Company terminates pursuant
to Section 3(a)(at the Specified Termination Date), Executive shall be entitled
to: (i) no severance benefits; and (ii) if Executive is older than 55 at the
Specified Termination Date, the supplemental retirement benefits under Section 9
of this Agreement to which he would have been entitled if he had retired at the
Specified Termination Date.
(b) If Executive's employment with the Company terminates by reason
of Section 3(b) (Executive's death), Executive shall be entitled to a pro rata
share of the minimum Bonus that Executive would have earned in the fiscal year
in which his employment terminated.
(c) If Executive's employment with the Company terminates by reason
of Section 3(c) (Executive's disability), Executive shall be entitled to
receive, until the earlier to occur of the end of the Specified Termination Date
or Executive's death: (i) salary at the rates applicable under Section 4 of this
Agreement (assuming a 10% annual increase); (ii) an annual Bonus equal to 25% of
salary (prorated for the fiscal year in which the Specified Termination Date or
Executive's death occurs); and (iii) a continuation of medical, dental, vision
and term life insurance as provided under Section 5 of this Agreement. The
Company may reduce any payments due Executive under this Section 10(c) by all
amounts received by Executive under disability insurance maintained by the
Company. The Executive shall inform the Company in writing of all disability
payments received by Executive, and shall authorize the Company to discuss such
payments with the insurance carrier.
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(d) If Executive's employment with the Company terminates pursuant
to Section 3(d) (by Executive without cause), Executive shall be entitled to no
severance benefits but if termination is after June 30, 2009, Executive shall be
entitled to the supplemental retirement benefits under Section 9 of this
Agreement commencing at age 55.
(e) If Executive's employment with the Company terminates pursuant
to Section 3(e) (by the Company for Cause), Executive shall be entitled to no
severance benefits. In the event of termination of Executive's employment
pursuant to Section 3(e)(for Cause), and subject to applicable law and
regulations, the Company shall be entitled to offset against any payments due
Executive the loss and damage, if any, which shall have been suffered by the
Company as a result of the acts or omissions of Executive giving rise to
termination under Section 3(e). The foregoing shall not be construed to limit
any cause of action, claim or other rights that the Company may have against
Executive in connection with such acts or omissions.
(f) If Executive's employment with the Company terminates by reason
of Section 3(f) (termination by the Company without cause) or Section 3(g)
(termination by Executive for Good Reason), Executive shall be entitled to
receive, until the earlier to occur of the Specified Termination Date or
Executive's death: (i) salary at the rates applicable under Section 4 of this
Agreement (assuming a 10% annual increase); (ii) an annual Bonus equal to 25% of
Executive's salary (prorated for the fiscal year in which the Specified
Termination Date or Executive's death occurs); and (iii) a continuation of
medical, dental, vision, term life and other insurance as provided under Section
5 of this Agreement; provided that Executive shall be entitled to other
insurance only to the extent permitted under the terms of the Company's
insurance policies (e.g., Executive would be entitled to be covered by
disability insurance only if the policy permitted coverage for non-employees or
persons of Executive's age, health, etc.).. In addition, following the Specified
Termination Date, Executive shall be entitled to the supplemental retirement
benefits under Section 9 of this Agreement commencing at the later of the
Specified Termination Date or the date Executive becomes 55 years old.
(g) If Executive's employment terminates as a result of a Change of
Control, Executive shall be entitled to: (i) as of the closing of the Change of
Control if the Company is a party to the transaction resulting in a Change of
Control, or within 30 days after a Change of Control if the Company is not a
party to the Change of Control, a lump sum payment equal to the salary that
would have been payable through the Specified Termination Date plus the minimum
Bonus that would have been payable through the Specified Termination Date; (ii)
continuation of medical, vision, dental, term life and other insurance benefits
provided under Section 5 of this Agreement through the earlier to occur of the
Specified Termination Date and Executive's death; and (iii) commencing on the
later to occur of the date Executive becomes 55 and the Specified Termination
Date, payment of supplemental retirement benefits under Section 9 of this
Agreement to which Executive would have been entitled had he retired at the
Specified Termination Date.
(h) For Executive to receive the severance benefits under Sections
10(c), 10(f) and 10(g) of this Agreement, Executive must execute and deliver to
the Company a release, in form and substance satisfactory to the Company,
releasing the Company from all claims relating to Executive's employment and
termination of employment, excluding express rights of Executive under this
Agreement and rights to indemnification under any other agreement that Executive
may have with any member of the Company Group and under applicable law. The
release shall not include a release of the rights of Executive under contracts
not relating to his employment with the Company (for example, Executive shall
not release rights under a lease pursuant to which Executive has leased real or
personal property to the Company).
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(i) Executive acknowledges that in the event of termination of his
employment for any reason, Executive shall not be entitled to any severance or
other compensation from the Company except as specifically provided in this
Section 10. Without limitation on the generality of the foregoing, this section
supersedes any plan or policy of the Company that provides for severance to its
officers or employees, and Executive shall not be entitled to any benefits under
any such plan or policy.
(j) Executive acknowledges that the Company has the right to
terminate Executive's employment without cause and that such termination shall
not be a breach of this Agreement or any other express or implied agreement
between the Company and Executive. Accordingly, in the event of such
termination, Executive shall be entitled only to those benefits specifically
provided for in this Agreement in the event of such termination, and shall not
have any other rights to any compensation or damages from the Company for breach
of contract.
11. Conditional Nature of Severance Payments; Non-Compete. Executive
acknowledges that the nature of the Company's business is such that if Executive
were to become retained, engaged, employed by, or substantially involved in the
business of a direct competitor of the Company during the 36 months following
the termination of Executive's relationship with the Company, it would be very
difficult for Executive not to rely on or use the Company's trade secrets and
confidential information. Thus, to avoid the inevitable disclosure of the
Company's trade secrets and confidential information, Executive agrees and
acknowledges that Executive's right to receive the severance and other benefits
set forth in Sections 9 and 10 of this Agreement shall be conditioned upon
Executive not directly or indirectly engaging in (whether as an employee,
consultant, agent, proprietor, principal, partner, stockholder other than as the
holder of less than 5% of the issued and outstanding stock of a publicly held
corporation, member corporate officer, director or otherwise), nor having any
ownership interest in or participating in the financing, operation, management
or control of, any Person that is in direct competition with the Company for a
period of 36 months subsequent to Executive's relationship being terminated with
the Company. Upon any material breach of this Section 11 by Executive, the
Company shall have no obligation to provide any further severance payments and
other benefits pursuant Sections 9 and 10 of this Agreement.
12. Confidential Information
(a) Non-Disclosure. At all times during Executive's employment, and
after termination of employment, Executive shall not make any unauthorized
disclosure or use of and shall use his best efforts to prevent publication or
disclosure or use of the Confidential Information.
(b) Consent to Restraining Order. Executive acknowledges that any
unauthorized disclosure or use of the Confidential Information by Executive may
result in material damages to the Company and Executive consents to the issuance
of a temporary restraining order or temporary or permanent injunction or other
equitable remedy to prohibit, prevent or enjoin unauthorized disclosure or use
of Confidential Information by Executive.
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(c) Restrictions. Except as authorized by the Company, Executive
will not:
(i) duplicate, transfer or disclose nor allow any other person
to duplicate, transfer or disclose any of the Company's Confidential
Information;
(ii) use the Company's Confidential Information without the
prior written consent of the Company; or
(iii) incorporate, in whole or in part, within any domestic or
foreign patent application any proprietary or Confidential Information disclosed
by the Company.
(d) Safeguarding. Executive will safeguard all Confidential
Information at all times so that it is not exposed to or used by unauthorized
persons, and will exercise at least the same degree of care to protect
Executive's own confidential information.
(e) Exceptions. The restrictive obligations set forth above shall
not apply to the disclosure or use of information which:
(i) is or later becomes publicly known under circumstances
involving no breach of this Agreement by Executive;
(ii) is already known to Executive in the same form at the
time of receipt of the Confidential Information; or
(iii) is lawfully made available to Executive by a third
party.
(f) Public Domain. If Executive contends that any such Confidential
Information disclosed to him by the Company is in the public domain or was in
the possession of Executive in the same form prior to such disclosure and not
under an obligation of confidence, Executive will, within ten days of receipt by
Executive of such disclosure, give written notice of such contention to the
Company, which written notice shall include a complete identification of the
information in question and the derivation thereof, including particulars of any
contract in which Executive or any other person has made use of such concept or
information. If Executive has not within ten days of receipt by Executive of
such disclosure given such written notice to the Company, then it shall be
conclusively presumed that all information communicated by the Company to
Executive concerning the development originated with the Company and constitutes
Confidential Information.
(g) Bringing Documents from Former Employer. Executive hereby
certifies that he has not brought and will not bring with him to the Company or
use while performing his Executive duties for the Company any materials or
documents of a former employer of Executive which are not generally available to
the public except the know-how to which the right to use has been duly licensed
to the Company by such former employer. Executive understands that while
employed by the Company, he is not to breach any obligation of confidence or
duty and Executive agrees that he will fulfill all such obligations during his
employment with the Company.
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(h) Survival. The provisions of this Section 12 shall survive the
termination of this Agreement.
13. Intellectual Property
(a) All Proprietary Information and Inventions shall be the sole and
exclusive property of the Company and its assigns, and the Company and its
assigns shall be the sole owner of all Rights.
(b) Company forever owns throughout the universe in all media now or
later known, from inception, all right, title, and interest (including, without
limitation, worldwide rights of copyright) in any and all of Executive's work
product ("Work Product") embodied in any intangible or tangible form, including,
without limitation, all designs, ideas, concepts, themes, stories, suggestions,
reports, plans, specifications, drawings, photographs, videotapes, schematics,
discs, prototypes, samples, models, Inventions, Proprietary Information, and all
other things, information, documents, and items in any media (now known or
hereafter developed) made during the course of or in contemplation of the entry
into this Agreement and arising from or during the provision of the services
delineated herein or provided heretofore or otherwise during Executive's
services, as a work-made-for-hire for the Company. The Company shall have the
right to utilize the Work Product, or authorize or permit others to utilize the
Work Product, in whole or in part, in any manner without limitation or
restriction as the Company shall elect, or refrain from using the Work Product,
at the Company's election. The Work Product and all related rights emanating
therefrom such as the right to reproduce, display, distribute, perform, and
prepare derivative works shall be owned solely by the Company and deemed to be
the Company's work-made-for-hire under the U.S. copyright laws and similar laws
of other countries and related international treaties and conventions.
(c) To the extent that any Work Product is not deemed to be
work-made-for-hire, then Executive hereby assigns to the Company all right,
title and interest in all Work Product (including, without limitation, all
worldwide rights of copyright) he creates or co-creates under this Agreement. On
Company's request, Executive agrees to assist the Company, at its expense, in
obtaining trademarks, copyrights or patents, including the disclosure of all
pertinent information and data, in the execution of all applications,
specifications, oaths, and assignments, and in the preparation of all other
instruments and papers which the Company or its successors deems necessary to
apply for and to obtain the assignment or conveyance of said trademarks,
copyrights and patents to the Company. Executive shall execute, as and when
requested, a Certificate of Authorship, but his signature on this Agreement is
deemed to have the same force and legal effect.
14. Assignment. This Agreement will be binding upon and inure to the
benefit of (a) the heirs, executors and legal representatives of Executive upon
Executive's death, and (b) any successor of the Company as a result of any
consolidation or merger or the sale of all or substantially all of the assets of
the Company. Any such successor of the Company will be deemed substituted for
the Company under the terms of this Agreement for all purposes. None of the
rights of Executive to receive any form of compensation payable pursuant to this
Agreement may be assigned or transferred except by Executive by will or the laws
of descent and distribution. The Company may assign this Agreement in connection
with any merger or consolidation to the surviving entity, in connection with a
Reverse Merger to the Reporting Corporation that acquires the Company, or to a
Person that acquires all or substantially all of the assets of the Company,
provided that such right to assign shall not impair the rights of Executive in
the event of a Change of Control.
11
15. Notices. All notices, requests, demands and other communications
called for hereunder shall be in writing and shall be deemed given (a) on the
date of delivery if delivered personally, (b) one day after being sent by a well
established commercial overnight service, or (c) four days after being mailed by
registered or certified mail, return receipt requested, prepaid and addressed to
the parties or their successors at the following addresses, or at such other
addresses as the parties may later designate in writing:
If to the Company:
CenterStaging Musical Productions, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
If to Executive:
at the last residential address known by the Company.
16. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement will continue in full force and effect without said
provision.
17. Arbitration. With the exception of matters in which equitable or
injunctive relief is sought or required, the parties to this Agreement shall
submit all disputes relating to this Agreement, whether sounding in contract,
tort, or based on a state, federal or administrative statute, rule, or
regulation, or all of them, to binding arbitration in accordance with California
Civil Procedure Code Sections 1280 through 1294.2. Either party may enforce the
award of the arbitrator under Section 1285 of the Code. The parties understand
that they are waiving their rights to a jury trial. For matters in which
equitable or injunctive relief is sought or required, a court of competent
jurisdiction shall be the appropriate forum. The party demanding arbitration
shall submit a written claim to the other party, setting out the basis of the
claim and proposing the name of the arbitrator. The responding party shall have
ten (10) business days in which to respond to this demand in a written answer,
and to either accept or reject the proposed arbitrator. If the proposed
arbitrator is accepted, the arbitration will proceed before the designated
arbitrator, who will establish the rules of the proceeding; provided, however,
that reasonable discovery rules will apply so that both sides can obtain the
necessary information to prepare the matter for arbitration, but recognizing
that certain limitations may be appropriate to lessen the cost of the
arbitration; provided, further, that the arbitrator shall permit the filing of
motions for summary judgment. If the responding party rejects the proposed
arbitrator, said party will propose an arbitrator to the party demanding
arbitration who shall have ten (10) days to either accept or reject the proposed
arbitrator. If rejected, the entire dispute will then be submitted to the
American Arbitration Association and will be governed by its then Employment
Dispute and/or Commercial Litigation Rules. In either case, the Arbitration will
be conducted in the County of Los Angeles and the costs of it (administrative
and arbitrator fees) will be borne by the Company.
12
18. Integration. This Agreement represents the entire agreement and
understanding between the parties as to the subject matter herein and supersedes
all prior or contemporaneous agreements whether written or oral. No waiver,
alteration, or modification of any of the provisions of this Agreement will be
binding unless in writing and signed by duly authorized representatives of the
parties hereto.
19. Governing Law. This Agreement will be governed by the laws of the
State of California (with the exception of its conflict of laws provisions).
20. Confidentiality of Terms. Until such time as this Agreement or the
terms and conditions of this Agreement are made public, Executive and the
Company mutually agree not to disclose, either directly or indirectly, any
information, including any of the terms of this agreement, regarding
compensation, salary, bonuses, or stock purchase or option allocations to any
person, including other employees and/or consultants of the Company; provided,
however, that Executive may discuss such terms with members of his immediate
family and any legal, tax or accounting specialists who provide individual
legal, tax or accounting advice; and provided, further, that the Company Group
may disclose this Agreement and the terms and conditions of this Agreement: (i)
when required by applicable law; (ii) to actual or potential acquirors, lenders
and investors; (iii) to investment bankers, consultants and others retained by
the Company; (iv) to the Company's auditors; and (v) if believed necessary by
the Company, in the Company's financial statements; and (vi) in a registration
statement or other filing with the Securities and Exchange Commission under the
Securities Act or the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, of the day and year
first above written.
CenterStaging Musical Productions, Inc.
By: /s/ Jan Parent
------------------------------------
Name: Jan Parent
Title: Senior Executive Vice President
Executive
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
