EXHIBIT 10.64
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "AGREEMENT") is made and
entered into and is effective as of June 1, 2003, by and between BRILLIANT
DIGITAL ENTERTAINMENT, INC., a Delaware corporation (the "COMPANY"), located at
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an individual ("EXECUTIVE"), of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
R E C I T A L
Whereas, the Company and Executive desire to assure that the Company
retains the services of Executive, whose experience, knowledge and abilities are
extremely valuable to the Company.
NOW, THEREFORE, in consideration of the terms, conditions, covenants,
representations, warranties and promises contained in this Agreement, the
Parties agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive and Executive
hereby accepts employment with the Company on the terms and conditions set forth
herein.
2. DUTIES. Throughout the Term (as defined below), Executive
shall faithfully and diligently perform Executive's duties in conformity with
the directions of the Board of Directors of the Company (the "BOARD") and serve
the Company to the best of Executive's ability. Executive shall devote as much
of Executive's working time, attention and energies to the business and affairs
of the Company as Executive determines, in his sole and absolute discretion,
appropriate. Executive shall have the title of Chief Executive Officer and
President, and shall report to the Board, and at all times during the Term.
Executive shall also be a member of the Board. Executive shall have at a minimum
the duties and responsibilities commonly incident to the position of a
President. At all times while Executive is an employee of the company, Executive
shall be headquartered in Sydney Australia or California. Executive is expressly
permitted to, directly or indirectly, be employed by, participate in, or be
connected in any manner with the ownership, management, operation or control of
any business, including, but not limited to, a business similar to, or
competitive with, the business of the Company in which the Company is presently
involved or becomes engaged during the Term. In this respect, Executive agrees
to comply with requests for disclosure made by the Board from time to time.
3. TERM. The initial term of this Agreement (the "TERM") shall
commence upon the date hereof and shall terminate two (2) years thereafter (the
"SECOND ANNIVERSARY DATE"), unless sooner terminated as provided herein (the
"TERMINATION DATE").
4. COMPENSATION.
4.1. ANNUAL BASE SALARY. For Executive's services hereunder, the
Company shall initially pay Executive an annual salary of two hundred fifty
thousand dollars ($275,000) (the "BASE SALARY"). The Base Salary shall be paid
in accordance with the Company's normal procedures for paying salaried
employees, but in no event less frequently than semi-monthly.
4.2. MANDATORY BASE SALARY INCREASES. The Base Salary shall be
increased each January 1st (the "ADJUSTMENT DATE"), commencing with July 1,
2003, pursuant to the Consumer Price Index-U.S. City Average, or any
substantially equivalent successor thereto, for the month of the then current
Adjustment Date, as published by the Bureau of Labor Statistics of the United
States Department of Labor.
4.3. BONUSES. Each year of the Term hereof, the Company shall award
to Executive a bonus of three percent (3%) of the Company's EBITDA (as defined
below) as reported in the Company's audited financial statements (the " BONUS").
The Bonus shall be payable on or within a reasonable time after each December
31st, commencing with December 31, 2003.
4.4. TAXES. All amounts paid to Executive hereunder shall be
subject to the applicable withholding of social security, federal, state, and
other taxes and deductions as required by law.
5. BENEFITS. Executive shall be entitled to participate in all benefits
offered to senior executives or similarly situated officers including, without
limitation, the following:
5.1. GROUP MEDICAL AND DISABILITY INSURANCE BENEFITS. During the
Term, Executive shall be eligible to participate, and the premiums shall be paid
by the Company on behalf of the Executive, in any group medical and disability
insurance programs as provided generally to officers of the Company.
5.2. CELLULAR TELEPHONE. During the Term, Executive shall be
entitled to the use of a cellular telephone and the monthly access charge and
any business-related charges shall be paid by the Company subject to SECTION 5.5
below.
5.3. VEHICLE. During the Term, Executive shall be entitled to the
use of a company vehicle including gas and insurance paid to Executive in the
form of a monthly allowance up to a maximum $2000 per month plus insurance.
5.4. COMPUTERS AND INTERNET. During the Term, Executive shall be
entitled to the use of computer equipment required by Executive to perform his
duties including monthly access charges for the Internet and any
business-related charges shall be paid by the Company.
5.5. VACATION. Executive shall be entitled to annual vacation to
the same extent as other similarly situated executives in accordance with the
Company's standard practices and policies.
5.6. RETIREMENT PLANS. During the Term, Executive shall be eligible
to participate in any retirement, pension, or other deferred or supplemental
compensation plans operated by the Company and any subsequent or additional
retirement plans established by the Board to the same extent as similarly
situated executives.
5.7. EXPENSE REIMBURSEMENT. Upon presentment of verifiable invoices
and other documentation as may be requested by the Company, and subject to the
Company's expense reimbursement policies applicable to similarly situated
executives, the Company shall reimburse Executive for the reasonable costs and
expenses which he incurs in connection with the performance of his duties and
obligations under this Agreement.
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6. STOCK OPTIONS. In addition to any other prior approved options offered
to Executive and pursuant to the terms and conditions of the Brilliant Digital
Entertainment, Inc. Second Amended and Restated 1996 Stock Option Plan (the
"PLAN"), subject to the approval of the Board or Committee (as such term is
defined in the Plan), which approval shall not be unreasonably withheld, the
Company shall grant Executive an option to purchase six million (6,,000,000)
shares of the Common Stock of the Company, which shall vest and become
exercisable as to one million (1,000,000) of the shares of underlying the option
upon signing, two million (2,000,000) on the first anniversary of the date
hereof (the "FIRST ANNIVERSARY DATE") and two hundred and fifty thousand
(250,000) of the shares underlying the option at the end of each month following
the month in which the First Anniversary Date occurs. In the event that the
Company undergoes a change of control, then, on the occurrence of such event,
Executive's previously granted options and options granted hereunder shall
immediately accelerate and vest entirely. To qualify as a change of control, one
of the following must occur: i) a sale of the company to a single entity of more
than 50% of the company's stock; ii) a merger in which shareholders of the
company's stock hold less than 50% of the surviving entity; or iii) a sale of
substantially all of the company's assets or iv) a change to more than 50% of
the current board of directors.
7. TERMINATION.
7.1 TERMINATION AT WILL.
7.1.1 BY THE COMPANY. Subject to the provisions of this
SECTION 7, the Company may terminate this Agreement at any time, for any reason,
or for no reason, either with or without Cause (as defined below). In the event
that such termination is without Cause, the Company shall provide Executive with
thirty (30) days' prior written notice.
7.1.2 BY EXECUTIVE. Subject to the provisions of SECTION 7,
Executive may terminate this Agreement at any time, for any reason, or for no
reason, either with or without Good Reason (as defined below), by delivering
thirty (30) days' prior written notice to the Company.
7.2 TERMINATION BY THE COMPANY WITHOUT CAUSE, TERMINATION BY
EXECUTIVE WITH GOOD REASON OR TERMINATION OF EXECUTIVE AS A RESULT OF DEATH OR
DISABILITY. If the Company terminates Executive without Cause, Executive
terminates his employment for Good Reason or Executive's employment terminates
as a result of his death or Disability (as defined below), in addition to
payment of Executive's accrued portion of the Base Salary, accrued vacation,
reimbursable expenses and pro rata portion of the Bonus, if any, through the
date of termination, Executive or Executive's representative shall be entitled
to the following:
7.2.1 SEVERANCE PAY. The Company shall pay Executive or
Executive's representative upon such termination a lump-sum amount equal to the
greater of: (1) the sum of twelve (12) months current monthly Base Salary; or
(2) the sum of (i) the monthly portion of the current Base Salary times (ii) the
number of months (including partial months) remaining until the Second
Anniversary Date, as defined in SECTION 3 herein (the "SEVERANCE PAY"). Any
Severance Pay due Executive under this SECTION 7.2.1 shall be paid to Executive
within ten (10) days after the Termination Date.
7.2.2 CONTINUATION COVERAGE. Except in the case of
Executive's termination of employment as a result of his death, the Company
shall pay, on behalf of Executive,
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for the maximum period for which COBRA coverage is available, the premiums
payable in order to continue the same coverage of Executive and Executive's
family under the Company's health insurance plan which exists as of the date of
termination, unless and until Executive and Executive's family are otherwise
covered by another health insurance plan (the "CONTINUATION COVERAGE").
7.2.3 ACCELERATED VESTING. Any options to purchase the
common stock of the Company granted to Executive not otherwise vested shall be
fully vested as of the Termination Date, and all restrictions regarding the
Restricted Stock shall be removed (the "ACCELERATED VESTING").
7.3 TERMINATION BY THE COMPANY WITH CAUSE. If the Company
terminates Executive's employment with Cause, Executive shall not be eligible to
receive the Severance Pay, Continuation Coverage or Accelerated Vesting. Within
a reasonable amount of time of Executive's termination for Cause, Executive
shall be paid Executive's accrued portion of Base Salary, accrued vacation and
reimbursable expenses through the Termination Date.
7.4 VOLUNTARY TERMINATION BY EXECUTIVE. If Executive voluntarily
terminates Executive's employment with the Company without Good Reason, as
defined herein, Executive shall not be eligible to receive the Severance Pay,
the Continuation Coverage or the accelerated Vesting. Within seventy two (72)
hours following such termination, Executive shall be paid Executive's accrued
portion of the Base Salary and accrued vacation and within ten (10) days
following such termination; Executive shall be paid Executive's reimbursable
expenses payable through the date of the termination of Executive's employment.
8. DEFINITIONS.
8.1 CAUSE. For purposes of this Agreement, the term "CAUSE" shall
mean termination of Executive by the Company for the following, as determined by
a majority vote of the Board at a meeting to which Executive and Executive's
counsel shall be invited upon proper notice: (a) a willful breach by Executive
of any material provision of this Agreement that remains uncured by Executive
within thirty (30) days of written notice of such breach from the Board; (b)
repeated and willful failure or refusal to perform Executive's material duties
hereunder or repeated and gross negligence in the performance by Executive of
his duties hereunder that remains uncured by Executive within thirty (30) days
of written notice from the Board; PROVIDED, HOWEVER, that the Company shall only
be required to give notice one time or (c) if Executive is convicted of a
felony.
8.2 GOOD REASON. For purposes of this Agreement, the term "GOOD
REASON" shall mean Executive's termination of his employment with the Company
for one or more of the following reasons: (a) the reduction of Executive's
title, authority, duties or responsibilities, or the assignment to Executive of
duties inconsistent with Executive's position with the Company as set forth in
SECTION 2 hereof that remains uncured by the Company within thirty (30) days of
written notice from Executive to the Board; (b) any requirement that Executive
report to any person other than the Board or its successor that remains uncured
by the Company within thirty (30) days of written notice from Executive to the
Board; (c) a substantial reduction in the Base Salary or Bonus opportunity of
Executive that is materially adverse to Executive and that remains uncured by
the Company within thirty (30) days of written notice from Executive to the
Board; (d) the relocation of Executive's office to a location that is outside of
California; or (e) any other material breach by the
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Company of this Agreement that remains uncured by the Company within thirty (30)
days of written notice from Executive to the Board.
8.3 DISABILITY. For the purposes of this Agreement, "DISABILITY"
shall mean any physical or mental disability which causes Executive to be unable
to substantially perform Executive's normal duties as an employee of the
Company; provided, however, that Executive shall not be considered disabled
until (i) Executive has been so disabled for one hundred eighty (180) days; (ii)
Executive's attending physician shall have furnished to the Company
certification that the return of Executive to his duties as an employee of the
Company is impossible or improbable; and (iii) Executive is determined to be
totally disabled by the disability insurer then insuring Executive, if any.
8.4 EBITDA. For purposes of this Agreement, the term "EBITDA"
shall mean, for any period, Net Income (as defined below) for such period PLUS,
without duplication and to the extent reflected as a charge in the statement of
such Net Income for such period, the sum of (a) income tax expense, (b) interest
expense, amortization or write-off of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with indebtedness,
(c) depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (e) any
extraordinary, unusual or non-recurring expenses or losses (including, whether
or not otherwise includable as a separate item in the statement of such Net
Income for such period, losses on sales or writ-downs of assets outside of the
ordinary course of business), (f) any other non-cash expenses and charges, (g)
non-cash provisions and reserves for discontinued operations, (h) any loss
accounted for by the equity method of accounting; MINUS, to the extent included
in the statement of such Net Income for such period, the sum of (a) interest
income, (b) any extraordinary, unusual or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Net Income for such period, gains on the sales of assets
outside of the ordinary course of business) and (c) any other non-cash income,
all as determined on a consolidated basis. For purposes of this Agreement, the
term "NET INCOME" shall mean, for any period, the consolidated net income (or
loss) of the Company, determined on a consolidated basis in accordance with GAAP
for the applicable period.
9. CONFIDENTIALITY AND NON-SOLICITATION. During the Term, Executive will
have access to and become acquainted with what Executive and the Company
acknowledge are trade secrets and other confidential information (the
"CONFIDENTIAL INFORMATION") which are the exclusive property of the Company. In
light of the sensitive and proprietary nature of the Confidential Information,
notwithstanding any provision in this Agreement, including SECTION 2, executive
agrees to execute and be bound by the Company's standard Confidential
Information and Non-Solicitation Agreement.
10. MISCELLANEOUS PROVISIONS.
10.1 INSURANCE FOR EXECUTIVE. Executive shall, at all times, be
indemnified by the Company in connection with his performance of services
hereunder, at the maximum level permitted by law. The Company shall cause
Executive (together with other offices and directors) to be covered at all times
by directors and officers liability insurance with such coverage to be not less
than $1,000,000. The Company shall continue to indemnify Executive as provided
above and maintain such liability insurance coverage for Executive, after the
Term has ended for any claims that may be made against him with respect to his
service as a director or officer of the Company.
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10.2 NOTICES. Except as otherwise provided in this Agreement, all
notices, requests, demands, and other communications under this Agreement shall
be given in writing and shall be served either personally, by facsimile or
delivered by first class mail, registered or certified, postage prepaid, and
properly addressed as follows:
If to the Company:
c/o Brilliant Digital Entertainment, Inc.
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Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Biztech Law LLP
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If to Executive:
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with a copy to:
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices shall be deemed received at the earliest of actual
receipt, confirmed facsimile or three (3) days following mailing.
10.3 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter contained
herein and supersedes all prior agreements, representations, and understandings
of the parties.
10.4 AMENDMENTS. This Agreement may not be amended, supplemented,
canceled, or discharged except by written instrument executed by the parties
hereto.
10.5 WAIVERS. All waivers hereunder shall be in writing. No waiver
by any party hereto of any breach or anticipated breach of any provision of this
Agreement by any other party
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shall be deemed a waiver of any other contemporaneous, preceding, or succeeding
breach or anticipated breach, whether or not similar, on the part of the same or
any other party.
10.6 SEVERABILITY. In the event that any provision of this
Agreement shall be unenforceable or inoperative as a matter of law, the
remaining portions or provisions shall remain in full force and effect.
10.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
representatives, executors, administrators, successors, and assigns, provided,
however, that Executive may not assign any or all of his rights or duties
hereunder except following the prior written consent of the Company.
10.8 COUNTERPARTS. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute one and the same Agreement.
10.9 SECTION HEADINGS. The section headings used in this Agreement
are inserted for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
10.10 GOVERNING LAW. Except where otherwise indicated, this
Agreement shall be construed and enforced in accordance with the laws of the
State of California.
10.11 ADVICE OF COUNSEL. Executive acknowledges that he has been
advised to seek independent legal counsel for advice regarding the effect of the
terms and provisions hereof, and has either obtained such advice of independent
legal counsel, or has voluntarily and without compulsion elected to enter into
and be bound by the terms of this Agreement without such advice of independent
legal counsel.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Employment Agreement as of the date first above written.
BRILLIANT DIGITAL ENTERTAINMENT, INC.
By: _____________________________
Title: _____________________________
EXECUTIVE
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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