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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of April 17, 1998, and is effective as of the
11th day of May, 1998 (the "Effective Date"), by and between KINGS ROAD
ENTERTAINMENT, INC., a Delaware corporation (herein referred to as the
"Company"), and you, XXXXXXXXXXX XXXXXXX.
In consideration of the mutual covenants, terms and conditions set
forth herein, you and the Company agree as follows:
1. The Company hereby employs you pursuant and subject to the terms,
conditions and provisions of this Agreement. You hereby accept such employment
and agree to render your services exclusively to the Company as provided herein,
where and when required by the Company (presently in Los Angeles, California),
all of which services shall be performed conscientiously and to the full extent
of your ability. You further agree to abide by all rules, regulations and
policies of the Company.
2. Your title and position with the Company shall be Senior Vice
President and Chief Financial and Administrative Officer.
3. You shall report to the Company's chief executive officer, currently
Xxxxxxx Xxxxxx, or to any other chief executive or operating officer who may be
employed by the Company during the Term. Any conflict between divisions of
responsibility between you and any other employee shall be resolved by the chief
executive officer.
4. The services to be rendered by you hereunder shall include, without
limitation, all services customarily rendered by persons engaged in the same
capacity or in a similar capacity in the entertainment industry, and such other
services as may be requested by the Company from time to time hereunder. Your
services shall be exclusive to the Company during the Term of this Agreement.
5. The Term of your employment by the Company under this Agreement
shall commence as of the Effective Date and (unless earlier terminated pursuant
to this Agreement) shall continue thereafter through May 5, 2000 (the "Term").
6. (a) As full consideration for all services to be rendered by you
pursuant hereto, and for all rights and interests herein granted by you to the
Company, and provided that you are not in breach or default of this Agreement
and that you have kept and performed all of your obligations hereunder, and
subject to the terms and conditions hereof, you shall be entitled to receive a
base salary in an amount equal to One Hundred Ten Thousand ($110,000) commencing
on the Effective Date and continuing through May 5, 1999. Commencing May 6, 1999
and continuing through the end of the Term, you shall be entitled to receive a
base salary in an amount equal to One Hundred Twenty Thousand ($120,000).
(b) Such compensation shall be paid in accordance with the
Company's normal payroll practices. The Company may make such deductions,
withholdings or payments from any sum payable to you pursuant to this Agreement
as are required by any applicable law, rule or regulation for taxes or similar
charges. Compensation payments made to you by the Company or any affiliate of
the Company shall be deemed made pursuant to this Agreement and any compensation
paid to you from and after the Effective Date of this Agreement shall be
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deemed to have been paid hereunder.
7. In addition to the base salary set forth in Paragraph 6, you shall
be entitled to receive 34,000 stock options at the current market price on the
date of grant. Your interest in such options shall vest as follows: (i) 50% on
May 11, 1999; and (ii) 50% on May 11, 2000. Such options shall have a five (5)
year term commencing on the Effective Date and shall be subject in all respects
to the Kings Road Stock Option Plan.
8. In addition to the base salary set forth in Paragraph 6, you shall
be eligible to receive such bonus compensation as the Company may elect to award
to you, if any, in the Company's sole and absolute discretion. Nothing in this
Paragraph 8 shall require or otherwise obligate the Company to pay you a bonus.
9. You represent and warrant that you are free to enter into the
Agreement and to grant the rights and interests to the Company that you purport
to grant thereunder and that there are no agreements or arrangements in effect,
whether written or oral, which could prevent you from rendering exclusive
services to the Company during the Term, and that you have not made and will not
make any commitment or do any act in conflict with the Agreement.
10. On the condition that you are not in breach or default of the
Agreement, the Company shall reimburse you for all of your reasonable expenses
incurred while employed and performing your duties under and in accordance with
the terms and conditions of the Agreement, subject to your full accounting
therefor and your providing the Company with appropriate documentation,
including without limitation receipts, for all such expenses in the manner
required pursuant to Company's policies and procedures and the Internal Revenue
Code, and subject to the Company's prior approval.
11. You and the Company agree that the services to be rendered by you
pursuant to the Agreement, and the rights and interests granted by you to the
Company pursuant to the Agreement, are of a special, unique, extraordinary and
intellectual character, which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in any action at law,
and that a breach by you of any of the terms of the Agreement will cause the
Company great and irreparable injury and damage. You hereby expressly agree that
the Company shall be entitled to the remedies of injunction, specific
performance and other equitable relief to prevent a breach of the Agreement by
you. This provision shall not, however, be construed as a waiver of any of the
rights which the Company may have hereunder, at law, for damages, or otherwise.
12. (a) In the event that (i) you become incapacitated or prevented
from fully rendering your services hereunder by reason of your illness, mental,
physical or other disability, and such incapacity or inability shall continue
for sixty (60) consecutive days during any period of the Term; or (ii) the
Company's normal operations are prevented or interrupted because of force
majeure events or any other cause beyond the Company's sole control (e.g., any
labor dispute, strike, fire, war, civil disturbance, act of God, governmental
action or proceeding or any event sufficient to excuse performance as a matter
of law), and such prevention or interruption shall continue for sixty (60)
consecutive days during any period of the Term; then the Company shall have the
right to terminate your employment under the Agreement immediately upon the
expiration of said six (6)-week period without any further liability or
obligation to you hereunder except for any accrued compensation payable to you
as of the date of such termination (such a termination herein referred to as a
termination "For Disability or Force Majeure").
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(b) In the event you, at any time, breach any provision of the
Agreement, fail, refuse or neglect (other than by reason of any above-referenced
disability or incapacity) to perform fully your obligations hereunder, or engage
or participate in any serious or willful misconduct in connection with any of
your obligations under the Agreement, the Company shall have the right to
terminate your employment under the Agreement at any time thereafter (such a
termination herein referred to as a termination "For Cause"). In the event of
any termination For Cause, you shall be entitled to receive only accrued
compensation payable to you as of the date of such termination, without regard
to any other compensation, benefits or perquisites.
(c) In addition to the right to terminate For Cause or For
Disability or Force Majeure, the Company shall have the right to terminate your
employment under the Agreement at any time for any reason, upon thirty (30)
days' notice to you (such a termination herein referred to as a termination
"Without Cause"); provided, however, that if termination of your employment is a
termination Without Cause, you shall continue to be entitled only to your base
annual compensation under Paragraph 6 of the Agreement subject to your
obligation to use your best efforts to find other suitable employment promptly,
at which time all your rights under the Agreement shall terminate, including
without limitation the right to receive compensation. During the time that you
are seeking other employment as a result of termination Without Cause, you agree
to report fully to the Company every three weeks regarding your efforts to
obtain other suitable employment, and the Company hereby reserves the right to
discontinue all payments to you under the Agreement, but no earlier than sixty
(60) days following such termination, if it reasonably determines that you are
not using your best efforts promptly to find such other suitable employment.
(d) Any termination under this Paragraph 12 shall not be
deemed to be a waiver by the Company of any of the Company's rights or remedies
otherwise available to the Company hereunder, at law, in equity or otherwise.
13. You shall not enter into any contracts or make any commitments on
behalf of the Company outside of the ordinary course of your duties and services
in the ordinary course of the Company's business nor for an amount in excess of
such limits as may be specified by the Company without the prior written
approval and consent of the Company in accordance with the standard practices
and operating procedures thereof.
14. During the Term hereof you shall be entitled to:
(a) The Company's basic health and life insurance benefits
generally available to other senior executives of the Company, including any
applicable major medical insurance benefits, subject to compliance with
provisions relating to eligibility or qualification; and
(b) Three (3) weeks vacation with pay and normal and customary
holidays in accordance with the Company's policy for vacations and holidays for
senior executives of the Company.
(c) To participate in any Company retirement or similar
benefit plan available to Company's senior executives, including, without
limitation, the Company's XXX plan, subject to all terms and conditions of any
such plan.
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For the purpose of determining your length of service with the Company with
respect to the applicable provisions of any benefit to which you may be entitled
hereunder (except with respect to stock options and the vesting provisions
thereof), such determination shall include your previous term of employment with
the Company from May 9, 1994 through March 31, 1998.
15. The Company may secure in its own name or otherwise, and at its own
expense, life, health, accident and other insurance covering you or you and
others, and you shall not have any right, title or interest in or to such
insurance other than as expressly provided herein. You agree to assist the
Company in procuring such insurance by submitting to the usual and customary
medical and other examinations to be conducted by such physician(s) as the
Company or such insurance company may designate and by signing such applications
and other written instruments as may be required by the insurance companies to
which application is made for such insurance.
16. During the Term, you shall not directly or indirectly compete or
interfere with the actual or contemplated businesses or activities of the
Company. In this regard, during the Term, you shall not, without the prior
written consent of the Company, (a) while actually employed by the Company
hereunder, become an officer, employee, consultant, agent, partner (other than a
limited partner) or director of any other business enterprise; and (b) while not
actually employed by the Company hereunder, become an officer, employee,
consultant, agent, partner (other than a limited partner) or director of any
other business enterprise engaged in any of the actual or contemplated
businesses or activities of the Company.
17. You agree that you will not, during the Term or thereafter,
disclose to any other person or entity the terms or conditions of the Agreement
(including the financial terms thereof) and shall not directly or indirectly
issue or permit the issuance of any publicity whatsoever regarding, or grant any
interview or make any statements concerning, the Company's engagement of you
hereunder without the prior written consent of the Company.
18. The primary place of your employment under the Agreement shall be
the Los Angeles Metropolitan Area. You shall make such trips away from the
County of Los Angeles as requested by the Company or as may be required for the
conduct of your duties under the Agreement.
19. The Company hereby represents and warrants that it has obtained all
approvals necessary to enter into this Agreement.
20. The Agreement shall be governed by, and construed in accordance
with, the laws of the State of California applicable to contracts entered into
and fully performed therein.
21. The Company shall have the right to assign or otherwise delegate
the Agreement or any of its rights or obligations thereunder, in whole or in
part, to any person or entity. Without limiting the generality of the foregoing,
the Company shall have the right to license, delegate, lend or otherwise
transfer any of its rights to any or all of your services under the Agreement to
any person, company or other entity controlling, controlled by, or under common
control with the Company, and you agree to render such services required under
the Agreement for such person, company or other entity as part of the services
to be rendered under the Agreement for no additional compensation other than as
provided for in this Agreement. You shall not have any right to assign, delegate
or otherwise transfer any duty or obligation to be performed by you hereunder to
any person or entity, nor to assign or transfer any rights hereunder.
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22. All notices which either party is required or may desire to give to
the other party under or in connection with the Agreement shall be sufficient if
given by addressing the same to the respective party at the address set forth
below or at such other place as may be designated by the respective party:
To Company: Kings Road Entertainment, Inc.
1901 Avenue of the Stars
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
with a copy to
Manatt, Xxxxxx & Xxxxxxxx, LLP
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx, Esq. or
Xxxxx Xxxxxxxxx, Esq.
To You: Xxxxxxxxxxx Xxxxxxx
00000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
When notices addressed as required by this Paragraph 21 shall be hand delivered,
telexed, or deposited, postage prepaid, registered or certified mail, in the
United States mail, or delivered to a telegraph office, toll prepaid, the
Company or you, as appropriate, shall be deemed to have delivered such notice.
23. If the compensation provided by the Agreement shall exceed the
amount permitted by any present or future law or governmental order or
regulation, such stated compensation shall be reduced, while such limitation is
in effect, to the amount which is so permitted. The payment of such reduced
compensation shall be deemed to constitute full performance by the Company of
its obligations hereunder with respect to compensation for such period;
provided, however, that the Company shall pay you the aggregate amount of such
reduction if and when such payment becomes permissible at law.
24. You agree to execute and deliver to the Company such further
documents and instruments as the Company may desire to further evidence,
effectuate or protect the Company's rights hereunder. The Agreement may be
modified only by a written instrument duly executed by each of the parties
thereto. No person has any authority on behalf of the Company to make any
representation or promise not set forth in the Agreement, and you hereby
represent and warrant that the Agreement has not been executed in reliance upon
any representation or promise except those contained therein. No waiver by the
Company of any default or other breach of the Agreement shall be deemed to be a
waiver of any preceding or succeeding breach or default.
25. Concurrently with your execution and delivery to Company of this
Agreement, you shall execute and deliver to the Company an Employee
Confidentiality Agreement in the form of Exhibit A attached hereto.
26. This Agreement supersedes all, prior or contemporaneous agreements,
whether
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oral or written, between the parties hereto concerning the subject matter
hereof, and constitutes the valid, binding and entire agreement between the
parties with respect thereto, enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
KINGS ROAD ENTERTAINMENT, INC.
By /s/ Xxxxxxx Xxxxxx
--------------------------------
Xxx Xxxxxx, CEO
ACCEPTED AND AGREED TO:
/s/Xxxxxxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxxxxxx Xxxxxxx
Social Security Number: ###-##-####
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EXHIBIT A
EMPLOYEE CONFIDENTIALITY AGREEMENT
In consideration of my employment, or my continued employment,
as the case may be, by Kings Road Entertainment, Inc., or by any direct or
indirect subsidiary or affiliate of Kings Road Entertainment, Inc. (such
employer for the purposes of this Employee Confidentiality Agreement being
hereinafter referred to as the "Company"), I agree with the Company as follows:
As long as I shall remain in the employ of the Company I shall
devote my whole time and ability to the service of the Company in my employment
capacity, as the Company shall from time to time direct, and I shall perform my
duties faithfully and diligently. Further, I shall abide by all rules,
regulations and policies of the Company (including without limitation those
contained in the Company's current employee manual as it may hereafter be
modified, supplemented or replaced), and I acknowledge that I am familiar with
the same.
I shall not, during my employment by the Company or
thereafter, use or disclose to others without the prior written consent of the
Company, any trade or business secrets, secret "know-how", confidential, secret,
technical, financial or proprietary information or other nonpublic information
relative to the business or activities of the Company, obtained by me while in
the employ of the Company or otherwise. Upon leaving the employ of the Company,
I shall not take with me any confidential, secret, technical, financial or
proprietary data, drawings, documents or information obtained by me as the
result of my employment, or any reproductions thereof. All such items and all
copies thereof, including without limitation all memoranda, notes, records and
other documents related to the actual or contemplated business or activities of
the Company that were made or compiled by me, or made available to me during the
term of my employment by the Company, shall be and remain the Company's
property, and I shall surrender the same to the Company on the termination of my
employment by the Company, or at any other time on request.
I acknowledge and agree that I am the Company's employee for
hire. In this regard, all right, title and interest of every kind and nature
whatsoever, whether now known or unknown, in and to any property (intellectual
or otherwise), including without limitation any inventions, patents, trademarks,
copyrights, films, scripts, ideas, writings and discoveries, invented, created,
written, developed, furnished, produced, disclosed or acquired by me, alone or
in collaboration with others, during the term of my employment by the Company or
within the one (l)-year period thereafter (qualified by the last sentence of
this paragraph), but excluding such musical or literary works created solely by
me and which are not created as "works made for hire" for Company or which are
not specifically licensed to or acquired by the Company, which property relates
to or may be useful in connection with the actual or contemplated business or
activities of the Company, shall be and remain, as between myself and the
Company, the sole and exclusive property of the Company for any and all purposes
and uses whatsoever (including any of my right, title and interest in and to any
domestic or foreign applications for patent or trademark, as well as any
divisions, continuations reissues, revivals, renewals or extensions thereof),
and to the extent protectible under copyright law, shall be deemed for such
purposes as works made for hire for the Company. I acknowledge and agree that I
shall disclose all of the foregoing to the Company immediately upon the
discovery, invention, creation, etc. thereof and that I shall have no right,
title or interest of any kind or nature in or to any of the foregoing or in or
to any results or proceeds therefrom. I further agree
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that I will, at the Company's request, whether during or subsequent to my
employment by the Company, do any and all acts, and execute and deliver to the
Company (in form satisfactory to the Company) such instruments or documents, as
may be deemed by the Company as necessary or desirable to evidence, effectuate,
secure, maintain or establish the terms of this agreement or the Company's
ownership of any of the foregoing, all without charge; but notwithstanding that
no such instruments or documents are executed, the Company, as my employer,
shall be deemed the owner thereof immediately upon the discovery, invention,
creation, etc. thereof. Except as otherwise specifically provided above
regarding certain musical or literary works created solely by me, any invention,
patent, trademark or other property relating to the Company's actual or
contemplated business or activities, that is discovered, invented, created, etc.
by me, alone or in collaboration with others, within one (1) year after the
termination of my employment by the Company for any reason, shall be deemed to
be within the provisions of this paragraph, unless I can prove that the same was
conceived and made following said termination.
Attached is a list of my existing trademark, copyright and/or
patent applications and unpatented inventions made prior to my employment by the
Company, which I agree is a complete list and which I desire to remove from the
operation of this agreement.
I agree that the Company shall be entitled to injunctive or
other appropriate equitable relief to prevent or remedy my proposed,
anticipatory or actual breach of the terms of this agreement including, without
limitation, the disclosure of any information, data, documents or other
materials covered by the terms of this agreement.
This agreement shall inure to the benefit of the Company, its
subsidiaries, affiliates, allied companies, successors and assigns or the
nominees of the Company; and I specifically agree to execute any and all
documents considered necessary or desirable to assign, transfer, sustain or
maintain inventions, discoveries, applications, copyrights, trademarks or
patents, both in the United States and in foreign countries.
IN WITNESS WHEREOF, I have hereunto signed my name as of the
date of the Employment Agreement to which this document is attached and
effective as of the Effective Date (as defined in the Employment Agreement).
/s/Xxxxxxxxxxx X. Xxxxxxx
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Xxxxxxxxxxx Xxxxxxx
Witness: /s/Xxxxx Xxxxx
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ACCEPTED:
Kings Road Entertainment, Inc.
/s/Xxxxxxx Xxxxxx
-------------------------
By: Xxxxxxx Xxxxxx
Its: CEO
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