EMPLOYMENT
AGREEMENT
This
Employment Agreement (the “Agreement”) is entered into by and between
Twistbox
Entertainment, Inc., a Delaware corporation organized under the laws of the
State
of
Delaware, with its principal offices located at 14242 Ventura Boulevard,
Sherman
Oaks, California 91423 (the “Company”) and Russell Burke (“Employee”) dated
as
of
December 11, 2006 (“Effective Date”).
I. EMPLOYMENT.
The
Company hereby employs Employee and Employee hereby accepts such employment
upon the terms and conditions hereinafter set forth commencing as of
December
11, 2006 (“Employment Date”) through and including December 10, 2008;
provided
that, notwithstanding any other provision contained herein to the contrary,
the
first
ninety (90) days of your employment will be on a probationary basis where
either
party
may
provide the other with fifteen (l5) days prior notice of its intention not
to
continue
with your employment with the Company for any or no reason whatsoever. In
such
event, you agree and acknowledge that neither party shall have any further
obligation to the other except with respect to the Company’s obligation
to
pay your accrued
salary as of the last day of your employment.
II. DUTIES.
A.
Employee
shall serve during the course of his employment as Chief Financial
Officer and shall have such other duties and responsibilities as are consistent
with
those generally performed by the Chief Financial Officer of a similarly situated
company
and as the Chief Executive Officer shall determine from time to time including
matters
concerning: capital asset/financial planning; financial systems and modeling,
budgeting
and forecasting; strategic planning and competitive analyses; business
evaluations
and due diligence; acquisitions and divestitures; debt and equity financing
and
restructuring; financial management; banking relations; business policies,
practices and
procedures; public and private offerings; and Sarbanes-Oxley (or similar)
compliance.
The Company shall provide Employee with all
reasonable and necessary business equipment to allow Employee to perform
such
duties and responsibilities. The Company
retains absolute discretion to reorganize the Company from time to time and
that
nothing in this Agreement shall in any way affect or limit such
discretion.
B.
Employee
agrees to devote substantially all of his time, energy and ability to
the
business of the Company. Nothing herein shall prevent Employee, upon approval
of
the
Board of Directors of the Company, from serving as a director or trustee
of
other corporations
or businesses which are not in direct competition with the business of the
Company
or in direct competition with any present or future affiliate of the Company;
provided, however, that no approval of the Board of Directors of the Company
shall be required
for Employee to continue to serve as a director of any company of which he
was
a
director as of the Effective Date so long as such company is not in competition
with the Company.
Nothing herein shall prevent Employee from (i) investing
in real estate for his own
account, (ii)
becoming
a partner or a stockholder in any corporation, partnership or other
venture not in direct competition with the business of the Company or in
competition
with any present affiliate of the Company, or (iii) becoming up to a
5% stockholder
in any publicly held corporation whether or not in competition with the
business
of the Company or in competition with any present or future affiliate of
the
Company.
C. Employee
shall report to Ian Aaron, Chief Executive Officer.
III. COMPENSATION.
A.
The
Company will pay to Employee a base salary at the annual rate of $240,000.
Such
salary shall be earned monthly and shall be payable in periodic installments
no
less frequently than monthly in accordance with the Company's customary
practices. Amounts
payable shall be reduced by standard withholding and other
authorized deductions. The Company may in its discretion increase Employee’s
salary
beyond these set amounts but it may not reduce it.
B.
Annual
Bonus. Employee
shall
eligible for an annual performance/merit bonus
(the “Bonus”) at the Company’s sole
discretion
based upon Employee’s performance
and the performance of the Company with a target Bonus of fifty percent
(50%)
of
your base salary. Such Bonus to be determined by the Company’s Board of
Directors
and/or Compensations Committee based upon several factors including the
profitability
of the Company, your performance and the achievement of goals each fiscal
year.
A
Bonus is to be paid on the Company’s fiscal year basis to the extent and in such
manner
as
determined with such other comparable senior executives
of
the
Company.
C.
Welfare
Benefit Plans. Employee
and/or his family,
as
the case
may be, shall
be
eligible for participation in and shall receive all benefits under welfare
benefit plans,
practices, policies and programs provided by the Company (including, without
limitation,
medical, prescription, dental, vision, disability, salary continuance, employee
life,
group life, accidental death, travel accident insurance plans and programs
and
401K Plan)
to
the extent applicable generally to other comparable senior executives of
the
Company.
D.
Expenses. Employee
shall be entitled to receive prompt reimbursement for
all
reasonable employment expenses incurred by him in accordance with the policies,
practices
and procedures as in effect generally with respect to other comparable senior
executives
of the Company.
E.
Fringe
Benefits. Employee
shall be entitled to fringe benefits in accordance
with the plans, practices, programs and policies as in effect generally with
respect
to other comparable senior executives of the Company.
F.
Vacation. Employee
shall be entitled to twenty (20) business days of paid vacation
for each full year employment which shall be taken in accordance with the
policies
and practices as in effect
generally with respect to other comparable senior executives of the
Company.
G.
Stock
Options. The
Company shall grant to Employee, subject to Compensation
Committee approval and the vesting provisions described in this Agreement,
nonqualified stock options (the “Options”) under the Company’s 2006 Stock
Incentive
Plan, as amended (the “Plan”), to acquire seventy five thousand (75,000) shares
of
the
Company’s Common Stock (“Common Shares”) at the exercise price of $0.59 per
Common
Share under each such Option. Each Option shall represent the right to acquire
one
(1)
Common Share. Subject to earlier termination of the Options as described
below,
the
Options shall vest in full and become immediately exercisable as follows:
(a)
twenty five percent (25%) on the first anniversary of the Employment Date
and
the remaining seventy
five percent (75%) in equal quarterly installments over the three (3) year
period following
the first anniversary of the Employment Date. The Options shall expire on
the
first
to
occur of (i) the close of business on the last business day of the Company
coinciding
with or immediately preceding the day before the tenth anniversary of the
Effective
Date, (ii) the termination of the Options pursuant to the Plan, or (iii)
the
termination
of the Options in connection with a termination of Employee’s employment
with
the
Company as contemplated by the Option Agreement. The
Options shall be evidenced
by a written option agreement in the Form attached hereto as Exhibit A (the
“Option
Agreement”). In
addition to any provision contained in the Plan and/or the Option
Agreement, all Options are subject to full accelerated vesting upon an
underwritten
initial public offering of the securities of the Company and/or a Change
of
Control
of the Company.
H. The
Company reserves the right to modify, suspend or discontinue any and
all
of the plans, practices, policies and programs described in Sections III-C,
III-D, and
III-E
above at any time without recourse by Employee so long as such action is
taken
generally
with respect to other comparable employees, is not applied retroactively,
and
does
not
single out Employee.
IV.
TERMINATION.
A.
Death or Disability. Employee’s
employment
shall
terminate
automatically
upon Employee’s death. If
a
Disability of Employee has occurred (pursuant
to the definition of Disability set forth below), the Company may give to
Employee
written notice of its intention to terminate Employee’s employment. In such
event,
Employee’s employment with the Company shall terminate effective on the 120th
day
after
receipt of such notice by Employee, provided that, within the 120 days after
such
receipt, Employee shall not have
returned to full-time performance of his duties. For
purposes of this Agreement. “Disability” shall mean either a physical or mental
impairment
which substantially limits a major life activity of Employee and which
renders
Employee unable to perform the essential functions
of his position, even with reasonable
accommodation which does not impose an undue hardship on the Company
for
an
aggregate of 120 days in any twelve-month period. The
determination of Disability
under the preceding sentence shall be based upon information supplied by
Employee
and/or his medical personnel,
as
well as
information from medical personnel (or
others) selected by the Company. In the event Employee’s health care provider
and the
Company do not agree as to whether Employee has a Disability, Employee and
the
Company
shall appoint a third-party qualified physician who shall evaluate Employee
and
provide a determination of whether Employee has a Disability.
B.
Cause. The
Company may terminate Employee’s employment for “Cause”
in the event the Employee has
engaged in or
committed:
willful misconduct; gross
negligence; theft, or fraud; any willful act that is reasonably likely to
and
which does
in
fact have the effect of materially injuring the reputation, business or a
business relationship
of the Company; and material breach of any material term of this Agreement.
In
the event the Company determines that Cause for termination exists based
upon
willful misconduct
or gross negligence, the Company shall give Employee fourteen (14) days
prior
written notice of such termination which notice shall include reasonable
detail
as to the
ground for such termination. If such ground is curable, Employee shall be
given
thirty (30)
days
from the date of such notice to cure such ground for termination for Cause.
After
the
expiration of any such cure period, the Company shall make a good faith
determination
as to whether Employee has cured such ground for termination for Cause
and
shall
give written notice thereof to the Employee which, in the case of a determination
that Employee has failed to cure, shall include reasonable detail as to why
Employee’s
efforts to cure were not adequate.
C.
Other
than Cause or Death or Disability. The
Company may terminate Employee’s
employment at any time, with or without cause, upon ninety (90) days’
written
notice.
D. Obligations
of the Company Upon Termination.
I.
Death
or Disability. If
Employee’s employment is terminated by reason
of
Employee’s Death or Disability, this Agreement shall terminate without
further obligations to Employee or his legal representatives under this
Agreement (except as provided in this Section IV-D-1),
other
than for (a)
payment of the sum of (i) Employee's pro rata portion of the annual base
salary
through the date of termination to the extent not theretofore paid,
(ii) Employee's pro rata portion of the Bonus for any unpaid amounts
accrued prior to termination for the calendar year during which the
Employee's Death or Disability occurs, and (iii) any accrued vacation
pay,
in
each
case to the extent not theretofore paid (the sum of the amounts
described in clauses (i),
(ii), and
(iii)
shall be hereinafter referred to
as the
“Accrued Obligations”), which shall be paid to Employee or his estate
or
beneficiary, as applicable, in a lump sum in cash within thirty (30)
days
of the date of termination; (b) payment to Employee or his estate or
beneficiary,
as
applicable, any amounts due pursuant to the terms of any applicable
welfare benefit plans, and (c) to the extent termination is due to Disability,
until the earlier of the end of such Disability and one (1) year following
Employee's notice to the Company of any such Disability, continued
participation in medical, dental, hospitalization and life insurance
coverage and in all other plans and programs in which Employee
was participating (on the same basis he was participating) on the
date
of
termination. Upon
a
termination
as
a
result of
Death
or Disability,
the Options, and any other options granted to Employee by the Company
during his employment,
to
the
extent outstanding and not previously
vested at the time of such termination, shall thereupon vest in full
and
shall continue to be exercisable for a period of three (3) years after
such
termination.
2.
Cause. If
Employee's employment is terminated by the Company for
Cause, this Agreement shall
terminate without further obligations to Employee.
3.
Other
than Cause or Death or Disability.
If
the
Company terminates
Employee’s employment for
other
than Cause or Death or Disability,
this Agreement shall terminate without further obligations to Employee other
than for: (a) the payment of Accrued Obligations and (b) the
lump
sum payment of a sum equal to the balance of base salary payments
for the remainder of the Term had Employee remained employed
through the end of the Term, less standard withholdings and other
authorized deductions. Such payments to be made upon Employee’s execution,
and non-revocation, of a release substantially in the form attached
hereto as Exhibit B. Furthermore,
if the Company terminates Employee's
employment for other than Cause, Death or Disability, the Options,
and any other options granted to Employee by the Company during
his employment, to the extent outstanding and not previously vested
at
the time of such termination, shall thereupon vest in full and shall
continue to be exercisable for a period of three (3) years after such
termination.
4.
Termination By Employee.
Employee
may terminate his employment
with Company upon ninety (90) days’ written notice for any reason
other than Good Reason, Death or Disability. For
all
purposes under
this agreement, any such termination by Employee shall be treated as
a
termination for Cause.
5.
Exclusive Remedy. Employee
agrees
that
the
payments
contemplated
by this Agreement shall constitute the
exclusive and sole remedy
for any termination of his employment and Employee covenants not
to
assert or pursue any other remedies, at law or in equity, with respect to
any
termination of employment.
V.
ARBITRATION.
Any
controversy arising out of or relating to this Agreement, its
enforcement or interpretation or because of an alleged breach, default, or
misrepresentation
in connection with any of its provisions, or any other controversy arising
out of Employee’s employment, including, but not limited to, any state or
federal statutory
claims, shall be submitted to arbitration in Los Angeles, California, before
a
sole
arbitrator selected from the American Arbitration Association (“AAA”),
and
shall
be conducted
in accordance with
the
AAA
rules for the resolution of Employment Disputes as
the
exclusive forum for the resolution of such dispute, provided, however, that
provisional
injunctive
relief may, but need not,
be
sought
by either party to this Agreement
in a court of law while arbitration proceedings are pending, and any
provisional
injunctive relief granted by such court shall remain effective until otherwise
modified
by the Arbitrator, provided, however, that such provisional injunctive relief
shall
be
sought in aid and in advance of the arbitration only. Final resolution of
any
dispute
through arbitration may include any remedy or relief which the Arbitrator
deems
just
and
equitable, including any and all remedies provided by applicable state or
federal statutes.
At the conclusion of the arbitration, the Arbitrator shall issue a written
decision that
sets
forth the essential findings and conclusions upon which the Arbitrator’s award
or decision
is based. Any award or relief granted by the Arbitrator hereunder shall be
final
and
binding on the parties hereto and may be enforced by any court of competent
jurisdiction.
The
parties acknowledge
and agree that they are hereby waiving any rights to
trial
by jury in any action, proceeding or counterclaim brought by either of the
parties against
the other in connection with any matter whatsoever arising out of or in any
way
connected
with this Agreement or Employee's employment. Employee and Company agree
that in any proceeding to enforce the terms of this Agreement, the prevailing
party shall
be
entitled to its or his reasonable attorneys’ fees and costs (including forum
costs associated
with the arbitration) incurred by it or him in connection with resolution
of the
dispute
in addition to any other relief granted.
VI.
ANTI SOLICITATION.
Employee
promises and agrees that during his employment, and for a period of twelve
(12) months thereafter, he will not influence or attempt to influence any
mobile
telecommunications
operator or other distributor of the Company's programming, games and
services to cease distribution of the Company's programming, games and services
with
its
subscribers and replace it with similar services of any competitor with the
business
of the Company.
VII.
SOLICITING
EMPLOYEES.
Employee
promises and agrees that
during his employment, and for a period of twelve
(12) months thereafter, directly or indirectly, solicit any of the Company
employees
who earned annually $50,000 or more as a Company employee during the last
six
months of his or her own employment to work for any business, individual,
partnership,
firm, corporation, or other entity then in direct competition with the business
of
the
Company or any subsidiary of the Company. For the purposes of this provision,
“indirectly
solicit” shall mean that Employee has provided name(s) or other identifying
information
to aid in the solicitation of such person.
VIII.
CONFIDENTIAL
INFORMATION.
A.
Employee,
in the performance of Employee's duties on behalf of the Company,
shall have access to, receive and be entrusted with confidential information,
including
but in no way limited to development, marketing, organizational, financial,
management,
administrative, production, distribution and sales information, data,
specifications
and processes presently owned or at any time in the future developed, by
the
Company or its agents or consultants, or used presently or at
any
time in the future in the
course of its business that is not otherwise part of the public domain
(collectively, the “Confidential
Material”). All such Confidential Material is considered secret and will be
available
to Employee in confidence. Except in the performance of duties on behalf
of
the
Company, Employee shall not, directly or indirectly for any reason whatsoever,
disclose
or use any such Confidential Material, unless such Confidential Material
ceases
(through
no
fault
of Employee’s) to be confidential
because it has become part of the public
domain. All records, files, drawings, documents, equipment and other tangible
items,
wherever located, relating in any way to
the
Confidential Material or otherwise to the
Company’s business, which Employee prepares, uses or encounters, shall be and
remain
the Company’s sole and exclusive property and shall be included
in the Confidential
Material. Upon termination of this Agreement by any means, or whenever
requested
by the Company, Employee shall promptly deliver to the Company any and all
of
the
Confidential Material, not previously delivered to the Company, that may
be or
at any
previous time has been in Employee’s possession or under Employee’s control,
provided
however, that Employee may retain in his possession any Confidential Material
that
reflects the terms of his employment with the Company or the terms or amount
of
his compensation
and benefits.
IX.
SUCCESSORS.
A. This
Agreement is personal to Employee and shall not, without the prior written
consent of the Company, be assignable by Employee.
B.
This
Agreement may not be assigned by the Company without Employee’s
prior written consent, unless such assignment is made in connection with
a
Change
in
Control, in which case, this Agreement shall inure to the benefit of and
be
binding
upon
the
Company
and
its
successors
and
assigns and any such successor or
assignee
shall be deemed substituted for the Company under the terms of this Agreement
for
all
purposes. With
respect to any assignment of this Agreement by Company requiring
Employee’s prior written consent,
no
such
permitted assignment shall relieve the
Company of its obligations or liability hereunder unless Employee otherwise
agrees in
writing.
X.
WAIVER.
No
waiver
of any breach of any term or provision of this Agreement shall be construed
to be, nor shall be, a waiver of any other breach of this Agreement. No waiver
shall
be
binding unless in writing and signed by the party waiving the
breach.
XI.
MODIFICATION.
This
Agreement may not be amended or modified other than by a written agreement
executed by Employee and the Company’s Chief Executive Officer.
XII.
SAVINGS
CLAUSE.
If
any
provision of this Agreement or the application thereof is held invalid, the
invalidity shall not affect other provisions or applications of the Agreement
which can be given effect without the invalid provisions or applications
and to
this end the provisions of this Agreement are declared to be
severable.
XIII.
COMPLETE
AGREEMENT.
This
Agreement constitutes and contains the entire agreement and final understanding
concerning Employee’s employment with the Company and the other subject matters
addressed herein between the parties. It is intended by the parties as a
complete and exclusive statement of the terms of their agreement. It supersedes
and replaces all prior negotiations and all agreements proposed or otherwise,
whether written or oral, concerning the subject matter hereof. Any
representation, promise or agreement not specifically included in this Agreement
shall not be binding upon or enforceable against either party.
XIV.
GOVERNING
LAW.
This
Agreement shall be deemed to have been executed and delivered within the
State
of
California, and the rights and obligations of the parties hereunder shall
be
construed
and enforced in accordance with, and governed by, by the laws of the State
of
California
without regard to principles of conflict of laws.
XV.
CONSTRUCTION.
Each
party has cooperated in the drafting and preparation of this Agreement.
Hence,
in
any construction to be made of this Agreement, the same shall not be construed
against
any party on the basis that the party was the drafter. The
captions of this Agreement
are not part of the provisions hereof and shall have no force or
effect.
XVI.
COMMUNICATIONS.
All
notices, requests, demands and other communications hereunder shall be in
writing
and shall be deemed to have been duly given if delivered or if mailed by
registered
or certified mail, postage prepaid, addressed to Employee at the address
on file
with
the
Company or addressed to the Company at 14242 Ventura Blvd., Sherman Oaks
CA
91423,
Attention: Ian Aaron, Chief Executive Officer. Either party may change the
address
at which notice shall be given by written notice given in the above
manner.
XVII.
EXECUTION.
This
Agreement is being executed in one or more counterparts, each of which
shall
be
deemed an original, but all of which together shall constitute one and
the same
instrument.
Photographic
copies of such signed counterparts may be used in lieu of the originals
for any purpose.
In
witness whereof, the parties hereto have executed this Agreement as of the
date
first
above written.
| Russell
Burke |
|
Twistbox
Entertainment, Inc. |
| |
|
|
|
|
| |
|
|
|
|
| By: |
/s/
R. J. Burke |
|
By: |
/s/
Ian
Aaron |
| |
|
|
|
Name:
Ian Aaron |
| |
|
|
|
Its:
President/CEO |
EXHIBIT
A
OPTION
AGREEMENT
TWISTBOX
ENTERTAINMENT, INC.
NON-QUALIFIED
STOCK OPTION AGREEMENT
PURSUANT
TO THE
TWISTBOX
ENTERTAINMENT, INC.
2006
STOCK INCENTIVE PLAN
This
Non-Qualified Stock Option Agreement (“Agreement”) dated
as
of December 11, 2006 (the “Grant
Date”) by
and
between Twistbox Entertainment, Inc., a Delaware corporation
(the “Company”) and
Russell Burke (the “Participant”).
Preliminary
Statement
The
Committee has authorized this grant of a non-qualified stock option (the
“Option”) on
November 21, 2006
to
purchase the number of shares of the Company’s common
stock (the “Common
Stock”) set
forth
below to the Participant, as an Eligible Employee
of the Company or a Subsidiary (collectively, the Company and all Subsidiaries
of the Company shall be referred to as the “Employer”). Unless
otherwise indicated,
any capitalized term used but not defined herein shall have the meaning
ascribed
to such term in the Twistbox Entertainment, Inc. 2006 Stock Incentive Plan
(the
“Plan”). A
copy of
the Plan has been delivered to the Participant. By
signing and returning
this Agreement, the Participant acknowledges having received and read a copy
of
the
Plan and agrees to comply with it, this Agreement and all applicable laws
and
regulations.
Accordingly,
the parties hereto agree as follows:
1.
Tax
Matters. No
part
of the Option granted hereby is intended to qualify as
an
“incentive stock option” under Section 422 of the Internal Revenue Code of 1986,
as
amended.
2.
Grant
of Option. Subject
in all respects to the Plan and the terms and conditions set forth herein
and
therein, the Participant is hereby granted an Option to purchase
from the (Company 75,000 shares of Common Stock, at a price per share of
$0.59
(the “Option
Price”).
3.
Exercise.
(a)
Except
as
set forth in subsection
(b) below, the Option shall vest and
become exercisable as provided in Schedule A, which shall be cumulative.
To the
extent
that the Option has become exercisable with respect to a number of shares
of
Common
Stock as provided below, the Option may thereafter be exercised by the
Participant,
in whole or in part, at any time or from time to time prior to the expiration
of
the
Option as provided herein and in accordance with Section 6.3(d) of the Plan,
including,
without limitation, the filing of such written form of exercise notice, if
any,
as may
be
required by the Committee and payment in full of the Option Price multiplied
by
the
number of shares of Common Stock underlying the portion of the Option exercised.
Upon
expiration of the Option, the Option shall be canceled and no longer
exercisable. Schedule
A (Vesting Schedule) indicates each date upon which the Participant shall
be
vested
and entitled to exercise the Option with respect to the percentage indicated
beside that date provided that the Participant has not suffered a Termination
of
Employment prior
to
the applicable vesting date. There shall be no proportionate or partial vesting
in the
periods prior to each vesting date and all vesting shall occur only on the
appropriate vesting
date.
(b)
Upon
the
occurrence of an IPO or Change of Control, the Options shall
immediately become exercisable with respect to all shares of Common Stock
subject
thereto.
(c)
Notwithstanding
the foregoing, the Participant may not exercise the
Option unless the shares of Common Stock issuable upon such exercise
are then
registered
under the Securities Act, or, if such shares of Common Stock are not then
so
registered,
the Company has determined that such exercise and issuance would be exempt
from
the
registration requirements of the Securities Act. The exercise of the Option
must
also
comply with other applicable laws and regulations governing the Option, and
the
Participant
may not exercise the Option if the Company determines that such exercise
would
not
be in material compliance with such laws and regulations. In addition, the
Participant
may not exercise the Option if the terms of the Plan do not permit the exercise
of
Options at such time.
4.
Option
Term. The
term
of each Option shall be until the tenth (10th)
anniversary
of the Grant Date, after which time it shall terminate, subject to earlier
termination
in the event of the Participant’s Termination of Employment as specified in
Section
5
below.
5. Termination
of Employment.
(a)
Subject
to the terms of the Plan and this Agreement, the Option, to the
extent vested at the time of the Participant’s Termination of Employment, shall
remain
exercisable as provided in Section 9.2(a) of the Plan.
(b)
Any
portion of the Option that is not vested as of the date of the Participant’s
Termination
of Employment for any reason shall terminate and expire as of the date of
such
Termination of Employment.
(c)
If
the
Participant breaches any agreement with the Company or any of its Subsidiaries
regarding competition, confidentiality or the solicitation of customers or
employees,
the Option (whether
vested or unvested) and shares of Common Stock acquired
upon exercise of the Option (without compensation other than repayment of
the
Option
Price) shall be immediately forfeited to the Company unless the Participant
cures such
breach (if curable) within I5 days of being notified of such
breach.
6. Restriction
on Transfer of Option. No
part
of the Option shall be Transferable
other than by will or by the
laws
of descent and distribution and during the lifetime
of the Participant,
may be
exercised only by the
Participant or the Participant's guardian
or legal representative. In addition, the Option shall not be assigned,
negotiated, pledged
or hypothecated in any way (except as provided by law or herein), and
the
Option
shall not be subject to execution, attachment or similar process. Upon
any
attempt
to Transfer the Option or in the event of any levy upon the Option by reason
of
any
execution, attachment or similar process contrary to the provisions hereof,
the
Option shall
immediately become null and void.
7.
Company
Call Rights; Restrictions on Transfer. The
Option, and any shares of Common Stock that the Participant acquires upon
exercise of the Option, shall be
subject to the Company call rights and restrictions
on transfer (including the Company’s
right of first refusal) set forth in Article XIII of the Plan. To
ensure
that the shares
of
Common Stock issuable upon exercise of the Option are not transferred
in contravention
of the terms of the Plan and this Agreement, and to ensure compliance with
other
provisions of the Plan and this Agreement, the Company may deposit the
certificates
evidencing the shares of Common Stock to be issued upon the exercise of the
Option with an escrow agent designated by the Company.
8.
Securities
Representations. Upon
the
exercise of the Option prior to the registration
of the Common Stock subject
to the
Option pursuant to the Securities Act or other
applicable securities laws, the Participant shall be deemed to
acknowledge and make
the
representations and warranties as described below and as otherwise may
be
requested
by the Company for compliance with applicable laws, and any issuances
of Common Stock by the Company shall
he
made in reliance upon the express
representations
and warranties of the Participant.
(a)
The
Participant is acquiring and will hold the shares of Common Stock
for
investment for his account only and not with a view to, or
for
resale in connection
with, any “distribution” thereof within the meaning of the Securities
Act
or
other
applicable securities laws.
(b)
The
Participant has been advised that the shares of Common Stock have
not
been registered under the Securities Act or other applicable securities laws,
on
the
ground that no distribution or public offering of the shares of Common Stock,
is
to be effected
(it being understood, however, that the shares of Common Stock are being
issued
and
sold
in reliance on the exemption provided under Rule 701 under the Securities
Act),
and
that
the shares of Common Stock must be held indefinitely,
unless they are subsequently
registered under the applicable securities laws or the Participant obtains
an
opinion
of counsel (in the form and substance satisfactory to the Company
and its counsel) that registration is not required. In
connection with the foregoing, the Company is
relying in part on the Participant’s representations set forth
in
this Section. The
Participant
further acknowledges and understands
that the Company is under no obligation
hereunder to register the shares of Common Stock.
(c)
The
Participant is aware of the adoption of Rule 144
by
the Securities
and Exchange Commission under the Securities Act, which permits limited
public resale of securities acquired in a non-public offering, subject to
the
satisfaction of certain
conditions. The Participant acknowledges that he is familiar with the conditions
for
resale set forth in Rule 144, and
acknowledges and understands that the conditions for resale
set forth in Rule 144 have not been satisfied and that the Company has no
plans
to satisfy
these conditions in the foreseeable future.
(d)
The
Participant will not
sell,
transfer or otherwise dispose of the shares
of
Common Stock in violation of the Plan, this Agreement, Securities Act (or
the
rules
and
regulations promulgated thereunder) or under any other applicable securities
laws.
The
Participant agrees that he will not dispose of the Common Stock unless and
until
he
has complied with all requirements of this Agreement applicable to the
disposition
of the shares of Common Stock.
(e)
The
Participant has been furnished with, and has had access to, such
information as he considers necessary or appropriate for deciding whether
to
invest in
the
shares of Common Stock, and the Participant has had an opportunity to ask
questions
and receive answers from the Company regarding the terms and conditions of
the
issuance of the Common Stock.
(f)
The
Participant is aware that his investment in the Company is a speculative
investment that has limited liquidity and is subject to the risk of complete
loss.
The
Participant is able, without impairing his financial condition,
to
hold the
Shares for
an
indefinite period and to suffer a complete loss of his investment in the
Common
Stock.
9.
Rights
as a
Stockholder. The
Participant shall have no rights as a stockholder
with respect to any shares covered by the Option unless and until the
Participant has become the holder of record of the shares, and no adjustments
shall be made
for
dividends in cash or other property, distributions or other rights in respect
of
any
such
shares, except as otherwise specifically
provided for in the Plan.
10.
Provisions
of
Plan Control. This
Agreement is subject to all the terms, conditions and provisions of the Plan,
including, without limitation, the amendment provisions
thereof, and to such rules, regulations and interpretations relating to the
Plan
as
may be
adopted by the Committee and as may be in effect from time to time. The Plan
is
incorporated herein by reference. If and to the extent that this Agreement
conflicts or is
inconsistent with the terms, conditions and provisions of the Plan, the Plan
shall control, and this Agreement shall be deemed to be modified accordingly.
This
Agreement
contains the entire understanding of the parties with respect to the subject
matter
hereof (other than any exercise notice or other documents expressly contemplated
herein
or
in the Plan) and supersedes any prior agreements between the Company and
the
Participant
with respect to the subject matter hereof.
11.
Notices. Any
notice or communication given hereunder shall be in writing
and shall be deemed to have been duly given: (i) when delivered in person;
(ii)
two
(2)
days after being sent by United States mail;
or
(iii) on
the first business day following
the date of deposit if delivered by a nationally recognized overnight delivery
service,
to
the
appropriate party at the address set forth below (or such other address as
the
party
shall from time to time specify):
If
to the
Company, to:
Twistbox
Entertainment, Inc.
14242
Ventura Boulevard, 3rd
Floor
Sherman
Oaks, California 91423
Attention:
Plan Administrator
If
to the
Participant, to the address on file with the Company.
12.
No
Obligation
to Continue Employment. This
Agreement is not an agreement
of employment. This Agreement does not guarantee that the Employer will
employ
the Participant for any specific time period, nor does it modify in any respect
the Employer’s
right to terminate or modify the Participant’s employment or
compensation.
13.
Agreement. As
a
condition to the receipt of shares of Common Stock when
the
Option is exercised, the Participant shall execute and deliver an Assumption
Agreement,
and to the extent required by the Committee, the Participant shall execute
and
deliver a stockholder’s agreement or such other documentation which shall set
forth certain
restrictions on transferability of the shares of Common Stock acquired and
such
other
terms or restrictions as the Committee shall from time to time establish.
Such
Assumption
Agreement, stockholder’s agreement or other documentation shall apply to
the
Common Stock acquired under the Plan and covered by such Assumption Agreement,
stockholder’s
agreement or other documentation. The
Company
may require,
as
a
condition
of
exercise, the Participant to become
a
party to any other existing stockholder agreement
or other agreement.
14.
409A. NOTWITHSTANDING
ANYTHING HEREIN OR IN THE PLAN
TO
THE
CONTRARY, IF THE COMMON STOCK DOES NOT CONSTITUTE “SERVICE
RECIPIENT STOCK” FOR PURPOSES OF SECTION 409A OF THE CODE
OR
IF THE OPTION OTHERWISE IS DEEMED TO BE DEFERRED COMPENSATION
UNDER SECTION 409A OF THE CODE AS A RESULT OF ANY PROPOSED,
TEMPORARY
OR
FINAL
REGULATIONS
OR
ANY
OTHER
GUIDANCE
ISSUED BY THE SECRETARY OF THE TREASURY AND THE INTERNAL
REVENUE SERVICE WITH RESPECT TO SECTION 409A OF THE CODE,
THE
COMPANY SHALL BE PERMITTED TO AMEND THE PLAN AND THE
OPTION
TO
COMPLY
WITH
SECTION
409A WITHOUT
THE
PARTICIPANT’S
CONSENT. THE COMPANY SHALL HAVE NO LIABILITY TO THE
PARTICIPANT OR OTHERWISE IF THE OPTION AND ANY AMOUNTS PAID
OR
PAYABLE THEREUNDER IS SUBJECT TO SECTION 409A OF THE CODE.
[Signature
Page Follows]
IN WITNESS
WHEREOF, the parties have executed this Agreement on the date and year
first above written.
| |
|
|
| |
TWISTBOX
ENTERTAINMENT, INC. |
|
|
|
|
|
By: |
/s/
Adi McAbian |
| |
Authorized
Officer |
| |
|
|
|
| /s/
Russell Burke |
|
|
|
|
Russell Burke
Employee Social Security number:
|
|
|
|
I,
____________________, the
spouse of the Participant, do hereby join with my spouse in
executing this Agreement and do hereby agree to be bound by all of the terms
and
provisions
thereof.
|
Employee
Name:
|
|
Russell
Burke
|
| |
|
|
|
Total
Grant:
Shares:
|
|
75,000
|
|
Date:
|
|
December
11, 2006
|
| |
|
|
|
First
Vesting Period:
|
|
|
|
Shares:
|
|
18,750
|
|
Date:
|
|
December
11, 2007
|
| |
|
|
|
Shares:
|
|
23,438
|
|
Date:
|
|
March
11, 2008
|
| |
|
|
|
Shares:
|
|
28,125
|
|
Date:
|
|
June
10, 2008
|
| |
|
|
|
Shares:
|
|
32,813 |
|
Date:
|
|
September
9,
2008 |
| |
|
|
|
Second
Vesting Period:
|
|
|
|
Shares:
|
|
37,500
|
|
Date:
|
|
December
10, 2008
|
| |
|
|
|
Shares:
|
|
42,188
|
|
Date:
|
|
March
11, 2009
|
| |
|
|
|
Shares:
|
|
46,875
|
|
Date:
|
|
June
10, 2009
|
| |
|
|
|
Shares:
|
|
51,563
|
|
Date:
|
|
September
9, 2009
|
| |
|
|
|
Third
Vesting Period:
|
|
|
|
Shares:
|
|
56,250
|
|
Date:
|
|
December
10, 2009
|
| |
|
|
|
Shares:
|
|
60,938
|
|
Date:
|
|
March
11, 2010
|
| |
|
|
|
Shares:
|
|
65,625
|
|
Date:
|
|
June
10, 2010
|
| |
|
|
|
Shares:
|
|
70,313
|
|
Date:
|
|
September
9, 2010
|
| |
|
|
|
Fourth
Vesting Period:
|
|
|
|
Shares:
|
|
75,000
|
|
Date:
|
|
December
10, 2010
|
EXHIBIT
B
General
Release Agreement
This
General Release Agreement (the “Agreement”) is entered into as
of____,
200__,
by
and between Russell Burke (the “Employee”)
and
Twistbox Entertainment, Inc. (the
“Company”). Employee
and the Company are parties to an Employment Agreement effective
as of December 11, 2006 (the “Employment Agreement”).
Employee’s
employment with the Company will
terminate
effective on_____ ,
200__
(the “Termination
Date”). In exchange for the severance pay and other severance benefits
provided to Employee under Section IV-D-3 of the Employment Agreement
(including,
but not limited to, the right to retain all vested 401K benefits pursuant
to the
401K
Plan), and except for the obligations of Company under such Section IV-D-3,
Employee
hereby covenants not to sue and releases the Company, and its subsidiaries,
parent
and affiliated entities, past and present, and each of them,
as
well as
their respective
trustees, directors, officers, agents, employees, shareholders, assignees,
successors,
attorneys, and insurers, past and present, and each of them (individually
and
collectively
referred to herein as “Releasees”), from any and all claims, wages, agreements,
contracts, obligations, covenants, demands, costs, expenses, attorneys’ fees,
rights,
debts, liens, and causes of action, known or unknown, suspected or unsuspected,
arising
out of or in any way connected with his employment or any other transactions,
occurrences,
acts or omissions, or any loss, damage or injury whatsoever, known or
unknown,
suspected or unsuspected, resulting from any act or omission by or on the
part
of
said
Releasees, or any of them, committed or omitted, prior to the execution of
this
Agreement, whether based on contract, tort, common law, or statute. Employee
acknowledges
by the execution of this Agreement that he has no further claims against
the
Releasees other than for the performance of the obligations set forth in
Section
IV-D-3
and
Section XI of the Employment Agreement.
The
Employee hereby acknowledges that he has read this Agreement, understands
its
contents and agrees to its terms and conditions knowingly, voluntarily and
of
his own free
will. Specifically,
the Employee agrees: (a) that he is releasing any and all claims under
the
Age Discrimination in Employment Act of 1967, as amended by the Older Workers
Benefit Protection Act, and any federal, state or local fair employment acts
arising
up to the date of the execution of this Agreement, (b) that the consideration
being received
by the Employee is greater than he would have been entitled to receive before
signing
this Agreement, (c) that the Employee is hereby advised to consult an
attorney
of his
choice prior to the execution of this Agreement, (d) that the Employee was
given
at least
twenty-one (21) days from the date of receipt of this Agreement to decide
whether or
not to
execute it, and (e) that the Employee has seven (7) days from the execution
of
this Agreement to revoke its execution and this Agreement will
become
null and void if he
elects
revocation
during that time. Any revocation must be in writing and must be received
by the Company during the seven-day revocation period. In the event of such
revocation,
the Company will
not
have any obligations under this Agreement or Section IV-D-3
of
the Employment Agreement except for the payment of Accrued Obligations as
defined in the Employment Agreement.
If
any
provision of this Agreement or its application is held invalid, the invalidity
shall
not
affect other provisions or applications of the Agreement which can be given
effect
without the invalid provisions or application and, therefore, the provisions
of
this Agreement are declared to be severable.
The
undersigned have read and understand the consequences of this Agreement
and
voluntarily sign it.
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the ________
day
of __________________ 200_.
|
Russell
Burke
|
|
Twistbox
Entertainment, Inc.
|
| |
|
|
|
|
| |
|
|
|
|
|
By:
|
/s/
Russell Burke |
|
By:
|
/s/
Adi McAbian |
| |
Social
Security #:
___________________________
|
|
|
Name:
Adi McAbian
|
| |
|
|
|
Its:
Managing Director
|