EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT ("Agreement") is entered into to be effective
as
of the 1st day of March 2006, by and between Tix Corporation, a
Delaware
corporation (hereinafter the "Company"), and Mitch Francis, an
individual
(hereinafter "Employee").
WITNESSETH
WHEREAS,
the Company desires to continue the services of Employee, and
Employee is willing to continue as an employee of the Company, on
the terms and
subject to the conditions hereinafter set forth. This Agreement
supersedes and
replaces all prior agreements between the Company and Employee
regarding the
subject matter hereof.
NOW,
THEREFORE, for and in consideration of the mutual promises
herein
contained, the parties hereto hereby agree as follows;
1.
Engagement; Nature of Duties. The Company hereby engages Employee,
for
the period hereinafter set forth, to serve as and hold the offices
of Chairman
of the Board, President and Chief Executive Officer, and to perform
the duties
of such offices as provided in the Bylaws of the Company and as
directed by the
Board of Directors of the Company. Employee agrees to serve in such
capacity and
to do and perform the service, acts, or things necessary to carry
out the duties
of such offices, and such other duties, not inconsistent with such
offices and
Employee's position as an executive officer of the Company.
Employee shall
report only to the Board of Directors of the Company from time to
time. It is
expressly agreed and acknowledged that employment in the capacity
of the
aforementioned offices was a material inducement to Employee to
enter into this
Agreement. The Company further agrees and acknowledges that
election, and being
retained in office, as a director was a material inducement to
Employee to enter
into this Agreement. The Board of Directors agrees to use its best
efforts, so
long as this Agreement remains in effect, to cause Employee to be
nominated as a
director at any meeting or action of the stockholders of the
Company for the
purpose of electing directors, and to use their best efforts to
cause Employee
to be elected and retained in office as a director throughout the
term of this
Agreement. Employee may assign certain of the compensatory benefits
hereunder to
Francis Development Inc. subject to approval of the Company, which
shall not be
unreasonably withheld. Employee is solely responsible for any and
all federal or
state tax consequences arising from any assignment of compensatory
benefits to
Francis Development, Inc.
<PAGE>
2. Term.
The term of employment pursuant to this Agreement shall be for
a
period of three (3) years, commencing on March 1, 2006 (the
"Commencement
Date"), unless sooner terminated in accordance with the provisions
hereof (the
"Term").
3.
Performance of Duties. Employee shall devote such time and
attention to
Employee's duties as may be reasonably necessary to perform and
carry out such
duties. Nothing herein contained shall be deemed to preclude
Employee from
performing services to other businesses or entities not affiliated
with the
Company or having personal investments and from devoting a
reasonable amount of
time to the care and attention thereof, provided that the same
shall in no
manner interfere with or derogate from Employee's work for the
Company or
conflict with the Company's business.
Employee
shall perform his duties hereunder primarily in the Los
Angeles,
California area, and shall not be required to perform such duties
on a regular
basis at any other location except for site or location visits to
be conducted
by Employee from time to time. Employee shall not be required to
relocate
without his consent.
4.
Compensation.
(i) Base Salary. The Company shall pay to Employee a base salary
in
the amount of Two Hundred Seventy-five Thousand Dollars ($275,000)
per year (the
"Base Salary"), payable in periodic installments in accordance with
the
Company's prevailing policy for compensating personnel, but not
less often than
semi monthly. On each yearly anniversary of the Commencement Date
(March 1,
2006), the Base Salary shall be increased by eight percent
(8%).
(2) Earnings Bonus. In addition to the Base Salary, and any and
all
other compensation, profit-sharing participation, benefits, bonuses
or other
amounts due to or receivable by Employee pursuant to this
Agreement, Employee
shall receive an annual bonus (the "Earnings Bonus") equal to six
(6%) percent
of the Company's annual earnings in excess of $500,000 before
taxes,
depreciation and amortization (ebtda) but after interest. A pro
rata portion of
the Earnings Bonus (calculated by annualizing the year to date
ebtda and taking
into account any Earnings Bonus paid for any prior periods) shall
be due and
payable within ninety (90) days after the calendar (or the
Company's fiscal)
year end.
(c) Restricted Shares. Within thirty (30) days of the
Commencement
Date, the Company shall cause the issuance to Employee of 500,000
restricted
shares of the Company's Common Stock. The shares shall be subject
to a
prohibition on trading, encumbering, or otherwise transferring the
shares
(without prior board approval) which shall lapse equally over three
(3) years
(166,666 shares on 3/1/07, 166,666 shares on 3/1/08 and 166,667
shares on
3/1/09).
2
<PAGE>
5.
Expenses Reimbursement; Automobile. The services required of
Employee
by this Agreement shall include the responsibility and duty of
entertaining
business associates and others with whom the Company is, desires to
be, or may
become engaged in business or with whom it seeks, now or in the
future, to
develop or expand business relationships, or with whom it is
otherwise to the
benefit of the Company to establish or maintain communications. It
may also be
necessary for Employee to travel from time to time on behalf of and
for the
benefit of the Company, or in furtherance of the Company's
business. It is the
Company's belief that the performance of Employee's duties in such
travel and
entertainment activities will produce the maximum benefits which
the Company
expects to derive from Employee's services. Accordingly, the
Company shall pay,
or if Employee shall have paid, shall reimburse to Employee, any
and all
expenses incurred by him or for his account in the performance of
his duties
hereunder, including all expenses for business, entertainment,
promotion and
travel by Employee, subject only to Employee providing appropriate
documentation
for such expenses. It is expressly agreed, in connection therewith,
that
Employee shall be provided or reimbursed for reasonable travel
and
accommodations, but no first-class air travel will be deemed
reasonable, (unless
under special price offering). The Company shall provide Employee
with an
automobile, reasonably commensurate with Employee's office and
position, for use
by Employee in performing Employee's duties hereunder and the
Company shall be
responsible for all expenses associated with ownership/leasing of
such
automobile, including, but not limited to, costs of licensing or
registration,
maintenance, taxes and gasoline. Employee shall maintain such
records with
respect to the use of such automobile as the Company may reasonably
request.
In the
event that Employee shall be deemed to have received income,
for
state or federal income tax purposes, by reason of Employee's
receipt of or
reimbursement for any of the benefits or expenses set forth in this
Section 5,
the Company shall pay or reimburse Employee for all taxes required
to be paid by
Employee with respect to such income.
6. Medical
and Life Insurance; Pension Benefits; Tax Preparation. The
Company shall provide or reimburse Employee and Employee's spouse
for health and
long-term care insurance (premiums up to $25,000 per year), and
Employee life
insurance (premiums up to $10,000 per year), and disability
insurance (up to
$10,000 per month coverage) (premiums up to $5,000 per year).
Employee shall
also have the right to participate in any and all employee
retirement benefits
plan or profit-sharing plan which the Company maintains for its
personnel, and
in effect at any time during the period of Employee's employment
hereunder,
subject only to any eligibility restrictions of such plans, the
plan documents
and generally applicable policies of the Company. Employee shall be
entitled to
reimbursement of up to $4,000 per year for personal tax
consultation and
preparation of tax returns and other forms and filings.
3
<PAGE>
7.
Vacation. During each year of the Term, Employee shall be entitled
to a
vacation of four (4) weeks, without deduction of salary. Such
vacation shall be
taken at such time or times during the applicable year as may be
mutually
determined by Employee and the Company. Any additional vacation
period shall be
determined by the Company consistent with the general customs and
practices of
the Company applicable to its personnel.
8.
Termination. This Agreement may be terminated by the Company for
cause.
As used herein, "cause" shall mean:
(a) the commission by Employee of any act of embezzlement,
fraud,
larceny or theft on or from the Company or an affiliate of the
Company;
(b) the commission by Employee of, or indictment of Employee for
a
felony;
(c) failure to perform, or materially poor performance of,
Employee's duties and responsibilities assigned or delegated under
this
Agreement, or any material misconduct or violation of the Company's
policies, in
either case, which continues for a period of thirty (30) days after
written
notice given to Employee; or
(d) a material breach by Employee of any of the covenants, terms
or
provisions of this Agreement or any agreement between the Company
and Employee
regarding confidentiality, non-competition or assignment of
inventions.
In addition, this Agreement shall automatically be terminated
upon
Employee's death or permanent disability. As used herein,
"permanent disability"
shall mean Employee's complete inability to perform Employee's
duties hereunder,
as determined by Employer's physician, which inability continues
for more than
one-hundred eighty (180) consecutive days.
In the event that this Agreement is terminated by the Company
for
any reason other than for cause or for death or permanent
disability as defined
above, or pursuant to a Change in Control discussed below, the
Company expressly
agrees and acknowledges that Employee shall be entitled to receive
the base
salary, bonuses and benefits described in Sections 4 and 5 of this
Agreement for
the remainder of the Term and shall have no duty or obligation to
accept other
employment, or otherwise mitigate Employee's damages resulting from
such
termination. The Company further agrees and acknowledges that, in
the event
Employee does obtain other employment following the Company's
termination of
this Agreement other than for cause, the Company shall not be
entitled to any
set off or reduction in the amounts payable to Employee hereunder
as a result of
any compensation paid to Employee with respect to such new
employment.
4
<PAGE>
9. Change
in Control
(a) Termination following a Change in Control. If a Change in
Control of the Company shall have occurred, Employee shall be
entitled to
Termination Benefits (as defined in Section 9(c)) upon the
subsequent
termination of Employee's employment during the term of this
Agreement, unless
such termination is pursuant to Section 8, above, or upon
termination by
Employee for Good Reason, as defined in Section 9(d).
(b) What Constitutes a "Change in Control". A "Change in Control
of
the Company" shall be deemed to have occurred upon the occurrence
of any one or
more of the following events:
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"),
other than Employee or a trustee or other fiduciary holding
securities under an
employee benefit plan of the Company; hereafter becomes the
"beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of
securities of the Company representing 20% or more of the combined
voting power
of the Company's then outstanding securities;
(ii) during any period (other than any period prior to the
execution of this Agreement), individuals who at the beginning of
such period
constitute the Board and any new directors (other than directors
designated by a
person who has entered into an agreement with the Company to effect
a
transaction described in clauses (i) or (iii) of this Section 9(b))
whose
election by the Board or nomination for election by the Company's
stockholders
was approved by a vote of at least two-thirds of the directors then
still in
office who either were directors at the beginning of the period or
whose
election or nomination for election was previously so approved,
cease for any
reason to constitute a majority thereof; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, 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) at least 80% of the combined voting power of the
voting
securities of the Company or such surviving entity outstanding
immediately after
such merger or consolidation, or the stockholders of the Company
approve a plan
of complete liquidation of the Company or an agreement for the sale
or
disposition by the Company of all or substantially all of the
Company's assets.
(c) Termination Benefits. As used in this Agreement, the term
"Termination Benefits" means the payment provision of all of the
following:
(i) Employee's salary through Employee's date of termination
at the rate in effect at that time, plus all other amounts,
including bonuses,
to which Employee is entitled under this Agreement and any
compensation plan of
the Company, at the time such payments are due but in any event
