EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of
September 30,
2005 (the "Effective Date") by and between Digicorp, a Utah
corporation, with an office located at 100 Wilshire Boulevard,
Suite 1750, Santa
Monica, CA 90401 (the
"Company") and Jay Rifkin, an individual with an address
c/o Rebel Crew Films,
Inc., 4143 Glencoe Avenue, Marina Del Rey, CA 90292
("Rifkin").
WHEREAS,
the Company has
entered into an agreement to acquire Rebel Crew
Films Inc. (the "Rebel Acquisition"); and
WHEREAS,
the Company desires to retain the services of Rifkin as the
Company's Chief Executive Officer and, in the event that the
Rebel Acquisition
is consummated,
Rifkin is willing to be employed by the Company in such
capacity.
NOW,
THEREFORE, in consideration of the mutual covenants contained
herein,
the parties agree as follows:
1.
Employment.
Upon the Effective
Date of this
Agreement,
Rifkin will
become the interim President of the Company, subject to termination
of the Rebel
Acquisition. Upon
consummation of the Rebel Acquisition, Rifkin will serve the
Company as its Chief Executive Officer and Rifkin does hereby
accept, and Rifkin
hereby agrees to such engagement and employment as the Company's
Chief Executive
Officer. In
addition, Rifkin shall be elected to the Company's Board of
Directors upon consummation of the Rebel Acquisition and, during
the "Employment
Term" (as defined
below), shall also serve as the Chairman of the Board of
Directors of the Company.
2.
Duties. Rifkin shall be responsible for the overall development,
operations and corporate governance of the Company. In addition,
Rifkin's duties
shall be such duties and responsibilities as the Company shall
specify from time
to time, but only if and to the extent that such duties and
responsibilities are
those customarily
performed by the Chief
Executive Officer of a company with a
business commensurate
with that of the Company. Rifkin shall have such
authority, discretion,
power and responsibility, and shall be entitled to
office, secretarial
and other facilities
and conditions of employment, as are
customary or appropriate to his position. Rifkin shall diligently
and faithfully
execute and perform
such duties and
responsibilities,
subject to the
general
supervision and
control of the Company's Board of Directors. Rifkin shall be
responsible and report to the Company's Board of Directors.
Rifkin shall
devote
such amount of his time, attention, energy, and skill during normal
business
hours to the business
and affairs of the Company as he may deem reasonably
necessary to fulfill his responsibilities hereunder.
Nothing in this Agreement shall preclude Rifkin from devoting
reasonable periods
required for:
(a) serving
as a director or member of a committee of any
organization or corporation involving no conflict of interest with
the interests
of the Company;
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(b) serving as a consultant in his area of expertise (in areas
other
than in connection with the business of the Company), to
government, industrial,
business and academic
panels where it does not conflict with the interests of
the Company; and
(c) managing his personal or family investments or engaging in any
other non-competing
business; provided that such activities do
not materially
interfere with the regular performance of his duties and
responsibilities
under
this Agreement.
3.
Efforts of Rifkin.
During his
employment
and while performing his
services hereunder,
Rifkin shall,
subject to the
direction and supervision of
the Company's Board of Directors, use his business judgment, skill
and knowledge
to advance
the Company's interests and to discharge his duties and
responsibilities hereunder. Notwithstanding the foregoing,
nothing herein shall
be construed as preventing Rifkin from investing his assets in any
business.
4.
Employment
Term. The term of this
Agreement shall
commence as of the
Effective Date and
shall, unless terminated pursuant to Section 12 of this
Agreement, and
continue for a term of three (3) years (the "Initial Term"),
and
shall be automatically
renewed for
successive
one (1) year terms (a
"Renewal
Term") unless a party hereto delivers to the other party
written notice of such
party's intention not to renew at least thirty (30) days prior to
the end of the
Initial Term or the
applicable
Renewal Term, as the case may be. The terms
"Initial Term" and
"Renewal Term" are
collectively
referred to herein as
the
"Employment Term."
5.
Compensation of Rifkin.
(a) Compensation. As compensation for the services provided by
Rifkin under this
Agreement, the Company
shall pay Rifkin a base salary of One
Hundred Fifty Thousand Dollars ($150,000) for the initial year of
the Employment
Term (the "Initial Salary"). The parties acknowledge and agree
that the Initial
Salary does
not represent a market salary for an executive of Rifkin's
experience and is based upon the Company's early stage.
The Company agrees
that
Rifkin's salary for
subsequent
periods should take into consideration the
Company's growth and the market compensation for executives of
Rifkin's caliber,
including compensation and benefits such as life insurance.
Irrespective of
the
Company's growth, Rifkin's base salary shall increase at least 10%
in the second
year of the Employment
Term and at least
10% more for the
third year of the
Employment Term. The
compensation of Rifkin under this Section shall be paid in
accordance with the Company's usual payroll procedures.
(b) Stock Options.
As a signing
bonus, the Company has granted
Rifkin options from the Company's existing Stock Option and Restricted Stock
Plan to purchase 4,400,000 shares of the Company's common stock
with an exercise
price of $0.85 per share (the fair market value on the grant date),
which stock
options shall vest
annually in equal
portions over a period of three (3) years
from the Effective
Date and shall expire five years after the Effective Date.
Rifkin acknowledges that such stock options were granted to him by
the Company's
Board of Directors
on September 30, 2005. Rifkin shall also be eligible
to
receive shares of the Company's authorized stock and options to
purchase shares
of the Company's
authorized stock from
time to time as determined by the Board
of Directors.
Notwithstanding the
three (3) year term vesting of said options,
all of the options shall immediately vest on an accelerated
basis, and remain
exercisable for a
period of five (5) years from the Effective Date on the first
to occur of any of the following: (i) any "change of control" of the
Company or
its business including, without limitation, if Rifkin ceases to own a
majority
of the Company's
voting securities, (ii) if the employment of Rifkin is
terminated by the Company without "Cause" (as defined below) or by
Rifkin with
"Good Reason"
(as defined below), or (iii) if the employment of Rifkin is
terminated upon the
death or disability
of Rifkin.
In addition,
the Company
hereby agrees to register its existing Stock Option and Restricted
Stock Plan on
a Form S-8 registration statement as soon as the Company is
eligible to use such
form so Rifkin may,
subject to Rule 144 under the Securities Act of 1933, as
amended, exercise the
above options and
freely sell the shares of common stock
obtained thereby in the public market.
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(c) Bonus. In addition to the compensation under Sections 5(a) and
5(b) hereof, Rifkin
shall be eligible to receive an annual bonus determined by
the Board of Directors based on the performance of the Company.
6.
Benefits. Rifkin shall also be entitled to
participate in any and all
Company benefit plans
in effect from time to time for employees of the Company.
Such participation
shall be subject to the terms of the applicable plan
documents and shall include, without limitation health, vision,
dental, life and
disability insurance.
Rifkin shall also be
entitled to receive a car allowance
as shall be reasonably determined by the Board of Directors.
7.
Vacation, Sick Leave and Holidays. Rifkin shall be entitled to four
(4)
weeks of paid vacation during the first year of the Employment Term
and five (5)
weeks per year
thereafter. In
addition, Rifkin shall
be entitled to such sick
leave and holidays at full pay in accordance with the Company's policies
established and in effect from time to time.
8.
Business Expenses. The
Company shall promptly reimburse Rifkin for all
reasonable
out-of-pocket business
expenses incurred in performing Rifkin's
duties and responsibilities hereunder in accordance with the
Company's policies,
provided Rifkin promptly furnishes to the Company adequate
records of each such
business expense.
Rifkin shall be
entitled to
reimbursement for
first-class
airfare and hotel for Company travel.
9.
Location of Rifkin's
Activities. Rifkin's
principal place of business
in the performance of his duties and obligations under this Agreement shall be
at a place no more than twenty (20) miles from the current
Santa Monica
office
of the Company.
Notwithstanding the preceding sentence, and subject to Rifkin's
availability, Rifkin
will engage in such travel as may be reasonably necessary
or appropriate in furtherance of his duties hereunder.
10.
Confidentiality.
Rifkin recognizes that the Company has and will have
business affairs,
products, future
plans, trade secrets,
customer lists,
and
other vital
information which is
valuable to the Company because it is not
public and not
required by applicable law to be made public (collectively
"Confidential
Information") that are
valuable assets of the
Company. Rifkin
agrees that he shall
not at any time or in
any manner
divulge, disclose or
communicate any
Confidential
Information
to any third
party (other than to
attorneys and advisors for the Company and/or Rifkin) without the prior written
consent of the Company's Board of Directors.
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11.
Non-Competition. Rifkin acknowledges that he has gained, and will
gain
extensive knowledge in
the business
conducted by the
Company and has had, and
will have, extensive contacts with customers of the Company.
Acc
