EMPLOYMENT
AGREEMENT
This Employment Agreement
(“Agreement”) is made as of September 26, 2005 by and
between Christine Martinez ("Employee”) and Genius Products,
Inc., a Delaware corporation (“Employer”), located at
740 Lomas Santa Fe, Suite 210, Solana Beach, California
92075.
INTRODUCTION:
Employer would like to engage the
services of Employee for Employee’s skills as a General
Manager and Executive Vice President of the Genius Division of
Employer and related services as requested by Employer on a
full-time basis, and Employee would like to be so
engaged;
Employer and Employee have agreed on
terms for such services and compensation; and
Employer and Employee wish to enter
into a formal written agreement to document the employment
relationship in order to set forth (a) Employee’s services
and compensation, (b) the terms of Employee’s employment,
including the "at-will" nature of the relationship, (c)
Employer’s exclusive ownership of all proprietary information
relating to Employer, (d) certain confidentiality matters, and (e)
the manner in which proprietary information produced or acquired by
Employee during such relationship shall be handled and made the
sole property of Employer;
THEREFORE, in consideration of the
foregoing, and in exchange for the promises set forth below,
Employee and Employer agree as follows:
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1.
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Services; Title
. Employee shall be employed as a
General Manager and Executive Vice President of the Genius Division
of Employer and provide such services as Employer shall reasonably
request to be performed (the "Services") on a full-time basis and
shall devote substantially all of Employee's work efforts to the
business and operations of Employer. Employee's title, subject to
change by Company at any time, shall be "General Manager and
Executive Vice President of the Genius Division”
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2.
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Compensation, Benefits and
Reviews . Subject to all
the other terms of this Agreement, in connection with Employee's
performance of the Services, Employer shall:
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(b)
Pay Employee's salary by check twice
per month in equal installments in accordance with Employer's
regular salary payment schedule, which shall be paid at the rate
(before deductions for advances and deductions made at Employee's
request, if any, and for deductions required by federal, state and
local law) of $16,667 per month commencing as of September 26,
2005.
(c)
At the sole discretion of Employer,
Employer may pay Employee a year-end performance bonus in the form
of cash or shares of Genius Products, Inc. Common Stock.
(d)
Recommend to the Board of Directors
that Employee be granted 225,000 stock options to vest in equal
installments over 3 years. The stock options exercise price will be
priced at the closing share price on the date of grant or
Employee’s first day of employment, whichever comes later,
and will be subject to Employee signing Employer’s form stock
option agreement, in substantially the form attached hereto as
Exhibit A . While Employer has every belief these stock
options will be approved, Employee acknowledges that this offer of
stock options is contingent on the Employer’s Board’s
approval. The Options shall be governed by the stock option plan,
as it may be amended from time to time. The stock option plan
currently in effect is attached as Exhibit B .
(e)
Grant Employee the option to
participate in all of the benefit plans offered by Employer to its
Employees generally, on the same terms and conditions, including
without limitation, insurance plans, 401(k) and other savings
plans, short and long term disability insurance, Section 125
(cafeteria) and similar pre-tax expense plans, holidays, sick
leave, etc., which may be amended from time to time in
Employer’s discretion. Employee understands that Employer has
only a Blue Cross PPO health plan and no other benefit plan as of
the date of this Agreement.
(f)
Grant Employee health insurance for
Employee and Employee’s dependents, and such other benefits
as Employer shall determine to provide to any of its employees from
time to time
(g)
Reimburse Employee for all
reasonable travel, meals, lodging, communications, entertainment
and other business expenses incurred by Employee in connection with
Employee’s performance under this Agreement.
(h)
Grant Employee three (3) weeks'
vacation with pay for each twelve-month period, taken at times
agreed with Employer. Unused vacation shall accrue to a maximum of
two times the annual accrual (for example a maximum accrual of six
(6) weeks if employee earns three (3) weeks vacation per
year.)
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3.
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Term and Termination
. The term of this Agreement may be
terminated “at will” by Employer or Employee at any
time and for any reason or for no reason. In the event Employee
shall be terminated by Employer without “Cause,”
Employer shall provide Employee with the compensation required by
clauses (a) of Paragraph 2 of this Agreement as of the termination
date for a six (6) month period (the “Severance
Period”) following the date of such termination
(“Severance”) plus all accrued but unpaid salary and
vacation time to the date of termination. Upon termination of
Employee's employment with Employer for Cause, Employer shall be
under no further obligation to Employee for salary or other
compensation except to pay all accrued but unpaid salary and
accrued vacation time to the date of termination. For purposes of
this Agreement, “Cause” shall mean (i) conviction of a
felony, or a misdemeanor where imprisonment is imposed, or (ii)
Employee’s entering into any arrangement with or providing of
any services to any company, business or person that produces or
markets videograms (including DVD’s, videocassettes, video
disks, UMD’s, or any other similar devise), children’s
or infant’s video or music or any other product or service
that directly competes with Employer or any of its affiliates and
successors, iii) Gross negligence or willful misconduct, iv) a
material breach of this Agreement, (v) a violation of Employers
policies and procedures, as amended from time to time, and
specifically a violation of Employer’s sexual harassment
and/or anti-discrimination policies, or a violation of
Employer’s trade secrets policy, or use or disclosure of
Employer’s trade secrets for personal gain. If Employee shall
die during the term of this Agreement, no Severance shall be
owed.
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4.
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Termination
Certificate . Upon the
termination of Employee's engagement under this Agreement for any
reason whatsoever, Employee agrees to sign, date and deliver to
Employer a "Termination Certificate" in the form of Exhibit
C , and to deliver and take all other action necessary to
transfer promptly to Employer all records, materials, equipment,
drawings, documents and data of any nature pertaining to any
invention, trade secret or confidential information of Employer or
to Employee's engagement, and Employee will not take with Employee
any documents containing or pertaining to any confidential
information, knowledge or data of Employer that Employee may
produce or obtain during the course of Employee's engagement under
this Agreement. This Paragraph 4 shall survive indefinitely any
termination of this Agreement or Employee's engagement
hereunder.
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5.
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Nondisclosure
. Employee agrees to keep
confidential and not to disclose or make any use of (except for the
benefit of Employer), at any time, either during or after
Employee’s engagement under this Agreement, any trade
secrets, confidential information, knowledge, data or other
information of Employer relating to products, processes, know-how,
designs, formulas, test data, customer lists, business plans,
marketing plans and strategies, pricing strategies or other subject
matters pertaining to any business or future business of Employer
or any of its clients, customers, Employees, licensees or
affiliates, which Employee may produce, obtain or otherwise acquire
or become aware of during the course of Employee’s engagement
under this Agreement. Employee further agrees not to deliver,
reproduce or in any way allow any such trade secrets, confidential
information, knowledge, data or other information, or any
documentation relating thereto, to be delivered or used by any
third party without specific direction or consent of a duly
authorized officer of Employer. This Paragraph 5 shall survive
indefinitely any termination of this Agreement or Employee's
employment.
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6.
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Work for Hire; Ownership of
Intellectual Property .
Employee understands and agrees that all of Employee’s work
and the results thereof in connection with the Employer and the
Services, whether made solely by Employee or jointly with others,
during the period of Employee's employment by Employer, that relate
in any manner to the actual or anticipated business, work,
activities, research or development of Employer or its affiliates,
or that result from or are suggested by any task assigned to
Employee or any activity performed by Employee on behalf of
Employer, shall be the sole property of the Employer, and, to the
extent necessary to ensure that all such property shall belong
solely to the Employer, Employee by Employee’s execution of
this Agreement transfers to the Employer any and all right and
interest Employee may possess in such intellectual property and
other assets created in connection with Employee’s employment
by Employer, and that may be acquired by Employee during the term
of this Agreement from any source that relates, directly or
indirectly, to Employer's business and future business. Employee
also agrees to take any and all actions requested by Employer to
preserve Employer's rights with respect to any of the foregoing.
This Paragraph 6 shall survive indefinitely any termination of this
Agreement or Employee's employment.
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7.
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No Partnership; Not Assignable by
Employee . This Agreement
is between Employee and Employer, as at-will employer, and shall
not form or be deemed to form a partnership or joint venture.
Employer’s rights, benefits, duties and obligations under
this Agreement shall inure to its successors and assigns.
Employee's rights, obligations and duties under this Agreement are
personal to Employee and may not be assigned.
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8.
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Trade Secrets of
Others : Employee
represents that Employee’s performance of all the terms of
this Agreement and as the Employer’s Employee does not, and
will not breach any agreement to keep in confidence any proprietary
information, knowledge or data acquired by Employee in confidence
or in trust before Employee’s engagement under this
Agreement, and Employee will not disclose to Employer or induce
Employer to use any confidential or proprietary information or
material belonging to any other person or entity. Employee agrees
not to enter into any agreement, either written or oral, in
conflict with this Paragraph 8.
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9.
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Employee's Representations and
Warranties . Employee
represents, promises, understands and agrees that: (i) Employee is
free to enter into this Agreement; (ii) Employee is not obligated
or a party to any engagement, commitment or agreement with any
person or entity that will, does, or could conflict with or
interfere with Employee's full and faithful performance of this
Agreement, nor does Employee have any
commitment, engagement or agreement of any kind requiring Employee
to render services or preventing or restricting Employee from
rendering services or respecting the disposition of any rights or
assets that Employee has or may hereafter acquir
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