Exhibit
99.3
EMPLOYMENT
AGREEMENT
This Employment Agreement
(“Agreement”) is made as of December 2, 2005 by and
between Rodney Satterwhite ("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 Executive Vice
President and Chief Operating Officer 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;
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; and
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 Executive Vice President and Chief Operating Officer
(COO)(the “Title”) 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.
The position of Executive Vice President and Chief Operating
Officer shall report directly to the Chief Executive Officer.
Employee's Title shall be subject to change by Company at any
time.
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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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(a) 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 on October 1,
2005.
(b) 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.
(c) Grant Employee the option to participate in all
of the benefit plans offered by Employer to its Senior Executives
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.
(d) Grant Employee health insurance for Employee and
Employee’s dependents, and such other benefits as Employer
shall determine to provide to all of its management employees from
time to time
(e) 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.
(f) 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.)
(g) Pay Employee an automobile allowance, 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 $ 800.00 per
month commencing on the first day of employment.
(h) Employer will recommend to the Board of
Directors that Employee be granted 225,000 stock options to vest in
three equal installments of 75,000 stock options per year, with the
initial grant of stock options to be granted on the date of grant.
The stock options’ exercise price will be priced at the
closing share price on the date of grant and will be subject to
Employee signing Employer’s form stock option agreement.
While Employer has every belief these stock options will be
approved, Employee acknowledges that this offer of stock options is
contingent on Employer’s Board of Directors’ approval.
The Options shall be governed by the stock option plan, as it may
be amended from time to time.
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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. For purposes of this
Agreement "without Cause" shall include, but not be limited to, a
relocation of the Employee's work location without mutual consent.
Employee’s eligibility for severance is conditioned on
Employee having first signed a release agreement in the form
attached as Exhibit D and a termination certificate as
provided in paragraph 4. 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 Employer’s 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, or shall become unable to perform the
functions for which Employee was hired for more than 120 days, 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 employment.
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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 there arising out of or in connection with the work
performed for Employer, 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,
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