Exhibit
99.5
EMPLOYMENT
AGREEMENT
This Employment Agreement
(“Agreement”) is made as of December 5, 2005, by and
between Mitch Budin ("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 of Sales 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
Executive Vice President of Sales (the “Title”)
starting on January 2, 2006, 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 of Sales shall report directly
to the Chief Executive Officer and be headquartered in New York,
NY. 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 $ 17,500 per month commencing on the first day of
employment which shall be January 2, 2006 .
(b) Pay Employee a guaranteed bonus of 25% of
Employee’s base salary set forth in Paragraph 2(a) above,
payable quarterly. By way of example, at the current base salary of
$17,500 per month, Employer will pay Employee a guaranteed bonus of
$13,125 every three months. In addition, 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 of
up to 50% of base salary.
(c) Recommend to the Board of Directors that
Employee be granted 225,000 stock options to vest as
follows: 75,000 upon date of grant; 75,000 at the first anniversary
of the grant date; and 75,000 at the second anniversary of the
grant date. The initial grant of stock options will be granted on
the date of grant or Employee’s first day of employment,
whichever comes later. 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 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. The
stock option plan currently in effect is attached as Exhibit
B .
(d) 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.
(e) 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
(f) 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.
(g) Reimburse Employee for reasonable telephone,
facsimile, and Internet service charges incurred at Employee's home
office based in New Jersey in connection with the 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.)
(i) 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 per month
commencing on the first day of employment
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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 twelve ( 12 ) 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 in excess of 50
miles without mutual consent. Notwithstanding anything herein to
the contrary, employee agrees that as Executive Vice President of
Sales, Employee will be required to travel extensively, including
frequent visits to Employer’s other offices. 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 Em
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