Employment Agreement - Ultimate Band List LLC and Steve Rennie
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is dated as of April 1, 1998
(the "Effective Date") and is entered into between The Ultimate Band List, LLC,
a California limited liability company (the "Company") and Steve Rennie
("Employee").
R E C I T A L S
WHEREAS, the Company desires to employ Employee to serve the Company and
its subsidiaries and Employee desires to be so employed by the Company, on the
terms and subject to the conditions hereinafter set forth.
A G R E E M E N T
NOW, THEREFORE, the parties hereto have agreed, and do hereby mutually
agree, as follows:
1. Employment and Duties. Subject to the other terms and conditions set forth
herein, the Company hereby employs Employee, and Employee agrees to be employed
by the Company, as the President of the Company. Employee shall report to Marc
Geiger, Donald Muller, and/or such other executives of the Company or
ARTISTdirect New Media, LLC, the Manager of the Company ("ADNM") as the Company
may designate from time to time. Subject to supervision by such persons,
Employee shall have responsibility over the day-to-day operations of the
Company.
2. Devotion.
(a) Subject to the terms of Section 2(b) below, during the Term, Employee
shall faithfully perform to the best of his ability and in a satisfactory manner
all services and acts necessary or advisable as both (i) are consistent with his
title and position and (ii) may reasonably be assigned to him by any of the
persons described in Section 1 above. In addition, during the Term, Employee
shall devote his business time, skill and energies exclusively to the business
of the Company and its subsidiaries and affiliates from time to time (the
"Subsidiaries").
(b) Provided his so doing does not materially interfere with the
fulfillment of Employee's obligations to Company under this Agreement, Employee
shall be entitled to spend a reasonable amount of time co-managing the recording
artist professionally known as "Incubus." Employee shall be entitled to retain
for his own account the proceeds earned by Employee from such co-management.
3. Principal Place of Employment. During the Term, Employee's place of
employment shall be at the principal offices of the Company in the Los Angeles
area; provided, however, it is agreed that Employee will be expected to travel
from time to time at the Company's expense in accordance with the provisions of
Section 6(c) below.
4. Term. The term of Employee's employment (the "Term") shall commence on the
Effective Date and continue until March 31, 2001, unless terminated sooner in
accordance with Section 7 below.
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5. Compensation. For all services to be rendered by Employee hereunder, and for
all rights granted the Company hereunder, Employee shall be paid by the Company
the amounts set forth in this Section 5.
(a) Base Salary. The Company shall pay Employee a base salary at the
annual rate of: (a) ONE HUNDRED THOUSAND DOLLARS ($100,000) for the first twelve
(12)-month period of the Term; (b) ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000)
for the second and third twelve (12)-month periods of the Term, in each case
prorated for any portion thereof and payable in accordance with the Company's
standard payment schedule for employees.
(b) Guaranteed Bonuses. The Company shall pay Employee the following
guaranteed bonuses: (a) FIFTY THOUSAND DOLLARS ($50,000) for the second twelve
(12)-month period of the Term; and (b) ONE HUNDRED THOUSAND DOLLARS ($100,000)
for the third (12)-month period of the Term, in each case prorated for any
portion thereof and payable in arrears at the end of each three (3)-month period
during the applicable twelve (12)-month period of the Term.
Amounts payable to Employee pursuant to this Section 5 shall be subject
to required withholdings and reviewed for any increases annually by the Company,
provided that any adjustments shall be in the sole discretion of the Company.
6. Employee Benefits; Reimbursement for Expenses.
(a) Employee shall be entitled to participate in such Company
retirement, profit sharing and pension plans and life and other insurance
programs, as well as other benefits programs, which are available to other
similarly situated employees of the Company, subject to the Company's policies
with respect to all of such benefits or insurance programs or plans; provided,
however, that notwithstanding anything herein to the contrary, the Company shall
not be obligated to institute or maintain any particular benefit or insurance
program or plan or aspect thereof.
(b) Employee shall be entitled to not less than three (3) weeks vacation
during each year of the Term hereof to be scheduled at mutually agreeable times
and accrued and taken in accordance with Company policy.
(c) During the Term, the Company agrees to reimburse Employee for such
reasonable, ordinary, necessary and authorized actual out-of-pocket expenses
incurred by Employee in the performing of assigned duties subject to approval by
the Company or the Company's designated agent, including but not limited to for
business-related travel, hotel, meals, telephone calls and entertainment. As an
additional condition to the reimbursement of such expenses by the Company to
Employee, Employee shall provide the Company with copies of all available
invoices and receipts, and otherwise account to the Company in sufficient detail
and with adequate documentation to allow the Company to confirm the business
nature of the expenses and claim an income tax deduction for such paid items, if
such items are deductible. The obligations of the Company to make the
reimbursements specified hereunder shall survive any termination of the Term.
7. Termination.
(a) The Company may terminate Employee's employment hereunder after the
occurrence and during the continuance of any "Disability" (as defined below) of
Employee, upon
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thirty (30) days' prior written notice to Employee. For purposes
of this Agreement, "Disability" means Employee's incapacity to perform
substantially all of his then current duties as required hereunder for one
hundred eighty (180) days or more within any period of three hundred sixty-five
(365) consecutive days because of mental or physical condition, illness or
injury, consistent with applicable state and federal law. In the event of any
dispute regarding the existence of Employee's Disability, the matter will be
resolved by the determination of a physician qualified to practice medicine in
the State of California, selected by the Company and reasonably approved by
Employee. For this purpose, Employee will submit to appropriate medical
examinations.
(b) The Company may terminate Employee's employment hereunder for
"Cause." For the purposes of this Agreement, "Cause" shall mean Employee shall
have (i) committed fraud, embezzlement or material dishonesty against the
Company or any of its Subsidiaries or an act of moral turpitude; (ii) engaged in
gross negligence or willful misconduct in the performance of Employee's duties
hereunder; (iii) been convicted of, or pleaded nolo contendere to, any felony;
(iv) breached any material provision hereof or failed to perform any material
duty assigned to Employee; or (v) materially misappropriated for his own purpose
and benefit any property or opportunity of the Company, or any Subsidiary or
other affiliated entity of Company. Notwithstanding anything to the contrary
contained herein, none of the foregoing events or circumstances (other than
clause (iii) above) shall constitute "Cause" for purposes of this Agreement
unless the Company gives Employee written notice delineating the claimed event
or circumstance and setting forth the Company's intention to terminate
Employee's employment if such claimed event or circumstance is not capable of
remedy or is not duly remedied within thirty (30) days following such notice, if
capable of remedy, and Employee fails to remedy such event or circumstance
within such thirty (30)-day period.
(c) The employment of Employee hereunder shall be automatically
terminated on the date of Employee's death.
(d) If Employee's employment is terminated pursuant to this Section 7,
Employee shall be entitled to, and the Company's obligation hereunder shall be
limited to, (i) the payment of the compensation (including, without limitation,
guaranteed bonus) accrued under Section 5 above to the effective date of such
termination; (ii) any approved unreimbursed expenses and other accrued employee
benefits (as described above) through the date of termination; and (iii) the
additional compensation provided in Section 7(e) below, if any.
(e) If Employee's employment is terminated:
(i) by the Company pursuant to 7(a) above, Employee will receive
the benefit of any Company disability plans; or
(ii) by the Company other than pursuant to Sections 7(a), 7(b) or
7(c) above, the Company shall continue to pay to Employee Employee's salary in
equal monthly installments, and Employee's guaranteed bonuses in equal quarterly
installments, in each case at the annualized levels being paid to Employee
pursuant to Section 5 above at the time of such termination, less required
withholdings, and for a period (the "Payment Period") equal to the lesser of (A)
twelve (12) consecutive months after the effective date of such termination and
(B) the number of months (rounded to the nearest whole number) remaining in the
Term. In addition, during the Payment Period, Employee shall be entitled to
continued participation in all of the Company's employee benefit plans,
including, without limitation, continued accrual for retirement benefits and
continued coverage under any Company medical, hospitalization, or life insurance
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plan; provided, however, that the Company may, at its option, in lieu of
continuing Employee's participation in any or all such benefit plans, pay
Employee a lump sum equal to the aggregate cost to the Company of Employee's
participation in the benefit plan in which Employee shall no longer participate,
which lump sum shall be calculated based upon the cost to the Company of
Employee's participation in such benefit plan immediately prior to the
termination of Employee's employment. Amounts payable by the Company pursuant to
this Section 7(e)(ii) shall be subject to Employee's duty to mitigate his
damages by using reasonable efforts to seek other comparable employment.
Compensation (in whatever form) payable to Employee on account of other
employment during the unexpired Term shall reduce Company's obligations
hereunder. Employee shall promptly notify the Company of such other employment
and the terms thereof. The parties hereto agree that the payments set forth in
this Section 7(e)(ii) constitute fair compensation and the sole remedy for
damages for any termination by the Company other than pursuant to Section 7(a),
7(b) or 7(c) above.
(f) Nothing in this Agreement shall be deemed a release or waiver of
right to any medical or other employee benefits available to Employee on or
after the effective date of termination of the executive's employment by the
Company under any federal, state or local law that provides for the continuation
of any medical or other employee benefits after employment.
8. Rights to Works. In return for the consideration described
herein, Employee agrees as follows:
(a) All programs, inventions, recordings and work product of any nature
made pursuant to this Agreement or otherwise in the course of Employee's
services and Employee's contributions thereto (hereinafter referred to as
"Works") shall belong solely and exclusively to the Company. The Company shall
have the perpetual and exclusive right to use, exhibit, distribute, or license
throughout the universe, any Work or part thereof in which Employee's services
are utilized by all forms of audio, visual, textual, digital, electronic or
other distribution that are now known or may hereafter exist, and otherwise
exploit such Works in such media, forums and for such uses throughout the
universe as it deems appropriate; provided, however, that no likeness or quote
of Employee shall be used without Employee's written consent. All revenues
derived by the Company from the use, exhibition, distribution, licensing, or
other exploitation of such Works shall be the sole and exclusive property of the
Company.
(b) To the extent that the Works are considered: (i) contributions to
collective works and/or (ii) as parts or components of audiovisual works, the
parties hereby expressly agree that the Works shall be considered "works made
for hire" under the United States Copyright Act of 1976, as amended (17 U.S.C.
Section 101 et seq.). In accordance therewith, the sole right of copyright in
and to the Works shall belong exclusively to the Company in perpetuity. To the
extent that the Works are deemed works other than contributions to collective
works and/or parts or components of audiovisual works, Employee hereby assigns
to the Company all rights, title and interest in and to the copyrights of such
Works and all renewals and extensions of the copyrights that may be secured
under the laws now or hereafter in force and effect in the United States of
America or any other country or countries. At the Company's reasonable written
request and sole expense, Employee shall execute, verify, acknowledge, deliver
and file any and all formal assignments, recordations and any and all other
documents that the Company may prepare and reasonably call for to give effect to
the provisions of this Agreement. If Employee fails to execute any such document
or instrument, or perform any such act, within ten (10) business days, Employee
shall be deemed to have irrevocably constituted and appointed the Company, with
full power of substitution, to be Employee's true and lawful attorney, in
Employee's name, place, and stead, to
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execute, acknowledge, swear to, and file all instruments, conveyances,
certificates, agreements, and other documents, and to take any action which may
be necessary or appropriate to effect the provisions of this Section 8. The
powers of attorney granted herein shall be deemed to be coupled with an interest
and shall be irrevocable.
(c) It is understood that the rights granted to the Company in this
Section 8 shall continue in effect after the termination or expiration of this
Agreement to the extent necessary for the Company's full enjoyment of such
rights.
(d) All provisions of this Agreement relating to the assignment by
Employee of any invention or innovation are subject to the provisions of
California Labor Code Sections 2870, 2871 and 2872. In accordance with Section
2870 of the California Labor Code, the obligation to assign as provided in this
Agreement does not apply to an invention or innovation that Employee developed
entirely on his own time without using the Company's equipment, supplies,
facilities, or trade secret information except for those inventions that either:
(i) relate to either (A) the business of the Company or any of its Subsidiaries
at the time of conception or reduction to practice of the invention, or (B)
actual or demonstrably anticipated research or development of the Company or any
of its Subsidiaries; or (ii) result from any work performed by Employee for the
Company or any of its Subsidiaries.
(e) Employee shall disclose all inventions and innovations to the
Company, even if Employee does not believe that he or she is required under this
Agreement, or pursuant to California Labor Code Section 2870, to assign his
interest in such invention or innovation to the Company. If the Company and
Employee disagree as to whether or not an invention or innovation is included
within the terms of this Agreement, it will be the responsibility of Employee to
prove that it is not included.
9. Trade Secrets. During the term of this Agreement and at all times
thereafter, Employee shall hold in secrecy all trade secrets and confidential
information relating to the Company's (and its affiliates') business and affairs
that may come to his knowledge or have come to his knowledge while employed by
the Company (excluding information that is or becomes publicly known or
available for use through no fault of Employee), including but not limited to:
(a) matters of a business nature, such as confidential information about costs,
profits, markets, sales, lists of customers, lists of clients and other
information of a similar nature, (b) confidential plans or strategies for
development of the business of the Company and (c) confidential matters of a
technical nature. Except as required in the performance of his duties to the
Company under this Agreement, Employee shall not use for his own benefit or
disclose to any person, directly or indirectly, such matters unless such use or
disclosure has been specifically authorized in writing by the Company in
advance.
10. Employee's Representations. Employee hereby represents and warrants
that: (a) he has the right to enter into this Agreement and to grant the rights
granted by him herein, (b) the provisions of this Agreement do not violate any
other contracts or agreements to which he is a party and that would adversely
affect his ability to perform his obligations hereunder, and (c) he will comply
with all policies of the Company of which he has notice, provided they are
consistent with applicable laws.
11. The Company's Representations. The Company hereby represents and
warrants that: (a) it has the right, power and authority to enter into this
Agreement and to incur the obligations incurred by it herein, (b) this Agreement
has been duly and validly authorized by the Company,
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and (c) the provisions of this Agreement do not violate any other contracts or
agreements to which it is a party that would adversely affect its ability to
perform its obligations hereunder.
12. Indemnification. The Company agrees that Employee shall be entitled to
indemnification and payment or reimbursement of expenses (including, without
limitation, attorneys' fees and expenses) to the fullest extent provided to
employees in the Company's Operating Agreement, as in effect on the date hereof,
and as it may be amended (but in no event on terms less favorable to Employee
than those in effect on the date hereof), for all damages, losses and expenses
incurred by Employee in connection with any third-party claim, action, suit or
proceeding that arises from Employee's services and/or activities (other than
Employee's gross negligence or willful misconduct) as an officer and/or employee
of the Company or any affiliate thereof. This Section 12 shall survive any
termination of the Term.
13. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal substantive laws (and not the laws of
choice of laws) of the State of California.
14. Entire Agreement. This Agreement constitutes the whole agreement of the
parties hereto in reference to any employment of Employee by the Company and in
reference to the subject matter hereof, and all prior agreements, promises,
representations and understandings relative thereto are merged herein.
16. Assignability.
(a) The services to be performed by Employee hereunder are personal in
nature and, accordingly, Employee may not, without the prior consent of the
Company, assign or transfer this Agreement or any rights or obligations
hereunder.
(b) Nothing expressed or implied herein is intended or shall be
construed to confer upon or give to any person, other than the parties hereto,
any right, remedy or claim under or by reason of this Agreement or of any term,
covenant or condition hereof.
17. Remedies. Any material breach, violation or evasion by Employee of the
terms of this Agreement, including specifically, but not limited to, Sections 8
and 9 above, would result in immediate and irreparable injury and harm to the
Company, and will cause damage to the Company in amounts difficult to ascertain
and for which Company's remedies and defenses at law would be inadequate.
Accordingly, in the event of any such breach or threatened breach, the Company
shall be entitled to, and Employee hereby consents to the entry of, the remedies
or injunction and specific performance, or either of such remedies, as well as
all other remedies to which the Company may be entitled, at law, in equity or
otherwise.
18. Amendments; Waivers. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived only by a written instrument executed by the parties hereto or, in the
case of a waiver, by the party waiving compliance. The failure of any party at
any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by any
party of the breach of any term or provision contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this Agreement.
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19. Notice. All notices, consents, requests and other communications
hereunder shall be in writing and, if given by personal delivery, shall be
deemed to have been validly served, given or delivered upon actual delivery and,
if mailed or delivered by overnight courier, shall be deemed to have been
validly served, given or delivered when deposited in the United States mail, as
registered or certified mail, with proper postage prepaid, or when deposited
with the courier service, and addressed to the party or parties to be notified,
at the following addresses (or such other address(es) as a party may designate
for itself by like notice):
If to Employee: Steve Rennie
1125 Coldwater Canyon
Beverly Hills, California 90210
With a copy to: David Wohlberg, Esq.
Troy & Gould Professional Corporation
1801 Century Park East
16th Floor
Los Angeles, California 90067
If to the Company: The Ultimate Band List, LLC
17835 Ventura Blvd.
Suite 310
Encino, California 91316
With a copy to: Lenard & Gonzalez LLP
1900 Avenue of the Stars
Twenty-Fifth Floor
Los Angeles, California 90067
Attn: Allen D. Lenard, Esq.
20. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent that a
restrictive covenant contained herein may, at any time, be more restrictive than
permitted under the laws of any jurisdiction where this Agreement may be subject
to review and interpretation, the terms of such restrictive covenant shall be
those allowed by law and the covenant shall be deemed to have been revised
accordingly. Each and every term of this Agreement shall be enforced to the
fullest extent permitted by law.
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21. Counterparts. This Agreement may be executed in two counterparts, each
of which shall be deemed an original and both of which together shall be deemed
one Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"EMPLOYEE" "COMPANY"
THE ULTIMATE BAND LIST, LLC
/s/ Steve Rennie
--------------------
Steve Rennie
By: ARTISTdirect New Media, LLC
Its: Manager
By: ARTISTdirect, LLC
Its: Member
By: /s/ Marc Geiger
-------------------------
Marc Geiger
Its: Member
By: /s/ Donald Muller
-------------------------
Donald Muller
Its: Member
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