genius_8k-ex1001.htm


    EXHIBIT
10.1


    SEVERANCE
AGREEMENT

    


    


    This Severance Agreement (this
“Agreement”) is entered into by and between John Mueller, an individual
(“Employee”), and Genius Products, Inc., a Delaware corporation, Genius
Products, LLC, a Delaware limited liability company, and each of their
respective subsidiaries, legal representatives, successors and
assigns  (collectively, “Employer”).  Employee and Employer
are hereinafter collectively referred to as “the Parties.”

    


    1.           Resignation of
Employment.  The Parties agree that effective as of May 9, 2008
(the “Termination Date”), Employee has resigned as Executive Vice President and
Chief Financial Officer of Employer, and Employee will no longer hold any
position with Employer or be employed in any capacity.  Without
limiting the foregoing, Employee acknowledges and agrees that effective as of
the Effective Date (as defined in Section 17 below) Employee’s Employment
Agreement with Employer, dated as of March 10, 2006, shall be terminated and of
no further force or effect.

    


    2.           Severance.  In
consideration of, and in return for the covenants and promises contained in this
Agreement, and as full and final compensation to Employee for all services as an
employee:

    


    A.           Employee
shall receive from Employer, with appropriate deductions and withholdings, in
one lump sum payment on the Effective Date, severance payment representing three
(3) months of Employee’s base salary (which severance shall be separate and
apart from, and in addition to, Employee’s final paycheck and all accrued and
unused vacation and other bonuses, benefits, commissions or compensation of any
type through the Termination Date).  Nothing in this Agreement is
intended to include in Employee’s severance any bonuses, benefits, vacations,
commissions or compensation of any type other than Employee’s regular
salary.  It is agreed that employee will have a balance of thirty-one
(31) vacation days at the time of Termination Date;

    


    B.           Employee
shall have health insurance paid for by Employer (COBRA benefits) for three (3)
months beginning on the Termination Date, subject to the same terms and
conditions Employee and/or Employee’s family received health insurance benefits
before the Termination Date (in other words, Employee’s co-pay shall remain the
same);

    


    C.           Employee
will retain 750,000 stock options already vested as of the Termination Date, at
an exercise price of $1.89 (the “Vested Options”), and Employee shall retain the
ability to exercise the Vested Options for a period of two (2) years after the
Termination Date, subject to the other terms and conditions of the Stock Option
Award and Agreement governing the exercise of such Vested Options;
and

    


    D.           Employer
warrants and Employee acknowledges that the agreements described under this
Section 2 constitute full payment of any and all claims of every nature and kind
arising out of or relating in any way to Employee’s employment by Employer or
the termination thereof, benefits owed, or any other claims as outlined below.
Employee acknowledges that Employee’s receipt of the severance described in this
Section 2 is contingent upon Employee’s execution of this
Agreement.

    



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    


    3.           Employee’s Release of All
Claims against Employer.

    


    A.          
In consideration of the covenants and other benefits described herein, Employee
does hereby unconditionally, irrevocably, and absolutely release and discharge
Employer, and any and all predecessor or successor entities thereof and its and
their affiliates, any and all holding, parent or subsidiary entities and any
predecessor or successor entities thereof, any other merged entities, any and
all present, former and future directors, officers, representatives, agents,
principals, administrators, agents, partners, employees, stockholders,
predecessors, successors, assigns, insurers, attorneys, and any fiduciaries of
any employee benefits plan (collectively, the “Released Parties”), from any and
all known and unknown losses, liability, claims, demands, causes of action or
suits of any type, whether in law or in equity, related directly or indirectly,
or in any way connected with any transaction, affairs, or occurrences between
them, including, without limitation, Employee’s employment with Employer and/or
the termination of said employment.  This Agreement specifically
applies, without limitation, to a release of any and all contract or tort
claims, claims for wrongful termination, retaliation, employment discrimination,
emotional distress, fraud, misrepresentation, defamation, interference with
prospective economic advantage, failure to pay wages due or other monies owed,
including, without limitation, severance, overtime compensation, accrued and
unused vacation, and claims arising under Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1866, the Age Discrimination in Employment Act,
the Americans with Disabilities Act, the Equal Pay Act, the Fair Labor Standards
Act, the Family and Medical Leave Act, the California Family Rights Act, The
Older Workers’ Benefit Protection Act of 1990, the California Fair Employment
and Housing Act, the Occupational Safety and Health Act, any applicable
California Industrial Wage Orders, all as amended, and any other local, state or
federal law, rule, or regulation relating to or affecting Employee’s employment
by Employer and/or the termination of said employment. Nothing in this release
is intended to affect Employee’s right to defense, contribution or
indemnification, if any, in the event Employee is sued or otherwise subject to
any claims for acts committed in the course and scope of Employee’s employment,
including, without limitation, any acts or omissions as the administrator of any
of Employer’s employee benefit plans.  Nothing in this release is
intended to affect Employee’s right to coverage under the California worker’s
compensation laws (although Employee hereby represents that Employee is not
currently aware of any such claim).

    


    B.           
Employee irrevocably and absolutely agrees that Employee will not prosecute nor
allow to be prosecuted on Employee’s behalf, in any administrative agency,
whether federal or state, or in any court, whether federal or state, any claim
or demand of any type related to the matters released above, it being the intent
of the Parties that with the execution by Employee of this Agreement, Employer
and any and all Released Parties will be irrevocably, absolutely,
unconditionally, and forever discharged of and from all obligations to or on
behalf of Employee related in any way to the matters discharged
herein.  If Employee should bring any action arising out of the
subject matter covered by this Agreement, Employee understands and agrees that
Employee will, at the option of Employer, be considered in breach of this
Agreement and shall be required to immediately return any and all funds received
pursuant to this Agreement.  Furthermore, if Employer should prevail
concerning any or all of the issues so presented, Employee shall pay to Employer
all of its costs and expenses of defense, including Employer’s reasonable
attorneys’ fees.

    



    
      
         


      

      
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    4.           Unknown
Claims.  Employee understands and agrees that this Agreement
extends to all claims of every nature, known or unknown, suspected or
unsuspected, past or present, and that any and all rights granted to Employee
under Section 1542 of the California Civil Code or any analogous federal law or
regulation are hereby expressly waived.  Section 1542
provides:

    


    “A
general release does not extend to claims which the creditor does not know of or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.”

    


    Employee certifies that he has read all
of this Agreement, including the release provisions contained herein and the
quoted Civil Code section, and that Employee fully understands all of the
same.

    


    5.           Confidential Information,
Trade Secrets and Company Property.  Employee acknowledges that
all confidential materials, records and documents, including, without
limitation, all company property, files, e-mails and other electronic
information concerning Employer that have come into Employee’s possession during
Employee’s employment with Employer,  will be returned to Employer
within seven (7) days of the Termination Date; provided that, subject to
returning the aforementioned confidential materials, Employee shall retain his
computer and related accessories after resignation.  Employee agrees
not to disclose to any person or entity, including any competitor of Employer
and any future employer, any of Employer’s trade secrets or other confidential
information. Employee acknowledges that all of Employer’s property obtained
during the course of Employee’s employment with Employer has been returned to
Employer.  Employee further agrees that Employee will not, for any
reason, disclose to others for the benefit of anyone other than Employer any
trade secret, confidential or proprietary information, including, without
limitation, information relating to Employer’s customers, employees,
consultants, affiliates, products, know-how, techniques, intellectual property,
computer systems, programs, policies and procedures, software programs, research
projects, future developments, costs, profits, pricing and/or marketing,
attorney-client communications, and/or customer business
information.  Employee further understands and agrees that the use of
any trade secret, confidential or proprietary information belonging to Employer
shall be a material breach of this Agreement.

    



    
      
         


      

      
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    6.           Non-Disparagement.  The
Parties agree not to make and/or publish any derogatory or adverse statements,
written or verbal, which tend to criticize or discredit the other, except as
required by law.

    


    7.           No Future
Employment.  Employee acknowledges and agrees that Employer
shall not in any way be obligated to offer employment to Employee or to hire
Employee for any reason, regardless of the circumstances, at any time on or
after the Termination Date.  Employee acknowledges that any future
application for employment with Employer may be denied, and Employee agrees that
Employer’s decision to reject any such application shall be solely within the
discretion of Employer and shall not be considered a breach of any express or
implied term of this Agreement.

    


    8.           No Admission of
Liability.  This Agreement is a compromise and settlement of
all disputed and potentially disputed claims being released, and therefore this
Agreement and the payments provided for in this Agreement do not constitute an
admission of liability on the part of Employer, or an admission, directly or by
implication, that any of them have violated any law, rule, regulation, policy or
any contractual right or other obligation owed to Employee.  Employer
specifically by this Agreement denies all allegations of improper or unlawful
conduct made by Employee, or which could have been made by
Employee.  Employer merely intends, by entering into this Agreement,
to avoid litigation.

    


    9.           No Assignment or Transfer of
Claims.  Employee represents and warrants that Employee has not
assigned or transferred to any other person or entity any rights, claims or
causes of action released and discharged, and no other person or entity has any
interest in the matters released and discharged, except as disclosed by the
terms of this Agreement.

    


    10.           Entire
Agreement.  The Parties declare and represent that no promise,
inducement or agreement not expressed in this Agreement has been made to them
and that this Agreement contains the full and entire agreement between the
Parties, and that the terms of this Agreement are contractual and not a mere
recital. However, to the extent that this Agreement and any previous trade
secrets, proprietary information or confidentiality agreement (whether in a
previous employment agreement or otherwise) conflict, the agreement that
provides the greatest protection to Employer shall prevail.

    


    11.           Applicable
Law.  The validity, interpretation, and performance of this
Agreement shall be construed and interpreted according to the laws of the State
of California.  To that end, this Agreement is binding on the Parties
pursuant to Section 664.6 of the California Code of Civil Procedure, even though
no lawsuit or claim has been filed.

    


    12.           Arbitration of
Disputes.  Any dispute arising out of this Agreement or
Employee’s employment and/or termination of said employment shall be resolved by
binding arbitration by a mutually agreed arbitrator, or, if no arbitrator can be
agreed to, then under the rules and procedures of the Judicial Arbitration and
Mediation Service (“JAMS”) in  Los Angeles, California. The findings
of the arbitrator shall be final and binding upon the Parties.  The
Parties shall equally pay for the arbitration costs of any such arbitration, but
the prevailing party shall be entitled to reasonable attorneys’ fees and
costs.

    



    
      
         


      

      
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    13.           Attorneys’
Fees.  In any dispute involving this Agreement, the prevailing
party shall be entitled to reasonable attorneys’ fees and costs.

    


    14.           [Intentionally
Omitted].

    


    15.           
Severability.  If
any provision of this Agreement, or part, is held invalid, void or voidable as
against public policy or otherwise, the invalidity shall not affect other
provisions, or parts, which may be given effect without the invalid provision or
part.  To this extent, the provisions, and parts thereof, of this
Agreement are declared to be severable.

    


    16.           
Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective heirs, legal representatives,
successors and assigns.

    


    17.           
ADEA
Release.

    


    A.          
Employee understands and acknowledges that: this Agreement constitutes a
voluntary waiver of any and all rights and claims against Employer as of the
Effective Date whether or not Employee is aware of them including, without
limitation, rights or claims arising under the Age Discrimination in Employment
Act of 1967, 29 U.S.C. § 621, et seq.; Employee has waived rights or claims
pursuant to this Agreement and in exchange for consideration, the value of which
exceeds payment or remuneration to which Employee was already entitled; Employee
is hereby advised to consult with an attorney concerning this Agreement prior to
executing it; and Employee was given a period of at least twenty-one (21) days
to consider the terms of this Agreement before executing this Agreement on the
date set forth opposite Employee’s signature below, but has specifically elected
not to utilize such twenty-one (21) day consideration period.

     

    
      B.          
The Parties acknowledge and agree that Employee may revoke this Agreement for up
to seven (7) calendar days following the execution of this Agreement, and that
it shall not become effective or enforceable until the revocation period has
expired (such date being referred to herein as the “Effective
Date”).  The Parties further acknowledge and agree that such a
revocation must be in writing, addressed to Trevor Drinkwater, Genius Products,
LLC, 2230 Broadway, Santa Monica, CA 90404, and received not later than 5:00
p.m. on the seventh (7th) day following execution of this Agreement by
Employee.  If Employee revokes this Agreement, it shall not be
effective or enforceable and Employee will not receive the monies and benefits
described above.




    
      
         


      

      
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    C.          
If Employee does not revoke this Agreement in the time frame specified in this
Section 17, this Agreement shall become effective at 12:01 a.m. on the eighth
(8th) day after it is signed by Employee.

    


    18.           Counterparts.  This
Agreement may be signed in counterparts.  A facsimile signature shall
have the same force and effect as an original signature, and trigger the
obligations under this Agreement.

    


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    THE
PARTIES HAVE READ THIS AGREEMENT AND KNOW ITS CONTENTS AND FULLY UNDERSTAND
IT.  THE PARTIES ACKNOWLEDGE THAT THEY HAVE FULLY DISCUSSED THIS
AGREEMENT WITH THEIR RESPECTIVE ATTORNEYS TO THE EXTENT DESIRED AND FULLY
UNDERSTAND THE CONSEQUENCES OF THIS AGREEMENT.  NO PARTY IS BEING
INFLUENCED BY ANY STATEMENT MADE BY OR ON BEHALF OF ANY OF THE OTHER PARTY TO
THIS AGREEMENT.  THE PARTIES HAVE RELIED AND ARE RELYING SOLELY UPON
THEIR BELIEF AND KNOWLEDGE OF THE NATURE, EXTENT, EFFECT AND CONSEQUENCES
RELATING TO THIS AGREEMENT AND/OR UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL
CONCERNING THE CONSEQUENCES OF THIS AGREEMENT.

    


    IN WITNESS WHEREOF, the
undersigned have executed this Agreement on the dates shown below.

     

    


     

    
      	
              DATED:     May 23,
      2008

            	
              /s/ John
      Mueller                                                   
      

            
	 
      	
              JOHN
      MUELLER

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              DATED:     May 23,
      2008

            	
              GENIUS
      PRODUCTS, LLC

            
	 	 
	 	 
	 
      	
              By: /s/
      Trevor
      Drinkwater                                   
      

            
	 
      	
              Name:  Trevor
      Drinkwater

            
	 
      	
              Title:    CEO

            
	 
      	 
      
	
              DATE:     May 23,
      2008

            	
              GENIUS
      PRODUCTS, INC.

            
	 	 
	 
      	 
      
	 
      	
              By: /s/
      Trevor
      Drinkwater                       
               
      

            
	 
      	
              Name:  Trevor
      Drinkwater

            
	 
      	
              Title:    President
      & CEO

            


    

    


    


    
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