Exhibit 10.35


 


REAL D

100 N. Crescent Drive., Suite 120

Beverly Hills, CA 90210


 


September 1,
2007


 


Andrew A. Skarupa


1518 Alta Park Lane


La Canada, CA 91011


 


	
  Re:

  	
  Amended and Restated
  Agreement of Employment by and between

  	
   

  
	
   

  	
  REAL D and Andrew
  Skarupa

  	
   

  



 


This Amended and Restated
Agreement of Employment by and between REAL D (“REAL D”, or the “Company”)  and
Andrew Skarupa (this “Agreement”)  amends
and restates the terms contained in that certain Offer of Employment by REAL D
dated December 17, 2004, previously agreed to by you and REAL D (the “Employment
Offer”). You shall report directly to the
Chief Executive Officer, and your title shall be Chief Financial Officer. The
terms of our offer, and the benefits to be provided by the Company, each to be
effective as of September 1, 2007, are as follows:


 


1.                                       Base Salary. Your base salary will be $225,000 per
annum, effective as of September 1, 2007. Your base salary shall increase
to $250,000 per annum once the installed base commitment exceeds 4,000 REAL D
systems, and the installed base exceeds 1,500 REAL D systems.


 


2.                                       Term. Unless sooner terminated as hereinafter
provided, the term of your employment hereunder shall continue for a period of
four (4) years from the date hereof (the “Term”).


 


3.                                       Benefits. The Company shall provide you with
standard medical benefits comparable in coverage to the medical benefits
customarily provided to senior executives of the Company. For each full
calendar year during the period that you are employed by the Company, you shall
be entitled to three (3) paid weeks vacation (each week consisting of five
(5) business days). In addition, you will be eligible to receive certain
other employee benefits pursuant to the Company’s standard benefit plans that
the Company generally provides to its senior executives, including, for
example, Company paid holidays. Finally, the Company will reimburse you for the
reasonable and necessary costs of DSL, phone and office expenses; provided,
that such expenses are approved in advance by the Company in writing.


 


4.                                       Bonuses. Throughout the Term, you shall be eligible to
receive a bonus, payable within sixty (60) days of the end of each fiscal year
during which you remain employed by the Company, in an amount equal to 1.2% of
the Company’s Annual Free Cash Flow. In addition, you shall be eligible to
receive an additional (i) one-time bonus equal to 15% of the base salary
that you are then being paid if the Company exceeds its plan for the fiscal
year ending March 31, 2008, and (ii) one-time bonus equal to 30% of
the base salary that you are then being paid if the Company exceeds its plan
for the fiscal year ending March 31, 2009, each such bonus to be


 

















 


payable within sixty (60)
calendar days of the end of the fiscal year during the Term in which the applicable
milestone is achieved. You must be employed at the end of a fiscal year to
receive a bonus that would otherwise be payable for that fiscal year; provided,
however, that in the event your employment is terminated by the Company
without “Cause”, or is voluntarily terminated by you for “Good Reason” (each as
defined in Section 9 below), you shall be entitled to receive a pro rated
share of the bonus that would otherwise be payable to you within sixty (60)
days of the end of the applicable fiscal year. For purposes of this Agreement, “Annual
Free Cash Flow” shall mean the Company’s cash flow provided by operations, less
all capital expenditures, for the fiscal year in question.


 


5.                                       Option Grant. In addition to the options to purchase
shares of Common Stock of the Company that were previously granted to you, if
and when the audited net income of the Company for any fiscal year exceeds
$1,000,000, and provided that you are employed by the Company as of the actual
date that this milestone is achieved (if at all), you will be granted an option
to purchase 50,000 shares of Common Stock of the Company, pursuant to the
Company’s 2004 Amended and Restated Stock Incentive Plan (the “Plan”), and
with an exercise price equal to the fair market value of the Company’s Common
Stock, as determined by the Board of Directors of the Company (the “Board”), on
the date of grant. If and when granted, 12,500 of the shares subject to the
option shall vest and become exercisable on the one (1) year anniversary
of the date of grant, and 37,500 of the shares subject to the options shall
vest and become exercisable monthly thereafter over the next three (3) years,
with all of the options vesting in full upon the four (4) year anniversary
of the date of grant. Further details on the Plan and any specific vesting and
option grants to you will be provided upon final approval of such grants by the
Board. Copies of the Plan and the Company’s standard form of option grant
notice and stock option agreement will be made available to you upon request.


 


6.                                       Travel. You shall also be entitled to
reimbursement, in accordance with the Company’s travel and entertainment
policy, for all expenses incurred in travel pursuant to the normal course of
business.


 


7.                                       Acceleration of
Vesting. In
accordance with the terms of the Plan, all of the then unvested shares subject
to any unvested options that you then hold shall accelerate, vest and become
exercisable (i) immediately prior to the consummation of a “Company Transaction”  (as
defined in the Plan), in the event the options are not assumed, converted or
substituted for by the successor company, or (ii) immediately, in the
event your employment hereunder should terminate (a) in connection with
the Company Transaction, or (b) subsequently within one (1) year following
such Company Transaction, or (iii) at such time as you no longer hold the
title of Chief Financial Officer, or (iv) ten (10) business days
following notice to us of either a change in your responsibilities that, in
your reasonable judgment, represents a substantial reduction in your
responsibilities as in effect immediately prior thereto, or the assignment to
you of any duties or responsibilities that, in your reasonable judgment, are
materially inconsistent with your status, title, position or responsibilities; provided,
however, that no acceleration shall occur in connection with a
termination of your employment for “Cause”, or by you voluntarily other
than for “Good Reason”  (each as defined in Section 9 below).


 


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8.                                       Confidentiality. As an employee of the Company, you will
have access to certain confidential information of the Company and you may,
during the course of your employment, develop certain information or inventions
which will be the property of the Company. To protect the interests of the
Company, you have previously executed the Company’s standard “Employee
Invention Assignment and Confidentiality Agreement” as a condition of your
employment. During the period that you render services to the Company, you (a) agree
to not engage in any employment, business or activity that is in any way
competitive with the 3-D cinema business then conducted or then proposed to be
conducted by the Company, (b) will disclose to the Company in writing any
other gainful employment, business or activity that you are currently
associated with or participate in that competes with the Company, and (c) will
not assist any other person or organization in competing with the Company’s 3-D
cinema business or in preparing to engage in competition with the 3-D cinema
business or proposed 3-D cinema business of the Company. You represent that
your execution of this Agreement, agreement(s) concerning stock options
granted to you, if any, under the Plan, and the Company’s Employee Invention
Assignment and Confidentiality Agreement, and your continuation of employment
with the Company, will not violate any agreement currently in place between
yourself and current or past employers.


 


9.                                  Severance. Notwithstanding anything to the contrary
set forth herein, in the event your employment hereunder is terminated by the
Company without “Cause”  or
by you for “Good Reason”  (each as defined in this Section 9), at any
time during the Term, you shall immediately receive a cash payment equivalent
to one-half (1/2) of the base salary per annum then being paid to you, and
payable in a lump sum amount (less required withholding).


 


For purposes of your
employment and any option grants to be made pursuant to the terms of this
Agreement, “Cause”  shall
mean your: (i) conviction of any crime which constitutes a felony
involving moral turpitude or which impairs your ability to perform your duties
with the Company; (ii) commitment of any act of dishonesty or fraud
against the Company, or its affiliates, or the misappropriation of funds of the
Company, or its affiliates; (iii) failure to follow the reasonable
policies or directions of the Board or failure to substantially perform your
duties to the Company, in either case which failure is not cured within thirty
(30) days of the Company’s written notice to you; or (iv) breach of any
terms of your employment hereunder or your Employee Invention Assignment and
Confidentiality Agreement, which breach is not cured within thirty (30) days of
the Company’s written notice to you.


 


For purposes of your
employment and any Option grants to be made pursuant to the terms of this
Agreement, “Good Reason,”  shall mean the occurrence of any of the
following events or conditions, and the failure of the Company or, in the case
that a “Company Transaction”  has occurred (as defined in
the Plan), the “Successor Company”  (as defined in the Plan), to
cure such event or condition within thirty (30) days after receipt of written
notice from you:


 


(a)                                  a change in your status, title, position
or responsibilities (including reporting responsibilities) that, in your
reasonable judgment, represents a substantial reduction in


 


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your status, title,
position or responsibilities as in effect immediately prior thereto; the
assignment to you of any duties or responsibilities that, in your reasonable
judgment, are materially inconsistent with your status, title, position or
responsibilities; or your removal from or any failure to reappoint or reelect
you to any of such positions, except in connection with the termination of your
employment for Cause, as a result of your “Disability”  (as defined in the Plan), or
death, or by you other than for Good Reason;


 


(b)                                 a reduction in your base annual salary;


 


(c)                                  the Company’s or the Successor Company’s
requiring you (without your consent) to be based at any place outside a 25-mile
radius of your place of employment on the date of this Agreement, except for
reasonably required travel on the Company’s or the Successor Company’s business
that is not materially greater than such travel requirements as historically
required;


 


(d)                                 the Company’s or the Successor Company’s
failure to (i) continue in effect any material compensation or benefit
plan (or the substantial equivalent thereof) in which you were participating as
of the date of this Agreement, or at the time of a Company Transaction, as
applicable, and including, but not limited to, the Plan, or (ii) provide
you with compensation and benefits substantially equivalent (in terms of
benefit levels and/or reward opportunities) to those provided for under each
material employee benefit plan, program and practice as in effect as of the
date of this Agreement, or immediately prior to the Company Transaction, as applicable;


 


(e)                                  any material breach by the Company or
Successor Company of its obligations to you under the Plan or any substantially
equivalent plan of the Company or the Successor Company;


 


(f)                                    any purported termination of your
employment or service relationship for Cause by the Company or the Successor
Company that is not in accordance with the definition of Cause contained in
this Section 9; or


 


(g)                                 any change in your reporting relationship
relative to Michael V. Lewis.


 


10.                                 Entire
Agreement; No Modification. This Agreement, your Employee Invention Assignment
and Confidentiality Agreement, and the Plan, shall constitute the entire
agreement between the parties hereto relating to the subject matter hereof, and
supersede all prior oral or written agreements, understandings, representations
and courses of conduct and dealing between the parties relating to the subject
matter hereof, including without limitation the Employment Offer. This
Agreement may not be amended or modified except in a writing executed by both
parties hereto. This Agreement may be executed in counterparts, each of which
shall constitute an original, and all of which will constitute one and the same
instrument.


 


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11.                            At-Will
Employment. You will continue to be an at-will employee of the Company, which
means the employment relationship can be terminated by either of us for any
reason, or no reason, and at any time, with or without notice. Any statements
or representations to the contrary (and, indeed, any statements contradicting
any provision in this letter) should be regarded by you as ineffective.
Further, your participation in any stock option or benefit program is not to be
regarded as assuring you of continuing employment for any particular period of
time.


 


12.                                 Miscellaneous.


 


(a)                                  All payments to be made pursuant to this
Agreement shall be made, in US Dollars, in accordance with normal payroll
practices, and shall be subject to withholding of such amounts as is required
under applicable law.


 


(b)                                 This Agreement shall be governed by and
construed under the laws of the State of California without regard to
principles of conflict of laws. The parties irrevocably consent to the
jurisdiction and venue of the state and federal courts located in Los Angeles
County, California in connection with any action relating to this Agreement.


 


(c)                                  Any and all notices required or permitted
to be given to you or the Company pursuant to the provisions of this Agreement
will be in writing and will be effective and deemed to provide such party
sufficient notice hereunder on the earliest of the following: (i) at the
time of personal delivery, if delivery is in person; (ii) one (1) business
day after deposit with an express overnight courier for United States deliveries,
or two (2) business days after such deposit for deliveries outside of the
United States; (iii) three (3) business days after deposit in the
United States mail by certified mail (return receipt requested) for United
States deliveries. All notices not delivered personally will be sent with
postage and/or other charges prepaid and properly addressed to the party to be
notified at the address set forth in this Agreement for such party, or at such
other address as such party may designate by one of the indicated means of
notice herein to the other party hereto.


 


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Could
you please sign the enclosed copy of this Agreement in the space indicated
below and return it to me. Your signature will acknowledge that you have read
and understood and agreed to the terms and conditions of this Agreement and the
Employee Invention Assignment and Confidentiality Agreement previously executed
by you.


 


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Michael
  V. Lewis,

  
	
   

  	
  Chief
  Executive Officer

  



 


 


Acceptance


 


I
have read and understand the Employment Terms, and hereby acknowledge that I accept and agree to the terms as set forth
above, and further acknowledge that no other commitments were made to me as
part of my employment except as specifically set forth herein.


 


 


	
   

  	
   

  	
   

  
	
  Andrew
  A. Skarupa

  	
   

  	
  Date
  Signed

  



 


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