Document:

Exhibit 10.44

 

SEPARATION AGREEMENT AND

GENERAL RELEASE OF CLAIMS

 

THIS SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (the “Agreement”) is made and entered into as of May 16, 2011, by and between RealD Inc., a Delaware corporation (the “Company”), and Joshua Greer (“Executive”) (together, the “Parties”). This Agreement is effective only if it has been executed by each of the Parties and the revocation period has expired without revocation as set forth in Sections 7(c) and (d) below (the “Effective  Date”).

 

WHEREAS, Executive is an employee of the Company and has served as its President pursuant to an employment agreement with the Company with an effective date of April 1, 2010 (the “Employment Agreement”) attached hereto as Exhibit 1;

 

WHEREAS, Executive also serves, without additional compensation, as a member of the Company’s Board of Directors (the “Board”);

 

WHEREAS, the Company and Executive mutually agree that they desire that (i) Executive’s employment with the Company will terminate no later than the close of business on July 15, 2011 and such termination may be treated as a Qualifying Termination as provided under this Agreement, and (ii) Executive will release the Company and its affiliates from any and all claims as of the Effective Date and also as of his Termination Date (as defined herein); and

 

WHEREAS, the Parties desire that, in connection with a Qualifying Termination, Executive became a consultant to the Company after the Termination Date pursuant to the consulting agreement attached hereto as Exhibit 3 (the “Consulting Agreement”).

 

NOW, THEREFORE, in consideration of the mutual promises contained herein, the Parties agree as follows:

 

1.                                       Transition. From the Effective Date through the Termination Date, Executive shall only be terminated for Cause. During this time period, the Company may require that Executive not (i) perform services at Company facilities or (ii) travel on Company business. The “Termination Date” means the earliest to occur of: (a) July 15, 2011, (b) the date of Executive’s death, (c) the date that Executive resigns his employment without Good Reason or (d) the date that the Company terminates Executive’s employment for Cause (as defined in the Employment Agreement). Termination under either clauses (c) or (d) will not constitute a Qualifying Termination for purposes of this Agreement and will mean that the Executive is not eligible for any of the separation benefits under Section 4 or for any payments under the Consulting Agreement and that the Consulting Agreement will be null and void with no force or effect. Executive shall be eligible to receive his Accrued Obligations (as defined in the Employment Agreement) up through and upon his Termination Date. While Executive is a Company employee or consultant to the Company and/or member of the Board, he will be (1) permitted to continue to use his Company provided email address, phone number and cell phone and (2) subject to all Company policies including without limitation its insider trading policy.

 

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Notwithstanding the above, at Executive’s request, the Company shall automatically forward all emails addressed to Executive to Executive’s new email address, which Executive shall provide, for a period of one (1) year following Executive’s request.

 

2.                                            Qualifying Termination of Employment. Executive and the Company acknowledge and agree that Executive’s employment with the Company will terminate in all cases as of the close of business on the Termination Date and that such termination will be treated as a Qualifying Termination by the Company, except as provided for terminations under clauses (c) and (d) of Section 1. As of the Termination Date, it is mutually agreed that Executive is no longer an employee or officer of the Company and no longer holds any positions or offices with the Company except for his membership on the Board if he is still then serving on the Board. Any continued service on the Board and any compensation for services rendered as a non-employee member of the Board will be determined in accordance with the Company’s charter documents and applicable corporate governance policies.

 

3.                                            Separation Benefits. In consideration for Executive’s general release of all claims set forth below and Executive’s other obligations under this Agreement and in satisfaction of all of the Company’s obligations to Executive and further provided that: (i) this Agreement is signed by Executive and delivered to the Company on or before May 16, 2011, (ii) this Agreement is not revoked by Executive under Section 7 below and therefore becomes effective on or before May 23, 2011, (iii) Executive remains in continuing material compliance with all of the terms of this Agreement, (iv) the termination of Executive’s employment with the Company is treated as a Qualifying Termination by the Company, (v) Executive does not resign from the Board at anytime before the annual meeting of Company stockholders in 2011, and (vi) on or within 60 days after the Termination Date, Executive (or his estate, if applicable) timely re-executes a second general release of claims (in a form prescribed by the Company and which will be substantially the same as this Agreement) and Executive (or his estate, if applicable) timely delivers to the Company such second release and does not revoke it, then the Company agrees to provide (and continue to provide) the separation benefits specified in Section 4(a) below to Executive (or his estate, if applicable).

 

The Parties agree and acknowledge that (A) the separation payments and benefits provided under Section 4(a) are being provided in lieu of all post-employment benefits set forth in the Employment Agreement and any post-employment benefits under any other agreement, and (B) this Agreement as of its effective date hereby supersedes and replaces in their entirety any and all compensation, severance, separation, benefits and/or termination plans, policies, agreements and/or programs between Executive and the Company (including, without limitation, the Employment Agreement).

 

In the event that the Company believes Executive is not in continuing material compliance with the terms of this Agreement, then the Company shall provide Executive with written notice of the same and the Company’s intention to terminate the separation benefits specified in Section 4(a) below within ninety (90) days of the date on which the General Counsel of the Company or a member of the Board (other than Executive) first becomes aware of the initial existence of the condition(s) giving rise to such lack of material compliance. If the Company does not timely provide such notice during the applicable 90 days, then the Company will be deemed to have waived the right to assert any such breach with respect to such

 

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condition(s), provided that at least one of such persons with knowledge of the initial existence of the condition(s) remains in service with the Company through the conclusion of the ninety (90) day notice period. Notwithstanding the foregoing, in the event that the actions or inactions giving rise to such lack of material compliance are reasonably capable of being cured, the written notice from the Company shall provide Executive with at least twenty (20) days to cure such noncompliance, prior to the effective date of the termination of separation benefits specified in Section 4(a) below. During such twenty (20) day period, the Company will suspend payment(s) of the separation benefits specified in Section 4(a) below, and if the actions or inactions giving rise to such lack of material compliance are not timely cured, then the Company shall immediately terminate any and all such separation payments and benefits. If Executive cures the circumstances giving rise to such lack of material compliance within such twenty (20) day period, the Company shall remove the suspension and continue to provide the separation payments and benefits specified in Section 4(a) below retroactive to the date of suspension.

 

4.                                       Payments, Benefits and Taxes.

 

(a)                                  Separation Benefits. Subject to the timely satisfaction of all applicable conditions specified in this Agreement, the Company will provide to Executive the separation benefits specified in this Section 4(a) and the Executive acknowledges and agrees that such benefits represent the entirety of post employment separation benefits to which Executive is eligible to receive:

 

(i)                                          Cash severance installment payments in an aggregate amount equal to $450,000 (“Cash Severance”) with such amount being paid in ten monthly installments of $45,000 each with the first such installment of Cash Severance being paid on the 90th day after the Termination Date and the last installment being paid on the first anniversary of the Termination Date.

 

(ii)                                       The Company will continue to pay the cost (to the same extent that the Company was doing so immediately before the Termination Date) for all group employee benefit coverage continuation under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to the same extent provided by the Company’s group plans immediately before the Termination Date for eighteen (18) months after the Termination Date or until Executive becomes eligible for group insurance benefits from another employer, whichever occurs first, provided that Executive timely elects COBRA coverage (“COBRA Benefits”). Executive agrees (i) at any time either before or during the period of time Executive is receiving benefits under this Section 4(a), to inform the Company promptly in writing if Executive becomes eligible to receive group health coverage from another employer; and (ii) that Executive may not increase the number of designated dependents, if any, during this time unless Executive does so at Executive’s own expense. The period of such COBRA Benefits shall be considered part of Executive’s COBRA coverage entitlement period, and may, for tax purposes, be considered income to Executive.

 

(iii)                                    A pro-rated cash “Performance Bonus” for fiscal year 2012, in an amount equal to 30% of 80% of Executive’s salary, as if the Qualifying Termination had not occurred and that Executive remained as President of the Company through the end of such fiscal year. This pro-rated Performance Bonus, if any, shall be paid to Executive no later than

 

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June 15, 2012. Executive will continue to be eligible to receive a full payment for his fiscal year 2011 performance bonus as provided in Section 9(a) of this Agreement.

 

(iv)                                   With respect to the two outstanding stock options that Executive currently holds and which were granted to Executive on July 15, 2010, the Company shall accelerate the vesting of all time-based vesting options (“First Option”) to the Termination Date and all shares under the First Option shall be vested and remain exercisable through the term of the Consulting Agreement and six months thereafter. In all other respects, the terms and conditions of the First Option remain as is and in full force and effect. With respect to the performance based vesting option that was also granted to Executive on July 15, 2010 (“Second Option”), such Second Option shall be entirely forfeited and canceled on the Effective Date without consideration. Executive agrees that he holds no other outstanding equity compensation awards.

 

(b)                                 Taxes. Any tax obligations of Executive and tax liability therefore, including without limitation, any penalties or interest based upon such tax obligations, that arise from the benefits and payments made to Executive shall be Executive’s sole responsibility and liability. All payments or benefits made under this Agreement to Executive shall be subject to applicable tax withholding laws and regulations and Executive shall be required to timely and fully satisfy any such withholding as a condition of receipt of any payments or benefits. The terms of Section 12 of the Employment Agreement are also applicable to this Agreement and to all payments and benefits provided hereunder.

 

(c)                                  WARN Payments. The separation payments to Executive hereunder shall be considered as including any and all payments by the Company that could or in fact become payable in connection with the Executive’s termination of employment pursuant to any applicable legal requirements, including, without limitation, the Worker Adjustment and Retraining Notification Act (the “WARN” Act), California Labor Code sections 1400-1408, or any other similar foreign, federal or state law.

 

(d)                                 Full Payment. Except with respect to any “Excluded Claims” (defined below), Executive represents and warrants to the Company that, as of the Effective Date, the payments set forth in Section 4(a) herein constitute all payments or obligations owed by the Company to Executive in connection with any severance, retention or a change in control plan or arrangement.

 

(e)                                  Internal Revenue Code Section Provisions. The terms of Sections 3(d)(iv) and 13 of the Employment Agreement are also applicable to this Agreement and to all payments and benefits provided hereunder.

 

5.                                       License Agreement. The Company shall negotiate in good faith a license agreement with Executive whereby the Company would grant to the Executive a non-exclusive, limited license to the Company’s proprietary technology for non-competing uses inside or outside of the entertainment industry on commercially reasonable terms generally available to other licensees; provided that, the Company shall have no obligation to enter into such license agreement if the Company, in its reasonable discretion, determines for business, strategic or any other compelling reason that it is not in the Company’s best interests to enter into such license

 

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agreement.

 

6.                                       Executive’s Representations, Warranties and Covenants.

 

(a)                                  Executive reaffirms that he will continue to be bound by, and will continue to comply with, all of the terms and conditions and covenants in Section 7 of the Employment Agreement and also all terms and conditions of the Employee Invention Assignment and Confidentiality Agreement dated May 26, 2010, as amended on May 16, 2011, attached as Exhibit 2, and Executive must execute the First Amendment to Employee Invention Assignment and Confidentiality Agreement, included in Exhibit 2, on or before the Effective Date as a condition of this Agreement. Executive also agrees to execute the Consulting Agreement, attached hereto as Exhibit 3, on or before the Effective Date as a condition to this Agreement (the “Services Agreement”).

 

(b)                                 Executive represents and warrants to the Company that, as of the Effective Date, Executive has no outstanding agreement or obligation that is in conflict with any of the provisions of this Agreement, or that would preclude Executive from complying with the provisions hereof, and further certifies that Executive will not enter into any such conflicting agreement.

 

(c)                                  Executive represents and warrants to the Company that, as of the Effective Date, Executive has not filed any claim against the Company or its affiliates and has not assigned to any third party any claims against the Company or its affiliates. Executive also acknowledges that he has no work-related injury, illness, disease or condition, and that he has not been unlawfully denied any family or medical leave or otherwise subjected to unlawful interference in that regard.

 

(d)                                 Executive acknowledges that Executive has had the opportunity to fully review this Agreement and, if Executive so chooses, to consult with counsel, and is fully aware of Executive’s rights and obligations under this Agreement.

 

(e)                                  Executive will not at any time during the period of his employment with the Company, during the term of any Services Agreement or at any time thereafter, make (or direct anyone else to make) any disparaging statements (oral or written) about the Company, or any of its affiliated entities, officers, directors, employees, stockholders, representatives or agents, or any of the Company’s products or services or work-in-progress, that are harmful to their businesses, business reputations or personal reputations. For the avoidance of doubt, nothing in this Agreement will prohibit the Executive from speaking, either publicly or privately, about his experiences with the Company, including, without limitation, the experience he had as a member of the team that together built the Company from a small start-up company to a publicly-traded company.

 

(f)                                    Any reference by Executive to Michael Lewis and/or Executive as founder(s) of the Company shall be to Michael Lewis and Executive as co-founders of the Company and Executive shall so advise any third parties when discussing the founding of the Company or otherwise.

 

7.                                       Executive’s Release of Claims. In exchange for the Company’s promises set forth

 

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herein, all of which are good and valuable consideration, Executive hereby covenants not to sue and releases and forever discharges the Company, its owners, parents, subsidiaries, attorneys, insurers, agents, employees, stockholders, directors, officers, affiliates, predecessors and successors of and from any and all rights, claims, actions, demands, causes of action, obligations, attorneys’ fees, costs, damages, and liabilities of whatever kind or nature, in law or in equity, that Executive may have (whether known or not known) (collectively, “Claims”), accruing to Executive as of the Effective Date, that Executive has ever had, including but not limited to Claims based on and/or arising under Title VII of the Civil Rights Act of 1964, as amended, The Americans with Disabilities Act, The Family Medical Leave Act, The Equal Pay Act, The Employee Retirement Income Security Act, The Fair Labor Standards Act, and/or the California Fair Employment and Housing Act; The California Constitution, The California Government Code, The California Labor Code, The Industrial Welfare Commission’s Orders, the Worker Adjustment and Retraining Notification Act, California Labor Code sections 1400-1408, and any and all other Claims Executive may have under any other federal, state or local Constitution, Statute, Ordinance and/or Regulation; and all other Claims arising under common law including but not limited to tort, express and/or implied contract and/or quasi-contract, arising out of or, in any way, related to Executive’s previous relationship with the Company as an employee, consultant and/or director. Furthermore, Executive acknowledges that Executive is waiving and releasing any rights Executive may have under the Older Workers Benefit Protection Act and Age Discrimination in Employment Act of 1967 (“ADEA”), as amended, and that this waiver and release is knowing and voluntary. Executive acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Executive was already entitled. Executive further acknowledges that Executive has been advised by this writing that in accordance with ADEA:

 

(a)                                  Executive should consult with an attorney prior to executing this Agreement;

 

(b)                                 Executive has at least twenty-one (21) days within which to consider this Agreement;

 

(c)                                  Executive has up to seven (7) days following the execution of this Agreement by the Executive to revoke the Agreement by timely providing written notice of revocation to the Company; and

 

(d)                                 This Agreement shall not be effective until the revocation period in Section 7(c) has expired without revocation by Executive.

 

The Company and Executive agree that the release set forth in this Section 7 shall be and remain in effect in all respects as a complete general release as to the matters released. Notwithstanding anything to the contrary herein, the Parties agree that Executive is not waiving any Claims he may have that arise from or are incurred in connection with any of the following matters (collectively, the “Excluded Claims”). (i) the Company’s breach of its obligations under Section 4(a) above; (ii) claims for indemnification under Section 2802 of the California Labaor Code, under the Company’s Certificate of Incorporation, Articles of Incorporation or by-laws, pursuant to that certain Indemnification Agreement (as amended from time to time) dated May 25, 2010 and with an effective date of April 10, 2010, and under any insurance policy of the Company or

 

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the established policies of the Company or any affiliate thereof expressly providing for such indemnity between Executive and the Company or any affiliate thereof; (iii) claims for any vested benefits under the terms of any of the Company’s pension, profit sharing, health, welfare, stock option, restricted stock, stock incentive, deferred compensation, supplemental compensation and any other welfare, benefit or other plan of the Company; (iv) claims for workers’ compensation benefits; and (v) any transactions or agreements entered into, and any occurrences, acts or omissions occurring, after the Effective Date.

 

8.                                       Civil Code Section 1542. Each of Executive and the Company acknowledge that they are familiar with the provisions of California Civil Code Section 1542, which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

Executive, being aware of said Code section, agree to expressly waive any rights Executive may have thereunder (except with respect to Excluded Claims), as well as under any other statute or common law principles of similar effect.

 

9.                                       Company’s Representations, Warranties and Covenants.

 

(a)                                  Executive shall be paid his 2011 bonus at the same time other Executives are paid their bonuses, provided that such payment is approved by the Compensation Committee of the Board of Directors in accordance with the Company’s Management Incentive Plan.

 

(b)                                 During the term of any Consulting Agreement, Executive shall be permitted to keep any computers, cell phones, television screens, and other similar items previously provided to him by Company, provided that Executive shall be required to make any remaining payments on such items.

 

(c)                                  Any reference in future Company publications to Michael Lewis and/or Executive as founder(s) of the Company shall be to Michael Lewis and Executive as co-founders of the Company and Company shall so advise any third parties when discussing the founding of the Company or otherwise.

 

(d)                                 Company, through its senior executives and managers, will not at any time during the period of Executive’s employment with the Company, during the term of any Services Agreement or at any time thereafter, make (or direct anyone else to make) any disparaging statements (oral or written) about Executive that are harmful to his businesses, business reputation or personal reputation.

 

(e)                                  Company shall defend, indemnify and hold harmless Executive with respect to any claim, demand, arbitration or lawsuit (a “Claim”) against Executive arising out of or in connection with Executive’s work for Company as a consultant except in the event of Executive’s gross negligence or intentional misconduct. Company’s obligation to defend,

 

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indemnify and hold harmless pursuant to this Section 9(e) includes, without limitation, payment of any settlement Company has consented to in writing or court-ordered judgment and payment of Executive’s reasonable attorney’s fees and costs (with counsel reasonably acceptable to Company) on an on-going basis (provided that Company shall provide any such advancement of expenses within 30 days following Executive’s written request therefor). Company shall be entitled to participate in the defense of any Claim subject to the indemnification provisions of this Section 9(e). For the avoidance of doubt, this Section 9(e) sets forth the sole and exclusive indemnification in favor of Executive for any Claim arising out of Executive’s work as a consultant to the Company.

 

10.                                 Labor Code Section 206.5. Executive acknowledges that, as of his execution of this Agreement, other than the amounts that are expressly set forth herein to be paid in accordance with this Agreement and his unpaid salary accrued from the Company’s most recent payroll payment and which will be paid at the next Company payroll payment, he has received timely payment in full for all compensation (of any sort, including, but not limited to, wages, bonuses, incentive compensation, stock options and vacation) earned by him during his employment with the Company, and for all reimbursement of expenses (of any sort) incurred by him during his employment with the Company and for which reimbursement would be required.  In light of the payment by the Company of all wages due, or to become due to Executive, California Labor Code Section 206.5 is not applicable to the Parties hereto. That section provides in pertinent part as follows:

 

No employer shall require the execution of any release of any claim or right on account of wages due, or to become due, or made as an advance on wages to be earned, unless payment of such wages has been made.

 

11.                                 Governing Law. This Agreement will be governed by the internal substantive laws, but not the choice of law rules, of the State of California.

 

12.                                 Assignment. This Agreement and all rights under this Agreement will be binding upon and inure to the benefit of and be enforceable by the Parties hereto and their respective owners, agents, officers, stockholders, employees, directors, attorneys, insurers, subsidiaries, parents, affiliates, successors, personal or legal representatives, executors, administrators, heirs, distributes, devisees, legatees, and assigns. This Agreement is personal in nature, and none of the Parties to this Agreement will, without the written consent of the other, assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity; except that the rights and obligations of the Company under this Agreement may be assigned (without the consent of the Executive) to an entity which becomes the successor to the Company as the result of a merger or other corporate reorganization or similar transaction or sale of substantially all the assets to a successor which continues the business of the Company or any other subsidiary of the Company.

 

13.                                 Notices. The terms of Section 11 of the Employment Agreement are also applicable to this Agreement.

 

14.                                 Integration and Interpretation. This Agreement, Exhibits 2 and 3, and the

 

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surviving provisions of the Employment Agreement, represent the entire agreement and understanding between the parties as to the subject matter hereof and supersede all prior agreements whether written or oral including, without limitation, all provisions of the Employment Agreement that are not referenced herein as continuing to be applicable. The terms of this Agreement have been voluntarily agreed to by Executive and Company, and the language used in this Agreement shall be deemed to be the language chosen to express the mutual intent of the Parties. This Agreement shall be construed without regard to any presumption or rule requiring construction against Company or Executive, or in favor of the Party receiving a particular benefit under this Agreement.

 

15.                                 Modification. This Agreement may only be amended in a writing signed by Executive and an authorized representative of the Company and which expressly references that this Agreement is being amended. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by the party against whom enforcement of the change or modification is sought. Failure or delay on the part of either party hereto to enforce any right, power, or privilege hereunder will not be deemed to constitute a waiver thereof. Additionally, a waiver by either party or a breach of any promise hereof by the other party will not operate as or be construed to constitute a waiver of any subsequent breach by such other party.

 

16.                                 Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

17.                                 No Representations. Each Party represents that it has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Neither Party has relied upon any representations or statements made by any other Party hereto which are not specifically set forth in this Agreement. By entering into this Agreement, the Company is not acknowledging or admitting any fault, wrongdoing, or liability on its part in any way.

 

18.                                 Authority. The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Executive represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through Executive to bind them to the terms and conditions of this Agreement. Each Party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.

 

19.                                 Voluntary Execution of Agreement. Executive acknowledges and agrees that this Agreement is an individually-negotiated Agreement and that he is not being separated as a result of any exit incentive program, plan or practice of the Company. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto,

 

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with the full intent of releasing all claims. The Parties acknowledge that:

 

(a)                                  They have read this Agreement;

 

(b)                                 They have been represented in the preparation, negotiation and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;

 

(c)                                  They understand the terms and consequences of this Agreement and of the releases it contains; and

 

(d)                                 They are fully aware of the legal and binding effect of this Agreement.

 

20.                                 Execution in Multiple Counterparts. This Agreement may be executed in multiple counterparts, each of which when together shall be deemed to constitute the executed original, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of the undersigned.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the dates shown below.

 

	
JOSHUA   GREER
    	
 
    	
REALD   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Joshua Greer
    	
 
    	
By:
    	
/s/   Michael V. Lewis
    
	
 
    	
 
    	
 
    	
Michael   V. Lewis
    
	
 
    	
 
    	
 
    	
Chief   Executive Officer
    

 

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EXHIBIT 1

EMPLOYMENT AGREEMENT

 

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EXHIBIT 2

EMPLOYEE INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT

AND FIRST AMENDMENT THERETO

 

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EXHIBIT 3

CONSULTING AGREEMENT

 

13Exhibit 10.45

 

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (the “Agreement”) is made as of the 16th day of May, 2011 by and between RealD Inc. (the “Company”), a Delaware corporation, and Joshua Greer (“Consultant”).  The commencement of consulting services under this Agreement will be July 16, 2011 (the “Effective Date”).

 

R E C I T A L

 

WHEREAS, Company desires to offer Consultant, and Consultant desires to accept, a consulting arrangement to provide services as an independent contractor to Company on the terms and conditions set forth herein;

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                       Services.

 

(a)                                  Performance.  Consultant shall use Consultant’s best efforts to perform the services as set forth on Exhibit A hereto and as otherwise reasonably requested by the Company from time to time (the “Services”).  Consultant shall report to the Company’s Chief Executive Officer.  Consultant shall at all times perform the Services in accordance with professional standards, and in compliance with all applicable laws.  Consultant shall be available to perform and shall devote such time to the performance of the duties assigned to Consultant hereunder as may be necessary to perform the Services.  Consultant shall make himself available to the Company to perform consulting services on an as-needed, best efforts basis as requested by the Company.  Consultant may perform the Services at his home office, at his discretion.  Company shall provide Consultant with reasonable notice if Company would like Consultant to be present at any meeting.  While it is expected that Consultant shall not be required to render more than 15 hours of Services each calendar month, Consultant understands and acknowledges that the time required for the performance of the Services hereunder will vary from week to week, and that Consultant’s time commitment hereunder may vary depending upon the demands of Company.  Notwithstanding the foregoing, Consultant shall not be obligated to perform consulting services at a level exceeding 20% of the average level of bona fide services that Consultant performed for the Company as an employee over the 36 month period immediately preceding the Effective Date.  Executive agrees to provide the Company with at least 3 business days’ advance notice of any vacation or other planned absence in which Executive will be unavailable to render consulting services for the Company for more than 3 consecutive business days during the term of this Agreement.

 

(b)                                 Compensation.  Company shall pay Consultant at a rate of $275,000 per year for the Services provided by Consultant to the Company (irrespective of the number of hours of Services Consultant renders in a month), commencing on the Effective Date and prorated for the applicable calendar month if the Effective Date is after the first of the applicable calendar month or if this Agreement is terminated for any reason prior to the end of a calendar month.  Subject to Section 2(c), pro-rated payments will be made by Company to Consultant within fifteen (15) days of the end of each quarter.

 

 

(c)                                  Expenses.  Subject to receipt of reasonable documentation in accordance with Company’s standard reimbursement policies, Company shall reimburse Consultant for all reasonable business expenses actually incurred by Consultant in connection with Consultant’s provision of the Services hereunder; provided, however, that Consultant shall obtain advance written approval from Company for any expenses that, individually or in the aggregate, exceed $500.00 during any 15-day period.  Executive shall be entitled to travel in the same manner as the CEO and to the same lodging and other accommodations as the CEO.

 

(d)                                 Work Space and Use of Company Facilities and Equipment.  During the term of this Agreement, Company may in its sole discretion make available to Consultant (i) a space in Company’s offices, (ii) use of designated Company facilities and equipment and (iii) use of Company email address (collectively, the “Designated Assets”) for the sole purpose of providing the Services hereunder.  While on Company’s premises and/or while using Company’s facilities or equipment or accessing Company’s internal systems, Consultant will be subject to Company’s policies and procedures applicable to outside consultants regarding conduct and use of Company’s facilities, equipment or internal systems.  Consultant acknowledges that Consultant has received and understands and will fully comply with such policies and procedures.  Consultant’s use of Company’s space, facilities, or equipment are to facilitate Consultant’s Services to Company and nothing in this provision shall constrict the right of Consultant to use Consultant’s own work space, facilities, and equipment.

 

2.                                       Relationship of Parties.

 

(a)                                  Independent Contractor.  The parties acknowledge that Consultant is an independent contractor engaged to perform professional services and nothing herein shall be construed to create a partnership, joint venture, agency or employment relationship between the parties.  Company will have an interest only in the results to be achieved by Consultant under this Agreement, and the manner and method of performing the Services under this Agreement and achieving the desired results shall be under the exclusive control of Consultant.  Consultant shall set Consultant’s own days and hours of operation and Consultant’s performance shall not be subject to supervision or monitoring by Company, except as otherwise provided for in this Agreement.  Nothing in this Agreement shall be construed to restrict the right of Company to use the services of other consultants.  Further, subject to Section 9(b), Consultant may offer its services to the general public.

 

(b)                                 Employment Taxes and Benefits.  Consultant understands and acknowledges it is Consultant’s obligation to pay all self-employment and other taxes in connection with the Services.  Consultant is not entitled to receive any vacation or illness payments, or to participate in any plans, arrangements, or distributions by Company pertaining to any bonus, profit sharing, insurance or similar benefits for Company’s employees, and will not receive any severance or other benefits from Company upon termination or expiration of this Agreement.

 

(c)                                  Other Compensation.  Consultant acknowledges and agrees that upon the termination of this Agreement pursuant to Section 7(e), no further compensation shall be earned and payable to Consultant pursuant to this Agreement and Consultant further waives any rights to such compensation.

 

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3.                                       Property of Company.

 

(a)                                  Definition.  For the purposes of this Agreement, “Designs and Materials”  means all documents, information, designs, materials, procedures, improvements, developments, drawings, notes, inventions and intellectual property made, conceived or developed, in whole or in part, by Consultant alone or with others, resulting from or relating to the Services.

 

(b)                                 Assignment of Ownership.  Consultant hereby irrevocably transfers and assigns any and all of its right, title, and interest in and to Designs and Materials, including but not limited to all copyrights, patent rights, trade secrets and trademarks, to Company.  To the extent consistent with this Agreement and applicable law, all Designs and Materials are works for hire for Company.  Designs and Materials will be the sole property of Company and Company will have the sole right to determine the treatment of any Designs and Materials, including the right to keep them as trade secrets, to file and execute patent applications on them, to use and disclose them without prior patent application, to file registrations for copyright or trademark on them in its own name, or to follow any other procedure that Company deems appropriate.  Consultant shall: (a) disclose promptly and fully in writing to Company all Designs and Materials as they are discovered, learned, created, or developed; (b) cooperate with and assist Company to apply for, and to execute, any applications and/or assignments reasonably necessary to obtain or maintain, any patent, copyright, trademark or other protection for Designs and Materials in Company’s name as Company deems appropriate; and (c) treat all Designs and Materials as “Confidential Information,” as defined below.  The provisions of this Section 3 shall survive any expiration or termination of this Agreement.

 

4.                                       Confidential Information.  Consultant acknowledges that Consultant will acquire information and materials from Company and knowledge about the business, products, experimental work, customers, clients and suppliers of Company and that all such knowledge, information and materials acquired, the existence, terms and conditions of this Agreement, and the Designs and Materials, are and will be the trade secrets and/or confidential and proprietary information of Company (collectively “Confidential Information”).  Notwithstanding the preceding sentence, Confidential Information does not include any information that is or becomes part of the public domain through no fault of Consultant or that Company regularly gives to third parties without restriction on use or disclosure.  Consultant agrees to hold all Confidential Information in strict confidence, not to disclose it to others or use it in any way, commercially or otherwise, except in furtherance of performing the Services, and not to allow any unauthorized person access to it, either before or after expiration or termination of this Agreement.  Consultant further agrees to take all action reasonably necessary and satisfactory to protect the confidentiality of the Confidential Information including, without limitation, implementing and enforcing operating procedures to minimize the possibility of unauthorized use or copying of the Confidential Information, including using at least the same degree of care to avoid improper disclosure or use as it uses with respect to its own confidential or proprietary information.

 

5.                                       Consultant Warranties; Indemnification.

 

(a)                                  Consultant represents and warrants that: (i) Consultant has full power and authority to enter into this Agreement, to carry out its obligations hereunder, and to grant the

 

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license to Company set forth in Section 3 hereof, (ii) Consultant owns all right, title and interest to Consultant’s intellectual property, and (iii) Consultant’s intellectual property does not knowingly infringe or conflict with any intellectual property rights of any third parties.

 

(b)                                 Consultant shall indemnify Company and hold it harmless from and against all actions, claims, damages, losses and expenses, including court costs and reasonable fees and expenses of attorneys, expert witnesses and other professionals, arising out of, resulting from, and/or based upon: (i) any gross negligence or willful conduct of Consultant; (ii) any bodily injury, sickness, disease or death caused by the Services; (iii) any injury or destruction to tangible or intangible property (including computer programs and data) or any loss of use resulting therefrom, caused by the Services; and/or (iv) any violation of any statute, ordinance, or regulation by Consultant.  At Company’s sole option, Consultant shall defend Company against any action or claim by a third party that is covered by the foregoing indemnity.

 

6.                                       Limitation of Liability.  The total aggregate liability of Company under this Agreement is limited to the total amount of the compensation and expenses paid or due under this Agreement.

 

7.                                       Termination and Expiration.

 

(a)                                  The term of this Agreement commences as of the Effective Date and, unless sooner terminated pursuant to this Section 7, terminates on the one (1) year anniversary of the Effective Date.

 

(b)                                 Consultant may terminate this Agreement in the event of a material breach of this Agreement by Company if such material breach continues uncured for a period of ten (10) business days after written notice.  This Agreement terminates automatically upon the Consultant’s death.

 

(c)                                  Company or Consultant may terminate this Agreement at any time, for any reason or no reason, by giving ten (10) calendar days prior written notice to the other party.

 

(d)                                 The election by Company or Consultant to terminate this Agreement in accordance with its terms will not be deemed an election of remedies, and all remedies provided by this Agreement or available at law or in equity survive any termination or expiration.

 

8.                                       Effect of Expiration or Termination.  Upon the expiration or termination of this Agreement for any reason:

 

(a)                                  Each party will be released from all obligations to the other under this Agreement arising after the date of expiration or termination; provided, however, that the covenants, agreements, representations, warranties, provisions, and designations contained or made in Sections 1, 2, 3, 4, 5, 7, 8 and 9 of this Agreement survive any termination or expiration hereof; and

 

(b)                                 Consultant shall promptly notify Company of all Confidential Information, including but not limited to, the Designs and Materials, in Consultant’s possession and, at the expense of Consultant and in accordance with Company’s instructions, shall promptly

 

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deliver (and irretrievably delete to the extent not deliverable) to Company, and cease any use of, all Confidential Information and all Designated Assets, without retaining any copy or representation thereof.

 

9.                                       Additional Covenants.

 

(a)                                  [Reserved.]

 

(b)                                 Consultant understands and acknowledges that the obligations regarding solicitation set forth in the Employee Invention and Assignment Agreement between Consultant and Company dated as of May 26, 2010, as amended, are necessary and reasonable to protect legitimate business interests, including trade secrets, confidential information, and relationships with prospective and existing customers and the goodwill associated with Company’s business, and are provided by Consultant as further inducement for Company to enter into this Agreement.

 

(c)                                  Competitive Activities; Non-Exclusivity.  The parties acknowledge and agree that this Agreement is a non-exclusive engagement for Consultant’s services and that Consultant shall have the right to engage in any other gainful activities and business; provided, however, that, during the term of this Agreement, Consultant shall not, directly or indirectly, engage in any activities or business, or engage or participate in or provide services to any business, conflicting or competitive with the activities or business of Company without the express prior written approval of Company.  Consultant shall provide Company written notice prior to any such engagement, participation or provision.  Company shall have the right to immediately terminate this Agreement upon or after receiving such notice of any such engagement, participation or provision.  Consultant understands and acknowledges that this obligation regarding competitive activities is necessary and reasonable to protect legitimate business interests, including trade secrets, confidential information, and relationships with prospective and existing customers and the goodwill associated with Company’s business, and is provided by Consultant as further inducement for Company to enter into this Agreement.

 

(d)                                 Provision of Services.  Consultant shall be the sole provider of the Services pursuant this Agreement and that Consultant shall not delegate or subcontract any of Consultant’s duties under this Agreement except in accordance with Section 10(a).

 

10.                                 General.

 

(a)                                  Assignment.  Neither Company nor Consultant may assign this Agreement and its rights and obligations to any other entity without the approval of the other party, which approval shall not unreasonably be withheld.  Any attempted assignment or delegation in violation of this provision is void.  Despite Company’s consent, no assignment releases Consultant of any of Consultant’s obligations or alters any of Consultant’s obligations to be performed under this Agreement.

 

(b)                                 Authority and Separate Obligations of Parties.  Except as otherwise expressly provided by this Agreement, each party shall be entirely liable for its own debts and obligations.  The employees and agents of one party shall not be, or be construed to be, the employees or agents of the other party for any purpose whatsoever.  As Consultant is not an employee of Company or any entity affiliated with Company, Company and its affiliates shall 

 

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not withhold any taxes from any amounts paid to Consultant.  Consultant has no authority to enter into any agreement with any person or entity in the name of or on behalf of the Company and has no authority by virtue of this Agreement to bind or subject Company to any obligations or liabilities whatsoever.  Company has the absolute right in all events to accept or not accept in whole or in part any or all of Consultant’s advice or recommendations.  Nothing in this Agreement shall cause either party to be responsible for any action, omission, or inaction of the other party.

 

(c)                                  Equitable Remedies.  Because the Services are personal and unique and because Consultant will have access to Confidential Information of Company, Company is entitled to enforce this Agreement and any of its provisions by injunction, specific performance and/or other equitable relief without prejudice to any other rights and remedies that Company may have for a breach of this Agreement, without the need for the posting of security and even if injunctive relief is sought to remedy a past, existing or threatened breach of contract.

 

(d)                                 Attorneys’ Fees.  If any action is necessary to enforce the terms of this Agreement, the substantially prevailing party will be entitled to reasonable attorneys’ fees, costs and expenses in addition to any other relief to which such prevailing party may be entitled.

 

(e)                                  Governing Law; Venue; Severability.  This Agreement is to be governed by and construed in accordance with the internal laws of the State of California excluding that body of law pertaining to conflict of laws.  Any action or proceeding arising out of or relating to this Agreement must be brought, if at all possible, in the state or federal courts within California, and the parties irrevocably agree to the jurisdiction and venue of such courts for such purposes.  If any provision of this Agreement is for any reason found to be unenforceable, the remainder of this Agreement will continue in full force and effect.

 

(f)                                    Notices.  All notices and other communications required or permitted hereunder shall be in writing and be sent by facsimile or electronic mail, with confirmed transmission and receipt or mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand or by messenger to the address specified on the signature page of this Agreement or such other address as the receiving party specifies in writing, and will be effective upon its mailing as specified.

 

(g)                                 Jointly Drafted; Review by Counsel.  The parties have participated jointly in the negotiation and drafting of this Agreement and have had the opportunity to review the Agreement with counsel of their choosing.  In the event an ambiguity or question of intent or interpretation arises, no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

 

(h)                                 Complete Understanding; Modification.  This Agreement constitutes the complete and exclusive understanding and agreement of the parties and cancels and supersedes all prior understandings and agreements including, without limitation, any prior employment agreements between the parties, whether written or oral, express or implied, with respect to the subject matter hereof.  Any waiver, modification or amendment of any provision of this Agreement will be effective only if in writing and signed by the parties hereto.

 

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(i)                                     Counterparts.  This Agreement may be executed by facsimile signatures and in counterparts, each of which shall constitute an original, and all of which shall constitute one and the same instrument.

 

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties have signed this Agreement as of the Effective Date.

 

	
Company:
    	
 
    	
Consultant:
    
	
 
    	
 
    	
 
    
	
REALD   INC.
    	
 
    	
JOSHUA GREER
    
	
 
    	
 
    	
 
    
	
By:   /s/ Michael V. Lewis
    	
 
    	
By: /s/ Joshua Greer
    
	
 
    	
 
    	
 
    
	
Name:   Michael V. Lewis
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title:   CEO
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
100   N. Crescent Drive, Suite 120
    	
 
    	
 
    
	
Beverly   Hills, California 90210
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Federal   Tax I.D. Number:
    
	
 
    	
 
    	
 
    

 

8

 

EXHIBIT A

 

SERVICES TO BE PROVIDED

 

Consultant shall provide services to Company at the request of the Chief Executive Officer as it relates to the development and direction of the Company’s technology, business and business operations, in the following areas, including but not limited to:

 

1.                                       Company technology research and development activities, strategies and direction in all existing and future areas where the Company does, or may do, business;

 

2.                                       Product development, design and roadmap in all existing and future areas where the Company does, or may do, business;

 

3.                                       Strategic advice regarding stereoscopic and other related technologies in all existing and future areas where the Company does, or may do, business; and

 

4.                                       Such other matters as the Chief Executive Officer may reasonably request.

 

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