Document:

Exhibit 10.1

Employment Contract

 

TGC INDUSTRIES, INC.

 

(as Amended and Restated

effective March 1, 2012)

 

This Contract is entered into between TGC Industries, Inc., a Texas corporation (hereafter called “Company”), and Wayne A. Whitener (hereafter called “Employee”).

 

Company and Employee previously entered into an Employment Contract dated to be effective August 1, 2005, which was subsequently amended by Amendment No. 1 thereto dated to be effective July 15, 2006, and Amendment No. 2 thereto dated to be effective May 1, 2007, and an Employment Contract dated effective September 11, 2008.  The purpose of this Contract is to completely replace and supersede any earlier Employment Contract (or amendment thereto).

 

Company is engaged in the business of providing seismic data acquisition services primarily to onshore oil and natural gas exploration and production companies.  Company desires to retain the services of Employee as one of its key executives, and Employee is willing and able to perform in that capacity.

 

Accordingly, in consideration of the mutual covenants herein contained, the parties to this Contract agree as follows:

 

1.                                Employment.  Company hereby continues the employment of Employee, and Employee hereby accepts such employment from Company, pursuant to those provisions herein contained.

 

2.                                Term of Employment  Subject to the provisions for termination hereafter provided, this Contract shall be for a term of three (3) years from the effective date set forth above (the “Initial Term”).  This Contract may be renewed for successive one (1) year terms if, 60 days prior to the initial expiration date or any subsequent expiration date, the Company and Employee mutually agree to a renewal of the Contract (the Initial Term and any successive terms, collectively referred to herein as the “Term”).

 

3.                                Duties of Employee.  Employee is employed as President and Chief Executive Officer of Company.  Employee shall devote substantially all of his time, attention, best efforts, and energy to the business of Company, and may not, during the term of this Contract, be engaged in any other material business activities which interfere with his ability to carry out his obligations hereunder.  However, such restriction shall not be construed as preventing Employee from making investments in (non-competitive) business enterprises so long as Employee will not be required to render personal services to any such business enterprises during Employee’s normal business hours with Company.

 

 

4.                                      Compensation.  To the extent Employee continues to comply with all of the provisions of this Contract (including the covenants referenced in paragraph 9 below and contained in Exhibits “B” and “C” attached hereto):

 

a.                                      Base Salary.  Company shall pay to Employee a minimum base salary at the annual rate of $350,000.00, payable in equal payments consistent with Company’s then existing payroll practices.  There shall be deducted from such minimum base salary payments federal withholding and social security taxes.

 

b.                                      Performance Bonus.  At the end of each calendar year, Company’s Board of Directors (or the Compensation Committee or any other appropriate Committee designated by the Board of Directors) shall make a determination as to whether the results of Company’s operations for such preceding calendar year warrant the payment to Employee of a special performance bonus.  If so, Employee shall be entitled to receive, in addition to the base salary referred above, a special performance bonus in such amount as is determined by the Board of Directors in the exercise of their sole discretion (up to a maximum of the minimum base salary then in effect, with the understanding that the Board of Directors can increase this maximum if special circumstances so warrant) payable no later than March 15th of the year following the calendar year to which the bonus relates.

 

c.                                       Increases.  The Board of Directors of Company may, at any time, elect to increase Employee’s Base Salary above the amount referred to in subparagraph “a.” above (in which event the ceiling on Employee’s Performance Bonus under subparagraph “b.” above shall be similarly increased).

 

d.                                      Change In Control.  In the event of a “Change in Control,” which includes any of the events described in Exhibit A, with regard to the Company, whether identified as a change in ownership of the corporation or change in the ownership of a substantial portion (at least sixty percent (60%)) of the corporation’s assets, during the Term of this Contract, and within 90 days of the Change in Control his employment is terminated by the Company without cause or by Employee for good reason, in lieu of any amounts due upon termination of employment under paragraph 8.c. or 8.d. below and subject to any delay required by paragraph 8.c.(3) and reduction as otherwise provided by this paragraph 4.d., Employee will receive a lump sum payment within 30 days of the date his employment terminates in an amount equal to 2.99 times his then present annual base salary.  Notwithstanding the foregoing,  in the event the Company determines that any payment or distribution made, or benefit provided, by Company to or for the benefit of Employee under this paragraph 4.d. (whether paid or payable or distributed or distributable or provided pursuant to the terms hereof or otherwise) would constitute a “parachute payment” as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then the benefits payable pursuant to this paragraph 4.d. shall be reduced so that the aggregate present value of all payments in the nature of compensation to (or for the benefit of) Employee that are contingent on a change of control (as defined in Section  280G(b)(2)(A) of the Code) is One Dollar ($1.00) less than the amount which Employee could receive without being considered to have received any parachute payment (the amount of this reduction in the benefits payable is referred to herein as the “Excess Amount”).  The determination of the amount of any reduction required by this paragraph 4.d. shall be made by an independent accounting firm

 

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selected by Company, and such determination shall be conclusive and binding on the parties hereto.

 

5.                                      Fringe Benefits.  During the period that Employee continues to comply with all of the provisions of this Contract, Employee shall receive the following fringe benefits:

 

a.                                      Medical Benefits.  Employee and his dependent family members shall be covered under the same group hospitalization, accident, and major medical plans as Company shall provide from time to time for other officers; provided, however, that Employee shall pay the same portion of the cost thereof as may be required from Company’s officers generally;

 

b.                                      Paid Vacation.  Each calendar year (or portion thereof), Employee may take a vacation of four (4) weeks during which time his compensation shall be paid in full.  In the event Employee’s employment is terminated for any reason other than “for cause” as defined herein, Employee will receive payment for any and all accrued, unused vacation;

 

c.                                       Automobile.  Company shall provide an automobile for Employee’s use in connection with the services to be rendered by Employee to Company.  Company shall pay or reimburse Employee for maintenance and repair expenses of the automobile upon submission of vouchers or itemized lists of such expenses prepared in compliance with Company’s policy.  For so long as Company owns (or leases) the automobile, Company shall insure the automobile with adequate automobile insurance company coverage.  Company agrees that Employee shall be designated as an additional insured on any Company provided policy providing liability insurance coverage.  In the event the automobile is damaged or destroyed by reason of accident, theft, vandalism, or otherwise, Employee will not have any liability to Company for any such loss or damage (including out-of-pocket deductibles); and

 

d.                                      Other Benefits.  No provision of this Contract shall preclude Employee from participating in any fringe benefit plan now in effect or hereafter adopted by Company, but Company shall be under no obligation to provide for his participation in, or to institute, any such plan or to make any contribution under any such plan, unless such opportunities are provided to all Company employees as a group, or to all of Company’s senior officers as a group.

 

6.                                      Business Expenses.  Employee may incur reasonable expenses in connection with the promotion of Company’s business including expenses for entertainment, travel, and similar items.  Company agrees to reimburse Employee for all such reasonable expenses upon the presentation by Employee, from time to time as required by Company, of an itemized account of such expenditures; provided, however, Employee shall not expend any sums in excess of those amounts permitted by the Code, without prior written approval from Company’s Board of Directors.

 

7.                                      Key-Man Insurance.  The parties agree that Company shall continue to own (and pay for) life insurance on Employee’s life in the amount of one million dollars ($1,000,000).  Employee agrees that he shall, at Company’s request, submit to such medical examinations, supply such information, and execute such documents as may be requested by the insuring company or companies.  It is agreed and understood that if Employee dies during the term of this Contract, the full amount of the proceeds payable under any such policy will be receivable solely by Company.

 

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8.                                      Termination of Employment.

 

a.                                            Notice/Date of Termination.  Company or Employee may at any time terminate this Contract as provided herein.  Subject to the provisions herein, for a termination by Company “for cause” no advance notice of termination is required.  For a termination by the Employee for good reason, Employee shall provide at least fifteen (15) days’ advance notice.  For a termination by Company for other than cause or by Employee other than for “good reason,” the party terminating this Agreement shall provide at least thirty (30) days’ advance notice.  In the event of termination by the Company for other than cause, Company may elect to require Employee to continue his employment during some or all of the notice period, or may excuse Employee from his duties.  In the event of termination by Employee for other than “good reason,” Company can require Employee to continue his employment during the notice period, or may excuse Employee from providing services during the notice period, but will only be obligated to pay Employee for any days actually worked during the notice period.  Employee shall leave the premises no later than the date as is specified in any notice of termination (the “Date of Termination”).

 

b.                                            By Company For Cause.  If termination by the Company is ‘‘for cause,” Company will have no obligation to pay to Employee any compensation or fringe benefits following the Date of Termination (unless otherwise required under applicable law).  For purposes of the preceding sentence, the phrase ‘‘for cause” will be deemed to mean:

 

(1)                                 absence from Company’s offices, physical or mental illness, or any other reason, for any successive period of sixty-one (61) business days, or for a total period of ninety (90) business days in any one of Company’s fiscal years (except that any vacation periods, travel on Company business, or leaves of absence specifically granted by Company’s Board of Directors shall not be considered as periods of absence from employment).  Provided, however, notwithstanding what has just been stated, in no event may any such absence constitute ‘‘for cause” if this would conflict with any state or federal law in effect at the time;

 

(2)                                 Employee’s commission of an act of gross negligence in the performance of his duties or obligations hereunder;

 

(3)                                 Employee’s commission of any act of fraud, malfeasance, disloyalty, or breach of trust against the Company, or Employee’s failure to observe any covenant referenced in paragraph 9 below or contained in Exhibits “B” or “C” hereto;

 

(4)                                 Employee’s refusal, or substantial inability, to perform the duties assigned in good faith to him pursuant to paragraph 3 hereof;

 

(5)                                 Employee dies or gives affirmative indication in writing, in the opinion of a majority of Company’s Board of Directors (i.e., greater than 50%), that he no longer intends to abide by the terms of this Contract; or

 

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(6)                                 Employee is guilty of acts of moral turpitude or dishonesty in Company’s affairs, gross insubordination or the equivalent, or Employee violates, or fails to comply with, any of the material provisions of this Contract.

 

The Company will provide Employee notice of the specific reason for any termination for cause.  Company will provide thirty (30) days’ notice and opportunity to cure prior to any termination for cause based on subparagraph b(4).

 

c.                                       By Company Other Than For Cause.  Except as otherwise provided by paragraph 4.d. above, if such termination is based on any reason other than ‘‘for cause”:

 

(1)                                 Severance.  Company shall be obligated to pay to Employee his base salary during the remainder of the Term of this Contract, (on a monthly basis at the same rate as payable immediately before the Date of Termination) and (ii) no later than March 15 following the calendar year during which occurred the event triggering such Date of Termination, Company shall pay to Employee his Weighted Proportionate Share of the special performance bonus referred to in paragraph 4.b. above.  For this purpose, Employee’s “Weighted Proportionate Share” for a calendar year equals the sum of the following amount calculated for each quarter (or portion of a quarter) that Employee is employed during such year: (A) the special performance bonus opportunity under paragraph 4.b. for the calendar year; multiplied by the (B) Quarterly Percentage; multiplied by (C) the number of calendar days Employee was employed in the quarter divided by the total number of calendar days in the quarter.  For this purpose “Quarterly Percentage” equals 50% for the first calendar quarter, 10% for the second calendar quarter, 15% for the third calendar quarter, and 25% for the fourth calendar quarter.  By way of example, if Employee was eligible for a $100,000 special performance bonus under paragraph 4.b. for a calendar year, and Company terminates Employee’s employment for a reason other than “for cause” on June 1 of such year, Employee would receive a special performance bonus equal to $56,703.30, calculated as follows: (1) 50% x $100,000 x 90/90 [$50,000] plus (2) 10% x $100,000 x 61/91 [$6,703.30].

 

(2)                                 Automobile.  If, at the time of termination, Company was providing an automobile to Employee under paragraph 5.c. above, then, for a consideration of Ten Dollars ($10.00) cash paid by Employee to Company, the following shall apply: (i) if Company owned the automobile, Company shall transfer the title (free and clear of any liens or other encumbrances) to Employee (along with any insurance coverage [if assignable]); and (ii) if Company was leasing such automobile, Company shall assign to employee all of its right, title, and interest in and to such lease. Such transfer or assignment shall be completed by the Company not later than two and one-half (2 1/2)  months after the end of the calendar year in which the Date of Termination occurs.  EMPLOYEE ACKNOWLEDGES THAT THE DIFFERENCE IN THE FAIR MARKET VALUE OF THE AUTOMOBILE ON THE DATE OF TRANSFER OVER THE CONSIDERATION PAID BY THE EMPLOYEE SHALL BE TAXABLE TO EMPLOYEE AS COMPENSATION INCOME AND BE SUBJECT TO EMPLOYMENT TAX WITHHOLDING REQUIREMENTS.

 

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(3)                                 Key Employee. Sec. 416(i)  of the Code defines “key employee” as meaning an employee who, at any time during the year, is: (i) an officer having an annual compensation greater than $130,000 (as, from time to time, indexed); (ii) a five percent owner of the employer; or (iii) a one percent owner of the employer having an annual compensation from the employer of more than $150,000.  Sec. 409A of the Code provides that deferred compensation benefits payable as a result of termination of employment cannot be made to “key employees” of publicly-traded corporations or their subsidiaries prior to the date that is six (6) months after the employee’s separation from service. Accordingly, notwithstanding what is otherwise stated in this subparagraph (c), in the event any of such payments are to be made as a result of Employee’s termination of employment at a time when Employee is a “key employee” (as defined above) of Company, then the amount so owing shall accrue but shall not be physically paid until at least six (6) months following Employee’s separation from service (but only to the extent required under Sec. 409A of the Code and authoritative guidance thereunder).

 

(4)                                 Notwithstanding what is stated in this subparagraph (c), in the event that any of such payments under this subparagraph (c) are subject to Sec. 409A of the Code, the payment of such amounts will be modified in order to be exempt from Sec. 409A (to the extent possible).  The parties understand and agree that this Contract will be amended as needed in order to specify the particular payment’s requirements and limitations as modified. For example, in the event that, at the time of Employee’s termination of employment, he is deemed to be a “key employee” (see subparagraph “(c)(3)” above), then the full amount of deferred compensation which could not be paid during the first six (6) months following the Date of Termination shall be paid in the seventh (7th) month following the Date of Termination. However, in the event of any such modification and/or amendment which has the effect of reducing the economic benefit receivable by Employee under this Contract, Company shall pay to Employee a reimbursement amount which will have the effect of offsetting (on an after-tax basis) the amount of such economic benefit lost.

 

(5)                                 Each payment under this Agreement that is subject to Sec. 409A of the Code shall be considered a separate payment for purposes thereof.

 

(6)                                 Employee shall not be required to mitigate the amount of any payment provided for in this subparagraph (c) by seeking other employment or otherwise, nor shall the amount of any payment provided for in this subparagraph (c) be reduced by any compensation earned by Employee as the result of self-employment or employment by another employer.

 

(7)                                 Failure to renew this Contract for a successive one (1)  year term pursuant to paragraph 2 shall not constitute a termination by Company other than “for cause” or trigger the rights or obligations of this paragraph 8(c).

 

d.                                      By Employee For Good Reason.  Employee may terminate this Contract for “good reason” including (1)  the Company’s material breach of this Agreement (including, but not limited to failure to timely pay any amounts due); or (2) the Company’s assignment to Employee of any duties materially inconsistent with Employee’s position, authority, duties or

 

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responsibilities contemplated herein; or (3) a Change in Control in which Employee elects not to remain with the Company.  If Employee terminates this Contract for “good reason,” he will receive either the same compensation and benefits he would receive if he was terminated by the Company without Cause as set forth in subparagraph 8.c., or the amount set forth in subparagraph 4.d. above, as applicable.

 

e.                                       By Employee For Other Than Good Reason.  If Employee terminates this Contract for other than “good reason,” Company will have no obligation to pay Employee any compensation or fringe benefits following the Date of Termination (unless otherwise required under applicable law).

 

f.                                        Non-Renewal.  If the parties fail to renew this Contract for a successive one (1) year term pursuant to paragraph 2, Company will have no obligation to pay Employee any compensation or fringe benefits following the Date of Termination (unless otherwise required under applicable law), except as otherwise expressly provided by this paragraph 8.f. However, notwithstanding this provision, no later than March 15 following the calendar year during which this Agreement expires, Company shall pay to Employee his Weighted Proportionate Share (as defined in paragraph 8.c.1.) of the special performance bonus referred to in paragraph 4.b. above.

 

9.                                      Disclosure of Confidential Information; Covenant Not To Compete.  Company possesses secret and confidential equipment, techniques, processes, procedures, technical data and information, and customer lists used or intended for utilization in its operations of which Employee has obtained or may obtain knowledge, and Company would suffer serious harm if this confidential information were disclosed or if Employee used this information to compete against Company.  Further, Employee in the performance of services hereunder may develop or conceive new and additional inventions and improvements with respect to such matters.  Accordingly, Employee hereby agrees that simultaneously with the execution of this Contract he shall execute and deliver to Company, and thereafter abide by, the terms of a “Confidentiality Agreement and Covenant Not to Compete” and “Disclosure and Invention Agreement,” copies of each of which are attached hereto as Exhibits “B” and “C” and incorporated herein by reference.

 

10.                               Remedies.  Employee agrees that in the event of his material breach of his covenants and agreements contained or referenced in this Contract, Company shall be entitled to obtain injunctive or similar relief from a court of competent jurisdiction.  The covenants contained in Exhibits “B” and “C” hereof shall be construed as agreements independent of any other agreements between Company and Employee, and the existence of any claim or cause of action of Employee against Company, whether predicated on this Contract or otherwise, shall not constitute a defense to the enforcement by Company of those covenants and agreements.  The successful party in any dispute concerning this Contract shall be entitled to reasonable attorneys’ fees and related legal costs in the event of a breach, or attempted breach, of such covenants by the other.  The remedies of Company and Employee under this Contract are cumulative and will not exclude any other remedies to which any party may be entitled hereunder, including a right of offset, whether at law or in equity.

 

11.                               Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such noticed or communication is delivered via facsimile prior to 5:30 p.m. (Dallas, Texas time); (b) the next business day after the date of transmission, if

 

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such notice or communication is delivered via facsimile on a day that is not a business day or later than 5:30 p.m. (Dallas, Texas Time); (c) the second business day following the date of mailing, if sent by U.S. nationally recognized overnight courier service; or (d) upon actual receipt by the party to whom such notice is required to be given.  The addresses for such notices and communications are as follows:

 

If to Company:

 

Dr. Allen T. McInnes

4532 7th Street

Lubbock, Texas 79416

Facsimile: 806.742.1572

 

With copy to:

 

Haynes and Boone, LLP

201 Main Street, Suite 2200

Fort Worth, Texas 76102

Attn: Rice M. Tilley, Jr., Esq.

Facsimile: 817.348.2384

 

If to Employee:

 

Wayne Whitener

49 Sunrise Circle

Pottsboro, Texas 75076

Facsimile: 972.424.3943

 

Either party hereto may change the address to which any such notice is to be addressed by giving notice in writing to the other party of such change.

 

12.                               Assignment.  Neither Employee nor anyone claiming under him may commute, encumber, or dispose of the right to receive benefits hereunder.  Such right to receive benefits hereunder is expressly declared to be non-assignable and non-transferable by Employee, and in the event of any attempted assignment or transfer, Company shall have no further liability hereunder; provided, however, the foregoing shall not apply to assignments by operation of law, such as to a guardian or to an executor of Employee’s estate.

 

13.                               Waiver.  The waiver by Company of Employee’s breach of any provision hereof shall not operate or be construed as a waiver of any subsequent breach by Employee.

 

14.                               Binding Effect.  This Contract shall be binding upon the parties hereto and their heirs, successors, executors, administrators, personal representatives, and (except as provided in paragraph 12) assigns.

 

15.                               Survival of Provisions.  All provisions of this Contract, including all representations, warranties, covenants, and agreements contained or referenced herein, will survive the execution and

 

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delivery hereof and any investigation of the parties with respect thereto. The provisions of paragraphs 8 through 22, and Exhibits “B” and “C” will survive the termination of this Contract.

 

16.                               Validity.  If any provision of this Contract is held by a court of law to be illegal or unenforceable, the remaining provisions of the Contract will remain in full force and effect.  In lieu of such illegal or unenforceable provision, there shall be added automatically as a part of this Contract a provision as similar in terms to such illegal or unenforceable provision as may be possible and be legal and enforceable.

 

17.                               Amendments.  This Contract may be amended at any time and from time to time in whole or in part by an instrument in writing setting forth the particulars of such amendment and duly executed by Company and Employee.

 

18.                               Duplicate Originals.  This Contract has been executed in duplicate originals, each of which for all purposes is to be deemed an original, and all of which constitute, collectively, one agreement; but in making proof of this Contract, it will not be necessary to produce or account for more than one such duplicate.

 

19.                               Captions.  The captions or section headings of this Contract are provided for convenience and shall not limit or affect the interpretation of this Contract.

 

20.                               Governing Law.  This Agreement has been made in, and its validity, interpretation, construction, and performance shall be governed by and be in accordance with, the laws of the State of Texas, without reference to its laws governing conflicts of law.  Each party hereby irrevocably agrees that any legal action or proceedings with respect to this Agreement may be brought in the courts of the State of Texas, or in any United States District Court of Texas, and, by its execution and delivery of this Agreement, each party hereby irrevocably submits to each such jurisdiction and hereby irrevocably waives any and all objections which it may have as to venue in any of the above courts.  Each party further consents and agrees that any process or notice of motion or other application to either of said Courts or any judge thereof, or any notice in connection with any proceedings hereunder, may be served inside or outside the State of Texas by registered or certified mail, return receipt requested, postage prepaid, and be effective as of the receipt thereof, or in such other manner as may be permissible under the rules of said Courts.

 

21.                               Legal Fees and Expenses.  The Company shall pay all reasonable legal fees and other reasonable expenses reasonably incurred by Employee in the negotiation and execution of this Contract up to $5,000.00

 

22.                               Complete Understanding.  This Contract (including the attached Exhibits A, B and C) is the entire agreement between the parties with respect to the subject matter hereof, and fully supersedes any and all prior agreements, understandings, representations, or inducements between the parties, whether oral or written, pertaining to the subject matter of this Agreement, except as otherwise expressly provided or referenced here.  Employee represents and acknowledges that in executing this Contract, Employee does not rely, and has not relied, upon any oral or written agreements, understandings, promises, inducements, or representation(s) by Company or its agents except as expressly contained in this Contract and Employee expressly disclaims any reliance on any prior oral or written agreements, understandings, promises, inducements, or representations in

 

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entering into this Contract.  Employee agrees that Employee has used his own judgment in executing this Contract.

 

23.                               Section 409A Compliance. Each payment under this Agreement is intended to be exempt from Sec. 409A of the Code or in compliance with Sec. 409A of the Code, and the provisions of this Agreement will be administered, interpreted and construed accordingly.  Each payment hereunder subject to Sec. 409A of the Code shall be considered a separate payment for purposes thereof.  All reimbursements or provision of in-kind benefits pursuant to this Agreement shall be made in accordance with Treas. Reg. § 1.409A-3(i)(1)(iv) such that the reimbursement or provision will be deemed payable at a specified time or on a fixed schedule relative to a permissible payment event.  Specifically, the amount reimbursed or in-kind benefits provided under this Agreement during one taxable year may not affect the amounts reimbursed or provided in any other taxable year (except that total reimbursements may be limited by a lifetime maximum under a group health plan), the reimbursement of an eligible expense shall be made on or before the last day of the taxable year following the taxable year in which the expense was incurred, and the right to reimbursement or provision of in-kind benefit is not subject to liquidation or exchange for another benefit.

 

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IN WITNESS WHEREOF, the parties have executed this Contract to be effective March 1, 2012.

 

 

	
COMPANY:
    	
 
    	
EMPLOYEE:
    
	
 
    	
 
    	
 
    
	
 
    	
TCG   INDUSTRIES, INC.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Allen T. McInnes
    	
 
    	
 
    	
/s/   Wayne A. Whitener
    
	
 
    	
 
    	
Dr.   Allen T. McInnes, Presiding Director
    	
 
    	
 
    	
 
    	
Wayne   A. Whitener
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
49   Sunrise Circle
    
	
 
    	
 
    	
Date:   April 13, 2012
    	
 
    	
 
    	
 
    	
Pottsboro,   Texas 75076
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
Date:   April 12, 2012
    

 

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Exhibit “A”

to

Employment Contract — “Change in Control”

 

For purposes of determining whether a “Change in Control” has occurred, a “Change in Control” is defined to include any one or more of the following:

 

I.                                         Change in the ownership of a corporation.

 

A change in the ownership of a corporation occurs on the date that anyone person, or more than one person acting as a group,(1) acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of such corporation.  However, if any one person, or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of a corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation (or to cause a change in the effective control of the corporation). An increase in the percentage of stock owned by anyone person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock.  This applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in such corporation remains outstanding after the transaction.

 

 

II.                                     Change in the ownership of a substantial portion of a corporation’s assets.

 

(A)                              In general.  Change in the ownership of a substantial portion of a corporation’s assets. A change in the ownership of a substantial portion of a corporation’s assets occurs on the date that any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or person) assets from the corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions.  For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

 

(B)                            Transfers to a related person.

 

(1) There is no change in control event when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer.  A transfer of assets by a corporation is not treated as a change in the ownership of such assets if the assets are transferred to -

 

(i)                                     A shareholder of the corporation (immediately before the asset transfer) in exchange for or with respect to its stock;

 

(1)  For purposes of this Exhibit, a “group” is as such term as is used in Section 13(d) of the Securities and Exchange Act of 1934, as amended.

 

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(ii)                                  An entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the corporation;

 

(iii)                               A person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding stock of the corporation; or

 

(iv)                              An entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in “(iii)” immediately preceding.

 

(2) A person’s status is determined immediately after the transfer of the assets.  For example, a transfer to a corporation in which the transferor corporation has no ownership interest before the transaction, but which is a majority-owned subsidiary of the transferor corporation after the transaction is not treated as a change in the ownership of the assets of the transferor corporation.

 

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Exhibit “B”

to

Employment Contract

 

Confidentiality Agreement and

Covenant Not To Compete

 

Wayne A. Whitener (hereafter called “Employee”)  has entered into an Employment Contract with TGC Industries, Inc., a Texas corporation (hereafter called “Company”), which is in the business of providing seismic data acquisition services primarily to onshore oil and natural gas exploration and production companies.

 

By signing this Agreement, Employee acknowledges his understanding of the following:

 

A.                                   All companies have information, generally not known outside the company, called “confidential information.”  All companies must conduct their businesses through their employees, and consequently many employees must have access to confidential information.  At times Employee himself may generate confidential information as a part of his job.  Company shall provide “confidential information” to Employee in connection with Employee’s employment;

 

B.                                     The phrase “confidential information” as used in this Agreement includes information known as, referred to, or considered to be, trade secrets, and comprises, without limitation, any technical, economic, financial marketing, computer program, computer software, computer data (regardless of the medium on which they are stored), computer source and object programs or codes, job operating control language procedures, data entry utility programs, and miscellaneous utilities, disk record layouts, flow charts, data entry input forms, operations and installation instructions, report samples, data files, printouts, or other information about Company or its business which is not common knowledge among competitors or other companies who might like to possess such confidential information or might find it useful.  Some examples of confidential information include customer lists, price lists, details of training methods, new products or new uses for old products, refining technology, contracts, and licenses, purchasing, accounting, long-range planning, business plans, financial plans and results, computer programs and operating manuals, computer source codes, personnel information and any other information affecting or relating to the business of Company, its manner of operation, its plans or processes.  This list is merely illustrative, and the confidential information covered by this Agreement is not limited to such illustrations; and

 

C.                                     Company’s confidential information, including information referred to as, known as, or considered to be, trade secrets, represents the most important, valuable, and unique aspect of Company’s business, and it would be seriously damaged if Employee breached the position of confidential trust in which Company has placed him by disclosing such confidential information to others or by departing and taking with him the aforesaid unique information compiled over a period of time for the purpose of himself competing against Company or disclosing such information to Company’s competitors, now existing or hereafter formed.

 

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Accordingly, the Company and Employee agree as follows:

 

1.                                       Confidential information, including information referred to as, known as, or considered to be, trade secrets, is proprietary to Company.  The Company shall provide Employee with “confidential information.”  Employee agrees to hold such information in strictest confidence, and not to make use thereof except in performance of duties under the Employment Contract.  Whether during or after his employment with Company, Employee may not disclose to others (excepting Company officers or employees having a need to know who have also signed a written agreement expressly binding themselves not to use or disclose it) any confidential information originated, created by, known to, or acquired by Employee while employed by Company.  Employee further agrees during such period not to remove from the premises any of Company’s records or other written or tangible materials, including without limitation computer programs and floppy disks (whether prepared by Employee or others) containing any confidential information, except as required for Employee to properly perform his duties as an employee of Company.  Exceptions to these restrictions may be made only by means of Company’s permission given in writing signed by the Chairman of the Board of the Company pursuant to an affirmative approval by a majority of Company’s Board of Directors granting permission to disclose.  Employee agrees that upon the termination of his employment, he will immediately return to the Company any confidential information of the Company in his possession and shall not retain any copies, in any form whatsoever, or any notes or summaries of same.

 

2.                                       During the “Non-Compete Period” (defined below)  Employee covenants that Employee, either individually or in any capacity, including without limitation, as an agent, consultant, officer, shareholder, or employee of any business enterprises or person with which he may become associated or in which Employee may have a direct or indirect interest, shall not, directly or indirectly for himself or on behalf of any other person or business entity, engage in any business venture or other undertaking which is competitive with the business or operations of Company (and/or any of its subsidiaries) as generally conducted at, or within one year prior to the termination of Employee’s employment with Company, which, includes, but is not limited to, seismic data acquisition and related goods and services in the oil and gas exploration and drilling industry, “competing business.”  Without limiting the generality of the foregoing, Employee shall not (i) so compete with Company or its subsidiaries; (ii) be employed by; (iii) be an affiliate (as defined by Securities and Exchange Commission Rule 405 under the Securities Act of 1933); (iv) perform any services for; or (v) establish or have an equity or ownership interest in, any person, firm, partnership, joint venture, or corporation that is a competing business or so competes, directly or indirectly, with Company or any of its subsidiaries.  Further, during the “Non-Compete Period,” Employee shall not solicit for employment or advise or recommend to any other person that such person employ, or solicit for employment, any employee of Company or any of its subsidiaries who was an employee at, or within one year prior to, the termination of Employee’s employment with Company.  For purposes of this agreement, the “Non-Compete Period” is defined as follows: (i) in the event Employee is terminated ‘‘for cause,” (excluding a termination as a result of a “Change in Control” as defined in paragraph 8.a.(3) of the Employment Contract), the “Non-Compete Period” shall be for a period of one (1) year following the date of termination of employment; and (ii) in the event Employee is terminated or separated from employment with Company for any other reason (including a termination as a result of a “Change in Control” as defined in paragraph 8.a.(3) of the Employment Contract),  the “Non-Compete Period” shall be for a period of one year from the date of termination or separation from employment or the remainder of the Contract Term, whichever is longer.  In the event of any breach by Employee of any provision of this Agreement, the “Non-

 

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Compete Period” shall be automatically extended by a number of days equal to the total number of days in the period from the date on which such breach shall have first occurred through the date as of which such breach shall have been fully cured.  Because the Company does business throughout the continental United States and Canada, and Employee, as the President and CEO has responsibility for the Company, the geographic area for the restrictive covenant is the continental United States and Canada.  If for any reason any court of competent jurisdiction finds these covenants to be unreasonable in duration or geographic scope, the prohibitions herein contained shall be restricted to such time and geographic areas as such court determines to be reasonable and enforceable.  However, the restrictions stated above will not apply if Company liquidates or if Employee becomes employed by a company (or its affiliate) which acquires (in a voluntary transaction) the stock or business assets of Company.

 

3.                                       Employee understands and agrees that his violation of any of the provisions of this Agreement will constitute irreparable injury to Company immediately authorizing it to enjoin Employee or the business enterprise with which he may have become associated from further violations, in addition to all other rights and remedies which Company may have under law and equity, including recovery of damages from Employee and a right of offset.

 

4.                                       Each party shall be entitled to receive from the other party reimbursement of attorneys’ fees and related legal costs to the extent incurred in connection with the successful enforcement or defense, as the case may be, of the terms and conditions hereof.

 

5.                                       The waiver by Company of Employee’s breach of any provision hereof shall not operate or be construed as a waiver of any subsequent breach by Employee.  This Agreement shall be binding upon the parties hereto and their heirs, successors, executors, administrators, personal representatives, and assigns.  Employee may not assign to any person his covenants, obligations and duties hereunder.  All provisions of this Agreement shall survive the termination of Employee’s Employment Contract.

 

6.                                       If any provision of this Agreement is held by a court of law to be illegal or unenforceable, the remaining provisions of the Agreement shall remain in full force and effect.  In lieu of such illegal or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal or unenforceable provision as may be possible and be legal and enforceable.

 

7.                                       This Agreement has been made in, and its validity, interpretation, construction, and performance shall be governed by and be in accordance with, the laws of the State of Texas, without reference to its laws governing conflicts of law.  Each party hereby irrevocably agrees that any legal action or proceedings with respect to this Agreement may be brought in the courts of the State of Texas, or in any United States District Court of Texas, and, by its execution and delivery of this Agreement, each party hereby irrevocably submits to each such jurisdiction and hereby irrevocably waives any and all objections which it may have as to venue in any of the above courts.  Each party further consents and agrees that any process or notice of motion or other application to either of said Courts or any judge thereof, or any notice in connection with any proceedings hereunder, may be served inside or outside the State of Texas by registered or certified mail, return receipt requested, postage prepaid, and be effective as of the receipt thereof, or in  such other manner as may be permissible under the rules of said Courts.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement to be effective March 1, 2012.

 

 

	
 
    	
 
    	
/s/   Wayne A. Whitener
    
	
 
    	
 
    	
 
    	
Wayne   A. Whitener
    
	
 
    	
 
    	
 
    	
49   Sunrise Circle
    
	
 
    	
 
    	
 
    	
Pottsboro,   Texas 75076
    
	
 
    	
 
    	
 
    	
Date:   April 12, 2012
    
	
ACCEPTED:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
TGC   INDUSTRIES, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Allen T. McInnes
    	
 
    	
 
    
	
 
    	
 
    	
Dr.   Allen T. McInnes, Presiding Director
    	
 
    	
 
    
	
 
    	
 
    	
Date:   April 13, 2012
    	
 
    	
 
    

 

17

 

Exhibit “C”

to

Employment Contract

 

Disclosure and Invention Agreement

 

Wayne A. Whitener (hereafter called “Employee”)  has entered into an Employment Contract with TGC Industries, Inc., a Texas corporation (hereafter called “Company”), which is in the business of providing seismic data acquisition services primarily to onshore oil and natural gas exploration and production companies.

 

In consideration of Company’s agreement to provide Employee with “confidential information” and to employ Employee pursuant to an Employment Contract (to which this Exhibit “C” is attached) the provisions of which are herein fully incorporated by reference for all purposes, Employee agrees as follows:

 

1.                                       Employee shall communicate to Company promptly and fully all ideas and the expressions thereof, conceptions, improvements, discoveries, methods, techniques, processes, adaptations, creations, and inventions (whether patentable or copyrightable or not) conceived or made by Employee (whether solely by Employee or jointly with others) from the time of entering Company’s employment until one year after Employee’s employment is terminated for any reason, or Employee resigns or retires for any reason, (a) which involve or pertain to, directly or indirectly, the business, assets, activities, computers or computer programs, or investigations of Company as existed at or prior to the cessation of Employee’s employment by Company, or (b) which result from or are suggested by any work which Employee or other Employees or independent contractors perform for or on behalf of Company, in whole or in part, as existed at or prior to the cessation of Employee’s employment by Company (“Ideas”).

 

2.                                       Employee shall assist Company during and subsequent to Employee’s employment in every proper way (solely at Company’s expense) to obtain patents and/or copyrights for its own benefit in any or all countries of the world, and to sign all proper papers, patent applications, assignments, and other documents necessary for this purpose, it being understood that such Ideas will remain the sale and exclusive property of Company, and shall not be disclosed to any person, nor used by Employee, except as expressly permitted herein.

 

3.                                       Written records of Employee’s Ideas in the form of notebook records, sketches, drawings or reports, will remain the property of and be available to Company at all times.

 

4.                                       Employee represents that Employee has no agreements with or obligations to others in conflict with the foregoing.

 

5.                                       Employee understands that this Agreement may not be modified or released except in writing signed by all members of Company’s Board of Directors.

 

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6.                                       Employee understands and agrees that his violation of any of the provisions of this Agreement will constitute irreparable injury to Company immediately authorizing it to enjoin Employee or the business enterprise with which he may have become associated from further violations, in addition to all other rights and remedies which Company may have at law and equity, including recovery of damages from Employee and a right of offset.  Each party shall be entitled to recover from the other party reimbursement of attorney’s fees and related legal costs to the extent incurred in connection with the. successful enforcement or defense, as the case may be, of the terms of conditions hereof.

 

7.                                       This Agreement shall be binding upon the parties hereto and their respective heirs, successors, executors, administrators, personal representatives, and assigns.  Employee may not assign his covenants, duties, or obligations hereunder to any other person.  The waiver by Company of Employee’s breach of any provision hereof shall not operate or be construed as a waiver of any subsequent breach by Employee.

 

8.                                       If any provision of this Agreement is held by a court of law to be illegal or unenforceable, the remaining provisions of the Agreement shall remain in full force and effect.  In lieu of such illegal or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal or unenforceable provision as may be possible and be legal and enforceable.

 

9.                                       This Agreement has been made in, and its validity, interpretation, construction, and performance shall be governed by and be in accordance with, the laws of the State of Texas, without reference to its laws governing conflicts of law. Any dispute or controversy arising under or in connection with this Agreement, or the breach thereof, shall be settled in accordance with the arbitration provision in the Employment Contract.

 

IN WITNESS WHEREOF, the parties have executed this Agreement to be effective March 1, 2012.

 

 

	
 
    	
 
    	
/s/   Wayne A. Whitener
    
	
 
    	
 
    	
 
    	
Wayne   A. Whitener
    
	
 
    	
 
    	
 
    	
49   Sunrise Circle
    
	
 
    	
 
    	
 
    	
Pottsboro,   Texas 75076
    
	
 
    	
 
    	
 
    	
Date:   April 12, 2012
    
	
ACCEPTED:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
TCG   INDUSTRIES, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Allen T. McInnes
    	
 
    	
 
    
	
 
    	
 
    	
Dr.   Allen T. McInnes, Presiding Director
    	
 
    	
 
    
	
 
    	
 
    	
Date:   April 13, 2012
    	
 
    	
 
    

 

19Exhibit 10.1

 

 

April 18, 2012

 

Robert Mayson

c/o RealD Inc.

100 N. Crescent Dr., Suite 200

Beverly Hills, CA 90210

 

Dear Robert:

 

On behalf of RealD Inc., a Delaware corporation  (the “Company”), I am pleased to provide you with this letter setting forth the terms and conditions of your continued employment with the Company (the “Agreement”).  This Agreement amends, restates and entirely supersedes the terms of your employment with the Company which were previously set forth in your May 25, 2010 employment agreement with the Company.

 

1.                                       Title; Duties; Reporting.  You will serve as the Company’s Managing Director, RealD Europe and EVP Cinema, EMEA (“Managing Director”) and shall report directly to the Company’s President, Worldwide Cinema.    You understand and agree that (i) you have voluntarily resigned from your prior position as President of the Company’s Consumer Electronics division; (ii) you will no longer be an executive officer of the Company; and  (iii) such change in your position and the geographic location of where you will be primarily rendering your services does not constitute “Good Reason” as defined under both this Agreement or your prior employment agreement with the Company and (iv) you specifically waive any claim that these changes in your employment constitute Good Reason.  You shall be a member of the Company’s management team and shall have such duties and responsibilities as shall be consistent with your position.  You shall work out of the Company’s headquarters in Beverly Hills, CA.  You will also devote your full time, efforts, abilities, and energies to promote the general welfare and interests of the Company and any related enterprises of the Company.  You will loyally, conscientiously, and professionally do and perform all duties and responsibilities of your position, as well as any other duties and responsibilities as will be reasonably assigned to you by the Company, consistent with your position.  You will strictly adhere to and obey all Company rules, policies, procedures, regulations and guidelines including, but not limited to, those contained in the Company’s employee handbook, as well as any others that the Company may establish.  You will strictly adhere to all applicable foreign, state and/or federal laws and/or regulations relating to your employment with the Company.

 

(a)                                  No Conflicting Obligations.  By signing this Agreement, you confirm to the Company that you have no contractual commitments or other legal obligations that would prohibit you from performing your duties for the Company.

 

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(b)                                 Effective  Date.  The effective date of this Agreement shall be April 18, 2012 (the “Effective Date”).

 

(c)                                  Outside Activities.  Notwithstanding anything to the contrary contained herein, you may (i) serve as a director or member of a committee or organization involving no actual or potential conflict of interest with the Company and its subsidiaries and affiliates; (ii) deliver lectures and fulfill speaking engagements; (iii) engage in charitable and community activities; and (iv) invest your personal assets in such form or manner that will not violate this Agreement; provided, however, that the activities described in clauses (i), (ii), (iii) or (iv) do not materially affect or interfere with the performance of your duties and obligations to the Company and further provided that the Company’s Chief Executive Officer must provide its advance written consent with respect to the items referenced in clause (i).

 

2.                                       Term.

 

(a)                                  Length of Term.  The term of this Agreement shall extend from the Effective Date through March 31, 2013 (“Term”) unless terminated earlier in accordance with the terms herein.  On April 1, 2013 and again on April 1, 2014, the end date of the Term shall automatically be extended by one (1) additional year until March 31, 2014 and March 31, 2015, unless either party has previously provided at least ninety (90) days’ prior written notice to the other party to not so extend the Term. Upon expiration of the Term, except as provided in Section 2(c) below, your employment with the Company shall terminate (if not terminated earlier in accordance with the terms herein).  The terms of Sections 8 through 15 shall survive any termination or expiration of this Agreement or of your employment.

 

(b)                                 Resignation.  Upon termination of your employment for any reason, you shall be deemed to have immediately resigned from all positions as an employee, officer and/or director with the Company, and any of its affiliates, as of your last day of employment.

 

(c)                                  At-Will Status.  If you and the Company mutually agree to continue your employment after the Term, then your employment shall thereafter continue on an “at will” basis and during such at-will period either party can terminate your employment without obligation (including without limitation any obligation to provide severance payments or benefits) and/or the Company can change any or all of the terms of your employment at any time for any reason or no reason by providing written notice of the same.  For the avoidance of doubt, no advance written notice will be required to effectuate a termination of your employment after the expiration of the Term.

 

(d)                                 No Eligibility for Severance.  For the avoidance of doubt, the expiration of the Term shall not trigger any rights to or eligibility for severance, including without limitation those payments and benefits described under Sections 3(d)(i) or 3(d)(ii).

 

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3.                                       Compensation.

 

(a)                                  Base Salary.

 

(i)                                     Your base salary will continue to be USD $400,000 per annum, less all applicable US and foreign taxes and required withholdings and deductions, payable in accordance with the Company’s standard payroll procedures.

 

(ii)                                  For all purposes of this Agreement, the term “Base Salary” shall refer to the base salary in effect from time to time.  During the Term, your Base Salary will be reviewed annually and is subject to adjustment at the discretion of the Company’s Board of Directors (“Board”).

 

(b)                                 Bonus.

 

(i)                                     During the period from the Effective Date through the end of the Company’s fiscal year 2013 in March 2013, if trailing twelve (12) month sales from the Consumer Electronics Division exceed USD $10 Million, you will be eligible for a one-time bonus of USD $200,000, less all applicable withholdings and deductions.  Such bonus will be paid within 30 days after the Company has determined that the foregoing objective has been satisfied and you must remain continuously employed by the Company through the date of payment in order to receive such payment.

 

(ii)                                  During the period from February 25, 2010 through the end of the Company’s fiscal year 2013 in March 2013, if contracted binding orders from the Consumer Electronics Division exceed USD $10 Million, you will be eligible for a one-time bonus of USD $200,000, less all applicable withholdings and deductions.  Such bonus will be paid within 30 days after the Company has determined that the foregoing objective has been satisfied and you must remain continuously employed by the Company through the date of payment in order to receive such payment.

 

(iii)                               During each fiscal year of the Term, you will annually be eligible to earn a cash performance bonus (“Performance Bonus”) with a target amount of eighty percent (80%) of your Base Salary.  Your actual bonus amount under clause (b) for fiscal year 2012, if any, shall be based on your successful completion of the performance objectives (“MBO Goals”) prescribed and established by the Company.  Thereafter, the MBO Goals will continue to be prescribed and established by the Company and you may have input into the development of such MBO Goals (provided that MBO Goals may be replaced with a successor incentive plan for you (and/or other employees) at the direction of a compensation committee of the Board acting in good faith).  The Performance Bonus shall be paid to you no later than the 15th day of the third month immediately following the fiscal year with respect to which the Performance Bonus relates.  To earn any Performance Bonus, you must remain

 

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employed by the Company through the end of the fiscal year(s) with respect to which the Performance Bonus relates, except in the event a “Pro-Rated Bonus” (defined below) is payable pursuant to Section 3(d)(i)(B) below (Qualifying Termination), Section 4(d) below (death) or Section 4(e) below (Disability).

 

(c)                                  Company-Sponsored Benefits.

 

As a member of the management team of the Company, you will also be eligible to receive all employee benefits pursuant to the Company’s standard benefit plans that the Company generally provides to the other members of the management team that may be in effect from time to time.  These currently include, without limitation, paid vacation, group health benefits, 401(k) retirement benefits, business expense reimbursements, PTO, sick time and Company paid holidays.  The Company may, in its sole discretion and from time to time, amend or eliminate any of these benefits.

 

(d)                                 Severance and Other Termination Benefits.

 

(i)                                     Qualifying Termination.  If your employment is terminated during the Term without Cause (as defined below) by the Company or by you for “Good Reason” (as defined below) (each, a “Qualifying Termination”), the Company shall pay you (or cause to occur, as applicable) each of the following:

 

(A)                              cash severance installment payments in an aggregate amount equal to one hundred percent (100%) of your annual Base Salary as in effect on your Termination Date (“Cash Severance”) being paid in ten monthly pro-rata installments with the first installment of Cash Severance being paid on the 90th day after your “separation from service” (within the meaning of Internal Revenue Code (“Code”) Section 409A) from the Company (“Termination Date”) and the last installment being paid on the first anniversary of the Termination Date;

 

(B)                                a pro-rated cash Performance Bonus, calculated as follows:  the product of (x) the Performance Bonus that would have been earned during the fiscal year in which the Qualifying Termination occurred, assuming that the Qualifying Termination had not occurred and that you remained as the Managing Director through the end of such fiscal year, which Performance Bonus, if any, shall be based on the extent to which the Company achieved the MBO Goals (or the performance standards set forth in any successor incentive plan) during such fiscal year, multiplied by (y) a fraction, the numerator of which is the number of days of the Company’s fiscal year prior to the Termination Date and the denominator of which is 365 days.  This pro-rated Performance Bonus (a “Pro-Rated Bonus”) shall be paid to you no later than the 15th day of the third month

 

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immediately following the fiscal year in which the Qualifying Termination has occurred;

 

(C)                                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”) or any comparable UK law, to the same extent provided by the Company’s group plans immediately before the Termination Date for twelve (12) months after the Termination Date or until you become eligible for group insurance benefits from another employer, whichever occurs first, provided that you timely elect COBRA coverage or coverage under any comparable UK law (in either case, “COBRA Benefits”).  You agree (i) at any time either before or during the period of time you are receiving benefits under this subsection (C), to inform the Company promptly in writing if you become eligible to receive group health coverage from another employer; and (ii) that you may not increase the number of your designated dependents, if any, during this time unless you do so at your own expense.  The period of such COBRA Benefits shall be considered part of your COBRA coverage entitlement period, and may, for tax purposes, be considered income to you; and

 

(D)                               the “Accrued Obligations” (defined below) as of the Termination Date.

 

For avoidance of doubt, the payments and benefits that may be provided under Sections 3(d)(i) above or 3(d)(ii) below shall not be provided more than once and if payments and benefits are provided under either one of these subsections, then no payments or benefits will otherwise be provided again under either one of these subsections.

 

(ii)                                  Change in Control.  If, during the Term, there is a Qualifying Termination and your Termination Date occurs (because of such Qualifying Termination) during the time period that commences on the date that is ninety (90) days before a “Change in Control” (defined below) and extends through March 31, 2013, then: (a) the amount of the total Cash Severance in Section 3(d)(i)(A) shall be equal to one hundred percent (100%) of the then annual Base Salary plus an additional eighty percent (80%) of the then annual Base Salary if the Change in Control occurs after March 31, 2012; (b) the duration of your COBRA Benefits under Section 3(d)(i)(C) shall be increased from twelve months to eighteen (18) months; and (c) one hundred percent (100%) of any stock options and other Company equity compensation incentives granted to you either before or during the Term (collectively, the “Equity Incentives”) (but excluding any portion of any performance-based stock option or any other performance awards 

 

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which are/were forfeited due to failure to achieve the requisite performance objectives) which are outstanding and unvested as of the Termination Date shall become fully vested and exercisable as of the later of your Termination Date or immediately prior to the date of the Change in Control.  Subject to Section 15 below, your Cash Severance shall instead be fully paid to you in a single lump sum payment on the 90th day after your Termination Date.

 

(iii)                               Release of Claims.  Notwithstanding anything to the contrary, in order to receive any payments or benefits under Section 3(d)(i) or Section 3(d)(ii) as applicable, you must timely execute and deliver (and not revoke) a separation agreement and general release of claims in favor of the Company, any affiliates or related entities, and their employees and affiliates, in the form and content acceptable to the Company, within the time period specified in the release, but in no event after the 60th day following the Termination Date.  However, you shall receive payment or benefits from the Company of the Accrued Obligations, as applicable, regardless of whether a separation agreement and general release of claims in the form and content acceptable to the Company is executed and timely provided to the Company.

 

(iv)                              Golden Parachute Excise Tax.  If any payment or benefit received or to be received by you (including any payment or benefit received pursuant to this Agreement or otherwise) would be (in whole or part) subject to the excise tax imposed by Code Section 4999, or any successor provision thereto, or any similar tax imposed by state or local law, or any interest or penalties with respect to such excise tax (such tax or taxes, together with any such interest and penalties, are hereafter collectively referred to as the “Excise Tax”), then, the payments or benefits provided under this Agreement or any other agreement pursuant to which you receive payments that give rise to the Excise Tax will either be (a) paid in full or (b) reduced to the extent necessary to make such payments and benefits not subject to such Excise Tax.  The Company shall reduce or eliminate the payments first by reducing those payments that are not payable in cash and then by reducing or eliminating cash payments, in each case in reverse order beginning with payments that are to be paid the farthest in time from the determination.  You shall receive the greater, on an after-tax basis, of (a) or (b).  However, if the imposition of such Excise Tax could be avoided by approval of stockholders as described in Code Section 280G(b)(5)(B), then you may request the Company to solicit a vote of such stockholders (described in Code Section 280G(b)(5)(B) and in which case you will cooperate and execute any such waivers of compensation as may be necessary to enable the stockholder vote to comply with the requirements specified under Code Section 280G and the regulations promulgated thereunder.  In no event will the Company be required to gross up any payment or benefit to you to avoid the effects of the Excise Tax or to pay any regular or excise taxes arising from the application of the Excise Tax.  Unless the Company and you otherwise agree in writing, any parachute payment calculation will be made in writing by independent public accountants selected by the Company,

 

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whose calculations will be conclusive and binding upon the Company and you for all purposes.  The Company and you will furnish to the accountants such information and documents as the accountants may reasonably request in order to make a parachute payment determination.  The accountants also will provide its calculations, together with detailed supporting documentation, both to the Company and to you.  As expressly permitted by Q/A #32 of the Code Section 280G regulations, with respect to performing any present value calculations that are required in connection with this Section, the parties affirmatively elect to utilize the Applicable Federal Rates that are in effect in February 2012 (the “February 2012 AFRs”) and the accountants shall therefore use such February 2012 AFRs in their determinations and calculations.

 

(e)                                  Expense Reimbursement.  You shall be reimbursed for all documented reasonable business expenses that are incurred in the ordinary course of business in accordance with the Company’s expense reimbursement policy as in effect from time to time.  Any reimbursements or in-kind benefits provided under this Agreement that are subject to Section 409A shall be made or provided in compliance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the period of time specified in this Agreement, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a fiscal year may not affect the expenses eligible for reimbursement or in-kind benefits to be provided, in any other fiscal year, (iii) the reimbursement of an eligible expense will be made no later than the last day of the fiscal year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

4.                                       Other Termination Rules.

 

Notwithstanding anything to the contrary in this Agreement whether express or implied, the Company may at any time terminate your employment with the Company and the Term,  for any reason or no reason, and with or without Cause, and you may resign from your employment with or without Good Reason and terminate the Term, all as set forth in greater detail in this Section 4.  If your employment terminates due to your resignation without Good Reason, or due to your death or Disability or by the Company for Cause, or the Agreement is terminated at the end of the Term, then you will not be eligible for any severance benefits, except as provided in Sections 4(d) and 4(e).

 

(a)                                  The following definitions shall apply for purposes of this Agreement:

 

(i)                                     “Accrued Obligations” shall mean the sum of (i) any portion of your accrued but unpaid Base Salary through the Termination Date; (ii) subject to Section 15, any compensation previously earned but deferred by you (together with any interest or earnings thereon) that has not yet been paid and that is not otherwise to be paid at a later date pursuant to any deferred compensation arrangement of the Company to which you are a party, if any; (iii) your accrued

 

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but unpaid vacation pay through the Termination Date; (iv) any reimbursements that you are entitled to receive under Section 3(e) of the Agreement or otherwise; and (v) any vested benefits or amounts that you are otherwise entitled to receive under any plan, policy, practice or program of or any other contract or agreement with the Company in accordance with the terms thereof (other than any such plan, policy, practice or program of the Company that provides benefits in the nature of severance or continuation pay).

 

(ii)                                  “Cause” shall mean (i) your commission of fraud, (ii) your willful misconduct, (iii) your material violation of Company policies or practices, (iv) your use or disclosure of Confidential Information (as defined below) that is unauthorized by this Agreement, or (v) your performance of any act or omission which, if you were prosecuted, would constitute a felony, in each case as determined by the Board (or a committee of members of the Board), whose determination shall be conclusive and binding.

 

(iii)                               “Change in Control” shall mean:

 

(1)                                  any person or group of persons (as defined in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended ( the “Exchange Act”) together with its affiliates, but excluding (i) the Company or any of its subsidiaries, (ii) any employee benefit plans of the Company, or (iii) a corporation or other entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company (individually, a “Person” and collectively, “Persons”), is or becomes, directly or indirectly, the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of the Company representing 50% or more of the combined voting power of the Company’s then-outstanding securities (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates);

 

(2)                                  the consummation of a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or other entity regardless of which entity is the survivor, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company, such surviving entity or any parent thereof outstanding immediately after such merger or consolidation;

 

(3)                                  there is consummated an agreement for the sale or disposition of all or substantially all of the Company’s assets; or

 

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(4)                                  any liquidation or dissolution of the Company.

 

(iv)                              “Confidential Information” shall mean:  The Company’s confidential and proprietary business information, including but not limited to the Company’s products, services, customers, contracts, fees, prices, costs, business affairs, marketing, accounting, financial statements, employees, research, inventions, data, software, and any other confidential and proprietary business information of any kind, nature or description, tangible or intangible, in whatever form.

 

(v)                                 “Disability” shall mean your medically-determined incapacity due to physical or mental illness which makes you unable to perform substantially the duties pertaining to your employment with or without reasonable accommodation for a period of six (6) consecutive months.

 

(vi)                              “Good Reason” shall mean any one or more of the following: (1) a material diminution in your Base Salary, (2) a material diminution in your authority, duties, reporting or responsibilities as the  Managing Director, (3) a material change in the geographic location at which you must perform your services to the Company, which shall be defined to be a relocation of your principal workplace to a new location that is more than thirty miles away from the workplace location specified in Section 1 above, or (4) a material breach by the Company of this Agreement.

 

(vii)                           “Separation from Service” has the meaning set forth in Treasury Regulations Section 1.409A-1(h)(1).

 

(viii)                        “termination or resignation for Good Reason” shall mean any termination or resignation by you of your employment for Good Reason.

 

(ix)                                “termination without Cause” shall mean any termination of your employment by the Company for any reason other than Cause or your death or Disability.

 

(b)                                 Termination for Cause.  The Company may terminate your employment and the Term at any time for Cause; provided, however, that in the event the Board determines to terminate your employment for Cause, such termination shall only become effective if the Board shall first provide you with written notice detailing the alleged grounds for such Cause, and if such act or omission is susceptible to cure, provide you a 30 day period to cure such act or omission.  Upon a termination of your employment by the Company for Cause, you only will be entitled to any salary and other benefits earned, but unpaid (including accrued but unpaid vacation), and any reimbursement for expenses owed to you by the Company, as of the Termination Date.

 

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(c)           Termination without Cause.   The Company shall have the unilateral right to terminate your employment and the Term at any time without Cause, and without notice, in the Company’s sole and absolute discretion.  Any such termination without Cause shall not constitute a breach of any term of this Agreement, express or implied, or a wrongful deprivation of your office or position.   If the Company terminates your employment and the Term without Cause, it shall be treated as a Qualifying Termination and the Company shall have no obligation to you, except to continue to pay you (or cause to occur, if applicable) the amounts (and actions) set forth in Sections 3(d)(i) or 3(d)(ii) above in accordance with the terms thereof and any related provisions of this Agreement.

 

(d)           Termination due to Death.  Your employment and the Term  will be automatically terminated on the date of your death.  In the event of your death, the Company shall pay your estate or assignees (or allow your estate or assignees to retain, as applicable) within thirty (30) days of the Termination Date the Accrued Obligations, subject to Section 15 below.  In addition, you shall be eligible to receive a Pro-Rated Bonus for the year in which your employment is terminated, calculated with reference to the Termination Date and calculated and paid as provided in Section 3(d)(i)(B) above.  The vested Equity Incentives as of the date of your death shall be exercisable by your estate or assignees until the earliest of (x) twelve (12) months following the Termination Date; (y) the scheduled expiration date of the Equity Incentives; or (z) the date on which the Equity Incentives are canceled (and not substituted or assumed) pursuant to a Change in Control or merger or acquisition or similar transaction involving the Company.

 

(e)           Termination due to Disability.  If you are subject to a Disability, and if within thirty (30) days after written notice is provided to you by the Company you shall not have returned to perform substantially your duties, your employment and the Term may be terminated by the Company for Disability.  During any period prior to such termination during which you are unable to perform substantially such duties due to Disability, the Company shall continue to pay all amounts required to be paid under this Agreement (including without limitation your Base Salary), offset by any amounts payable to your under any disability insurance plan or policy provided by the Company, and the Company shall continue to provide all benefits to you hereunder.  Upon termination of your employment due to Disability, the Company shall pay you (or allow you to retain, as applicable) within thirty (30) days of such termination the Accrued Obligations, subject to Section 15 below.  In addition, you shall be eligible to receive a Pro-Rated Bonus for the year in which your employment is terminated, calculated with reference to the Termination Date and calculated and paid as provided in Section 3(d)(i)(B) above.  The vested Equity Incentives as of the Termination Date shall be exercisable by you until the earliest of (x) twelve (12) months following the Termination Date; (y) the scheduled expiration date of the Equity Incentives; or (z) the date on which the Equity Incentives are canceled (and not substituted or assumed) pursuant to a Change in Control or merger or acquisition or similar transaction involving the Company.

 

(f)            Resignation for Good Reason.  You may terminate your employment and the Term at any time for Good Reason, provided that you provide written notice to the

 

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Company describing the existence of any Good Reason condition(s) within ninety (90) days of the date of the initial existence of the condition(s) or else you will be deemed to have waived any Good Reason with respect to such condition(s).  Upon the Company’s receipt of such written notice, the Company shall then have thirty (30) days during which it may cure or remedy the condition(s).  If the Company does cure or remedy the condition(s) during such thirty (30) day period then Good Reason will be deemed to have not occurred with respect to such condition(s).  If the Company does not cure or remedy the condition(s) during such thirty (30) day period then your employment with the Company and the Term shall be terminated for Good Reason as of the day following the expiration of the thirty (30) day cure/remedy period.  If you terminate your employment for Good Reason in accordance with the provisions of this Section 4(f), it shall be treated as a Qualifying Termination and the Company shall pay you (or cause to occur, if applicable) the amounts (and actions) set forth in Sections 3(d)(i) or 3(d)(ii) above in accordance with the terms thereof and any related provisions of this Agreement.

 

(g)           Resignation without Good Reason.  You may terminate your employment and the Term at any time for no reason, or for any reason that does not otherwise constitute Good Reason, in your sole and absolute discretion, but only if you provide written notice to the Company at least six (6) months prior to the effective date of your resignation (and such notice must specify the effective date of your resignation of employment).  In the event you so terminate your employment without Good Reason, you shall only be entitled to receive (subject to Section 15 below) the Accrued Obligations through the effective date of your resignation, as well as all other compensation and benefits required under this Agreement through the effective date of your resignation, and neither you nor the Company shall have any further obligations to the other except as set forth in Section 8 (Confidential Information), Section 9 (Covenants) and Sections 10 through and including 15.  However, in the event you terminate your employment without Good Reason and your Termination Date occurs prior to the end of the required minimum six-month notice period provided in this Section 4(g), then all of your stock options and stock appreciation rights shall immediately expire and be forfeited as of such Termination Date.  The Company is not obligated to actually utilize your services at any time during the six-month period preceding the effective date of your resignation, and may prevent you from accessing any of the Company premises or resources during such six-month period.  Additionally, as long as the Company provides you with any compensation and benefits that would have been earned by you pursuant to Sections 3(a), 3(b) and 3(c) during the six-month period preceding the effective date of your resignation had you remained employed during such period, the Company may terminate your employment prior to the expiration of such six-month period without triggering any rights to or eligibility for severance, including without limitation those payments and benefits described under Sections 3(d)(i) or 3(d)(ii).

 

5.             Equity Compensation.  Your outstanding equity compensation awards shall continue to be governed pursuant to the terms of the applicable grant agreements and you shall be eligible to be considered for equity compensation awards during each year of the Term at the discretion of the Board (or an appropriate committee thereof).

 

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6.             Contingencies.  Your continued employment pursuant to this Agreement is contingent upon you timely providing the Company with any legally required proof of your identity and authorization to work in the United Kingdom effective upon your relocation to the United Kingdom.

 

7.             Relocation Expenses.

 

(a)           The Company will reimburse you for your actual reasonable relocation expenses that incurred after the Effective Date in relocating from the United States to the United Kingdom in an aggregate amount not to exceed $35,000.  You must submit your request for reimbursement for all such expenses (with appropriate supporting documentation and receipts) to the Company by not later than June 15, 2012 and you will receive reimbursement for validly incurred amounts within 60 days of the Company’s receipt of your reimbursement request.  No expenses will be reimbursed which are incurred after the earlier of (i) your Termination Date or (ii) May 30, 2012.

 

(b)           In addition, in the event of a reimbursement or benefits payable under this Section 7 that constitutes an item of deferred compensation that is subject to Section 409A, (i) the amount of expense reimbursement in one calendar year can in no way affect the amount of reimbursement in another calendar year for you; (ii) in all events such reimbursement(s) must be made no later than the last day of the year following the calendar year in which the expense is incurred; and (iii) no such reimbursement(s) may be subject to liquidation for cash or exchange for another benefit.

 

8.             Confidential Information.  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 or thereafter, develop certain information or inventions which will be the property of the Company.  By signing this Agreement, you reaffirm your obligations and continued compliance with the RealD Employee Invention Assignment and Confidentiality Agreement (the “Confidentiality Agreement”) which you previously executed.

 

9.             Covenants.  You agree to timely and fully comply with all of the covenants set forth in this Section 9 and further understand and agree that such covenants shall survive any termination of your employment and termination or expiration of this Agreement.

 

(a)           Return of Company Property.  On your Termination Date, or at any other time as required by the Company, you will immediately surrender to the Company all Company property, including but not limited to Confidential Information (as such term is defined herein and in the Confidentiality Agreement), keys, key cards, computers, telephones, pagers, credit cards, automobiles, equipment, and/or other similar property of the Company.

 

(b)           Non-disparagement.  You will not at any time during the period of your employment with the Company and during any period in which you are receiving

 

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severance payments under Section 3(d), 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.

 

(c)           Cooperation.  You agree that, upon the Company’s request and without any payment therefore, you shall reasonably cooperate with the Company (and be available as necessary) after the Termination Date in connection with any matters involving events that occurred during your period of employment with the Company.

 

(d)           Amounts Due.  You will fully pay off any outstanding amounts owed to the Company no later than their applicable due date or within thirty (30) days of the Termination Date (if no other due date has previously been established).  Within thirty (30) days of the Termination Date, you will submit any outstanding business expense reports to the Company for business expenses incurred prior to the Termination Date.

 

(e)           Company Resources.  As of the Termination Date, you will no longer represent that you are an officer, director or employee of the Company or any Company affiliate and you will immediately discontinue using the Company mailing address, telephone, facsimile machines, voice mail and e-mail.

 

(f)            Notice of New Employment.  You will provide written notice to the Company within three (3) business days after the date that you agree to accept new full or part time employment or agree to provide consulting or other services to another entity or venture.

 

(g)           Representations.  You represent that you have not entered into any agreements, understandings, or arrangements with any person or entity that you would breach as a result of, or that would in any way preclude or prohibit you from entering into, this Agreement with the Company or performing any of the duties and responsibilities provided for in this Agreement.  You represent that you do not possess any confidential, proprietary business information belonging to any other entity, and will not use any confidential, proprietary business information belonging to any other entity in connection with your employment with the Company.  You represent that you are not resigning employment or relocating any residence in reliance on any promise or representation by the Company regarding the kind, character, or existence of such work, or the length of time such work will last, or the compensation therefor.

 

(h)           Clawback Policy.  Without limiting the requirement in Section 1 that you will strictly adhere to and obey Company policies, you understand and agree that the Company has a policy on the recoupment of compensation which the Company may in its discretion amend from time to time (“Clawback Policy”).  As a result, you may be required to repay to the Company certain previously paid compensation (that was earned

 

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or accrued on or after April 1, 2010) in accordance with any such Clawback Policy and/or in accordance with applicable law.

 

(i)            Violations.  You acknowledge that (i) upon a violation of any of the covenants contained in this Section 9; or (ii) if the Company is terminating your employment for Cause as provided under this Agreement, the Company would sustain irreparable harm as a result and that the Company would not have entered into this Agreement without such restrictions, and, therefore, you agree that in addition to any other remedies which the Company may have, the Company shall be entitled, without bond of any kind, to seek equitable relief including specific performance and injunctions restraining you from committing or continuing any such violation.

 

10.           Entire Agreement.  This Agreement and its attachments, the Confidentiality Agreement, and the plans and agreements governing your equity and bonus compensation, and any other agreements referenced herein, as amended or superseded from time to time, contain the entire agreement between you and the Company regarding their terms and supersede any and all prior written or oral understandings including without limitation your May 25, 2010 employment agreement with the Company.  Except as otherwise provided herein, this Agreement may not be amended or modified except in a writing, executed by you and a duly authorized officer of the Company other than yourself.  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.  Notwithstanding the foregoing, with respect to your Director Services Agreement and any other agreements related to your employment with RealD Europe Limited dated November 2008 (collectively, “RealD Europe Agreement”), Clauses 12, 14, 18 with respect to your employment in the United Kingdom, and Schedule 2 thereof, will continue in full force and effect.  Clause 13 of the RealD Europe Agreement RealD Europe Limited remains effective for any intellectual property, inventions and patents made or acquired by you prior to May 25, 2010.

 

11.           Choice of Law; Severability; Waiver.  This Agreement will be governed by the laws of the State of California, United States, without reference to the conflict of law provisions thereof.  If any provision of this Agreement, or portion thereof, shall be held invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall attach only to such provision or portion thereof, and shall not in any manner affect or render invalid or unenforceable any other provision, or portion thereof, of this Agreement.  For the avoidance of doubt, the laws of England shall not apply to your employment or termination in, or transfer to, or from the United States.  You will remain responsible for any taxes or reporting obligations, if any, under the laws of England for any income or benefits received by you.  No breach of any provision hereof can be waived unless in writing.  Waiver of any one breach of any provision hereof will not be deemed to be a waiver of any other breach of the same or any other provision of this Agreement.

 

12.           Successors and Assigns.  The Company may assign this Agreement to any successor (whether by amalgamation, merger, consolidation, sale of assets, purchase or otherwise) to all or substantially all of the equity, assets or business of the Company, and this Agreement will be

 

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binding upon and inure to the benefit of such successors and assigns, including any successor entity.  You may not assign this Agreement or your obligations hereunder.

 

13.           Notice.  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 that the Company is required to or may desire to give you that are not delivered personally will be sent with postage and/or other charges prepaid and properly addressed to you at your home address of record with the Company, or at such other address as you may from time to time designate by one of the indicated means of notice herein.  All notices that you are required to or may desire to give to the Company that are not delivered personally will be sent with postage and/or other charges prepaid and properly addressed to the Company’s General Counsel at its principal office, or at such other office as the Company may from time to time designate by one of the indicated means of notice herein.

 

14.           Withholding and Taxes.  The Company shall have the right to withhold and deduct from any payment hereunder any foreign, federal, state or local taxes of any kind required by law to be withheld with respect to any such payment.  The Company (including without limitation members of the Board) shall not be liable to you or other persons as to any unexpected or adverse tax consequence realized by you and you shall be solely responsible for the timely payment of all taxes arising from this Agreement that are imposed on you.

 

15.           Section 409A.  The payments under this Agreement are intended to be exempt from the application of Section 409A pursuant to the “short-term deferral” exception and “separation pay plan” exception under Section 409A to the fullest extent possible.  Each individual payment provided under Sections 3(d), 4(d) or 4(e) is intended to be a separate payment and not a series of payments for purposes of Section 409A.  Anything in this Agreement to the contrary notwithstanding, if the severance payment above constitutes an item of nonqualified deferred compensation subject to Section 409A, the Company and you shall take all steps necessary (including with regard to any post-termination services you may perform) to ensure that any such termination constitutes a “separation from service” within the meaning of Section 409A.  In addition, if you are deemed at the time of your “separation from service” to be a “specified employee” within the meaning of that term under Section 409A and to the extent delaying commencement of payment of nonqualified deferred compensation (that is payable on account of your separation from service) is required in order to avoid the imposition of taxes under Section 409A, then all such payments and benefits will instead be paid to you in a lump sum without interest on the earlier of (a) the first business day of the seventh month following your “separation from service” or (b) five business days after the date the Company receives written confirmation of your death.  It is intended that payments under this Agreement will be exempt from or comply with Section 409A, but the Company makes no representation or covenant to ensure that the payments under this Agreement are exempt from, or compliant with, Section

 

15

 

409A, and will have no liability to you or any other party if a payment under this Agreement that is intended to be exempt from, or compliant with, Section 409A is not so exempt or compliant.

 

16.           Exhibits.  All Exhibits attached to this Agreement shall be incorporated herein by this reference as though fully set forth herein.

 

A duplicate original of this Agreement is enclosed for your records.  If you decide to accept the terms of this Agreement, please sign the enclosed copy of this Agreement.  Your signature will acknowledge that you have read and understood and agreed to the terms and conditions of this Agreement.  Should you have anything else that you wish to discuss, please do not hesitate to contact me.

 

 

	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
RealD   Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael V. Lewis
    
	
 
    	
 
    	
Michael V. Lewis
    
	
 
    	
 
    	
Chief Executive Officer
    

 

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I have read, understand, and accept this Agreement.  Furthermore, in choosing to accept this Agreement, I agree that I am not relying on any representations, whether verbal or written, except as specifically set out within this Agreement.

 

 

	
/s/   Robert Mayson
    	
 
    
	
Employee   Signature
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Robert   Mayson
    	
 
    
	
Printed   Name
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date:  April 18, 2012
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Enclosures:
    	
Duplicate   Original Letter
    	
 
    
			

 

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