EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT
This
Employment Agreement (this "Agreement") is made and entered into as of this
31st
day of
October 2006, by and between New Motion, Inc. a Delaware corporation (the
"Company")
and
Xxxxxx Xxxxxx ("Employee").
1. Engagement
and Duties.
1.1 Upon
the
terms and subject to the conditions set forth in this Agreement, the Company
hereby engages and employs Employee as Director of Products. Employee hereby
accepts such engagement and employment.
1.2 Employee
will have access to certain confidential information and may, during the course
of his employment, develop certain information which will be the property of
the
Company. Employee will be required to sign the Company’s “Proprietary
Information and Assignment of Inventions Agreement” as a condition of his
employment under this Agreement.
1.3 Employee’s
duties and responsibilities shall be as follows: to develop and manage the
product offerings in a specific channel (i.e. Sports, Entertainment, Lifestyle,
etc), subject to the supervision, direction and control of the Senior VP of
Operations of the Company. In addition, Employee's duties shall include those
duties and services for the Company and its affiliates as the Board shall from
time to time reasonably direct. Employee shall report directly to the Senior
VP
of Operations of the Company.
1.4 Employee
agrees to devote his primary business time, energies, skills, efforts and
attention to his duties hereunder, and will not, without the prior written
consent of the Company, which consent will not be unreasonably withheld, render
any material services to any other business concern. Employee will use his
best
efforts and abilities faithfully and diligently to promote the Company's
business interests.
1.5 Except
for routine travel incident to the business of the Company, Employee shall
perform his duties and obligations under this Agreement principally from an
office provided by the Company in Los Angeles, California, or such other
location in Los Angeles County, as the Senior VP may from time to time
determine. In addition, the Employee will be expected to make routine trips
to
the company’s headquarters in Orange County California as his job
requires.
1.6 Notwithstanding
anything to the contrary, and including both during and after the term of the
agreement, your employment is at-will and therefore your employment can be
terminated, with or without cause, and with or without notice, at any time,
at
your option or the Company's option. Although other terms and conditions of
employment may change, this at-will employment relationship as defined above
will remain in effect throughout your employment with the Company, unless it
is
modified by a specific, express written agreement with the Company signed by
you
and the CEO of the Company. This at-will employment relationship may not be
modified by any oral or implied agreement, or by any person, statement, act,
and
series of events or pattern of conduct. This paragraph about the at-will nature
of your employment sets forth our complete understanding regarding this
subject.
2. Term
of Employment.
Employee’s employment pursuant to this Agreement shall commence on December 4,
2006 (“Start Date”) and shall terminate on the earliest to occur of the
following:
(a) the
close
of business on the second anniversary of the Start Date;
(b) the
death
of Employee ;
(c) delivery
to Employee of written notice of termination by the Company if Employee shall
suffer a “permanent disability,” which for purposes of this Agreement shall mean
a physical or mental disability which renders Employee , in the reasonable
judgment of the Board, unable to perform his duties and obligations under this
Agreement for 90 days in any 12-month period;
(d) notice
to
Employee of termination by the Company for Cause. For purposes of this
Agreement, Cause means: (ii) any material breach of any of the terms of this
Agreement; (ii) any act or omission knowingly undertaken or omitted by Employee
with the intent of causing damage to the Company, its properties, assets or
business, goodwill, or its stockholders, officers, directors or employees;
(ii)
commission of any material act of dishonesty, fraud, misrepresentation,
misappropriation, embezzlement, or other act of moral turpitude; (iii) Employee
's consistent failure to perform his normal duties or any obligation under
any
provision of this Agreement, in either case, as directed by the Chief Executive
Officer and/or the Board; (iv) conviction of, or pleading nolo contendere to
(A)
any crime or offense involving monies or other property of the Company; (B)
any
felony offense; or (C) any crime of moral turpitude; or (v) the chronic or
habitual use or consumption of drugs or alcoholic beverages; or
(e) notice
to
Employee of termination by the Company "without cause."
After
the
expiration of the Employment term under Section 2(a), if employee continues
to
be employed by the Company, such employment shall be terminable "at will" by
either the Company or Employee and the terms and conditions of this Agreement
shall continue to apply; provided, however, that if the Company terminates
Employee's "at will" employment without Cause, then the severance amount set
forth in Section 3.1 payable to Employee as a result of such termination shall
be equal to Employee’s then-current base salary and health benefits described in
Section 3.5 below as severance pay for two months and such amount shall be
paid
in a lump sum within 20 calendar days of the date of Employee's
termination.
In
the
event Employee is terminated for Cause pursuant to section 2(d), the Employee
shall only receive his base salary though the termination date and shall not
be
entitled to any additional compensation, including salary, bonus or commissions.
3. Compensation;
Employee Benefit Plans.
3.1 Base
Salary.
Commencing on the Start Date, the Company shall pay Employee an annual base
salary of $85,000. Employee’s base salary shall be payable in installments
throughout the year in the same manner and at the same times the Company pays
base salaries to other Employee’s of the Company. In the event that Executive's
employment is terminated pursuant to Section 2(e), above (i.e., without cause),
the Company shall continue to pay Executive's then-current base salary and
health benefits described in Section 3.5 below as severance pay for two months.
3.2 Bonus.
Employee will also be eligible to receive a bonus; up to $15,000 per year (the
"Bonus") based On-Target.
3.3 Stock
Options.
Subject
to approval by the Company’s Board of Directors, you will be granted an option
to purchase shares of the Company’s common stock at an exercise price per share
equal to the fair market value of the common stock, to be determined by the
Board of Directors on the date of the grant. Your option will be granted under
the Company's 2005 Stock Option Incentive Plan, in accordance with and subject
to each term of the Company's standard form of option agreement.
3.4 Vacation.
You
will receive three weeks paid vacation, one week will vest immediately upon
the
Start Date and you shall accrue the other two weeks. During the second year
of
your employment, you will receive three weeks paid vacation, which shall begin
to accrue as of the first day of your second year of employment. All vacation
shall be paid and earned in accordance with the Company’s vacation policy.
3.5 Relocation
Allotment.
Within
30 days following the effective date, the Company shall make available to the
Employee “Advanced Funds” up to the amount of $3,000 through cash payment or
expense reimbursements directly related to and to assist with the Employee’s
cost incurred in relocation of his personal residence to Los Angeles or Orange
County, California. All expenses to be covered by such Advance Funds must be
submitted to the Company for prior approval.
3.6 Other
Benefits.
During
the term of his employment hereunder, Employee shall be eligible to participate
in all operative employee benefit and welfare plans of the Company then in
effect from time to time and in respect of which all Employees of the Company
generally are entitled to participate ("Company Employee Benefit Plans"),
including, to the extent then in effect, medical, and other insurance plans,
all
on the same basis applicable to employees of the Company whose level of
management and authority is comparable to that of Employee.
The
Company reserves the right to modify, suspend, or discontinue any and all of
the
above-mentioned plans, practices, policies and programs at any time as long
as
such action is taken generally with respect to other similarly situated
Employee’s of the Company.
4. Expenses.
4.1 Generally.
Employee shall be entitled to reimbursement from the Company for the reasonable
costs and expenses which he incurs in connection with the performance of his
duties and obligations under this Agreement in a manner consistent with the
Company's practices and policies as adopted or approved from time to time by
the
Board.
4.2 Travel.
All
travel requests must be approved in advance by the Senior VP of Operations.
The
Company will reimburse Employee for expenses reasonably incurred by him for
business travel, including transportation, lodging and reasonable entertainment
expenses, pursuant to the Company’s Travel Policy.
4.3 Mobile
Telephone/PDA.
The
Company will reimburse Employee for the monthly fees associated with a mobile
telephone and Blackberry service, up to a maximum of $300 per month.
5. Dispute
Resolution.
5.1 Agreement
to Arbitrate.
Employee and the Company agree to arbitrate before a neutral arbitrator any
and
all disputes or claims arising from or relating to Employee’s recruitment to or
employment with the Company, or the termination of that employment, including
claims against any current or former agent or employee of the Company, whether
the disputes or claims arise in tort, contract, or pursuant to a statute,
regulation, or ordinance now in existence or which may in the future be enacted
or recognized, including, but not limited to, the following claims:
|
·
|
claims
for fraud, promissory estoppel, fraudulent inducement of contract
or
breach of contract or contractual obligation, whether such alleged
contract or obligation be oral, written, or express or implied by
fact or
law;
|
|
·
|
claims
for wrongful termination of employment, violation of public policy
and
constructive discharge, infliction of emotional distress,
misrepresentation, interference with contract or prospective economic
advantage, defamation, unfair business practices, and any other tort
or
tort-like causes of action relating to or arising from the employment
relationship or the formation or termination
thereof;
|
|
·
|
claims
of discrimination, harassment, or retaliation under any and all federal,
state, or municipal statutes, regulations, or ordinances that prohibit
discrimination, harassment, or retaliation in employment, as well
as
claims for violation of any other federal, state, or municipal statute,
regulation, or ordinance, except as set forth herein;
and
|
|
·
|
claims
for non-payment or incorrect payment of wages, commissions, bonuses,
severance, employee fringe benefits, stock options and the like,
whether
such claims be pursuant to alleged express or implied contract or
obligation, equity, the California Labor Code, the Fair Labor Standards
Act, the Employee Retirement Income Securities Act, and any other
federal,
state, or municipal laws concerning wages, compensation or employee
benefits.
|
5.2 Claims
Excluded from Arbitration.
The
Company and Employee understand and agree that arbitration of the disputes
and
claims covered by this Agreement shall be the sole and exclusive mechanism
for
resolving any and all existing and future disputes or claims arising out of
Employee’s recruitment to or employment with the Company or the termination
thereof. The Company and Employee further understand and agree that the
following disputes and claims are not covered by this Agreement and shall
therefore be resolved as permitted or required by the law then in
effect:
|
·
|
claims
for workers’ compensation benefits, unemployment insurance, or state or
federal disability insurance;
|
|
·
|
claims
for injunctive and/or other equitable relief;
and
|
|
·
|
any
other dispute or claim that has been expressly excluded from arbitration
by law.
|
Also,
nothing in this section should be interpreted as restricting or prohibiting
Employee from filing a charge or complaint with a federal, state, or local
administrative agency charged with investigating and/or prosecuting complaints
under any applicable federal, state or municipal law or regulation. Any dispute
or claim that is not resolved through the federal, state, or local agency must
be submitted to arbitration in accordance with this section.
5.3 Waiver
of Court or Jury Trial.
Employee and the Company understand and agree that the arbitration of disputes
and claims under this section shall be instead of a trial before a court or
jury
or a hearing before a government agency. Employee and the Company understand
and
agree that, by signing this Agreement, Employee and the Company are expressly
waiving any and all rights to a trial before a court or jury or before a
government agency regarding any disputes and claims which we now have or which
we may in the future have that are subject to arbitration under this
section.
5.4 Arbitration
Procedures.
The
arbitrator shall issue a written award that sets forth the essential findings
and conclusions on which the award is based. The arbitrator shall have the
authority to award any relief authorized by law in connection with the asserted
claims or disputes. The arbitrator’s award shall be final and binding on both
the Company and Employee and it shall provide the exclusive remedy(ies) for
resolving any and all disputes and claims subject to arbitration under this
section. The arbitrator’s award shall be subject to correction, confirmation, or
vacation, as provided by California Code of Civil Procedure Section 1285.8
et
seq and any applicable California case law setting forth the standard of
judicial review of arbitration awards.
The
arbitration shall be conducted in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association;
provided, however, that the Arbitrator shall allow the discovery authorized
by
California Code of Civil Procedure section 1283.05 or any other discovery
required by California law. Also, to the extent that any of the National Rules
for the Resolution of Employment Disputes or anything in this Agreement
conflicts with any arbitration procedures required by California law, the
arbitration procedures required by California law shall govern.
5.5 Place
of Arbitration.
The
arbitration shall take place in Orange County, California, or, at the Employee’s
option, the county in which the Employee resides at the time the arbitrable
dispute(s) or claim(s) arose, or in any county in which venue would have been
proper if Employee were free to bring the dispute(s) or claim(s) in
court.
5.6 Governing
Law.
This
Agreement and its validity, construction and performance shall be governed
by
the laws of the State of California, without reference to rules relating to
conflicts of law. Any dispute(s) and claim(s) to be arbitrated under this
section shall be governed by the laws of the State of California, without
reference to rules relating to conflicts of law.
5.7 Costs
of Arbitration.
The
Company will bear the arbitrator’s fee and any other type of expense or cost
that the employee would not be required to bear if he or she were free to bring
the dispute(s) or claim(s) in court as well as any other expense or cost that
is
unique to arbitration. The Company and Employee shall each bear their own
attorneys’ fees incurred in connection with the arbitration, and the arbitrator
will not have authority to award attorneys’ fees unless a statute or contract at
issue in the dispute authorizes the award of attorneys’ fees to the prevailing
party, in which case the arbitrator shall have the authority to make an award
of
attorneys’ fees as required or permitted by applicable law. If there is a
dispute as to whether the Company or Employee is the prevailing party in the
arbitration, the arbitrator will decide this issue.
5.8 Knowing
Waiver.
Employee
has been advised to consult with an attorney of his our own choosing before
signing this Agreement, and has had an opportunity to do so. Employee agrees
that he has read this section carefully and understands that by signing this
Agreement, he is waiving all rights to a trial or hearing before a court or
jury
of any and all disputes and claims regarding Employee’s employment with the
Company or the recruitment to or termination thereof (except as otherwise stated
herein).
6. Miscellaneous.
6.1 Notices.
All
notices, requests and other communications (collectively, "Notices") given
pursuant to this Agreement shall be in writing, and shall be delivered by
personal service or by United States first class, registered or certified mail
(return receipt requested), postage prepaid, addressed to the party at the
address set forth below:
| If to Company: |
New Motion, Inc
00 Xxxxxxxxx Xxxx Xxxxx
000 Xxxxxx XX
92606949-777-3700 (phone)
000-000-0000 (facsimile)
Attention Board of Directors &
Legal
|
|
|
| If to Employee: |
Xxxxxx
Xxxxxx
Address
Tel:
000-000-0000
|
Any
notice shall be deemed duly given when received by the addressee thereof,
provided that any Notice sent by registered or certified mail shall be deemed
to
have been duly given three days from date of deposit in the United States mails,
unless sooner received. Either party may from time to time change its address
for further Notices hereunder by giving notice to the other party in the manner
prescribed in this section.
6.2 Entire
Agreement.
This
Agreement contains the sole and entire Agreement and understanding of the
parties with respect to the entire subject matter of this Agreement, and any
and
all prior discussions, negotiations, commitments and understandings, whether
oral or otherwise, related to the subject matter of this Agreement are hereby
merged herein. No representations, oral or otherwise, express or implied, other
than those contained in this Agreement have been relied upon by any party to
this Agreement.
6.3 Severability.
The
Company and Employee believe the covenants contained in this Agreement are
reasonable and fair in all respects, and are necessary to protect the interests
of the Company and Employee. However, in case any one or more of the provisions
or parts of a provision contained in this Agreement shall, for any reason,
be
held to be invalid, illegal or unenforceable in any respect in any jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision or part of a provision of this Agreement or any other jurisdiction,
but this Agreement shall be reformed and construed in any such jurisdiction
as
if such invalid, illegal or unenforceable provision or part of a provision
had
never been contained herein and such provision or part shall be reformed so
that
it would be valid, legal and enforceable to the maximum extent permitted in
such
jurisdiction.
6.4 Neutral
Interpretation.
This
Agreement constitutes the product of the negotiation of the parties hereto
and
the enforcement hereof shall be interpreted in a neutral manner, and not more
strongly for or against either party based upon the source of the draftsmanship
hereof.
6.5 Captions.
The
various captions of this Agreement are for reference only and shall not be
considered or referred to in resolving questions of interpretation of this
Agreement.
6.6 Indemnification.
The
Company shall provide indemnification for its directors and officers (which
shall include Employee) to the maximum extent allowed by the Company’s Articles
of Incorporation, by-laws or Section 145 of the Delaware General Corporation
Law.
6.7 Business
Day.
If the
last day permissible for delivery of any Notice under any provision of this
Agreement, or for the performance of any obligation under this Agreement, shall
be other than a business day, such last day for such Notice or performance
shall
be extended to the next following business day (provided, however, under no
circumstances shall this provision be construed to extend the date of
termination of this Agreement).
6.8 Miscellaneous
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of
this Agreement. This Agreement embodies the entire Agreement and understanding
of the parties hereto in respect of the subject matter contained herein and
may
not be modified orally, but only by a writing subscribed by the party charged
therewith. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred
to
herein. This Agreement supersedes all prior Agreements and understandings
(whether oral or written) between the parties with respect to such subject
matter.
In
witness whereof, the parties have executed this Agreement as of the date first
set forth above.
|
Company:
|
Executive:
|
|
New
Motion, Inc.
|
|
|
By:___________________________
|
_____________________________
|
|
Xxxxxx
Xxxx, Chief Executive Officer
|
Xxxxxx Xxxxxx |
