EXHIBIT 10.5
EMPLOYMENT
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AND NONDISCLOSURE AGREEMENT
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THIS EMPLOYMENT AND NONDISCLOSURE AGREEMENT (the "Agreement") is made
and entered into as of the 25th day of January, 1999 (the "Effective Date"), by
and between NBG RADIO NETWORK, INC., a Nevada corporation (the "Company"), and
XXXXXXXXXXX X. XXXXXX (the "Employee", and, together with the Company, the
"Parties").
BACKGROUND
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Company is a publicly traded Nevada corporation engaged in the business
of creating and nationally marketing and syndicating radio advertising
programming.
Employee has managerial skills and expertise related to the business of
Kiosk programs and Kiosk integration.
Company has formed or is in the process of forming a fully owned
subsidiary under the name CustomLink, Inc. ("Subsidiary"), which will be in the
business of developing Kiosk programs and Kiosk integration.
Company intends to assign this Agreement to Subsidiary with the
intention that Employee will be employed by Subsidiary.
Employee is the co-owner of M-Tek Technical Services, Inc. ("M-Tek"),
which is currently involved in the business of Kiosk programming and Kiosk
integration. Contemporaneous with this Agreement, Company has acquired the
assets of M-Tek which assets have been or will be transferred to Subsidiary. The
parties desire to set forth the terms and conditions for Employee's employment
with Subsidiary. Company will remain liable and obligated to Employee according
to the terms of this Agreement.
I. EMPLOYMENT
The Company hereby employs Employee subject to the terms and conditions
contained in this Agreement. Employee hereby accepts such employment upon the
terms and conditions hereinafter set forth.
Page 1 - EMPLOYMENT AND NONDISCLOSURE AGREEMENT
II. TERM
The employment of Employee in accordance with the terms of this
Agreement shall commence on the Effective Date hereof and shall continue in
effect until November 30, 2002, at which time this Agreement shall terminate
unless renewed by the parties. This Agreement shall not be terminated by Company
prior to November 30, 2002, except for cause. The date on which Employee's
employment ceases for any reason, shall be referred to herein as the
"Termination Date."
III. COMPENSATION
For all services rendered by Employee under this Agreement the Company
shall pay to Employee the compensation and Employee benefits described in
Exhibit A attached hereto and incorporated herein by reference. Employee shall
also be entitled to all other Employee benefits established by the Subsidiary
and outlined in any employment manual in effect with Subsidiary, including but
not limited to benefits set forth in any non-qualified profit sharing plan
established by Subsidiary.
IV. DUTIES
A. Job Responsibilities. Employee will occupy the position of Chief
Operating Officer of Subsidiary and shall be responsible for those duties
associated with that position as set forth in Exhibit B attached hereto and
incorporated herein by reference. Employee shall use his best efforts to promote
the interests of the Subsidiary, shall devote his working time, attention and
energies to the business of the Subsidiary, and shall not, during the term of
this Agreement, be engaged in any other business activity, whether or not such
business activity is pursued for gain or profit, that is in any way competitive
with Company or Subsidiary, provided, however, that Employee shall not be
restricted from engaging or participating in businesses or other activities
totally unrelated to the business activities of the Company or Subsidiary that
do not interfere with the satisfactory performance of Employee's duties and
obligations to the Subsidiary as set forth in this Agreement.
B. Company Policies. Employee shall comply with all Subsidiary
policies, rules, regulations and procedures as are applicable to the officers of
the Subsidiary.
V. REIMBURSEMENT FOR EXPENSES
Employee shall be entitled to reimbursement for reasonable business
expenses actually incurred by him on behalf of the Subsidiary, as required in
the performance of his duties hereunder. Employee shall submit supporting
vouchers, receipts and records for all such business expenses to the President
or Controller of the Subsidiary in order to obtain reimbursement.
Page 2 - EMPLOYMENT AND NONDISCLOSURE AGREEMENT
VI. RESTRICTIVE COVENANT
A. Confidential Information. Employee acknowledges that by reason of
his employment by the Subsidiary, he will have access to valuable confidential
proprietary information concerning the Company and the Subsidiary, including but
not limited to its business plans, products, finances, customers, personnel,
trade secrets, computer programming, source codes, technical data and
information and business activities (the "Confidential Information"). At any
time during Employee's employment or after termination of Employee's employment
with the Subsidiary, Employee shall not, without the express authorization of
the President of the Company (i) disclose the Confidential Information to any
third party other than employees and authorized agents of the Company or
Subsidiary for purposes of performing his duties under this Agreement; or (ii)
use the Confidential Information, except for purposes of performing his duties
under this Agreement. All Company and Subsidiary property in the possession of
Employee must be returned to the Company upon termination of employment for any
reason. For purposes of this Agreement, Confidential Information does not
include matters that are public knowledge.
B. Covenant Not to Compete. Employee acknowledges that by (reason of
his employment) with Subsidiary and by reason of his contacts with Company, he
is of significant interest and value to competing companies. Accordingly,
Employee agrees that he will not for a period of three (3) years after the
Termination Date accept employment with or act as a consultant to, directly or
indirectly own, manage, operate, or control or participate in ownership
management or control of any company engaged in a business competing directly or
indirectly with the Company or Subsidiary. The scope of this covenant is
worldwide.
C. Solicitation of Employees. Employee agrees that for a period of
three (3) years immediately following the Termination Date, Employee shall not
directly or indirectly solicit, induce, recruit or entice any other Company or
Subsidiary employee to leave employment with Company or Subsidiary to pursue
employment with Employee or any other person or entity.
D. Injunctive Relief; Remedies. Employee acknowledges that the
restrictions contained in this section are necessary to protect the legitimate
interests of Company and Subsidiary and that any violation thereof would result
in irreparable harm and injury to the Company and/or Subsidiary. Employee
therefore agrees and acknowledges that in the event of any violation of any of
these restrictions, the Company and/or Subsidiary shall be entitled to obtain
from any court, preliminary and permanent injunctive relief, as well as damages
and an accounting of all earnings, profits and other benefits arising from such
violation, which damages may be cumulative and in addition to any other damages
or remedies which they may be entitled.
E. Scope of Agreement; Modification. The Parties have attempted to
limit Employee's right to compete only to the extent necessary to protect the
Company and Subsidiary from unfair competition. However, in the event the period
of time or the geographical area specified in this Agreement is adjudged
unreasonable by a court, the parties agree that a court or trier of fact in such
Page 3 - EMPLOYMENT AND NONDISCLOSURE AGREEMENT
event may, and is hereby required, to modify and enforce this Agreement and the
covenant not to compete set forth herein to the extent it believes to be
reasonable under the circumstances.
F. Employee Acknowledgement. Employee acknowledges that Employee has
certain management skills which would be applied or could be applied to earn
gainful employment not in violation of the covenant not to compete set forth
herein.
VII. TERMINATION. Employee's employment with Company shall terminate on
November 30, 2002. Nothing set forth herein shall limit Company's right to
terminate Employee's employment for Cause as defined in Exhibit C upon thirty
(30) days advance written notice.
VIII. NOTICE. Any notice or other communication required or permitted
to be given under this Agreement shall be in writing and shall be personally
delivered, mailed by certified mail, return receipt requested, postage prepaid,
or sent by telex or facsimile transmission, addressed to the parties as follows:
EMPLOYEE: XXXXXXXXXXX X. XXXXXX
00000 X.X. Xxxxxxx
Xxxxxxxx, Xxxxxx 00000
Fax No. (000) 000-0000
COMPANY: NBG RADIO NETWORK, INC.
c/o Xxxx Xxxxxx
000 X.X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Fax No. (000) 000-0000
SUBSIDIARY: CustomLink, Inc.
c/o Xxxx Xxxxxx
000 X.X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Fax No. (000) 000-0000
Any notice or other communication shall be deemed to be given: (1) in the case
of personal delivery on the date of delivery; (2) in the case of telex or
facsimile transmission on the date of confirmation of delivery to the addressee;
and (3) in the case of delivery by mail at the at the expiration of the third
day after the date of deposit in the United States mail. The addresses to which
notices or other communications shall be mailed may be changed from time to time
by giving written notice to the other party as provided in this Section.
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IX. ASSIGNMENT
This Agreement may be assigned by the Company, at its discretion, to
any subsidiary of the Company, and the rights and obligations of the Company
under this Agreement shall automatically inure to the benefit of and shall be
binding upon the assigned subsidiary of the Company. This Agreement may not be
assigned by the Company to any person, firm or corporation that is not a
subsidiary of the Company without first obtaining the written consent of
Employee. As to Employee, this Agreement is personal and may not be assigned by
Employee to any other person, firm or corporation.
As to Company, it is understood and agreed that this Agreement shall be
assigned to Subsidiary (the "Assignment"), which is a wholly owned subsidiary of
Company. Employee hereby acknowledges and consents to the Assignment.
Notwithstanding the Assignment, Company shall remain liable and obligated to
Employee as set forth in this Agreement.
As to Company and Subsidiary, this Agreement may not be assigned except
to a wholly owned subsidiary of Company without Employee's consent which consent
shall not be unreasonably withheld.
X. RENEWAL
This Agreement may be renewed at the end of the Term of this Agreement,
upon written agreement, signed by the parties.
XI. MISCELLANEOUS
A. Entire Agreement. This Agreement and the attached and incorporated
Exhibits contain the entire Agreement of the Parties hereto, and may be amended
only by an agreement in writing signed by each of the Parties.
B. Arbitration. All disputes arising under this Agreement shall be
settled exclusively by arbitration before one (1) arbitrator and according to
the Rules of the American Arbitration Association (the "AAA"). The arbitration
will be held in Portland, Oregon.
The arbitrator shall be selected by agreement of Employee and the
Company or Subsidiary, but if they do not so agree within thirty (30) days after
the date of the request for arbitration, the selection of an arbitrator shall be
made pursuant to the Rules of the AAA. The award rendered by the arbitrator
shall be conclusive and binding upon the Parties hereto and judgment on any such
award may be entered in any court having jurisdiction over the Parties to and
the subject matter of the controversy. Except as may be provided otherwise, each
Party shall pay its own expenses of arbitration and the expenses of the
arbitrator shall be equally shared. Nothing herein set forth shall prevent the
Parties hereto from settling any dispute by mutual agreement at any time.
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The Parties agree that they shall only be bound to conduct the
arbitration in accordance with the Rules of the AAA and shall not be required to
and shall not use the services of the AAA. The Parties, however, agree that for
purposes of discovery the rules of Oregon Civil Procedure, and Multnomah County
Circuit Court Local Rules shall apply.
The fact of and the content of any arbitration proceeding shall be
confidential and neither Party shall disclose the same to anyone without the
consent of all Parties to the arbitration, except that a judgment on the
arbitrator"s award may be filed as otherwise provided herein.
C. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one an the same instrument. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more Parties hereto,
and an executed copy of the Agreement may be delivered by one or more Parties
hereto by facsimile or similar instantaneous transmission devise pursuant to
which the signature of or on behalf of the such Party can be seen and such
execution and delivery shall be considered valid, binding, and effective for all
purposes. At the request of any Party hereto, all Parties hereto agree to
execute an original of this Agreement as well as any facsimile, telecopy or
other reproduction hereto.
D. Freedom to Deal. Employee hereby represents and warrants to the
Company that he is free to enter into this Agreement, and his execution of this
Agreement and performance of his duties hereunder for the Company do not and
shall not constitute a breach of any agreement of Employee with, or other legal
obligation of Employee to, any third party.
E. Governing Law. This Agreement shall be construed in accordance with
and governed for all purposes by the laws of the State of Oregon applicable to
contracts executed and wholly-performed within such State, without regard to
principles of conflicts of law. The Parties hereby consent to the jurisdiction
and venue of the state and federal courts in and for Multnomah County, Oregon,
in connection with any disputes concerning the enforceability of Section X.C.
(Arbitration).
F. No Waiver. The failure of a Party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver of
such Party's rights or deprive such Party of the right thereafter to insist upon
strict adherence to that term or any other term of this Employee Agreement.
G. Severability. In the event that any one or more of the provisions of
this Agreement shall become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.
H. Binding Agreement. This Agreement shall inure to the benefit of and
be binding upon the personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees of
Employee and upon the successors and assigns of Company and Subsidiary.
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I. Definitions. Definitions used herein shall include those as set
forth in Exhibit C attached hereto and incorporated by reference.
IN WITNESS WHEREOF, the Parties have caused this Employment and
Nondisclosure Agreement to be duly executed effective as of the date first
mentioned above.
COMPANY: EMPLOYEE:
NBG RADIO NETWORK, INC. XXXXXXXXXXX X. XXXXXX
By:
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Xxxx X. Xxxxxx, President Xxxxxxxxxxx X. Xxxxxx
Date: Date:
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EXHIBIT A
EMPLOYEE COMPENSATION AND BENEFITS
1. Employee Compensation. Employee shall be paid a base salary of
$120,000.00 per year. The base salary shall be paid to Employee on a bi-monthly
basis.
a. Profit Sharing Plan. At the end of each fiscal year, Employee
shall be eligible to participate in the Non-Qualified Profit Sharing Plan of the
Subsidiary.
2. Additional Employee Benefits.
a. Retirement/Deferred Compensation Benefits. Employee shall be
included as a participant in all Subsidiary qualified retirement plans.
b. Health Benefits. Employee and Employee's family, if
applicable, shall be included in all Subsidiary health and medical insurance
plans.
c. Vacation/Personal Leave. Employee shall receive all vacation
and personal leave benefits, or any other benefit provided for in the Company
Employee Manual.
d. Expense Reimbursement. Employee shall be entitled to expense
reimbursement as set forth in Section V of this Agreement.
e. Mileage Reimbursement. Employee will be paid mileage for use
of her automobile with mileage reimbursement based upon Internal Revenue Service
Guidelines applicable at the time of reimbursement.
f. Other Employee Benefits. Employee shall be entitled to all
other employee benefits as adopted and put into effect by Subsidiary.
g. Non-Qualified Profit Sharing Plan. Employee shall be entitled
to the benefits of the Non-Qualified Profit Sharing Plan (the "Profit Sharing
Plan"), a copy of which is attached hereto as Exhibit A. If Company shall cause
to be implemented by Subsidiary as soon as practicable subsequent to the date of
this Agreement.
h. Level of Benefits. With respect to Employee benefits a, b and
c above, the level of benefits as provided by Subsidiary shall be the same as
provided by Company on behalf of its employees.
Initial:
Company
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Xxxxxxxxxxx X. Xxxxxx
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EXHIBIT B
JOB DESCRIPTION
Direct and operate of Subsidiary, including the management of
Subsidiary's financial condition, production, marketing, promotion, sales.
Essential duties and responsibilities include the following:
Oversee and direct accounting and purchasing activities for
Subsidiary.
Direct the procedures and systems necessary to maintain proper
records and to afford adequate controls over production and
services of Subsidiary.
Direct the activities of Subsidiary.
Appraise the Company's President and/or Board of Directors of
Subsidiary's productivity and issue periodic financial and
operating reports.
Direct and coordinate the establishment of budget programs.
Perform other related duties may be assigned by Subsidiary.
Initial:
Company
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Xxxxxxxxxxx X. Xxxxxx
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EXHIBIT C
ADDITIONAL DEFINITIONS
"Cause" as used herein means fraud, embezzlement, a crime (whether
misdemeanor or felony), any act of malfeasance which relates to Employee's
employment by Company or which would reasonably be expected to bear adversely
upon Company's or Subsidiary's reputation or failure by Employee to materially
perform Employee's duties as set forth herein.
Initial:
Company
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Xxxxxxxxxxx X. Xxxxxx
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