EMPLOYMENT AGREEMENT IMPART MEDIA GROUP, INC.
Exhibit
10.1
IMPART
MEDIA GROUP, INC.
This
Employment Agreement (this “Agreement”)
is
entered into as of February 28, 2006 (the “Commencement
Date”)
by and
between Xxxxxxx Xxxxxx, an individual residing at 0 Xxxxxx Xxxxxx Xxxx,
Xxxxxxxxxx Xxx, Xxx Xxxx 00000 (the “Employee”),
and
IMPART Media Group, Inc., a corporation organized under the laws of the State
of
Nevada with offices at 0000 X. Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxxxx 00000 (the
“Company”).
In
consideration of the premises and mutual covenants herein contained, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Company and Employee, (each a “Party,”
and
together the “Parties”)
hereby
agree as follows:
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1.
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Definitions
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“Accrued
Amount”
shall
have the meaning set forth in Section 5(a) hereof.
“Annual
Base Salary”
shall
have the meaning set forth in Section 4(a) hereof.
“Business”
shall
mean the provision of digital advertising services to the out-of-home
advertising market.
“Business
Personnel”
shall
mean, as of any date, any person (a) who is, or within the one (1)-year period
prior to such date was, an employee of the Company or any subsidiary or
affiliate thereof, or (b) who is, or within the one (1)-year period prior to
such date was, a consultant or free-xxxxx worker engaged in the Business for
or
on behalf of the Company or any subsidiary or affiliate thereof.
“Cause”
shall
mean (a) Employee’s conviction of, admission of guilt to or plea of nolo
contendere
or
similar plea (which, through lapse of time or otherwise, is not subject to
appeal) with respect to any crime or offense that constitutes a felony in the
jurisdiction involved; (b) acts of dishonesty or moral turpitude which are
materially detrimental to the Company; (c) repeated willful failure by Employee
to obey the reasonable and lawful orders of the Board of Directors of the
Company which remain uncured, if reasonably capable of cure, for thirty (30)
days from receipt of written notice thereof from the Company; (d) any act by
Employee in violation of Section 8 hereof, any statement or disclosure by
Employee in violation of Section 6 hereof, or any material breach by Employee
of
any provision of this Agreement which remains uncured, if reasonably capable
of
cure, for thirty (30) days from receipt of written notice thereof from the
Company; and (e) if
Employee is regularly under the influence of alcohol or drugs
by
not prescribed by a qualified physician, provided,
however,
that
such condition shall be confirmed by a qualified physician.
“Commencement
Date”
shall
mean February 28, 2006.
“Company
Digital Elements”
shall
mean hardware products sold by the Company on which advertising and media
content is displayed.
“Confidential
Information”
shall
mean all of the Company's trade secrets and proprietary and non-public
confidential information consisting of, but not limited to, customer lists,
processes, computer programs, compilations of information, records, sales and
solicitation procedures, customer requirements, pricing techniques and
information, pricing, methods of doing business and any other information
generally used in the operation of the Business not generally known in the
industry relevant to the Business or otherwise not generally available to the
public, which was obtained by Employee during his employment with or from the
Company. For purposes of the definition of Confidential Information,
“the
Company”
shall
be deemed to include the Company, its predecessors and successors and any
subsidiaries or affiliates of the Company.
“Disability”
shall
mean, with respect to Employee, the inability due to illness, accident, injury,
physical, or mental incapacity or other disability to participate effectively
or
actively in the affairs of the Company or any of its subsidiaries or affiliates
for more than twenty-six (26) consecutive weeks or more than thirty-nine (39)
weeks in any consecutive fifty-two (52) week period as determined in good faith
by the Company.
“EBITDA”
is
defined as earnings before interest, taxes, depreciation and amortization and
cumulative effect of changes in accounting principles, less an appropriate
allocable amount of overhead costs incurred by the Company in connection with
the operation of the Impart Advertising Division, as determined by the Company’s
regular accountants in accordance with generally accepted accounting principles
consistently applied.
“Employment
Period”
shall
have the meaning set forth in Section 2 hereof.
“Expiration
Date”
shall
have the meaning set forth in Section 2 hereof.
“Good
Reason”
shall
mean the occurrence of any one or more of the following events which has not
been cured within thirty (30) days after the Company's receipt of written notice
thereof from Employee: (a) a material breach by the Company of any material
provision of this Agreement; (b) any decrease in Employee's Annual Base Salary
without the prior written consent of Employee; (c), any decrease or demotion
in
Employee’s title or material diminution of responsibilities as set forth in this
Agreement; or (d) a required relocation of Employee’s primary place of work of
more than thirty (30) miles from New York City.
“Impart
Advertising Division”
shall
mean the strategic business unit of the Company that is responsible for the
sale
of advertising content which shall initially be conducted by Impart Media
Advertising, Inc., a wholly-owned subsidiary of the Company.
“Notice
of Termination”
shall
have the meaning set forth in Section 5(c) hereof.
“Restricted
Activities”
shall
have the meaning set forth in Section 9 hereof.
“Restricted
Persons”
shall
have the meaning set forth in Section 9 hereof.
“Severance
Period”
shall
have the meaning set forth in Section 5(b) hereof.
2. Employment
Term. The
Company hereby agrees to employ Employee, and Employee hereby agrees to be
employed by the Company, for a term (the “Employment
Period”)
commencing on the Commencement Date and expiring on December 31, 2008 (the
“Expiration
Date”),
unless earlier terminated as provided herein.
3. Services. During
the Employment Period, Employee shall hold the position of Executive Vice
President of the Company and President of the Impart Advertising Division,
reporting directly to the Company’s Chief Executive Officer. Employee shall
devote substantially all of his business time, skill and attention to the
business of the Company and its subsidiaries and affiliates engaged in the
Business and shall perform such duties as are customarily performed by similar
Employees and as are more specifically enumerated in Exhibit
A
attached
hereto, which are consistent with Employee's position; provided,
however,
that
the foregoing is not intended to preclude Employee, subject to the restrictions
set forth in Section 8 hereof, from (a) owning and managing personal
investments, or (b) engaging in charitable activities and community affairs,
provided that the performance of these activities referred to in clauses (a)
and
(b) does not prevent Employee from devoting substantially all of his business
time to the Company and its subsidiaries and affiliates.
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4.
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Compensation
and Benefits.
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(a) Annual
Base Salary.
Subject
to Section 4(b) below, during the Employment Period, the Company shall pay
Employee an annual base salary in the amount of One Hundred Twenty-Five Thousand
Dollars ($125,000) (the “Annual
Base Salary”).
The
Annual Base Salary shall
be
payable in accordance with the Company's normal payroll practices.
(b) Commissions.
Employee shall be entitled to receive quarterly commissions, payable in
accordance with the Company’s normal payroll practices, in an amount equal to
(i) five percent (5%) of the net cash revenues of the Company that are directly;
and solely attributable to the sale of the Company Digital Elements;
provided
that
such sale was made as a direct result of the efforts of the Impart Advertising
Division and (ii) two and 21/100ths percent (2.21%) of the net, collectible
margins on media xxxxxxxx of the Impart Advertising Division that directly
and
solely result from Employee’s sales efforts (collectively, “Commissions”).
(c) Cash
Bonus.
For
each fiscal year during the Employment Period, Employee shall receive a cash
bonus equal to nine and 82/100ths percent (9.82%) of the Impart Advertising
Division’s EBITDA for the fiscal year then ended. Any cash bonus amount payable
pursuant to this Section 4(c) shall be paid to Employee as soon as practicable
following the end of the fiscal year to which it relates.
(d) Fringe
Benefits.
In
addition to the Annual Base Salary, Commissions
and cash bonus set forth above, Employee shall receive the following benefits
in
accordance with, and subject to, the Company’s policies and
practices:
(i) To
the
extent eligible, participation in any Company-sponsored welfare benefit plans,
programs or policies, including, without limitation, any health, dental or
vision plan, as may be made generally available to employees of the Company,
as
each such plan, policy or program may be adopted or amended from time to time;
(ii) To
the
extent eligible, participation in all Company-sponsored pension, retirement,
savings and other employee benefit plans and programs, as each such plan may
be
adopted or amended from time to time;
(iii) Paid
vacation pursuant to the vacation policy of the Company, as the same may be
adopted or amended from time to time, provided,
however,
Employee shall be entitled to not less than three (3) weeks paid vacation;
(iv)
Reimbursement
for reasonable business expenses incurred by Employee in furtherance of the
interests of the Company in accordance with the policy of the Company, as the
same may be amended from time to time; and
(v) Cash
bonuses, option grants, life insurance, disability insurance, and other
appropriate insurance coverages as mutually agreed by Employee and the Company
and as approved by the Company’s board of directors.
(d) Withholding.
The
Company shall deduct and withhold from such compensation all social security
and
other federal, state and local taxes and charges which currently are or which
hereafter may be required by law to be so deducted and withheld.
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5.
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Termination
of Employment.
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(a) In
the
event (i) the Company terminates Employee's employment with the Company for
Cause, (ii) Employee voluntarily terminates his employment with the Company
other than for Good Reason, or (iii) Employee's employment terminates as a
result of either Employee's death or Disability, the Company shall pay Employee
(or his estate in the case of death) any unpaid salary, any unpaid Commissions,
any vacation accrued but unused, and reimbursement for any unreimbursed
expenses, all through and including the date of termination (the “Accrued
Amount”).
(b) In
the
event the Employee's employment is terminated for any reason other than (i)
by
the Company for Cause, (ii) by Employee voluntarily without Good Reason, the
Company shall pay to Employee (A) the Accrued Amount, plus (B) his Annual Base
Salary, pro-rated, for the lesser of (i) the balance of the Employment Period,
or (ii) twelve (12) months following such date of termination (the “Severance
Period”),
with
such pro-rated payments of Annual Base Salary to be made in accordance with
the
Company’s payroll practices.
(c) Any
termination of Employee's employment by the Company or any such termination
by
Employee (other than on account of death) shall be communicated by written
Notice of Termination to the other Party. For purposes of this Agreement, a
“Notice
of Termination”
shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under the provision so indicated.
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6.
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Confidential
Information.
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Employee
understands and acknowledges that during his employment with the Company, he
has
been and will be exposed to Confidential Information, all of which is
proprietary and which rightfully belongs to the Company. Employee acknowledges
and agrees that the Confidential Information is a valuable, special and unique
asset of the Company, the disclosure or unauthorized use of which could cause
substantial injury and loss of profits and good will to the Company.
Accordingly, Employee shall hold in a fiduciary capacity for the benefit of
the
Company such Confidential Information obtained by Employee during his employment
with the Company and shall not, directly or indirectly, at any time, either
during or after his employment with the Company, without the Company’s prior
written consent, use any of such Confidential Information for his own benefit,
for the benefit of others, or to the detriment of the Company or disclose any
of
such Confidential Information to any individual or entity other than the Company
or its employees, except as required in the performance of his duties for the
Company or as otherwise required by law. Employee shall take all reasonable
steps to safeguard such Confidential Information and to protect such
Confidential Information against disclosure, misuse, loss or theft.
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7.
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Return
of Documents.
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Except
for such items which are of a personal nature to and the property of Employee
(e.g.,
daily
business planner and roll-o-dex), all writings, records and other documents
and
things containing any Confidential Information shall be the exclusive property
of the Company, shall not be copied, summarized, extracted from or removed
from
the premises of the Company, except in pursuit of the business of the Company
or
at the direction of the Company, and shall be delivered to the Company, without
retaining any copies, upon the termination of Employee's employment or at any
time as requested by the Company.
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8.
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Non
Compete/Non Solicit.
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Employee
agrees that during the Employment Period and for one (1) year thereafter,
Employee shall not, and shall use his best efforts to ensure that any agents,
representatives and any other persons acting on his behalf (Employee and such
agents, representatives, and other persons collectively hereinafter referred
to
as the “Restricted
Persons”)
do
not, directly or indirectly, for the benefit of the Employee, any other
Restricted Persons or their affiliates (the activities being so restricted
hereinafter being referred to as the “Restricted
Activities”):
(a) Own,
manage, operate, join, control, or participate in the ownership, management,
operation or control of, or be connected with as a director, officer, Employee
or administrative employee, partner, lender, consultant or otherwise with any
business or division or line of business or organization in the United States
which engages in a business substantially similar to or directly or indirectly
competitive with the Business of the Company or any of its subsidiaries and
affiliates. Nothing herein shall prohibit Employee and all other Restricted
Persons collectively from being passive owners of an aggregate of not more
than
five (5%) percent of the outstanding stock of any class of securities of a
corporation which is publicly traded and substantially similar to or competitive
with the Business of the Company or any of its subsidiaries and affiliates,
so
long as he has no active participation (including, without limitation, as a
consultant or advisor) in the business of such corporation or other entity;
(b) Induce
or
attempt to persuade any current or then current customer or vendor of the
Company, or any of its subsidiaries or affiliates, to terminate such
relationship with the Company, or with any of its subsidiaries or affiliates;
and
(c) Induce
or
attempt to persuade any Business Personnel to terminate or to refuse to enter
into any employment, agency or other business relationship with the Company,
or
any of its subsidiaries or affiliates.
Employee
acknowledges and agrees that the violation of this non competition/non
solicitation covenant could cause substantial injury and loss of profits to
the
Company. The Parties hereby acknowledge and agree that this Section 8 will
not
apply in the case where Employee’s employment with the Company is terminated
without Cause or for Good Reason.
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9.
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Enforcement.
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(a) For
purposes of Sections 6, 7, or 8, the Company shall be deemed to include the
Company, its predecessors and successors and any subsidiaries and affiliates
of
the Company.
(b) If,
at
the time of enforcement of Sections 6, 7, or 8, a court shall hold that the
duration, scope, area, or other restrictions placed on Employee therein are
unreasonable, as to duration, scope, area or other restrictions, those
restrictions shall be reduced and enforceable to the maximum extent deemed
reasonable by such court for the stated duration, scope, area, or other
restrictions.
(c) The
Parties agree that the Company, or its subsidiaries or affiliates would suffer
irreparable harm from a breach by Employee of any of the covenants or agreements
contained in Sections
6, 7, or 8.
Therefore, in the event of the actual or threatened breach by Employee of any
of
Sections
6, 7, or 8,
the
Company or any of its subsidiaries or affiliates may, in addition and
supplementary to other rights and remedies existing in its favor, apply to
any
court of law or equity of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any violation of
the
provisions hereof.
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10.
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Maintenance
of Records.
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So
long
as Employee is employed by the Company, Employee shall maintain proper files
and
records relating to work performed by him in accordance with standard procedures
of the Company or as otherwise reasonably specified by the Company from time
to
time. All such files and records are to be kept in the Company’s custody and
subject to its control and to be the exclusive property of the Company. Upon
termination of Employee’s employment with the Company or any affiliate thereof,
Employee shall deliver to the Company all files and records of any nature which
are in Employee’s possession or control and which relate in any manner to his
employment or to the activities of the Company or any affiliate
thereof.
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11.
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Successors
and Assigns.
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(a) This
Agreement and all rights of the Company hereunder shall inure to the benefit
of
and be enforceable by the Company’s successors and assigns.
(b) This
Agreement and all rights of Employee hereunder shall inure to the benefit of
and
be enforceable by Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees.
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12.
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Modification
or Waiver.
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No
amendment, modification, waiver, termination, or cancellation of this Agreement
shall be binding or effective for any purpose unless it is made in a writing
signed by the Party against whom enforcement of such amendment, modification,
waiver, termination, or cancellation is sought. No course of dealing between
or
among the Parties shall be deemed to affect or to modify, amend, or discharge
any provision or term of this Agreement. No delay on the part of the Company
or
Employee in the exercise of any of their respective rights or remedies shall
operate as a waiver thereof, and no single or partial exercise by the Company
or
Employee of any such right or remedy shall preclude other or further exercise
thereof. A waiver of right or remedy on any one occasion shall not be construed
as a bar to or waiver of any such right or remedy on any other
occasion.
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13.
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Notices.
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All
notices or other communications required or permitted hereunder shall be made
in
writing and shall be deemed to have been duly given if delivered by hand or
delivered by a recognized delivery service or mailed, postage prepaid, by
express, certified or registered mail, return receipt requested, and addressed
to the Employee or to the Company (with a copy addressed to Xxxx X. Xxxxxxx,
Esq, Xxxxx Xxxxxxx Xxxxxxx & Xxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
10022), at the address set forth above (or to such other address as shall have
been previously provided in accordance with this Paragraph 13).
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14.
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Governing
Law.
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This
Agreement will be governed by and construed in accordance with the laws of
the
State of New York without regard to principles of conflicts of laws thereunder.
Any dispute arising out of this Agreement that is not settled by mutual consent
of the parties shall be adjudicated by any federal or state court sitting in
the
County, City and State of New York. Each Party consents to the exclusive
jurisdiction of such courts over any such dispute.
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15.
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Severability.
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Whenever
possible, each provision and term of this Agreement shall be interpreted in
such
manner as to be effective and valid under applicable law, but if any provision
or term of this Agreement shall be held to be prohibited by or invalid under
such applicable law, then such provision or term shall be ineffective only
to
the extent of such prohibition or invalidity, without invalidating or affecting
in any manner whatsoever the remainder of such provisions or term or the
remaining provisions or terms of this Agreement.
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16.
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Counterparts.
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This
Agreement may be executed in separate counterparts, each of which is deemed
to
be an original and both of which taken together shall constitute one and the
same agreement.
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17.
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Headings.
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The
headings of the Paragraphs of this Agreement are inserted for convenience only
and shall not be deemed to constitute a part hereof and shall not affect the
construction or interpretation of this Agreement.
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18.
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Entire
Agreement.
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This
Agreement constitutes the entire agreement of the Parties with respect to the
subject matter hereof and supersedes all other prior agreements and
undertakings, both written and oral, among the Parties with respect to the
subject matter hereof.
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19.
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Survival
of Agreements.
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The
covenants made in Sections 5, 6, 7, 8, 9, and 11-16 shall survive the
termination of this Agreement.
In
Witness Whereof,
the
undersigned have executed this Agreement as of the date first above
written.
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IMPART
MEDIA GROUP, INC.
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By:
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/s/Xxxxxx
Xxxxxxxx
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Name:
Xxxxxx Xxxxxxxx
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Title:
Chief Financial Officer
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EMPLOYEE
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/s/Xxxxxxx
Xxxxxx
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Xxxxxxx
Xxxxxx
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