Exhibit 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") made and entered as of November 18,
2004, by and among Branded Media Corporation (the "Company"), a Nevada
corporation, and Xxx Xxxxxxxxxxxx (the "Executive").
BACKGROUND
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The parties desire to enter into an employment agreement and to set forth
herein the terms and conditions of the Executive's employment by the Company.
Accordingly, in consideration of the mutual covenants and agreements set forth
herein and the mutual benefits to be derived here from, and intending to be
legally bound hereby, the Company and the Executive agree as follows:
1. Employment.
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(a) Duties. The Company shall employ the Executive, on the terms set forth
in this Agreement, as Chief Executive Officer. Subject to the conditions set
forth in Section 2(b) below being met to the satisfaction of the Executive, in
her sole and absolute discretion, (i) the Executive accepts such employment with
the Company and (ii) the Executive shall perform and fulfill such duties as are
reasonable and necessary for such position and will devote her efforts to the
performance and fulfillment of her duties and to the advancement of the
interests of the Company, subject only to the direction, approval, control and
directives of the Board of Directors of the Company (the "Board"); provided,
however, that the Executive may make passive investments in other business
ventures so long as such other ventures are not competitive with the business of
the Company.
(b) Place of Performance. In connection with her employment by the Company,
the Executive shall be based in the borough of Manhattan, except for required
travel on Company business.
2. Term.
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(a) Commencement. The Executive's employment under this Agreement shall be
for a four-year term (the "Term") commencing on the later of (i) November 18,
2004 or (ii) the date which is five (5) business days from the satisfaction by
the Company of the conditions set forth in Section 2(b) below (the "Commencement
Date"; "Commencement Date" shall also refer to the anniversary date for calendar
year purposes in determining Executive's annual increase for purposes of Section
3(a) of this Agreement), and shall continue uninterrupted for the Term.
(b) Conditions to Commencement of Employment. The commencement of the Term
and the obligations of Executive to perform her obligations hereunder is subject
to the fulfillment at or prior to the Drop Dead Date (as defined below) of the
following conditions: (i) the closing by the Company of an equity financing in
which the gross proceeds to the Company are equal to or greater than five
hundred thousand ($500,000) dollars, (ii) the binding by the Company of
director's and officer's insurance including, without limitation, $1,000,000,
with a retention in an amount no greater than $150,000 per claim, and otherwise
satisfactory to Executive in her sole and absolute discretion, (iii) there shall
have occurred no event, occurrence, fact, condition, change, development or
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effect with respect to or affecting the Company which would reasonably be
expected to result in a material adverse effect on the business, financial
condition, assets, liabilities, or results of operation of the Company, or (iv)
no statement by the Company, whether oral or written, furnished or to be
furnished by Company to Executive, when taken together with all such statements,
in the aggregate, is subsequently determined or discovered by Executive to
contain any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements not misleading.
(c) Termination. Unless extended by the Executive by written instrument,
this Agreement shall terminate and be of no further force and effect if the
conditions set forth in Section 2(b) above have not been fulfilled on or before
December 31, 2004 (the "Drop Dead Date").
3. Compensation.
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(a) Base Salary. During the Term, the Executive shall be entitled to
receive an annual salary (the "Base Salary") as follows:
(1) for the year ending Commencement Date, 2005, $300,000;
(2) for the year ending Commencement Date, 2006, $400,000;
(3) for the year ending Commencement Date, 2007, $500,000;
(4) for the year ending Commencement Date, 2008, $600,000;
which shall be the base salary (the "Base Salary") for the remaining Term,
payable in installments at such times as the Company customarily pays its other
senior executive employees (but in any event no less often than monthly).
(b) In the event of a change in control such as would require the Company
to file a Form 8-K with the Securities and Exchange Commission if the Company
was a reporting company, the Executive shall be entitled to (i) a lump sum
payment equal to the Base Salary, with minimum ten percent (10%) increases each
year, for the remaining Term, plus a, lump sum bonus equal to five times the
largest bonus paid to Executive under this Agreement and (ii) immediate
acceleration of any and all unvested Company stock options (which provision
shall be reflected in the grant of Company stock options to Executive).
(d) Bonus. Executive shall receive an annual bonus in accordance with a
Company Bonus Plan adopted by the Board, provided, however, that the annual
bonus in any given year shall be no less than ten (10%) of Executive's Base
Salary with respect to such year (the "Minimum Bonus"). The annual bonus shall
be paid no later than January 15 with respect to the immediately previous
calendar year, or part thereof.
4. Health Insurance and Other Benefits.
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During the Term, the Executive shall be entitled to all employee benefits
offered by the Company to its senior executives and key management employees,
including, without limitation, all pension, profit sharing, retirement, stock
option, salary continuation, deferred compensation, disability insurance,
hospitalization insurance major medical insurance, medical reimbursement
survivor income, life insurance or any other benefit plan or arrangement
established and maintained by the Company, subject to the rules and regulations
then in effect regarding participation therein. The Company shall implement a
benefits plan within one (1) month from Commencement Date which, as it pertains
to Executive, shall include, without limitation, health and medical insurance,
dental insurance, and short-term and long-term disability insurance. Within one
(1) month of the Commencement Date, the Company shall have procured and funded
for Executive a life insurance policy, in form and substance satisfactory to
Executive, acting reasonably, in the amount of one million dollars ($1,000,000),
with the beneficiary to be named by Executive.
5. Reimbursement of Expenses.
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The Executive shall be reimbursed for all items of travel, entertainment and
miscellaneous expenses which the Executive reasonably incurs in connection with
the performance of her duties hereunder, provided that the Executive submit to
the Company such statements and other evidence supporting said expenses as the
Company may reasonably require. Executive shall be entitled to business class
travel and accommodations when traveling for Company business, as well as car
service to and from all airports.
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6. Grant of Common Stock Purchase Warrant.
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Upon the execution of this Agreement, the Company shall grant to Executive,
a Common Stock Purchase Warrant to purchase Two Million (2,000,000) shares of
the Company's common stock at a price of $.01 per share. The form of warrant is
attached to this Agreement as Exhibit "A".
7. Employee Incentive Stock Option Plan.
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The Executive will also be eligible to participate in the Company's
Employee Incentive Stock Option Plan when approved by the Board, with vesting on
a monthly basis over no greater than a two year period, as well as one hundred
(100%) acceleration of any and all unvested Company stock options upon a change
of control, as set forth in Section 3(b) (ii) above.
8. Vacations.
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The Executive shall be entitled to the number of paid vacation days in each
calendar year determined by the Company from time to time for its senior
executive officers, but not less than six (6) weeks in any calendar year
(prorated in any calendar year during which the Executive is employed hereunder
for less than the entire year in accordance with the number of days in such
calendar year during which he is so employed), with up to four (4) weeks allowed
to be carried over in any given calendar year, prorated as applicable on the
same basis as set forth above. The Executive shall also be entitled to all paid
holidays given by the Company to its senior executive officers.
9. Termination of Employment.
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(a) Death or Total Disability. In the event of the death of the Executive
during the Term, this Agreement shall terminate as of the date of the
Executive's death. Salary for the remaining Term shall be paid to Executive's
beneficiary or estate, and all health, medical and dental insurance benefits for
Executive's family shall be continued for at least two years following the
Executive's death, as well as payment in respect of accrued but unused vacation
and reimbursement of any outstanding expenses. In the event of the Total
Disability (as that term is defined below) of the Executive for any consecutive
twelve months during the Term, the Company shall have the right to terminate
this Agreement by giving the Executive thirty (30) days prior written notice
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thereof, and upon the expiration of such thirty (30) day period, the Executive's
employment under this Agreement shall terminate. In the event of such
termination, the salary for the remaining Term shall be paid to Executive. If
the Executive shall resume her duties within thirty (30) days after receipt of
such a notice of termination, this Agreement shall continue in full force and
effect. Upon termination of this Agreement under this Section 9(a), the Company
shall have no further obligations or liabilities under this Agreement, except to
pay to the Executive's estate or the Executive, as the case may be, the portion
of salary that remains unpaid for the Term, including applicable increases,
Minimum Bonus for each calendar year or part thereof, and continuation of
benefits, as well as payment in respect of accrued but unused vacation and
reimbursement of any outstanding expenses, as forth herein.
The term "Total Disability," as used herein, shall mean a mental or physical
condition which in the reasonable opinion of an independent medical doctor
selected by the Company and approved by Executive or, if Executive is mentally
incapacitated, by Executive's duly appointed guardian, in each case acting
reasonably, renders the Executive unable or incompetent to carry out the
material duties and responsibilities of the Executive under this Agreement at
the time the disabling condition was incurred. If the Executive is covered under
any policy of disability insurance under paragraph 4, the definition of Total
Disability hereunder shall be the definition of that term in such policy.
(b) Termination for Cause. The Executive's services under this Agreement
may be terminated for cause where the Executive engages in the following
conduct: (a) embezzlement, intoxication or illegal drug use which materially
interferes with job performance on an ongoing basis, wrongful disclosure of
Company's confidential information which directly results in material harm to
the Company, gross negligence in performance of duties, conviction of a felony,
receipt of any rebate, kickback or other remuneration or consideration from any
party that conducts business with Company other than reasonable and customary
incidentals for a chief executive such as meals, tickets to live events, invites
to parties/benefits, promotional trips, etc.; (b) material breach of this
Agreement; or, (c) failure to perform competently, in the Board's sole
discretion, the customary duties of Chief Executive Officer, provided, however,
that in the case of clauses (b) and (c) Executive shall have been afforded an
opportunity to address the Board directly and answer any allegations, criticisms
or other questions which form the basis for termination for cause hereunder;
and, provided, further, that if the basis for termination for cause hereunder is
capable of being cured, Executive shall be afforded a reasonable and good faith
opportunity to cure. In such circumstances, Executive shall be entitled to
severance pay in the amount of the annual salary earned in the full calendar
year immediately preceding termination. Payment in such circumstance shall be
made in equal monthly installments beginning fifteen (15) days from date of
termination; provided, however, that the Company shall be required to post a
letter of credit in form and substance reasonably satisfactory to the Executive
and issued by a bank with a credit rating no less than "A", in the absence of
which payment shall be made in a lump sum on the date of termination.
(c) Termination without Cause. The Company may unilaterally terminate this
Agreement for any reason in its sole discretion in the absence of a Termination
for Cause. In such circumstances, Executive shall be entitled to receive all
compensation and benefits payable to Executive pursuant to this Agreement
through the end of the Term, including Base Salary, Minimum Bonus, health,
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medical and dental benefits (i.e., the Company shall make COBRA payments on
behalf of the Executive through the end of the Term), as well as payment in
respect of accrued but unused vacation and reimbursement of any outstanding
expenses. In addition, any and all unvested Company stock options shall
immediately vest and be exercisable, and Executive shall have no less than
eighteen (18) months following termination to elect whether or not to exercise
any and all of such stock options.
(d) Resignation for Good Reason. The Executive may resign from time to time
and at any time, upon not less than one (1) month written notice to the Board,
for Good Reason. In such circumstances, the Executive shall be entitled to
receive all compensation and benefits payable to Executive pursuant to this
Agreement through the end of the Term, including Base Salary, Minimum Bonus,
health, medical and dental benefits (i.e., the Company shall make COBRA payments
on behalf of the Executive through the end of the Term), as well as payment in
respect of accrued but unused vacation and reimbursement of any outstanding
expenses. In addition, any and all unvested Company stock options shall
immediately vest and be exercisable, and Executive shall have no less than
eighteen (18) months following termination to elect whether or not to exercise
any and all of such stock options.
"Good Reason" shall mean (i) a reduction in, or the failure to pay, the
Executive's Base Salary or Minimum Bonus, as each is then in effect, (ii) the
relocation of the Executive's principal place of employment to a location
outside the borough of Manhattan, (iii) material reduction in the Executive's
duties or responsibilities, (iv) reduction in title, (v) change in reporting
(i.e., if Executive should be required to report to any person/body other than
directly to the Board) or (vi) a material breach by the Company or any of its
affiliates of any other provision of this Agreement (including, without
limitation, a situation in which Executive discovers at some point after the
Commencement Date that any of the conditions set forth in Section 2(b) were not
satisfied as of the Commencement Date), in each case which failure is not cured
within fifteen (15) days from receipt of written notice thereof.
10. No Mitigation.
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The Executive shall not be required to mitigate the amount of any payment or
benefit provided for in this Agreement by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Agreement be reduced by
any compensation earned by the Executive as the result of her employment by
another employer.
11. Restrictive Covenant.
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(a) Competition. Executive undertakes and agrees that until six (6) months
after termination of this Agreement for any reason other than for Cause, death
or Total Disability, or resignation by the Executive for Good Reason, she will
not compete or participate as a director, officer, employee, consultant agent,
consultant, representative or otherwise, or as a stockholder, partner or joint
venturer, or have any direct or indirect financial interest, including, without
limitation, the interest of a creditor, in any business that is competitive with
the business of the Company or any of its wholly-owned subsidiaries.
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(b) Trade Secrets. During the Term hereof and after termination for any
reason Executive shall not disclose, divulge, copy or otherwise use any trade
secret of the Company or its subsidiaries, it being acknowledged that all such
information and materials compiled or obtained by or disclosed to Executive
while employed by the Company hereunder or otherwise are confidential and the
exclusive property of the Company and, if applicable, its wholly-owned
subsidiaries.
(c) Injunctive Relief. The parties hereto agree that the remedy at law for
any breach of the provisions of this paragraph 11 will be inadequate and that
the Company shall be entitled to injunctive relief. Such injunctive relief shall
not be exclusive, but shall be in addition to any other rights and remedies
Company might have for such breach.
(d) Scope of Covenant. Should the duration, geographical area or range or
proscribed activities contained in subparagraph (a) above be held unreasonable
by any court of competent jurisdiction, then such duration, geographical area or
range of proscribed activities shall be modified to such degree as to make it or
them reasonable and enforceable.
12. Indemnity.
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The Company shall indemnify and hold the Executive harmless to the maximum
extent permitted by law against any claim, action, demand, loss, damage, cost,
expense, liability or penalty arising out of any act, failure to act, omission
or decision by her while performing services as an officer, director or employee
of the Company, other than as act, omission or decision by the Executive which
constitutes an act of gross negligence or willful misconduct. To the extent
permitted by law, the Company shall pay all attorney's fees, expenses and costs
actually incurred by the Executive in connection with the defense of any of the
claims referenced herein.
13. Miscellaneous.
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(a) Notices. Any notice, demand or communication required or permitted
under this Agreement shall be in writing and shall either be hand-delivered to
the other party or mailed to the addresses set forth below by registered or
certified mail, return receipt requested, or sent by overnight express mail or
courier or facsimile to such address, if a party has a facsimile machine. Notice
shall be deemed to have been given and received when so hand-delivered or after
three business days when so deposited in the U.S. Mail, or when transmitted and
received by facsimile or sent by express mail properly addressed to the other
party. The addresses are:
To the Company:
Xxxxxx X. Xxxxxx, Esq.
Branded Media Corporation
000 Xxxxxxx Xxxxxx - Xxxxxxxxx
Xxx Xxxx, XX 00000
To the Executive:
Xxx Xxxxxxxxxxxx
000 Xxxx Xxx Xxxxxx #00X
Xxx Xxxx, XX 00000
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With a copy to:
Xxxx Xxxxxxxxx, Esq.
Hand & Baldachin LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
(000) 000-0000
The foregoing addresses may be changed at any lime by written notice given in
the manner herein provided.
(b) Integration: Modification. This Agreement constitutes the entire
understanding and agreement between the Company and the Executive regarding its
subject matter and supersedes all prior negotiations and agreements, whether
oral or written, between them with respect to its subject matter. This Agreement
may not be modified except by a written agreement signed by the Executive and a
duly authorized officer of the Company.
(c) Enforceability. If any provision of this Agreement shall be invalid or
unenforceable, in whole or in part, such provision shall be deemed to be
modified or restricted to the extent and in the manner necessary to render the
same valid and enforceable, or shall be deemed excises from this Agreement, as
the case may require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law as if such provision had been originally
incorporated herein as so modified or restricted, or as if such provision had
not been originally incorporated herein, as the case maybe.
(d) Bindinq Effect. This Agreement shall be binding upon and inure to the
benefit of the parties, including and their respective heirs, executors,
successors and assigns, except that this Agreement may not be assigned by the
Executive.
(e) Waiver of Breach. No waiver by either party of any condition or of the
breach by the other of any term or covenant contained in this Agreement, whether
by conduct or otherwise, in any one or more instances shall be deemed or
construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition, or the breach of any other term or covenant set
forth in this Agreement. Moreover, the failure of either party to exercise any
right hereunder shall not bar the later exercise thereof.
(f) Governing Law and Interpretation. This Agreement shall be governed by
the internal laws of the New York. Each of the parties agrees that he or it, as
the case may be, shall deal fairly and in good faith with the other party in
performing, observing and complying with the covenants, promises, duties,
obligations, terms and conditions to be performed, observed or complied with by
him or it, as the case may be, hereunder, and that this Agreement shall be
interpreted, construed and enforced in accordance with the foregoing covenants
notwithstanding any law to the contrary.
(g) Headings. The headings of the various sections and paragraphs have been
included herein for convenience only and shall not be considered in interpreting
this Agreement.
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(h) Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed by the Executive and
on behalf of the Company by its duly authorized officer(s) on the date first
above written.
Branded Media Corporation
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Director
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Director
ACKNOWLEDGED AND AGREED:
/s/ Xxx Xxxxxxxxxxxx
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Xxx Xxxxxxxxxxxx
Executive
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