EMPLOYMENT AGREEMENT LIMELIGHT MEDIA GROUP, INC.
Exhibit
10.7
LIMELIGHT
MEDIA GROUP, INC.
This
Employment Agreement (this “Agreement”)
is
entered into as of June 30, 2005 (the “Commencement
Date”)
by and
between Xxxxxx Xxxxx, an individual residing at 0000 000xx
Xxxxxx
XX, Xxxxxxxx, Xxxxxxxxxx 00000 (the “Executive”),
and
Limelight Media Group, Inc., a corporation organized under the laws of the
State
of Nevada with offices at 0000
Xxxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxx 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 Executive, (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) Executive’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 Executive
to obey the reasonable and lawful orders of the Board of Directors of the
Company which remains uncured, if reasonably capable of cure, for thirty (30)
days from receipt of written notice thereof from the Company; (d) any act by
Executive in violation of Section 8 hereof, any statement or disclosure by
Executive in violation of Section 6 hereof, or any material breach by Executive
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; (e) excessive alcoholism or addiction to drugs by Executive not
prescribed by a qualified physician, provided,
however,
that
such condition shall be confirmed by a qualified physician; or (f) gross
negligence by Executive in the performance of the Executive’s obligations
hereunder.
“Commencement
Date”
shall
mean June 30, 2005.
“Confidential
Information”
shall
mean all of the Company's trade secrets and proprietary and 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 Executive during his employment 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 Executive, 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.
“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 Executive: (a) a material breach by the Company of any material
provision of this Agreement; (b) any decrease in Executive's Annual Base Salary
without the prior written consent of Executive; (c), any decrease or demotion
in
Executive’s title or material diminution of responsibilities as set forth in
this Agreement; or (d) a required relocation of Executive’s primary place of
work of no more than thirty (30) miles from Seattle, Washington.
“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 Executive, and Executive hereby agrees to be
employed by the Company, for a term (the “Employment
Period”)
commencing on the Commencement Date and expiring on the third anniversary of
the
Commencement Date (the “Expiration
Date”),
unless earlier terminated as provided herein.
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3.
Services. During
the Employment Period, Executive shall hold the position of Chief Strategy
Officer of the Company, reporting directly the Company’s board of directors.
Executive 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 executives and as are more specifically enumerated ,in
Exhibit
A
attached
hereto, which are consistent with Executive's position; provided,
however,
that
the foregoing is not intended to preclude Executive, 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 Executive 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
Executive an annual base salary in the amount of One Hundred Twenty Thousand
Dollars ($120,000) (the “Annual
Base Salary”).
The
Annual Base Salary shall
be
payable in accordance with the Company's normal payroll practices.
(b)
Benefits.
In
addition to the Annual Base Salary set
forth
above, Executive shall be eligible for the following benefits:
(i)
To
the
extent eligible, participation in any welfare benefit plans, programs or
policies, including, without limitation, any health, dental, 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 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,
Executive shall be entitled to not less than three (3) weeks paid vacation;
and
(iv)
Reimbursement
for reasonable business expenses incurred by Executive 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.
(v)
Cash
bonuses, option grants, life insurance, disability insurance, and other
appropriate insurance coverages as mutually agreed by Executive and the Company
and as approved by the Company’s board of directors.
(c)
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 Executive's employment with the Company for
Cause, (ii) Executive voluntarily terminates his employment with the Company
other than for Good Reason, or (iii) Executive's employment terminates as a
result of either Executive's death or Disability, the Company shall pay
Executive (or his estate in the case of death) any unpaid salary, 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 Executive's employment is terminated for any reason other than (i)
by
the Company for Cause, (ii) by Executive voluntarily without Good Reason, the
Company shall pay to Executive (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 on a monthly basis.
(c)
Any
termination of Executive's employment by the Company or any such termination
by
Executive (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 Executive's
employment under the provision so indicated.
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6.
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Confidential
Information.
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Executive
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. Executive 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, Executive shall hold in a fiduciary capacity for the benefit of
the
Company such Confidential Information obtained by Executive 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. Executive 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 Executive
(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 Executive'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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Executive
agrees that during the Employment Period and for the one (1)-year period
following the Employment Period, Executive shall not, and shall use his best
efforts to ensure that any agents, representatives and any other persons acting
on his behalf (Executive 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 Executive, 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, executive
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 Executive 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 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.
Executive
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 Executive’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 Executive therein are
unreasonable, the Parties agree that without further action on their parts
reasonable maximum duration, scope, area or other restrictions shall be
substituted 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 Executive 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 Executive 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 Executive is employed by the Company, Executive 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 Executive’s employment with the Company or any
affiliate thereof, Executive shall deliver to the Company all files and records
of any nature which are in Executive’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 Executive hereunder shall inure to the benefit
of
and be enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If
Executive should die while any amounts would still be payable to him hereunder
if he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to Executive's
devisee, legatee, or other designee or, if there be no such designee, to
Executive's estate.
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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
Executive 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
Executive 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 Executive 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 Washington 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 King County, Washington. 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.
[Remainder
of page left intentionally blank]
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IN
WITNESS WHEREOF,
the
undersigned have executed this Agreement as of the date first above
written.
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LIMELIGHT
MEDIA GROUP, INC.
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By:
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/s/Xxxxx
X. Xxxx
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Name:
Xxxxx X. Xxxx
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Title:
Chief Executive Officer
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EXECUTIVE
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/s/Xxxxxx
Xxxxx
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Xxxxxx
Xxxxx
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EXHIBIT
A
RESPONSIBILITIES
The
Chief
Strategy Officer will pursue a framework of sequential decisions to guide
Company, as it pursues new alliances and endeavors. The framework includes
recommendations for developing strategic plans targeting Company’s prioritized
business areas and identifying if and how alliances could be helpful. Position
also is responsible for developing an integrated, proactive,
cross-business/market unit approach to strategic marketing and technology
planning. Execute the responsibilities of a company director, according to
lawful and ethical standards.
