EXHIBIT 10.7
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EMPLOYMENT AGREEMENT
EFFECTIVE DATE July 11, 2000
EMPLOYEE Xxxxxx X. Xxxxxxx ("TFC")
EMPLOYER In Store Media Systems, Inc. ("ISMS")
DUTIES AND RESPONSIBILITIES ISMS is employing TFC in the capacity of Vice
President, Marketing & Sales. Unless directed by the President of ISMS or the
Board of Directors, TFC shall report to the President of ISMS.
TERM This Agreement is a twelve (12) month employment contract between TFC and
ISMS, beginning at their Effective Date. Unless modified by mutual agreement and
in writing, if neither party executes its unilateral right, in such party's sole
discretion, to terminate this agreement by written notice to the other party on
or before 5pm MDT, on November 1, 2000 after the three (3) month anniversary of
the Effective Date, then this Agreement shall remain in effect for the entire
twelve month term.
COMPENSATION Unless modified by mutual agreement and in writing, TFC shall
receive a gross salary of $12,500 per month during the term of this Agreement.
The salary shall be paid twice per month, on or: before the first and fifteenth
day of each month. In addition to the salary received, TFC shall receive 75,000
options to purchase shares of voting common stock of ISMS which options shall be
immediately vested on the Effective Date of this contract. These options shall
have a strike price of $0.25/share and shall expire two (2) years from the date
of issue. In addition, TFC shall be eligible to receive additional options to
purchase shares of voting common stock of ISMS, which options shall be fully
vested at the time of their issuance. These options shall be exercisable at a
strike price of $1.00/share or 85% of the average closing price of the stock
over the 15 calendar days prior to exercise, whichever is less and shall expire
two (2) years from the date of issue. These options shall be issued upon
achieving one or more of the following milestones as follows:
1. Twenty-five thousand (25,000) options for obtaining a signed ISMS agreement
with a supermarket chain to install and demonstrate between I and 4 "First
Coupon Bank" coupon clearing units in Denver area store(s) with a
contingent agreement to install in the rest of their Denver stores based
upon the system performing as represented by ISMS.
2. Twenty-five Thousand (25,000) options when any chain agrees to accept
installation of these systems in the majority of the rest of its stores
chainwide.
3. Twenty five thousand (25,000) options as above for an agreement with a
second supermarket chain in Denver or another geographical market.
4. Twenty five thousand (25,000) options for obtaining agreements as described
above to install "InStaClearing" in-lane, coupon clearing units, or "Coupon
Exchange Center" units.
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5. Fifty thousand (50,000) options when ISMS has 150 of any of its systems
operating in any one geographic market area.
TFC Will also be eligible to participate in ISMS' Stock Option and Incentive
Plan, which will provide incentive to employees to provide significant service
to and have a proprietary interest in ISMS. The plan is still being developed
and has not yet been completed.
BONUS TFC shall be eligible to participate in ISMS' Bonus Plan which is still
being developed and has not yet been completed.
BENEFIT During the Term of this Agreement, TFC shall receive the same benefits
(e.g., health insurance, holidays, sick leave, 401 K, and profit sharing) as is
offered and provided to other employees of ISMS, With the exception of life and
disability insurance. Such insurance is already held by TFC and the Company
shall pay these premiums beginning on the effective date.
VACATION TFC will be entitled to four (4) weeks of paid vacation during the
duration of this contract.
TERMINATION FOR CAUSE At any time, ISMS may terminate TFC for any or all of the
following reasons: (a) negligent conduct or performance of duties and
responsibilities, (b) evidence of theft, misrepresentation, or fraud against
ISMS, (c) evidence of misconduct, including sexual harassment or substance
abuse, or (d) criminal conviction.
SEVERANCE TFC will be entitled to receive three (3) months of severance pay if
this contract is terminated by ISMS without cause within the first 90 days after
the Effective Date of this agreement. TFC will be entitled to twelve (12) months
of severance pay if this contract is terminated by ISMS without cause any time
between the 91st day and the one year anniversary date of the Effective Date of
this agreement. In the event of severance from this position without cause due
to a change of control of ISMI, TFC will be entitled to one year of severance
pay. For purposes of this agreement, change of control shall be defined as a
sale of 51% or more of the voting shares of ISMS other than by registration for
sale to the public.
REPRESENTATIONS AND WARRANTIES OF TFC TFC represents and warrants that he is
free to enter into this agreement and to perform the duties required, and that
there are no employment contracts, restrictive covenants or other restrictions
preventing the execution and delivery of the duties and responsibilities of this
Employment. TFC represents that he will work full time to perform the duties
except that he may continue to perform services for the ussoccermom program and
wind down the customer appreciation program on an as needed and approved basis.
CONFIDENTIALITY TFC agrees that he will not, during this Agreement and for a
period of two years after its termination, disclose to any firm, corporation, or
other entity, except as required by law, any nonpublic information
("Confidential Information") concerning the business, clients or affairs of ISMS
for any reason or purpose whatsoever nor shall he make use of any of the
Confidential Information for his own purposes or for the benefit of any person,
firm, corporation, or other entity except ISMS. Confidential Information shall
exclude information of any kind which either: (a) is or becomes generally
available to the public other than as a direct result of a disclosure by TFC,
(b) was known to TFC on a non-confidential basis prior to its disclosure, or (c)
becomes available to TFC on a non-confidential basis from a source other than
ISMS, which is entitled to disclose.
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NON-COMPETITION For a period of two (2) years if TFC voluntarily terminates the
employment relationship and for one (1) year if TFC is terminated by ISMS, TFC
agrees not to solicit ISMS' accounts and/or clients or to engage in any conduct
which is in direct competition with the business of ISMS as defined by ISMS at
the termination of the employment relationship, without the express written
consent of ISMS.
CONDITIONS PRECEDENT TO EFFECTIVE DATE It is a condition of this Agreement that,
prior to the commencement of employment, TFC will meet with Xxxxx Xxxxxx of
Summax Associates, with which intends to execute an agreement to obtain
$20,000,000. In anticipation of this meeting, TFC has agreed to review, certain
ISMS business models and proforma financials and to perform other studies to
enable TFC to be responsive to marketing due diligence questions of Summax and
prospective investors. For rendering such services prior to his Effective Date,
TFC shall receive 12,500 options with a stock price of $0.25/share, which shall
be fully vested upon execution of this agreement.
ADDITIONAL PROVISIONS All notices and communications regarding this Agreement
shall be in writing. The 'Agreement is not assignable unless by mutual consent.
This Agreement sets forth the entire agreement and understanding between TFC and
ISMS regarding employment. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Colorado.
In Store Media Systems, Inc.
Dated this ____day of _________2000
/S/ Xxxxxx X. Xxxxxxx /S/ Xxxxxx X. Xxx
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Xxxxxx X. Xxxxxxx Xxxxxx X. Xxx, President/CEO
Address: Address:
0000 Xxxxx Xxxxxx Xxxxxx 00000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000 Xxxxxx, XX 00000
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