Exhibit 10.9
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") made and entered as of October
21, 2005 by and among Branded Media Corporation (the "Company"), a Nevada
corporation, and Xxxxx X. Xxxxxxxxx (the "Executive").
BACKGROUND
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 herefrom, 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 President of Executive Media Network, a wholly-owned
subsidiary of the Company ("EMN"). The Executive accepts such employment with
the Company and the Executive shall perform and fulfill such duties as are
reasonable and necessary for such position and will devote his efforts to the
performance and fulfillment of his 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. It is hereby understood that the Executive will report directly to
the Chief Executive Officer and the Board of Directors of the Company.
b. Place of Performance. In connection with his 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 three-year term (the "Term") commencing on October 21, 2005.
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:
i) for the period commencing October 21, 2005 to October 20, 2006,
$300,000;
ii) for the period commencing October 21, 2006 to October 20, 2007,
$350,000;
iii) for the period commencing October 21, 2007 to October 20, 2008,
$400,000;
payable in installments at such times as the Company customarily pays its other
senior executive employees (but in any event no less often than twice per
month).
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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 (1) a lump sum
payment equal to the Base Salary, plus a lump sum bonus equal to five (5) times
the largest bonus paid to Executive under this Agreement and (2) immediate
acceleration of any and all unvested Company stock options (which provision
shall be reflected in the grant of Company stock options to Executive).
c. [LEFT BLANK INTENTIONALLY].
d. Bonus. The parties shall mutually agree upon an annual cash flow
projection for EMN's business. If EMN's business meets the agreed upon projected
cash flow, the Executive shall be entitled to an annual bonus equal to his Base
Salary for that year (i.e., in Year 1 - $300,000). To the extent EMN's actual
cash flow is greater than or is less than the projected cash flow, Executive
shall be paid a proportionately greater or lesser percentage of his Base Salary
for that year in the form of a bonus; provided, however, that the Executive's
annual bonus in any given year shall be no less than ten percent (10%) of the
Executive's Base Salary for such year. For example, if EMN's actual cash flow is
75% of the projection, Executive shall be paid a bonus equal to 75% of his Base
Salary - which would be $225,000 in Year 1. Conversely, if EMN's actual cash
flow is 125% of the projection, Executive shall be paid a bonus equal to 125% of
his Base Salary - which would be $375,000 in Year 1. The annual bonus shall be
paid no later than January 15 with respect to the immediately previous calendar
year, or part thereof. For the avoidance of doubt, for the period October 21,
2005 to December 31, 2005, Executive shall be entitled to 25% of the bonus
otherwise payable pursuant to the foregoing provisions (with respect to 25% of
the agreed-upon projected cash flows of EMN for the period January 1, 2005 to
December 31, 2005 as the "yardstick" against which performance is to be
measured). Thereafter, the measuring period for the annual bonus determination
shall be EMN's performance for the applicable calendar year.
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e. Life Insurance. Branded Media shall pay for Executive's personal life
insurance policy, currently in force, in the amount of $1.5 million (estimated
cost: $8,000 per annum). Executive shall designate the beneficiary of the
policy.
4. Reimbursement of Expenses.
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a. 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 his 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 on all transcontinental and transatlantic flight and
accommodations when traveling for Company business, as well as car service to
and from all airports.
5. Health Insurance and Other Benefits.
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a. 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 options, 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.
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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 One Million (1,000,000)
shares of the Company's common stock at a price of $ .50 per share. The form of
warrant is attached to this Agreement as Schedule "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
percent (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 four (4) 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 two (2) 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.
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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, 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 thereof, and upon the expiration of such thirty (30) day period, the
Executive' 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 his 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 set 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 5, the definition of Total
Disability hereunder shall be the definition of that term in such policy.
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b. Termination for Cause. The Executive's services under this Agreement
may be terminated for cause where during the term of employment 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,
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 an 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 the President of EMN, provided, however,
that in the case of clauses (b) and (c) above, 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 the 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.
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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 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 by 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 or all of such stock options.
d. Termination 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 by 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 or all of such stock options.
"Good Reason" shall mean (I) a reduction in, or 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 of the Borough of Manhattan, (iii) material reduction in the Executive's
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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 CEO or to the Board) or (vi) a material breach by the Company or
any of its affiliates of any other provision of this Agreement 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 his
employment by another employer.
11. Restrictive Covenant.
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a. 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.
b. Injunctive Relief. The parties hereto agree that the remedy at law
for any breach of the provision 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.
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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 him 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. Operational Issues.
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The Company and the Executive hereby agree that 50% of the cash flow
generated by the operations of EMN shall be left in EMN for its working capital
and operational uses, and shall not be upstreamed to the Company in any form.
14. 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
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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:
Xxxxx X. Xxxxxxxxx
000 Xxxxxxx Xxxx
Xxxx, Xxxxxxxxxxx 00000
The foregoing addresses may be changed at any time 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 the subject matter of employment.
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 excised 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 may be.
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d. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties, including 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
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 State of 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 covenant
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.
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.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been executed by the Executive
and on behalf of the Company by its duly authorized officer on the date first
above written.
BRANDED MEDIA CORPORATION
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Chief Operating Officer
ACKNOWLEDGED AND AGREED:
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
Executive
