Exhibit 10.7
EMPLOYMENT AGREEMENT
Agreement made this 19th day of January, 2006 by and between Soft Wave
Media, Inc., a Delaware corporation (the "Company"), and Xxxxxx Xxxxxx (the
"Executive".)
WHEREAS, the Company desires to employ the Executive, and the Executive
desires to accept employment with the Company, all on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and the Executive hereby agree as follows:
1. The company shall employ the Executive, and the Executive
shall serve the Company, for the three-year (3 year) period beginning January
19, 2006 and ending on January 19, 2009, unless earlier terminated in accordance
with the terms hereof or extended by written agreement of the parties (this
term, as it may be so modified from time to time, the "Term"). This Agreement
will renew automatically for an additional one-year term at the end of the
initial three year term, and at the end of each subsequent Term, unless notice
of non-renewal is given in writing at least 60 days before the end of the Term.
2. The Executive shall serve the Company as its Chief Executive
Officer during the Term. Subject to the terms hereof, during the Term, the
Executive shall diligently perform such duties and exercise such powers as may
be from time to time assigned to or vested in him by the Company's Board of
Directors (the "Board"), and shall obey the directions of the Board; and use his
best efforts to promote the interests of the Company. Executive agrees to devote
his best efforts and full professional time to performing services on behalf of
the Company and its subsidiaries and affiliates, but this shall not be construed
as preventing Executive from investing his assets in such form or manner as will
not require any services on the part of the Executive in the operation of the
affairs of the companies in which such investments are made. The Company
acknowledges that the Executive has other business interests and ownerships as
well as serving on the Boards of Directors of other companies in which the
Executive is a stockholder or principal, and it consents to the continuation of
these ownerships and relationships, provided they do not conflict with
Executive's duties as contemplated hereby. The Executive shall adhere to all
policies of the Company as may be in effect from time to time. Nothing herein
contained shall require the Executive to relocate from the N.Y. Tri-state area
unless the Executive agrees to such relocation.
3. a. During the initial three-year term of this Agreement,
the Company shall pay the Executive a salary at an annual rate of $300,000,
which shall be payable periodically in accordance with the Company's then
prevailing payroll practices (as it may be increased, but not decreased, from
time to time, the "Base Salary").
b. The Executive shall be entitled to such vacation time,
sick leave, perquisites of office, fringe benefits, incentive, retirement,
profit-sharing, life, medical, disability and other benefit plans and programs
and other terms and conditions of employment as the Company generally provides
to its Executives having rank and seniority at the Company comparable to the
Executive (collectively, the "Benefits"). Notwithstanding the foregoing, in no
event will Executive receive less than four weeks paid vacation, disability
insurance and life insurance of at least $1 million payable to beneficiaries
identified by Executive.
c. During the Term, the Company shall reimburse Executive
for reasonable expenses incurred on behalf of the Company in accordance with the
Company's policies. d. The Executive shall receive stock options (the "Stock
Options") to purchase shares of common stock of the Company under terms and
conditions established by a majority independent Board compensation committee
from time to time.
4. Unless terminated in accordance with the following provisions
of this paragraph 4 or an earlier resignation by Executive, the Company shall
continue to employ the Executive and the Executive shall continue to work for
the Company, during the Term.
a. This Agreement shall terminate automatically upon the
death of the Executive ("Termination on Death").
b. The Company may terminate the Executive's employment if
the Executive suffers from a physical or mental disability to an extent that
renders it impractical for the Executive to continue performing his duties
hereunder. The Executive shall be deemed to be so disabled if (i) a physician
selected by the Company advises the Company that the Executive's physical or
mental condition will render the Executive unable to perform his duties for a
period exceeding six consecutive months, or (ii) due to a physical or mental
condition, the Executive has not substantially performed his duties hereunder
for a period of six consecutive months. Any termination pursuant to this
paragraph 4 b. shall hereinafter be defined as a "Disability Termination."
c. The Company may terminate the Executive's employment at
any time for Cause (as hereinafter defined, and any such termination, a
"Termination for Cause"). "Cause" shall mean (i) Executive's conviction of a
felony involving fraud or dishonesty; (ii) conduct of the Executive determined
by a court of law to constitute theft or intentional misappropriation of funds,
trade secrets or other proprietary property of the Company, and which materially
injures the Company;. (iii) willful misconduct on the part of the Executive
determined by a court of law to constitute illegal, fraudulent, dishonest or
unethical dealings with the Company, clients, customers and/or vendors, and
which materially injures the Company; (iv) conduct that causes substantial harm
to the reputation of the Company among any of the general public or the
Company's customer or supplier base; or (v) refusal to be examined by a
physician selected by the Company after Executive has been unable to perform his
duties for a period exceeding six consecutive months. Any Termination for Cause
shall require that all of the following occur prior to termination: (i) written
notice be provided to Executive detailing the grounds for such Termination for
Cause and providing specific facts underlying such grounds; (ii) the Executive
be provided an opportunity to be heard by the Board, with or without presence of
counsel for the parties (at Executive's discretion), and shall be given a
reasonable time, but in no case less than 10 days, to cure the situation; and
(iii) the Board thereafter issues its findings in writing to the Executive and
counsel to the Company renders a written opinion that the Executive's acts or
omissions constitute grounds for a Termination for Cause and provides a copy
thereof to Executive or his counsel.
d. The Company may terminate the Executive's employment at
any time without Cause ( a "Termination Without Cause" or Executive being
"Terminated Without Cause"). In the event that the Executive is Terminated
Without Cause, the Company shall continue to pay the greater of: (1) the
Executive's compensation equivalent to his Base Salary and Bonuses that would
have been payable (as measured by the Threshold for the highest paid Executive
of equivalent rank who remains or becomes employed with the Company during the
Term ) for the remainder of the Term. The Company shall provide all Benefits and
keep in place and maintain all premiums for life and health insurance policies
as if the Executive were still employed in such capacity with the Company
throughout the remainder of the Term, as applicable. In addition, all Stock
Options shall fully vest effective the date of such termination and the time
during which they must be exercised will be extended for a further one-year
period, or through the end of the Original Term, whichever is later. In
addition, Executive will receive all other vested benefits, retirement plans,
accrued vacation pay and other amounts due by law. Such payments and
consideration to the Executive by the Company will be in full and complete
satisfaction (except as provided in subsection e below) of any and all
obligations owing to the Executive pursuant to this Agreement.
e. That in the event that there is a material change in
the duties or responsibilities of the Executive, or material diminution of his
authority within the Company (any of the foregoing, a "Change in Employment"),
the Executive may treat such Change in Employment as a Termination Without
Cause, hereunder, and shall be entitled to all rights relating thereto.
f. Upon a Termination on Death or a Disability Termination
or for a Termination With Cause, the Company shall pay the Executive or his
estate the Base Salary and Bonuses earned and unpaid to the date of termination,
accrued vacation, vested benefits and other amounts due by law. Any such
payments to Executive may (at the Board's discretion) be subject to offset for
any unpaid advances, amounts receivable, and loans, including accrued interest,
outstanding on the effective date of the employment termination. Except as
otherwise provided herein as to a Termination Without Cause, the Executive's
benefits and rights under any benefit plan, other than any basic health and
medical benefit plan, shall be paid, retained or forfeited in accordance with
the terms of such plan; provided, however, that Employer shall have no
obligation to make any payments toward these benefits for Employee from and
after termination. Executive shall be entitled to assume any life insurance or
disability policies as are in effect at the time of termination, at his sole
cost and expense.
5. a. The Executive shall execute and deliver the
confidentiality agreement as in use from time to time by the Company for its
executives (the "Confidentiality Agreement").
b. The Executive also agrees that during his employment at
the Company, he will not knowingly be actively engaged in any business directly
competing with the Company in any business that the Company is engaged in at
that time (a "Competing Company"). For purposes of this Agreement, the Executive
shall be deemed to be engaged in or to have a financial interest in a Competing
Company if he is an employee, officer, director, or partner of any Competing
Company, or if he or any member of his immediate family beneficially owns (as
defined in the "34 Act") an equity interest, or interest convertible into
equity, in any such entity; provided, however, that the foregoing shall not
prohibit the Executive or a member of his immediate family from owning, for the
purpose of passive investment, less than 5% of any class of securities of a
publicly-held Competing Company.
6. Any notice or other communication required or permitted under
this Agreement shall be effective only if it is in writing and delivered
personally or sent by registered or certified mail, postage prepaid, addressed
as follows:
If to the Company:
------------------
Soft Wave Media
0 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If to the Executive:
--------------------
Xxxxxx Xxxxxx
00 Xxxxxxx Xx.
Xxxxxxxxxx Xxxxx, XX 00000
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
7. This Agreement and those contemplated or referenced herein
constitute the entire agreement between the parties hereto with respect to the
Executive's employment by the Company, and supersedes and is in full
substitution for any and all prior understandings or agreements with respect to
the Executive's employment.
8. The Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either party hereto at any
time to require the performance by the other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or be held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
9. This Agreement is binding on and is for the benefit of the
parties hereto and their respective successors, heirs, executors, administrators
and other legal representatives, including but not limited to any purchaser of
substantially all of the Company's assets or into which the Company' is merged.
Except as otherwise expressly provided herein, neither this Agreement nor any
right or obligation hereunder may be assigned by the Company or by the
Executive.
10. If any provision of this Agreement, or portion thereof, is so
broad, in scope or duration, so as to be unenforceable, such provision or
portion thereof shall be interpreted to be only so broad as is enforceable.
11. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
12. Any disputes between Company and Executive shall be resolved
through arbitration in the County of Westchester, State of New York, pursuant to
the Commercial Arbitration Rules of the American Arbitration Association, and
judgments on the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. Each party shall pay the fees of his or its
attorneys; the expenses of his or its witnesses; and all other expenses
connected with presenting his or its case. Other costs of the arbitration,
including filing fees, the cost of any record or transcripts of the arbitration
hearing, administrative fees, the fees of the arbitrator, and all other fees and
costs shall be borne by the Company.
13. This Agreement may be executed in several counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same instrument.
14. The Company hereby agrees to indemnify, defend, save, and hold
harmless Executive to the maximum extent permitted by law from and against all
claims, liabilities, causes of action, damages, judgments, attorneys' fees,
court costs, and expenses which he may incur as a result of his employment with
Company, except for the Executive's own willful and wanton misconduct. The
Company understands that this obligation of indemnification survives the
expiration or termination of this Agreement.
15. This Agreement shall be assigned or transferred to, and shall
be binding upon and shall inure to the benefit of, any successor of the Company,
and any such successor or successors shall be deemed substituted for all
purposes for "the Company," as applicable, under the terms of this Agreement. As
used in this Agreement, the term "successor" shall mean any Person which at any
time, whether by merger, purchase, or otherwise, acquires all or substantially
all of the assets of the Company and any person whose beneficial ownership
causes a change in control. The Company shall require any successor to agree in
writing to assume, satisfy and discharge all obligations of the Company under
this Agreement, such written agreement to be for the benefit of and enforceable
by Executive as a third party beneficiary. Except as herein provided, this
Agreement may not otherwise be assigned by the Company.
16. ACKNOWLEDGMENT. Executive acknowledges that he has carefully
read this Agreement, has had an opportunity to consult counsel regarding the
Agreement.
IN WITNESS WHEREOF, the Company and the Executive have executed
this Agreement as of the date first written above.
/s/ Xxxxxx Xxxxxx SOFT WAVE MEDIA, INC.
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Executive's Name: Xxxxxx Xxxxxx
By: /s/ Xxxxxxx Xxxxxxxxx
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Title: President
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