Exhibit 10
Execution Copy
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is being made as of the 7th day of
April, 1999 among MARKETING SERVICES GROUP, INC., a Nevada corporation having
its principal office at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("MSGI");
CMG DIRECT CORPORATION, a Delaware corporation having its principal office at
000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 ("CMGD"), and
XXXXXX X. XXXXXX, an individual residing at 000 Xxxxx Xxxx Xxxx, Xxxxxxxx Xxxx,
Xxxxxxxxxxxxx 00000 ("Executive").
W I T N E S S E T H:
WHEREAS, on Xxxxx 0, 0000, XXXX and CMGI, Inc. entered into a Stock
Purchase Agreement (the "Purchase Agreement"), relating to the acquisition of
all of the issued and outstanding common stock of CMGD by MSGI.
WHEREAS, Executive has agreed to be employed by MSGI and CMGD,
effective upon the closing of the transaction contemplated by the Purchase
Agreement (the "Commencement Date").
WHEREAS, MSGI may form a new division or subsidiary ("Newco")
consisting of CMGD's existing Internet-based businesses. Executive understands
that Newco may or may not include MSGI's existing Internet-based businesses. For
purposes of this Agreement, MSGI and CMGD shall each be referred to as a
"Company" and collectively as the "Companies."
1. NOW, THEREFORE, in consideration of the mutual premises and agreements
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows: Nature of Employment; Term of Employment; Effectiveness of
Agreement. Each Company hereby employs Executive and Executive agrees to serve
each Company as their President, upon the terms and conditions contained herein,
for a term commencing on the Commencement Date hereof and continuing until May
30, 2003 (the "Initial Term"). This Agreement shall automatically be renewed for
one (1) additional four (4) year period after the Initial Term (the "Renewal
Term" and the Initial Term collectively, the "Employment Term"), unless MSGI or
Executive gives written notice to the other party of its intention not to renew
this Agreement at least six (6) months prior to the expiration of the Initial
Term or a Renewal Term. This Agreement and the Option (as defined in Section
3(c)) shall terminate and be of no force or effect if the transaction
contemplated by the Purchase Agreement is not consummated.
2. Duties and Powers as Executive; Board Participation; Other Activities.
(a) During the Employment Term, Executive agrees to devote substantially all of
his full working time, energy and efforts to the business of the Companies and
Newco. In performance of his duties, Executive shall be subject to the
reasonable direction of, and report to, the Chief Executive Officer of MSGI.
Executive shall be senior in reporting responsibility to all employees of MSGI
and its subsidiaries, other than J. Xxxxxx Xxxxxxx. In addition to the office of
President, Executive shall be the Chief Executive Officer of Newco and, as such,
shall have authority to hire any and all employees of Newco (subject to
budgetary considerations approved by MSGI's Board of Directors) and to terminate
the employment of any and all such employees (in accordance with MSGI's human
resources policies then in effect). Executive's duties shall include, but not be
limited to, (i) investor relations, (ii) participation in strategic planning
activities, (iii) participation in mergers and acquisitions activities, (iv)
growing the Company's Internet-related businesses; (v) the integration of CMGD
with MSGI's other existing and any newly acquired businesses; and (vi) the
continued development of Permission Plus. Executive shall be available to travel
as the needs of the business requires, it being understood that Executive will
often spend two-three days per week in the New York metropolitan area. Executive
shall consult with and obtain the approval from the Chief Executive Officer of
MSGI on any single expenditure by the Companies, either individually or in the
aggregate, in excess of $75,000, including compensation payments by any of the
Companies to an employee or a consultant that alone or in the aggregate exceeds
$75,000 per annum.
(b) Promptly after the Commencement Date, the Board of Directors of MSGI (the
"Board") shall appoint Executive to serve as a member of the Board. Thereafter,
for so long as this Agreement is in effect, MSGI shall cause Executive to be
nominated as a Board-endorsed nominee for election by the stockholders of MSGI
at the expiration of his term. If Newco shall be established as a subsidiary,
Executive shall be its Chief Executive Officer and a member of its Board of
Directors.
(c) Executive may serve on the Board of Directors (or other similar body) of any
nonprofit organization. Executive shall not serve on the Board of Directors (or
other similar body) of any for-profit entity without the prior consent of MSGI,
which consent shall not be unreasonably withheld.
3. Compensation.
(a) As compensation for his services hereunder, the Companies shall pay
Executive a salary (the "Base Salary"), payable in equal semi-monthly
installments, in the aggregate at the annual rate of not less than $275,000
through June 30, 1999; $300,000 for the period July 1, 1999 through December 31,
1999; $350,000 for the period January 1, 2000 through June 30, 2000. Thereafter,
during the Initial Term, such Base Salary shall be further increased on each
July 1st commencing July 1, 2000 by an amount equal to 10% of the then current
Base Salary and by $27,500 on each January 1, commencing January 1, 2001. The
Base Salary for the Renewal Term shall be no lower than the Base Salary in
effect at the end of the Initial Term.
(b) For each fiscal year during the Employment Term, commencing with the fiscal
year ending June 30, 2000, Executive shall be eligible to receive an annual
bonus (the "Annual Bonus") of up to 75% of the amount of Base Salary payable to
Executive during such fiscal year; it being understood that the criteria for
eligibility of the portion of the Annual Bonus of up to 50% of such Base Salary
shall be based upon meeting annual predetermined criteria as determined by the
Compensation Committee (the "Compensation Committee") of the Board not later
than sixty (60) days prior to the commencement of each fiscal year, with the
agreement of Executive, based upon the Companies' business plan for such period,
which shall be adopted not later than such dates for determination of criteria
for the Annual Bonus. It is further understood that the criteria for eligibility
of the additional portion of the Annual Bonus of up to 25% of such Base Salary
shall be based upon higher performance criteria also to be established at such
times. Such Annual Bonus shall be paid within sixty (60) days following the end
of each fiscal year. At Executive's election (which election must be made within
thirty (30) days following the end of each fiscal year), one half of such Annual
Bonus shall be paid in cash and one half of such Annual Bonus shall be paid in
common stock of MSGI based upon the thirty (30) calendar day average closing
price of such common stock for the period ending on the date that is two (2)
days prior to such sixtieth (60th ) day. Executive acknowledges that MSGI does
not presently have an equity compensation plan. Accordingly, such stock would
not be registered under the Securities Act of 1933, as amended. Unless such a
plan is adopted Executive (if he elects to take stock) shall sign an appropriate
investment representation letter. MSGI shall advise Executive if during the
Employment Term it shall adopt an equity compensation plan, which plan would be
registered under a registration statement on Form S-8 to enable such shares to
be freely resold on the public market at any time after receipt thereof. With
respect to the fiscal year ending June 30, 1999, Executive shall receive a
discretionary bonus, as determined by the Compensation Committee, provided that
such bonus shall not be less than $20,000.
(c) Executive is hereby granted a seven-year option (the "Option") to acquire
400,000 shares of common stock of MSGI pursuant to the option agreement,
attached hereto as Exhibit A, at an exercise price equal to $5.17 per share
(being the price per share agreed to in the Purchase Agreement). The shares
underlying the Option will be promptly registered under a registration statement
on Form S-8 promptly following the Commencement Date. The Option shall vest and
be fully exercisable immediately as to 133,000 shares; and shall vest in
twenty-four (24) equal monthly installments as to 11,125 shares on the first day
of each calendar month commencing after the Commencement Date. The Option is
subject to accelerated vesting upon a Change in Control (as defined in Section 9
of this Agreement) as set forth in Section 10(c) of this Agreement.
(d) The Compensation Committee shall undertake to review and determine within 60
days after the Commencement Date, with the advice of a compensation consultant
having expertise in compensation practices and standards for Internet-related
companies, the manner and extent to which Executive will participate in the
future increase in equity value of Newco; it being understood that if Newco is
established as a subsidiary, Executive's position is that stock options in Newco
representing seven percent (7.0%) of such equity with an exercise price based on
the fair market value of Newco as of the Commencement Date, is an appropriate
level of participation. Executive acknowledges that the Board has not yet
determined whether or not to form Newco as a subsidiary. In the event that MSGI
does not form Newco as a separate subsidiary, it will determine, in good faith,
a manner in which to give Executive comparable incentive with respect to the
future increase in equity value of Newco, which may include additional market
options with respect to MSGI's common stock, which additional options would vest
over the Employment Term.
4. Expenses; Vacations; and Benefits.
Executive shall participate in all present or future employee benefit plans of
the Companies; provided, that he meets the eligibility requirements of any such
plans, which shall be no more restrictive for Executive than other members of
MSGI's senior management group generally. Executive shall be entitled to no less
than the following.
(i) Family medical and dental insurance, life insurance, disability insurance,
retirement programs, officer and directors insurance, and all other benefits
afforded to other senior executives.
(ii) Retention of interests in current retirement plan, to be combined with or
rolled over into MSGI plan, if feasible.
(iii) Credit for all service time with CMGD with respect to all MSGI (and its
subsidiaries) benefits plans and programs and to have no waiting periods with
respect thereto.
(iv) Cell phone, home business phone, state-of-the-art laptop computer and
peripheral, Internet access, and all charges related thereto.
(v) Monthly reimbursement of automobile expenses, not to exceed $1,000 per
month.
(vi) Vacation of six weeks per contract year, which vacation shall accrue as of
the first day of the contract year in accordance with MSGI's policies. Executive
acknowledges that MSGI policies do not provide for cash payment of unused
vacation time.
(vii) Reimbursement for reasonable travel and other out-of-pocket expenses
necessarily incurred in the performance of his duties hereunder shall be paid
upon submission and approval of written statements and bills in accordance with
the then regular policies and procedures of MSGI made known to Executive prior
to incurrence of such reimbursable expenses. Executive agrees that MSGI or Newco
may obtain a life insurance policy on the life of Executive naming MSGI or Newco
as the beneficiary thereof.
5. Representations and Warranties of Executive.
Executive represents and warrants to the Companies that: (i) Executive is under
no contractual or other restriction or obligation which is inconsistent with the
execution of this Agreement, the performance of his duties hereunder or the
other rights of the Companies hereunder; and (ii) Executive is under no physical
or mental disability that would hinder the performance of his duties under this
Agreement.
6. Non-Competition.
7. (a) Executive agrees that while employed by MSGI or any of its subsidiaries
he will not engage in, or otherwise directly or indirectly be employed by, or
act as a consultant, or be a director, officer, employee, owner, agent, member
or partner of, any other business or organization that is or shall then be
competing with MSGI or any of its subsidiaries, except that in each case the
provisions of this Section 6 will not be deemed breached merely because
Executive owns not more than five percent (5%) of the outstanding common stock
of a corporation, if, at the time of its acquisition by Executive, such stock is
listed on a national securities exchange, is reported on NASDAQ, or is regularly
traded in the over-the-counter market by a member of a national securities
exchange.
8. (b) If Executive's employment under this Agreement is terminated by MSGI or
by Executive, for a period of one (1) year from the date of termination, shall
not, directly or indirectly, initiate discussions with any person who was a
customer of MSGI or any of its subsidiaries at the time of such termination or
during the period of one (1) year prior to the date of such termination
regarding such person's ceasing to do business with MSGI or any of its
subsidiaries or to do business with any other enterprise that is engaged in the
same or similar business to that of such entity. If Executive's employment under
this Agreement is terminated by MSGI or by Executive, for a period of one (1)
year from the date of termination, shall not, directly or indirectly, (i)
initiate discussion with any person who was an employee of MSGI or any of its
subsidiaries at the time of such termination or during the one (1) year prior to
the date of such termination regarding leaving the employ of such entity or (ii)
engage or employ any such person to provide services to Executive or Executive's
employer if such person terminated his other employment with MSGI or any of its
subsidiaries voluntarily and not for Good Reason. Notwithstanding the foregoing,
a general advertisement in any general circulation print publication or trade
print publication or a general or trade-directed video or audio (whether on
broadcast or cable television, radio, the Internet or otherwise) not targeted at
MSGI's or any of its subsidiaries' current or former customers or employees
shall not constitute a breach of this Agreement by Executive.
9. (c) Executive acknowledges that: (i) monetary damages are not sufficient to
compensate the Companies for a breach of this Section 6; (ii) the Companies
shall be irreparably harmed if Executive breaches the covenants in this Section
6; and (iii) the issuance of injunctive relief on behalf of any of the Companies
is appropriate to remedy any such breach.
10. Inventions; Patents; Copyrights.
Any interest in patents, patent applications, inventions, copyrights,
developments and processes which are protectable as intellectual property by
either the filing of a registration thereof or the filing and approval of an
application pursuant to federal or state statute or as trade secrets but not
including general know-how of Executive developed or improved by Executive
("Inventions") which Executive now or hereafter during the period he is employed
by the Companies under this Agreement may, directly or indirectly, own or
develop relating to the fields in which the Companies may then be engaged shall
belong to the Companies; and forthwith upon request of the Companies, Executive
shall execute all such assignments and other documents and take all such other
action as the Companies may reasonably request in order to vest in the Companies
all of his right, title, and interest in and to such Inventions, free and clear
of all liens, charges, and encumbrances.
11. Confidential Information.
All confidential information which Executive may now possess, may obtain during
the Employment Term, or may create prior to the end of the period he is employed
by the Companies under this Agreement, relating to the business of the Companies
or of any customer or supplier of the Companies, shall not be published,
disclosed or made accessible by him to any other person, firm, or corporation
during the Employment Term or any time thereafter without the prior written
consent of the Companies. Executive shall return all tangible evidence of such
confidential information to the Companies prior to or at the termination of his
employment
12. Termination.
Executive's employment hereunder may be terminated without breach of this
Agreement only under the following circumstances:
(a) Death Executive's employment hereunder shall terminate upon his death.
(b) Disability. If, as a result of Executive's incapacity due to physical or
mental illness, Executive shall have been absent from his duties hereunder for
the entire period of six (6) consecutive months, and within thirty (30) days
after written Notice of Termination (as defined in paragraph (e) below) is given
(which may occur before or after the end of such six month period) shall not
have returned to the performance of his duties hereunder, Executive's employment
hereunder shall terminate for "Disability."
(c) Termination by MSGI for Cause. The Company may terminate Executive's
employment hereunder for "Cause." For purposes of this Agreement, the Company
shall have "Cause" to terminate Executive's employment hereunder (i) upon
Executive's conviction for the commission of an act or acts constituting a
felony under the laws of the United States or any state thereof, (ii) upon
Executive's intentional commission of any act or intentional omission to take
any action, in bad faith and to the material detriment of any of the Companies,
(iii) upon commission of an act of moral turpitude to the material detriment of
any of the Companies, (iv) upon the commission of an act of fraud against any of
the Companies, (v) upon Executive's willful and continued failure to
substantially perform his duties hereunder (other than any such failure
resulting from Executive's incapacity due to physical or mental illness), after
written notice which has been delivered to Executive by MSGI, which notice
specifically identifies the manner in which Executive has not substantially
performed his duties, and Executive's failure to substantially perform his
duties is not cured within fifteen (15) business days after notice of such
failure has been given to Executive if reasonably susceptible to being cured
within such number of business days or, if reasonably susceptible to cure within
a greater number of business days, if cure commences within such number of
business days and is diligently pursued until cure is effected.
(d) Termination by Executive for Good Reason; Change in Control.
(i) Executive may terminate his employment hereunder for "Good Reason." For
purposes of this Agreement, Executive shall have "Good Reason" to terminate his
employment hereunder (A) upon a failure by the Company to comply with any
material provision of this Agreement that has not been cured within ten (10)
business days after notice of such noncompliance has been given by Executive to
MSGI, (B) upon action by MSGI resulting in a diminution of Executive's title or
authority, (C) upon a request by MSGI that Executive relocate outside the Boston
area, (D) upon any failure of MSGI timely to perform or observe its obligations
with respect to Executive's right to serve as a member of the Board or Newco's
Board of Directors under Section 2(b), or (E) for any reason within six (6)
months following the occurrence of a Change in Control.
(ii) For purposes of this Agreement, a "Change in Control" shall be deemed to
have occurred if:
(iii) (A) any "person," as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than (1)
MSGI, (2) any trustee or other fiduciary holding securities under an employee
benefit plan of MSGI or (3) any corporation owned, directly or indirectly, by
the stockholders of MSGI in substantially the same proportion as their ownership
of Shares), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of MSGI representing
30% or more of the combined voting power of MSGI's then outstanding voting
securities;
(iv) (B) individuals who at the Commencement Date constitute the Board, and any
new director whose election by the Board or nomination for election by the Board
or nomination for election by the Board or nomination for election by MSGI's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof;
(v) (C) the stockholders of MSGI approve a merger or consolidation of the
Company with any other corporation, other than (1) a merger or consolidation
that would result in the voting securities of MSGI outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving or parent entity) a majority
of the voting securities of MSGI or such surviving or parent entity outstanding
immediately after such merger or consolidation or (2) a merger or consolidation
effected to implement a recapitalization of MSGI (or similar transaction) in
which no "person" (as hereinabove defined) acquires 30% or more of the combined
voting power of MSGI's then outstanding securities;
(vi) (D) the failure of J. Xxxxxx Xxxxxxx to be the Chief Executive Officer of
MSGI; or
(vii) (E) the stockholders of MSGI approve a plan of complete liquidation of
MSGI or an agreement for the sale or disposition by MSGI of all or substantially
all of MSGI's assets (or any transaction having a similar effect).
(e) Termination by MSGI Without Cause. The Company may terminate Executive's
employment hereunder without Cause.
(f) Termination by Executive Without Good Reason. Executive may terminate his
employment hereunder other than for Good Reason.
(g) Notice of Termination; Procedure. Any termination of Executive's employment
by MSGI or by Executive shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 14 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice that 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. Except in the event of a termination for the commission of a felony,
no termination shall take place until the Executive shall have been given
written notice specifying the alleged grounds for termination and an opportunity
to be heard, with representation by counsel, by the Board; provided, further,
that any such decision to terminate to be effective only if so voted by
three-fourths of the members of the Board.
(h) Date of Termination. "Date of Termination" shall mean (i) if Executive's
employment is terminated by his death, the date of his death, (ii) if
Executive's employment is terminated pursuant to paragraph (b) above, thirty
(30) days after Notice of Termination is given (provided that Executive shall
not have returned to the performance of his duties on a full-time basis during
such thirty (30)-day period), (iii) if Executive's employment is terminated
pursuant to paragraph (c) or (d) above, the date specified in the Notice of
Termination but not less than fourteen (14) days after such notice is given
(except in the case of termination for the commission of a felony, in which case
the Date of Termination shall be the date of the Notice of Termination);
provided, however, that if within fourteen (14) days after any Notice of
Termination is given the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties or by a binding and final arbitration
award, (iv) if Executive's employment is terminated by the Company without
Cause, sixty (60) days after the Notice of Termination, and (v) if Executive's
employment is terminated by him voluntarily, sixty (60) days after notice of
such termination by him to MSGI, unless waived by MSGI.
13. Compensation Upon Termination or During Disability.
(a) Disability or Death. During any period that Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness,
Executive shall continue to receive his full salary at the rate or rates in
effect for such period, as well as other applicable benefits provided to
employees of the Companies, until his employment is terminated pursuant to
Section 9(b) hereof. In the event Executive's employment is terminated pursuant
to Section 9(a) or 9(b) hereof, then
(i) as soon as practicable thereafter, the Companies shall pay Executive or
Executive's beneficiary, as the case may be, all unpaid amounts, if any, to
which Executive was entitled as of the Date of Termination under Section 3(a)
hereof and shall pay to Executive or Executive's beneficiary, as the case may
be, in accordance with the terms of the applicable plan or program, all other
unpaid amounts to which Executive was then entitled under any of the Companies'
benefit plans (collectively, "Accrued Obligations");
(ii) as soon as practicable thereafter, the Companies shall pay Executive or
Executive's beneficiary, as the case may be, a lump-sum payment equal to the sum
of (A) the actual amount of Base Salary that Executive would have earned during
the twelve (12)-month period commencing on the Date of Termination, reflecting
any rate increase determined pursuant to Section 3(a) hereof or otherwise, and
(B) the Annual Bonus earned by Executive with respect to the most recent
complete fiscal year of MSGI in which Executive was employed by the Companies
(the "Historical Bonus"); or $150,000 if the Date of Termination occurs prior to
June 30, 2000;
(iii) as of the Date of Termination, all outstanding stock options (including
the Option) granted to Executive which by their terms are then fully vested and
exercisable shall continue to be fully vested and exercisable by Executive, or
Executive's Beneficiary (as the case may be), for a period of the earlier of
ninety (90) days following the Date of Termination or the expiration of the term
of any such option.
(b) Termination for Cause; Voluntary Termination Without Good Reason; Expiration
of Term. If Executive's employment is terminated by MSGI for Cause or
voluntarily by Executive for other than for Good Reason or upon the expiration
of the Employment Term, then the Companies shall pay the Accrued Obligations to
Executive at the time(s) set forth in Section 10(a)(i) hereof and the Companies
shall have no further obligations to Executive under this Agreement. In the case
of termination by MSGI for Cause or termination by Executive for other than Good
Reason, Executive shall have the right to exercise any stock option, to the
extent then vested and exercisable (including the Option), for a period of
ninety (90) days following the Date of Termination. In the event of an
expiration of the Employment Term, Executive shall have the right to exercise
any stock option to the extent then vested and exercisable (including the
Option), for the remaining term of such options.
(c) Termination Without Cause; Termination for Good Reason. If (i) MSGI shall
terminate Executive's employment, other than for Disability or for Cause, or
(ii) Executive shall terminate his employment for Good Reason, then:
(i) the Companies shall pay the Accrued Obligations to Executive at the time(s)
set forth in Section 9(a)(i) hereof;
(ii) the Companies shall pay to Executive a lump sum payment equal to the sum of
(A) the actual amount of Base Salary that Executive would have earned during the
balance of the Initial Term or the Renewal Term, as applicable, but not less
than an amount equal to Executive's then-current Base Salary for twenty-four
(24) month periods if fewer than twenty-four (24) months remain during the
Initial Term or the Renewal Term in each case such Base Salary shall reflect any
rate increases determined pursuant to Section 3(a) hereof or otherwise, and (B)
two (2) times the Historical Bonus; or $300,000 if the Date of Termination
occurs prior to June 30, 2001;
(iii) for purposes of computing the benefits payable to Executive under the
Companies' benefit plans in which Executive participated as of the Date of
Termination, Executive shall be treated as if he had continued in employment for
the balance of the Initial Term or the Renewal Term, as applicable, or
twenty-four (24) months if less than twenty-four (24) months remain on the
Initial Term or the Renewal Term, as applicable.
(iv) as of the Date of Termination, all outstanding stock options granted to
Executive (including the Option), which is and shall continue to be fully vested
and exercisable in any event) and not then by their terms fully vested and
exercisable shall become fully vested and exercisable. Executive shall have the
right to exercise any stock option, to the extent then exercisable, following
the Date of Termination until the expiration of the term of any such option.
14. Merger.
In the event of a future disposition of the properties and business of MSGI,
substantially as an entirety, by merger, consolidation, sale of assets, sale of
stock, or otherwise where the majority of MSGI Common Stock is acquired by a
party which is not an affiliate of MSGI, then the Company may elect to assign
this Agreement and all of its rights and obligations hereunder to the acquiring
or surviving corporation.
15. Survival.
The covenants, agreements, representations, and warranties contained in or made
pursuant to this Agreement shall survive Executive's termination of employment,
irrespective of any investigation made by or on behalf of any party.
16. Modification.
This Agreement sets forth the entire understanding of the parties with respect
to the subject matter hereof, supersedes all existing agreements between them
concerning such subject matter, and may be modified only by a written instrument
duly executed by each party.
17. Notices.
Any notice or other communication required or permitted to be given hereunder
shall be in writing and shall be sent by telecopier, by overnight courier,
certified mail, return receipt requested, or delivered against receipt to the
party to whom it is to be given at the address of such party set forth in the
preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 13). In
the case of a notice to the Companies or MSGI, a copy of such notice (which copy
shall not constitute notice) shall be delivered to Camhy Xxxxxxxxx & Xxxxx LLP,
0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxx X. Annex, Esq.
In the case of a notice to Executive, a copy of such notice (which copy shall
not constitute notice) shall be delivered to Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo P.C., Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attn.:
Xxxxxxx X. Xxxxx. Notice to the estate of Executive shall be sufficient if
addressed to Executive as provided in this Section 13. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, all other notices shall be deemed given at the time of
receipt if by telecopier, overnight courier or delivery in hand.
18. Waiver.
Any waiver by either party of a breach of any provision of this Agreement shall
not operate as or be construed to be a waiver of any other breach of such
provision or of any breach of any other provision of this Agreement. The failure
of a party to insist upon strict adherence to any term of this Agreement on one
or more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. Any waiver must be in writing and signed by the party against
who the waiver is asserted.
19. Binding Effect.
Executive's rights and obligations under this Agreement shall not be
transferable by assignment or otherwise, such rights shall not be subject to
encumbrance or the claims of Executive's creditors, and any attempt to do any of
the foregoing shall be void. The provisions of this Agreement shall be binding
upon and inure to the benefit of Executive and his heirs and personal
representatives, and shall be binding upon and inure to the benefit of the
Companies and its successors and those who are its assigns.
20. Arbitration.
Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a single
arbitrator but, if Executive and MSGI fail to agree on a single arbitrator
within ten (10) days after a notice of dispute by one given to the other, a
panel of three arbitrators, one of which shall be selected by each of them and
the third of which shall be selected by the two arbitrators selected by the
parties, in Boston, Massachusetts, or in such other location as may be agreed
upon by the parties, in accordance with the rules of the American Arbitration
Association then in effect. The prevailing party in such arbitration shall be
reimbursed for his or its reasonable attorneys' fees and expenses incurred in
such proceeding as determined by the arbitrators.
21. Indemnification.
To the fullest extent permitted by law, the Companies shall indemnify Executive
for all amounts (including, without limitation, judgments, fines, settlement
payments, losses, damages, costs and expenses, including reasonable attorneys'
fees) incurred or paid by Executive in connection with any action, proceeding,
suit or investigation arising out of or relating to the performance by Executive
of services for, or acting as a director, officer or employee of, MSGI or any
subsidiary thereof. In addition, during the Term, MSGI shall maintain directors'
and officers' insurance on behalf of Executive on the same basis as that
maintained for other directors and officers of the Company.
22. Expenses.
MSGI shall pay Executive's reasonable attorneys' fees (including disbursements)
for the negotiation and preparation of this Agreement, which payment shall be
made directly to Xxxxx Xxxxx within fifteen (15) days of receipt of invoice
regardless of whether or not the transaction contemplated by the Purchase
Agreement is consummated and this Agreement takes effect.
23. Headings.
The headings in this Agreement are solely for the convenience of reference and
shall be given no effect in the construction or interpretation of this
Agreement.
24. Counterparts; Governing Law.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. It shall be governed by, and construed in accordance with,
the laws of the State of New York, without giving effect to the rules governing
the conflicts of laws. Each of the parties hereto agrees that such court may
award reasonable legal fees and expenses to the prevailing party.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
MARKETING SERVICES GROUP, INC.
By: /s/Xxxxxx Xxxxxxx
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Name: J. Xxxxxx Xxxxxxx
Title: Chief Executive Officer
/s/Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
