EMPLOYMENT AGREEMENT
Exhibit
10.1
EMPLOYMENT AGREEMENT made as
of the 26th day of
January, 2009, by and between VIBE RECORDS, INC., a Nevada
corporation, with principal offices in Westbury, New York (the "Company"), and
XXXXXXX X. XXXXXX., a
resident of the State of New York ("Executive").
1. Employment. The Company
hereby agrees to employ Executive, and Executive hereby accepts such employment,
upon the terms and conditions set forth in this Agreement.
2. Term. The term of
Executive's employment under this Agreement shall commence on the January
26th, 2009,
(“Effective Date”) and shall terminate on the third anniversary of the Effective
Date (the "Termination Date"); provided that, the term of this Agreement will
automatically renew for successive one-year periods thereafter (in which case
the Termination Date shall be extended accordingly), unless, at least thirty
days prior to the applicable Termination Date, either party gives the other
written notice of non-renewal.
3. Position and Duties.
Executive will serve as the President and Chief Executive Officer of the
Company. Executive shall be elected or appointed a member of the Company's Board
of Directors ("Board") as of the Effective Time, and from and after the
Effective Time until the expiration of the Term, the Company shall nominate the
Executive for appointment or election as a member of the Board and shall use
commercially reasonable efforts to cause the Executive to be appointed or
elected a member of the Board. Executive will report directly to the Board.
Except as otherwise specifically provided herein, the duties which may be
assigned to Executive will be the usual and customary duties of the offices of
president and chief executive officer and will be consistent with the provisions
of the Company's Articles or Certificate of Incorporation, By-laws and
applicable law. At the request of the Board, Executive will serve as an officer
or director of the Company's subsidiaries and other affiliates without
additional compensation. Executive will devote all of his business time and
attention to the performance of his obligations, duties and responsibilities
under this Agreement. Executive may engage in personal, charitable, and passive
investment activities to the extent such activities do not conflict or interfere
with his obligations to, or his ability to perform the duties and
responsibilities of his employment by, the Company hereunder, as determined by
the Board in its discretion.
4. Annual
Compensation.
(a)
Base Salary. The Company will pay salary to Executive at an annual rate of
$75,000, in accordance with its regular payroll practices. The Board will review
Executive's salary at least annually. The Board, acting in its discretion, may
increase (but may not decrease) the annual rate of Executive's salary in effect
at any time.
(b)
Bonus. For each fiscal year of the Company during the Term, Executive will have
an opportunity to earn a performance bonus determined in the sole discretion of
the Board based upon such criteria as it deems appropriate. The Company as soon
as practicable after the beginning of each year, the Board will communicate
performance criteria that it may take into account, in whole or in part, for
determining bonuses for that year. Annual incentive compensation, if any, will
be determined by the Board, in its sole discretion, and paid as soon as
practicable after the end of the year.
5. Additional
Compensation.
(a)
Grant of Series A Shares. On the Effective Date, as additional
consideration for past services to the Company, the Company hereby grants to Xx.
Xxxxxx the irrevocable right to be issued, upon (61) days written notice, a
total of 7,500 shares of Series A Preferred Stock of the Company. The power to
direct the issuance of such shares of Series A Preferred shall be at Xx.
Xxxxxx’x sole discretion, subject to the (61) day waiting period.
6.
Employee Benefit Programs and Perquisites.
(a)
General. Executive will be entitled to participate in such qualified and
nonqualified employee pension plans, group health, long term disability and
group life insurance plans, and any other welfare and fringe benefit plans,
arrangements, programs and perquisites sponsored or maintained by the Company
from time to time for the benefit of its employees generally or its senior
executives generally.
(b)
Reimbursement of Business Expenses. Executive is authorized to incur
reasonable expenses in carrying out his duties and responsibilities under this
Agreement and the Company will promptly reimburse him for all expenses that are
so incurred upon presentation of appropriate vouchers or receipts, subject to
the Company's expense reimbursement policies applicable to senior executive
officers generally.
(c)
Automobile-Related Expenses. During the term of this Agreement, the
Company will provide Executive with the use of an automobile of Executive's
choice The Company will cover the reasonable "drive-off" costs, monthly lease
payments of up to $1,000 per month, registration fees, fuel, maintenance and
insurance costs of such automobile. Executive will have the option to purchase
the automobile at the end of the lease term per the purchase provision within
the lease contract.
(d)
Location of Employment. Executive's place of employment during the Term will be
at the principal office of the Company, which is presently in the Long Island,
NY metropolitan area, subject to the need for business travel in connection with
Company business.
7. Termination of
Employment.
(a)
Death. If Executive's employment with the Company terminates before
the end of the then current Term by reason of his death, then (1) as soon as
practicable thereafter, the Company will pay to his estate an amount equal to
his "Accrued Compensation" (defined below) through the date of death, and (2)
the Company will pay or reimburse Executive's spouse and covered dependents for
the cost of the first six months of continuing group health plan coverage which
they receive pursuant to COBRA. For the purposes of this Agreement, the term
"Accrued Compensation" means, as of any date, the amount of any unpaid salary
earned by Executive through that date, plus any additional amounts and/or
benefits payable to or in respect of Executive under and in accordance with the
provisions of any employee plan, program or arrangement under which Executive is
covered. In the event of Executives death, Executive’s estate shall have the
power to direct the issuance of the Additional Consideration shares as detailed
in Section 5 of this agreement.
(b)
Disability. Company agrees to assist Executive in meeting the
contingency of disability. The Company deems it to be in its best interest to
establish a sick pay or disability plan to provide Executive's salary
continuation or sick pay benefits in the event of absence from work due to
accident, injury, or sickness by way of paying the premium of an insurance
policy, which will pay Executive no less than Executive's then-base salary per
month for the duration of the remaining portion of the Term of this Agreement.
If the Company terminates Executive's employment by reason of Executive's
"Disability" (defined below), then (1) as soon as practicable thereafter,
Executive will be entitled to receive his Accrued Compensation through the date
his employment terminates, and (2) the Company will pay or reimburse Executive
for the cost of the first twelve months of continuing group health plan coverage
which he and his covered dependents receive pursuant to COBRA. For purposes of
this Agreement, the term "Disability" means the inability of Executive to
substantially perform the customary duties and responsibilities of his
employment by the Company for a period of at least 120 consecutive days by
reason of a physical or mental illness or incapacity which is expected to result
in death or last indefinitely.
(c)
Termination by the Company for Cause or Voluntary Termination by Executive. If
the Company terminates Executive's employment for "Cause" (defined below) or if
Executive terminates his employment voluntarily for any reason before the end of
the then-current Term, Executive will be entitled to receive: (1) his Base
Salary through the date his employment terminates, (2) his pro rata bonus and
(3) the immediate issuance of the Additional Consideration shares which are
issuable under Section 5 of this Agreement but which remain unissued at the time
of the Executives termination by the Company with cause. For purposes of this
Agreement, the Company may terminate Executive's employment for "Cause" if: (1)
Executive is engaged in misconduct which is materially injurious to the Company
or its affiliates; (2) perpetration by Executive of an intentional and knowing
fraud against or affecting the Company or any customer, client, agent or
employee of the Company or any of its affiliates; or (3) Executive's commission
of a felony or a crime involving fraud, dishonesty or moral turpitude. In order
for Executive to terminate his employment voluntarily Executive must provide
sixty (60) calendar days written notice to the Company of such termination
pursuant to Section 18 hereof.
(d)
Termination by the Company Without Cause. If Executive's employment is
terminated by the Company without "Cause" then Executive will be entitled to
receive (1) his Base Salary through the termination date; (2) his pro rata
bonus; (3) a single sum payment equal to $75,000; (4) reimbursement for the cost
of up to 12 months of continuing group health plan coverage which Executive and
his covered dependents receive pursuant to COBRA, and (5) the immediate issuance
of the Additional Consideration shares which are issuable under Section 5 of
this Agreement but which remain unissued at the time of the Executives
termination by the Company without cause.
8. Restrictive
Covenants.
(a)
Nondisclosure of Confidential Information. Executive acknowledges that, during
the course of his employment hereunder, he will have access to confidential and
proprietary information, documents and other materials relating to the Company
and its affiliates which are not generally known to persons outside the Company
or its affiliates (whether conceived or developed by Executive or others) and
confidential information, documents and other materials entrusted to the Company
or its affiliates by third parties, including, without limitation, financial
information, trade secrets, techniques, know-how, marketing and other business
plans, data, strategies and forecasts, and the substance of arrangements and
agreements with customers, suppliers and others (collectively, "Confidential
Information"). Any Confidential Information conceived or developed by Executive
during the period of his employment will be the exclusive property of the
Company. Except as specifically authorized by the Company, Executive will not
(during or after his employment hereunder) disclose Confidential Information to
any third person, firm or entity or use Confidential Information for his own
purposes or for the benefit of any third person, firm or entity other than (1)
as may be legally required in response to any summons, order or subpoena issued
by a court or governmental agency, or (2) Confidential Information which is or
becomes available to the general public through no act or failure to act by
Executive.
(b)
Non-Competition. During Executive's employment by the Company hereunder and
during a period of three (3) years following the date of termination of his
employment with the Company, the Executive will not, directly or indirectly,
whether as an owner, partner, shareholder, consultant, agent, employee,
co-venturer or otherwise, or through any other "person" (which, for purposes of
this subsection, shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, any unincorporated organization, or
a government or political subdivision thereof), compete in any state or
territory of the United States or any geographic area outside of the United
States with the Company in any business involving products similar in nature to
those designed, manufactured or sold by the Company
(c)
Non-Solicitation. During Executive's employment by the Company hereunder and
during a period of two (2) years following the date of termination of his
employment with the Company, Executive will not, directly or indirectly, whether
as an owner, partner, shareholder, consultant, agent, employee, co-venturer or
otherwise, or through any other "person" (which, for purposes of this
subsection, shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, any unincorporated organization, or
a government or political subdivision thereof), (1) hire or attempt to hire any
employee of the Company or any affiliate of the Company or any person who was an
employee of the Company or any affiliate of the Company at any time during the
twelve months immediately prior to the termination of Executive's employment
with the Company, assist in such hiring by any other person, encourage any such
employee to terminate his relationship with the Company or any affiliate of the
Company; (2) directly or indirectly, request or cause customers, suppliers or
other parties with whom the Company or any of its affiliates has a business
relationship to cancel or terminate any such business relationship with the
Company or any of its affiliates; and (3) solicit from a customer of the Company
or its affiliates any business which is competing with or related to the
business of the Company or its affiliates, or with the products or services of
the Company or its affiliates.
(d)
No Other Remuneration; No Disparagement. Executive covenants and agrees that
during his employment by the Company he will not directly or indirectly receive
any remuneration from the Company or anyone connected with the Company except as
provided pursuant to the terms of this Agreement or otherwise approved by the
Board of Directors in writing. Executive further covenants and agrees that at no
time during or after his employment by the Company will the Executive disparage
the Company or any of its Affiliates, shareholders, directors, officers,
employees, or agents.
(e)
Reasonableness of Restrictive Covenants. Executive acknowledges that the
covenants contained in the preceding subsections of this Section 8 are
reasonable in the scope of the activities restricted, the geographic area
covered by the restrictions, and the duration of the restrictions, and that such
covenants are reasonably necessary to protect the Company's legitimate interests
in its Confidential Information and in its relationships with its employees,
customers and suppliers. Executive further acknowledges such covenants are
essential elements of this Agreement and that, but for such covenants, the
Company would not have entered into this Agreement.
9. Company
Property. All records, files, lists, including computer generated lists,
drawings, documents, equipment and similar items related to the Company's
business that Executive shall prepare or receive from the Company shall remain
the Company's sole and exclusive property. Executive will not copy or cause to
be copied, print out, or cause to be printed out any software, documents or
other materials originating with or belonging to the Company other than in
connection with performing his duties. Upon termination of his employment with
the Company, Executive shall promptly return to the Company all property of the
Company in his possession or control and will not retain in his possession or
control any software, documents or other materials originating with or belonging
to the Company.
10. Intellectual
Property. The Company has hired Executive to work full time so anything
Executive produces during the period of his employment with the Company and
applicable to the business of the Company is the property of the Company. Any
writing, invention, design, system, process, development or discovery conceived,
developed, created or made by Executive, alone or with others, during the period
of his employment with the Company and applicable to the business of the
Company, whether or not patentable, registerable or copyrightable, shall become
the sole and exclusive property of the Company. Executive shall disclose the
same promptly and completely to the Company, and shall, during the period of his
employment with the Company, and any time and from time to time thereafter, (1)
execute all documents reasonably requested by the Company for the purpose of
vesting in the Company the entire right, title and interest in and to the same,
(2) execute all documents reasonably requested by the Company for filing such
applications for and procuring all patents, trademarks, service marks or
copyrights as the Company, in its sole discretion, may desire to prosecute, and
(3) give the Company all assistance it may reasonably require, including the
giving of testimony in any suit, action, investigation or other proceeding, in
order to obtain, maintain, and protect the Company's right therein and thereto.
If such assistance is requested after Executive's employment has terminated, the
Company shall pay Executive reasonable compensation in respect of, and reimburse
Executive for Executive's reasonable expenses incurred in connection with,
rendering such assistance and performing such acts. Executive shall not have or
claim any right, title or interest in any trade name, trademark, copyright or
other similar rights belonging to or used by the Company.
11. Litigation
Assistance. Executive will cooperate with the Company, during the term of
his employment and thereafter by making himself reasonably available to testify
on behalf of the Company or any subsidiary or affiliate of the Company in any
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, and to reasonably assist the Company or any such subsidiary or
affiliate in any such action, suit, or proceeding by providing information and
meeting and consulting with the Board or its representatives or counsel, or
representatives or counsel to the Company or any such subsidiary or affiliate,
as reasonably requested; provided, however, that the same does not materially
interfere with his then current professional activities. The Company will
reimburse Executive for all expenses reasonably incurred by him in connection
with his provision of testimony or assistance.
12. Severability and
Enforcement.
(a)
If any one or more of the provisions (or portions thereof) of this Agreement
shall for any reason be held by a final determination of a court of competent
jurisdiction to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
(or portions of the provisions) of this Agreement, and the invalid, illegal or
unenforceable provisions shall be deemed replaced by a provision that is valid,
legal and enforceable and that comes closest to expressing the intention of the
parties hereto.
(b)
Without limiting the generality of Section 12(a), to the extent that any court
shall hold that any of the covenants set forth in Section 8 are unenforceable
because they are unreasonable as to scope and/or duration, then the parties
intend that such covenant(s) be reduced in scope and/or duration to the extent
required to be held enforceable.
(c)
Executive confirms and agrees that only a monetary remedy for a breach of any of
the covenants set forth in Section 8 would be inadequate, and may be
impracticable and difficult to prove, and further agrees that any such breach
would cause the Company irrevocable harm and damage. Accordingly, Executive
hereby specifically agrees that Company shall be entitled to temporary and
permanent injunctive relief without the necessity of proving actual damages as a
result of any material breach of Section 8 by Executive.
13. Resolution of
Disputes.
(a)
Agreement to Arbitrate; Injunctive Relief. THE PARTIES HERETO AGREE THAT ANY
CLAIM, DEMAND, DISPUTE, ACTION OR CAUSE OF ACTION ARISING UNDER OR RELATING TO
THE TERMS OF THIS EMPLOYMENT AGREEMENT, WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE (COLLECTIVELY, THE "PARTIES' DISPUTES"), SHALL BE DECIDED, UNLESS
OTHERWISE SPECIFICALLY INDICATED HEREIN, BY ARBITRATION PURSUANT TO THE NATIONAL
RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES OF THE AMERICAN ARBITRATION
ASSOCIATION ("AAA RULES") AS MODIFIED HEREBY, AND THAT ANY PARTY TO THIS
AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT INCLUDING
THIS SECTION WITH THE AMERICAN ARBITRATION ASSOCIATION (THE "AAA") AS WRITTEN
EVIDENCE OF THE AGREEMENT OF THE PARTIES TO SO ARBITRATE. THE PARTIES HERETO
ACKNOWLEDGE THAT THEY HAVE HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING
THIS SECTION, THAT THEY FULLY UNDERSTAND ITS TERMS, CONTENT AND EFFECT, AND THAT
THEY VOLUNTARILY AND KNOWINGLY AGREE TO THE TERMS OF THIS SECTION AND AGREE TO
ARBITRATE ALL PARTIES' DISPUTES.
(b)
Any arbitration pursuant to this Agreement shall take place in Long Island, NY,
before a panel of three commercially experienced arbitrators appointed in
accordance with the AAA Rules or, if the parties to the arbitration agree, a
single retired judge. Notice of any demand for arbitration shall be provided in
writing to the other party and to the AAA (the "Arbitration Notice"). For the
purposes of this Agreement, an arbitration shall be deemed to have been
commenced at such time as the Arbitration Notice has been delivered to all the
other parties pursuant to the provisions hereof. The parties shall be entitled
to discovery in conjunction with such arbitration (with the scope of discovery
to be co-extensive with discovery rights applicable to an arbitration pursuant
to New York Code of Civil Procedure.). Any award rendered by the arbitrators
(or, if applicable, retired judge) shall be final and may be enforced in the
Superior Court for the State of New York. Each party shall pay half of the fees
and expenses of the arbitrators.
14.
Indemnification. To the extent permitted by its Certificate of
Incorporation and By-laws and subject to applicable law, the Company will
indemnify, defend and hold Executive harmless from and against any claim,
liability or expense (including reasonable attorneys' fees) made against or
incurred by Executive as a result of his employment with the Company or any
subsidiary or other affiliate of the Company, including service as an officer or
director of the Company or any subsidiary or other affiliate of the
Company.
15. Assignment; Binding
Nature. The services and duties to be performed by Executive hereunder are
personal and may not be assigned. This Agreement shall be binding upon and inure
to the benefit of the Company, its successors and assigns and Executive and his
heirs and representatives.
16. No Impediment to
Agreement. Executive covenants that except as otherwise disclosed herein,
he is not, as of the date hereof, and will not be, during the period of his
employment hereunder, employed under contract, oral or written, by any other
person, firm or entity, and is not and will not be bound by the provisions of
any other restrictive covenant or confidentiality agreement, and is not aware of
any other circumstance or condition (legal, health or otherwise) which would
constitute an impediment to, or restriction upon, his ability to enter into this
Agreement and to perform the duties and responsibilities of his employment
hereunder.
17. Amendment or Waiver. No
provision in this Agreement may be amended unless such amendment is agreed to in
writing and signed by Executive and an authorized officer of the Company. Except
as set forth herein, no delay or omission to exercise any right, power or remedy
accruing to any party shall impair any such right, power or remedy or shall be
construed to be a waiver of or an acquiescence to any breach hereof. No waiver
by either party of any breach by the other party of any condition or provision
contained in this Agreement to be performed by such other party shall be deemed
a waiver of a similar or dissimilar condition or provision at the same or any
prior or subsequent time. Any waiver must be in writing and signed by Executive
or an authorized officer of the Company, as the case may be.
18. Survivorship. The
respective rights and obligations of the parties hereunder shall survive any
termination of Executive's employment to the extent necessary to the intended
preservation of such rights and obligations.
19. Governing Law. This Agreement shall
be governed by, construed and interpreted in accordance with the laws of New
York.
20. Notices. Any notice given
to a party shall be in writing and shall be deemed to have been given when
delivered personally or sent by certified or registered mail, postage prepaid,
return receipt requested, or express mail to the recipient at his or its last
known address.
21. Withholding. Employer may
deduct and withhold from the payments to be made to Employee hereunder any
amounts required to be deducted and withheld by Employer under the provisions of
any statute, law, regulation or ordinance now or hereafter enacted.
22. Entire Agreement.
This Agreement contains the entire understanding and agreement between
the parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the parties with respect thereto.
IN WITNESS WHEREOF, the
undersigned have executed this Agreement on the date first above
written.
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By:
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/s/Xxx Xxxxxx
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Xxx
Xxxxxx
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President
and CEO
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Date:
January 26th
2009
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By:
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/s/Xxx Xxxxxx
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Xxx
Xxxxxx
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President
and CEO
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Date:
January 26th
2009
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