EMPLOYMENT AGREEMENT
THIS EMPLOYMENT Agreement (the "Agreement") is made and entered into on
the 1st day of September, 1999 by and between MCY Music World, Inc., a Delaware
corporation with offices at 1133 Avenue of the Americas, New York, New York (the
"Company"), and Xxxxxx Xxxxx, an individual residing at 0000 X. Xxxxxxxx, Xxxxx
Xxx, Xxxxxxxxxx 00000 ("Employee").
W I T N E S S E T H:
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WHEREAS, the Company desires to employ Employee as a Director
of Technology Projects; and
WHEREAS, Employee desires to gain employment with the Company
as a Director of Technology Projects under the terms and conditions herein
stated; and
NOW, THEREFORE, in consideration of the mutual premises,
covenants and Agreements hereinafter set forth, the parties hereby agree as
follows:
1. TERM. The Company hereby employs Employee, and Employee hereby
accepts employment hereunder, for a term of thirty-six (36) months (the "Term")
commencing on the date hereof, subject to prior termination as provided in
Section 8 herein.
2. POSITION AND DUTIES. In connection with his employment hereunder,
Employee (i) shall serve as a Director of Technology Projects of the Company;
(ii) shall serve at the direction of and report to the Chief Executive Officer
of the Company, or such other officer of the Company as the Chief Executive
Officer shall from time to time designate; (iii) shall allocate approximately
50% of his working time (at least 12 days per month) at the Company's offices in
New York; (iv) shall manage and oversee the Company's Los Angeles office at such
times as Employee is not present in New York (together with such other duties in
Los Angeles as may be prescribed by the Chief Executive Officer or such other
officer of the Company as the Chief Executive Officer may designate); and (v)
shall manage technology products and projects of the Company as set forth below:
(i) Design, develop, supervise and maintain the technological
platform of the Company and its subsidiaries on a global basis;
(ii) Develop, supervise, update and maintain the U.S. and global web
sites for the Company and its subsidiaries;
(iii)Design, develop and supervise all digital download and streaming
technology of the Company and its subsidiaries;
(iv) Develop, supervise, update and maintain the U.S. and global
credit card, electronic payment and electronic commerce systems
of the Company and its subsidiaries;
(v) Develop, supervise, update and maintain the U.S. and global
Graphic User Interface for Germany, Latin America, China, Japan
and such other countries as the Company shall dictate;
(vi) Develop, supervise, update and maintain a new artist upload page
for the web site of the Company and its subsidiaries;
(vii)Develop, supervise, update and maintain a Christmas page for the
web site of the Company and its subsidiaries;
(viii) Develop, supervise, update and maintain reggae and other genre
specific pages for the web site of the Company and its
subsidiaries;
(ix) Develop, supervise, update and maintain a business to business
interface to facilitate the license of music, film and other
digital products to third parties; and
(x) Develop, supervise, update and maintain a karaoke and kiosk
system for the Company and its subsidiaries.
3. COMPENSATION.
3.1 BASE SALARY. For Employee's services hereunder, the Company
shall pay to Employee an annual salary of $145,000 (such amount is referred to
herein as the "Base Salary"). The Base Salary shall be payable in equal
installments in conformity with the Company's normal payroll period. In
addition, the Employee shall receive additional compensation of $20,000 per
annum for his services in supervising the Los Angeles office and for performing
the services referred to in Section 2 (iv) above, provided however, that such
additional compensation shall not become payable until eight weeks from the
execution of this Agreement. Such additional salary shall be
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payable in equal installments commencing eight weeks from the date of this
Agreement in conformity with the Company's normal payroll period.
3.2 STOCK OPTIONS. In connection with the execution of this
Agreement, the Company shall cause XXX.xxx, Inc. ("XXX.xxx") to issue to
Employee options to purchase 50,000 shares of XXX.xxx's common stock, par value
$.001 per share, at an exercise price of $12.50 per share, pursuant to XXX.xxx's
1999 Stock Incentive Plan (the "Plan"). The foregoing options shall vest over a
period of thirty-six months as set forth on the annexed Stock Option Agreement,
commencing eight weeks from the execution of this Agreement (unless this
Agreement is terminated prior to the last day of such eight week period).
3.3 SIGNING BONUS. The Employee shall receive a one time bonus of
$5,000 upon execution of this Agreement.
4. EMPLOYEE BENEFITS.
4.1 AUTOMOBILE ALLOWANCE. Commencing eight weeks from the
executionof this Agreement, the Company shall pay to Employee a monthly
automobile allowance in an amount not to exceed $600 per month.
4.2 OTHER BENEFITS. During the Term, Employee shall be entitled to
receive other perquisites and fringe benefits in accordance with the plans and
policies of the Company, including, without limitation, medical insurance,
disability and life insurance, participation in retirement and savings plans,
and other such perquisites and fringe benefits generally made available by the
Company to its executives and key management employees, subject to and on a
basis consistent with the terms, conditions, and overall administration of such
plans and policies.
4.3 VACATION. Employee shall be entitled to two weeks paid vacation
as is consistent with the Company's policies for its senior management. The
Employee shall additionally be paid for up to five (5) sick days and all
traditional holiday vacation days in accordance with Company policy and US Law.
5. INSURANCE. The Company shall have the right to apply for and take
out, in the Company's own name or otherwise, at the Company's expense, life,
health, accident, or other insurance covering Employee, in any amount the
Company deems necessary to protect the Company's interest hereunder, and
Employee shall have no right, title or interest in or to any such insurance.
Employee shall assist the Company in obtaining such insurance by submitting to
usual and customary medical and other *examinations
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and by signing such applications, statements and other instruments as may be
reasonably required by any insurance company.
6. EXPENSES. During the Term, Employee shall be entitled to receive
reimbursement for all reasonable business expenses (inclusive of air travel
between New York and Los Angeles) incurred by him, (in accordance with the
policies and procedures from time to time adopted by the Board of Directors of
the Company for its senior executives) in performing services hereunder,
provided that Employee properly accounts therefor in accordance with such policy
and procedures. All expenses over $5,000 in any calendar month shall be
pre-approved in writing by an officer of the Company. In addition, the Company
shall provide Employee with suitable housing in New York in an amount not to
exceed the sum of $2,500 per month whenever, Employee shall be working in New
York on Company business.
7. DEDUCTIONS AND WITHHOLDINGS. All amounts payable or which become
payable under any provision of this Agreement shall be subject to any deductions
authorized by Employee and any deductions and withholdings required by law.
8. TERMINATION.
8.1 DEATH. This Agreement shall terminate immediately upon
Employee's death, unless sooner terminated hereunder, subject to Section 8.6 (a)
and (d) below.
8.2 TERMINATION BY THE COMPANY WITH CAUSE. The Company shall have
the right to terminate Employee's employment hereunder for Cause, subject to
Section 8.6 (c) and (d) below. For purposes of this Agreement, "Cause" means (a)
the failure by Employee substantially to perform his duties or obligations
hereunder; (b) Employee engaging in misconduct which is materially injurious to
the Company; (c) Employee's conviction of a crime of moral turpitude; or (d)
Employee's conviction by, or entry of a plea of guilty or nolo contendere in, a
court of competent jurisdiction of a crime constituting a felony.
8.3 TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
terminate Employee's employment hereunder without Cause at any time during the
Term of this Agreement, subject to Section 8.6 (b) and (d) below.
Notwithstanding any provision herein to the contrary, if the Company terminates
the Employee within eight (8) weeks from the execution of this Agreement,
Employee shall receive four (4) weeks severance of Base Salary as opposed to the
compensation set forth in Section 8.6 (b) below.
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8.4 DISABILITY. If Employee shall be unable to perform his services
hereunder by reason of illness or other incapacity, his failure so to perform
his duties will not be grounds for terminating his employment for Cause by the
Company; provided, however, should the period of such incapacity exceed three
months, or if on 50% or more of the normal working days throughout six (6)
consecutive months Employee is unable to perform his duties fully due to such
incapacity, then the Company may terminate his employment hereunder, subject to
Section 8.6 (a) and (d) below.
8.5 TERMINATION BY THE EMPLOYEE. In the event that the Employee
terminates this Agreement, all rights and obligations of the Company hereunder
shall thereupon immediately terminate, as set forth in Section 8.6 (c) and (d)
below.
8.6 EFFECT OF TERMINATION.
(a) Upon termination of this Agreement or Employee's employment
hereunder pursuant to Sections 8.1 or 8.4 hereof, all
compensation and benefits payable by the Company hereunder
shall be immediately terminated; provided, however, Employee
or his estate, as the case may be, shall be entitled to
receive any payments under any applicable life or disability
insurance plans. Such payments, if any, shall be made at the
time and in accordance with the terms and conditions of such
plans.
(b) Upon termination of Employee's employment pursuant to
Section 8.3 hereof, within 10 days after such termination
Employee shall be entitled to receive a payment equal to
forty-five (45) calendar days of Base Salary as
consideration for such termination.
(c) Upon termination of Employee's employment pursuant to
Sections 8.2 or 8.5 hereof, Employee shall not be entitled
to receive any payment upon such termination.
(d) Notwithstanding the termination of this Agreement or any
provision herein to the contrary, the Employee shall in all
events be subject to the Confidentiality Agreement (as
hereinafter defined) after the termination of this Agreement
pursuant to its terms.
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9. TRUST AND CONFIDENTIALITY. The Company and the Employee acknowledge
that each of such parties shall be required to execute a Trust and
Confidentiality Agreement upon the execution of this Agreement. Employee agrees
to abide by the terms of said Trust and Confidentiality Agreement.
10. GENERAL PROVISIONS.
10.1 NOTICES. All notices required to be given under the terms of
this Agreement shall be in writing and shall be deemed to have been duly given
only if delivered to the addressee in person or mailed by certified mail, return
receipt requested, to the address as included in the Company's records or to any
such other address as the party to receive the notice shall advise by due notice
given in accordance with this paragraph. Any party hereto may change its or his
address for the purpose of receiving notices, demands and other communications
as herein provided, by a written notice given in the manner aforesaid to the
other party hereto.
10.2 BENEFIT OF AGREEMENT AND ASSIGNMENT. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
executors, administrators, successors and assigns; provided, however, that
Employee may not assign any of his rights or duties hereunder except upon the
prior written consent of the Board of Directors of the Company.
10.3 APPLICABLE LAW. This Agreement is made in and is to be governed
by and construed under the laws of the State of New York.
10.4 CAPTIONS. The captions appearing at the commencement of the
sections hereof are descriptive only and for convenience of reference only and
are not intended to be part of or to effect the meaning or interpretation of
this Agreement.
10.5 SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
10.6 ENTIRE AGREEMENT. This Agreement contains the entire Agreement
of the parties, and supersedes any and all other Agreements, either oral or in
writing, between the parties hereto with respect to the subject matter hereof.
Each party to this Agreement acknowledges that no representations, inducements,
promises, or Agreements,
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oral or otherwise, have been made by either party, or anyone acting on behalf of
either party, which are not embodies herein, and that no other Agreement,
statement or promise not contained in this Agreement shall be valid or binding.
10.7 AMENDMENTS. This Agreement may be modified or amended only by
an Agreement in writing signed by the Company and Employee.
10.8 WAIVER. No waiver of any provision hereof shall be valid unless
made in writing and signed by the party making the waiver. No waiver of any
provision of this Agreement shall constitute a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver.
10.9 ATTORNEYS' FEES. Should any party hereto institute any action
or proceeding at law or in equity, or in connection with any arbitration, to
enforce any provision of this Agreement, including an action for declaratory
relief, or for damages by reason of an alleged breach of any provision of this
Agreement, or otherwise in connection with this Agreement, or any provision
hereof, the prevailing party shall be entitled to recover from the losing party
or parties reasonable attorneys' fees and costs for services rendered to the
prevailing party in such action or proceeding.
10.10 REPRESENTATIONS AND WARRANTIES. Each party hereto represents
and warrants that it or he has the power and authority to execute and deliver
this Agreement and to perform its or his obligations hereunder.
10.11 COMPLIANCE WITH LAWS AND POLICIES. Employee agrees that he
will at all times comply strictly with all applicable laws and all current and
future policies of the Company, including but not limited to the Trust and
Confidentiality Agreement of even date herewith by and among the Employee and
the Company, the provisions of which are hereby incorporated herein by reference
and made a part hereof.
10.12 ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement, other than matters pertaining to injunctive
relief, including, without limitation, temporary restraining orders, preliminary
injunctions and permanent injunctions, shall, upon the written demand of either
party served upon the other party, be submitted to arbitration. Such arbitration
shall be held in the City of New York, New York, and conducted in accordance
with the Rules of the American Arbitration Association.
IN WITNESS WHEREOF, this Agreement is executed on the day and year
first above written.
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MCY MUSIC WORLD, INC. EMPLOYEE
By: /s/ Xxxxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, President Xxxxxx Xxxxx
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