EXHIBIT 10.1
EMPLOYMENT AGREEMENT
--------------------
This EMPLOYMENT AGREEMENT, dated as of April 2, 2007 by and between
COACTIVE MARKETING GROUP, INC., a Delaware corporation with its principal place
of business at 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Employer") and XXXXX
XXXXXX, an individual residing at 000 Xxxxxxx Xxxx Xxxx, Xxx. 0000, Xxx Xxxx,
Xxx Xxxx 00000 ("Employee").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Employer operates a sales promotion and marketing services
business;
WHEREAS, Employee and Employer's wholly-owned subsidiary, U.S. Concepts
LLC, a Delaware limited liability company ("USC"), are parties to an Employment
Agreement, dated as of December 29, 1998 (as amended from time to time, the
"Original Employment Agreement") pursuant to which USC currently employs
Employee; and
WHEREAS, Employer desires to employ Employee, and Employee desires to
be employed by Employer, on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements and covenants hereinafter set forth, the parties hereto agree as
follows:
1. Employment. Employer hereby employs Employee and Employee
hereby accepts employment by Employer for the period and on the terms and
conditions set forth in this Agreement.
2. Position, Employment Duties and Responsibilities. Employee
shall be employed as Vice Chairman of Employer, subject to such reasonable
duties and responsibilities granted, and restrictions imposed, by Employer's
Chief Executive Officer, and subject to Employer's company policies and
procedures. Throughout the term of this Agreement, Employee shall devote his
entire working time, energy and skill and best efforts to the performance of his
duties hereunder in a manner which will faithfully and diligently seek to
further the business and interests of Employer and its subsidiaries. Employee's
direct reporting responsibility is to Employer's President and Chief Executive
Officer.
3. Working Facilities. Employee will work out of Employer's
office located in New York, New York. Employee shall not be required to relocate
his office from New York, New York.
4. Compensation and Benefits.
-------------------------
4.1 Salary. For all of the services rendered by Employee
to Employer, Employer shall pay to Employee an annual base salary of three
hundred sixty two thousand dollars ($362,000), payable in reasonable periodic
installments in accordance with Employer's regular payroll practices in effect
from time to time. Employee's salary may be increased (but not decreased) from
time to time as the Board of Directors of Employer (the "Board") may determine
in its sole discretion.
4.2 Bonus. Employer from time to time may pay Employee
such bonuses or other additional compensation as the Board may determine in its
sole discretion, but Employee acknowledges that there is no agreement regarding
any such additional payments. Employee may also be eligible to receive bonuses
in accordance with the terms and provisions of a management bonus plan that may
be established for senior executives of Employer.
4.3 Employee Benefits. Employee shall be entitled to
participate in and be provided with health insurance, life insurance and other
benefit plans and programs offered to and or made available to Employer's
employees. In addition, Employee shall be entitled to paid holidays in
accordance with Employer's regular policy and twenty days of vacation in each
calendar year and reasonable absences for illness. Any vacation time not taken
during any calendar year of employment shall not be carried into any subsequent
calendar year, and Employer shall not be obligated to pay Employee for any
vacation time available to but not used by Employee within the prescribed
period.
4.4 Travel, Entertainment and Other Business Expenses.
During the period of employment pursuant to this Agreement, Employee will be
reimbursed promptly for reasonable expenses incurred for the benefit of Employer
in accordance with the general policy of Employer. Those reimbursable expenses
shall include properly documented, authorized or otherwise reasonably required,
travel, entertainment and other business expenses incurred by Employee, other
than those expenses related to or in connection with routine commutation to and
from Employee's home, in accordance with Employer's general policy.
4.5 Deductions. All references herein to compensation to
be paid to Employee are to the gross amounts thereof which are due hereunder.
Employer shall have the right to deduct therefrom all taxes which may be
required to be deducted or withheld under any provision of the law (including,
without limitation, social security payments, income tax withholding and any
other deduction required by law) now in effect or which may become effective at
any time during the term of this Agreement.
5. Term; Severance.
---------------
5.1 Term. This Agreement shall be for a term of three (3)
years, commencing on the date hereof and ending on April 2, 2010, unless sooner
terminated as hereinafter provided. The term of this Agreement shall
automatically continue after the initial three-year term unless and until either
party terminates this Agreement by providing the other party with no less than
ninety (90) days prior written notice of termination effective on or after the
third anniversary of the date hereof.
5.2 Severance. In the event (i) Employer terminates
Employee's employment under this Agreement for any reason other than for "Cause"
under Section 7, or (ii) Employee terminates his employment under this Agreement
for Good Reason (as defined below), Employee shall be entitled to receive
aggregate severance payments ("Severance Payments"), equal to Employee's then
monthly base salary under Section 4.1, multiplied by the "Service Factor." The
2
Service Factor shall be a whole number equal to the number of years (not
including fractional years) that have elapsed from the date that Employee
initially became an employee of Employer or one of its subsidiaries (i.e.,
December 29, 1998), and the date Employee's employment is terminated hereunder,
provided, however, that the Service Factor shall not be less than six (6) or
greater than twelve (12). The Severance Payments shall be paid to Employee in
equal monthly installments, each such installment equal to Employee's then
monthly base salary under Section 4.1, provided Employee is then in compliance
with his obligations under Section 6 of this Agreement. Notwithstanding the
foregoing, any amount payable under this Section 5.2 shall be reduced on a
dollar-for-dollar basis by the amount Employee earns for providing personal
services during the period for which Severance Payments would otherwise be due,
and Employee hereby agrees to mitigate the Severance Payments payable hereunder
by using reasonable efforts to obtain other employment during such period.
5.3 Good Reason. For the purposes hereof, "Good Reason"
shall mean the occurrence of any of the following events without Employee's
consent: (i) a reduction in Employee's base salary to an amount below $362,000,
(ii) the termination or material reduction of any material employee benefit or
perquisite enjoyed by the Employee (other than in connection with the
termination or reduction of such benefit or perquisite to all executives of
Employer or as may be required by law), (iii) Employer relocates its offices
outside of the greater New York metropolitan area requiring Employee to relocate
his primary residence in order to perform his duties and responsibilities
described herein; or (iv) the failure of Employer to obtain the assumption in
writing of its obligation to perform this Agreement by any successor to all or
substantially all of the assets of Employer within thirty (30) calendar days
after the closing of a merger, consolidation, sale or similar transaction.
Notwithstanding the foregoing, following written notice from the Employee of any
of the events described in (i) through (iii) above, Employer shall have thirty
(30) calendar days in which to cure the alleged conduct. If Employer fails to
cure, the Employee's termination shall become effective on the 31st calendar day
following such written notice.
6. Nondisclosure and Non-Compete.
-----------------------------
6.1 Definitions. The following words and expressions used
in this Agreement shall have the respective meanings hereby assigned to them as
follows:
(a) "Affiliate" shall mean any partnership,
firm, corporation, association, trust, unincorporated organization or other
entity, that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, Employer.
(b) "Business Associate" shall mean and refer to
any individual, partnership, corporation, associations or other business
enterprise in any form which has had in the past, have currently, shall have or
be attempting to develop during the Restriction Period a business relationship
with Employer or any of its Affiliates as a customer or supplier.
(c) "Customer" shall mean and refer to any past
or current customer of Employer or any of its Affiliates and shall also include
those prospective customers who are actively being marketed by Employer or any
of its Affiliates during the Term.
3
(d) "Competitor" shall mean and refer to any
individual, partnership, corporation, association or other business enterprise
in any form, other than Employer and its Affiliates, which at any time during
the Restriction Period, either directly or indirectly, (i) engages in the
business of promotion marketing and sells to Customers in the Restriction Area
or (ii) engages in any other business directly competitive with Employer or any
of its Affiliates and sells to Customers in the Restriction Area.
(e) "Confidential Information" shall mean and
refer to all information of Employer and its Affiliates which is not generally
known or available to the public or a Competitor (whether or not in written or
tangible form), the knowledge of which could benefit a Competitor, including
without limitation, all of the following types of information:
(i) identities of, and information pertaining
to, Customers, Personnel and Business
Associates;
(ii) research, projections, financial
information, cost and pricing information,
invoices and internal accounting statistics;
(iii) product or service development plans and
marketing strategies;
(iv) purchasing methods; and
(v) trade secrets, or other knowledge or
processes of or developed by Employer or any
of its Affiliates.
(f) "Confidential Materials" shall mean and
refer to any and all documents, materials, programs, recordings or any other
tangible media (including, without limitation, copies or reproductions of any of
the foregoing) in which Confidential Information may be contained.
(g) "Personnel" shall mean and refer to any and
all employees, contractors, agents, brokers, consultants or other individuals
rendering services to Employer or any of its Affiliates for compensation in any
form, whether employed by or independent of Employer or any of its Affiliates.
(h) "Restriction Area" shall mean and refer to
the United States.
(i) "Restriction Period" shall mean and refer to
the period of time, commencing on Employee's date of employment and expiring
twelve (12) months after, for any reason whatsoever, (i) the employment
relationship between Employee and Employer or any of its Affiliates terminates
or (ii) Employee ceases to perform services for Employer or any of its
Affiliates, whichever occurs later.
6.2 Covenant Not to Compete.
-----------------------
(a) During the Restriction Period, Employee
shall not directly or indirectly, own, manage, invest or acquire any economic
stake or interest in, or otherwise engage or participate in any manner
whatsoever in any Competitor (whether as a proprietor, partner, shareholder,
4
investor, manager, director, officer, employee, venturer, representative, agent,
broker, independent contractor, consultant, or other participant). Employee,
however, shall not be prohibited from owning a passive investment of less than
two percent (2%) of the outstanding shares of capital stock or bonds of a
corporation, which stock or bonds are listed on a national securities exchange
or are publicly traded in the over-the-counter market.
(b) The parties recognize the possibility that
there might be some limited ways, which the parties do not now contemplate,
through which Employee might be able to participate in a Competitor, and which
pose no risk of harm to the interests of Employer or its Affiliates. If, prior
to beginning any such relationship with a Competitor, Employee makes a full
disclosure to Employer of the nature of Employee's proposed participation,
Employer agrees to evaluate in a timely manner whether it or its Affiliates will
suffer any risk of harm to it or their respective interests, and will notify
Employee if it has any objection to Employee's proposed participation; provided,
however, that Employer's failure to notify Employee shall not be deemed to be an
approval of Employee's proposed participation. Employer's determination in this
regard shall be final and not subject to review. If Employee fails to make the
prior disclosure required by this Section 6.2(b), it shall be conclusively
presumed and Employee shall be deemed to have admitted that his participation in
a Competitor during the Restriction Period will cause harm to the interests of
Employer or its Affiliates.
6.3 Covenant Not to Interfere.
-------------------------
(a) During the Restriction Period, Employee
shall not, directly or indirectly, solicit, induce or influence, or attempt to
induce or influence, any Customer to terminate a relationship which has been
formed or is being formed with Employer or any of its Affiliates, or to reduce
the extent of, discourage the development of, or otherwise harm its relationship
with Employer or any of its Affiliates, including, without limitation, to
commence or increase its relationship with any Competitor.
(b) During the Restriction Period, Employee
shall not, directly or indirectly, recruit, solicit, induce or influence, any
Personnel of Employer or any of its Affiliates to discontinue, reduce the extent
of, discourage the development of, or otherwise harm their relationship or
commitment to Employer or its Affiliates, including, without limitation, by
employing, seeking to employ or inducing or influencing a Competitor to employ
or seek to employ any Personnel of Employer or any of its Affiliates, or
inducing an employee of Employer or any of its Affiliates to leave employment by
Employer or its Affiliate, as the case may be.
(c) During the Restriction Period, Employee
shall not, directly or indirectly, solicit, induce or influence, or attempt to
induce or influence, any Business Associate to discontinue, reduce the extent
of, discourage the development of, or otherwise harm its relationship with
Employer or any of its Affiliates, including, without limitation, by inducing a
Business Associate to commence, increase the extent of, develop or otherwise
enhance its relationship with any Competitor, or to refuse to do business with
Employer or any of its Affiliates.
5
6.4 Confidential Information.
------------------------
(a) Duty to Maintain Confidentiality. Employee
shall maintain in strict confidence and duly safeguard to the best of his
ability any and all Confidential Information. Employee covenants that Employee
will become familiar with and abide by all written policies and rules issued by
Employer now or in the future dealing with Confidential Information.
(b) Covenant Not to Disclose, Use or Exploit.
Employee shall not, directly or indirectly, disclose to anyone or use or
otherwise exploit for the benefit of anyone, other than Employer and its
Affiliates, any Confidential Information.
(c) Confidential Materials. All Confidential
Materials are and shall remain the exclusive property of Employer. No
Confidential Materials may be copied or otherwise reproduced, removed from the
premises of Employer, or entrusted to any person or entity (other than the
Personnel entitled to such materials by authorization of Employer) without prior
written permission from Employer.
6.5 Employer's Property. Any and all writings,
improvements, processes, procedures and/or techniques which Employee may make,
conceive, discover or develop, either solely or jointly with any other person or
persons, at any time during the term of this Agreement, whether during working
hours or at any other time and whether at request or upon the suggestion of
Employer or any Affiliate thereof, which relate to or are useful in connection
with any business now or hereafter carried on or contemplated by Employer or any
Affiliate thereof, including developments or expansions of its present fields of
operations, shall be the sole and exclusive property of Employer. Employee shall
make full disclosure to Employer of all such writings, improvements, processes,
procedures and techniques, and shall do everything necessary or desirable to
vest the absolute title thereto in Employer. Employee shall not be entitled to
any additional or special compensation or reimbursement regarding any and all
such writings, improvements, processes, procedures and techniques.
7. Discharge for Cause. Employer may discharge Employee at any
time for cause. For purposes of this Agreement, "Cause" shall mean only (a)
gross neglect of willful misconduct in the discharge of Employee's duties and
responsibilities to Employer, resulting, in either case, in material economic
harm to Employer, (b) material and repeated failure to comply with significant
corporate policies adopted by, or to obey reasonable and appropriate directions
within the scope of Employee's duties from, the Board (after written notice to
Employee in reasonable detail and a period of at least twenty (20) days to cure
such alleged conduct) which failure has a material adverse effect on the
business of Employer, (c) any act of willful misappropriation by Employee of
Employer's property or (d) any final conviction or plea of guilty or nolo
contendere with respect to a felony crime; provided, however, that prior to any
termination, Employer shall notify Employee that it intends to terminate
Employee for Cause, which written notice shall specify the act or acts upon
which a termination for Cause is based, and, before such termination shall
become effective, Employee shall be given the opportunity, within five (5) days
of Employee's receipt of such notice, to meet with the Board to discuss such act
or acts. If Employer terminates the employment of Employee for Cause, Employee
shall be entitled to receive his base salary through the effective date of
termination.
6
8. Consequences Upon Termination.
-----------------------------
8.1 Payment of Compensation Owed. Upon the termination of
Employee's employment and this Agreement for any reason whatsoever, Employer
shall promptly pay to Employee all compensation owed to Employee up until the
date of termination.
8.2 Return of Property. Upon the termination of
Employee's employment and this Agreement for any reason whatsoever, Employee
shall promptly return to Employer all Confidential Materials in his possession
or within Employee's control, all keys, credit cards, business card files and
other property belonging to Employer.
9. Remedies.
--------
9.1 Equitable Relief. The parties acknowledge that the
provisions and restrictions of Section 6 of this Agreement are reasonable and
necessary for the protection of the legitimate interests of Employer and
Employee. The parties further acknowledge that the provisions and restrictions
of Section 6 of this Agreement are unique, and that any breach or threatened
breach of any of these provisions or restrictions by Employee will provide
Employer with no adequate remedy at law, and the result will be irreparable harm
to Employer. Therefore, the parties agree that upon a breach or threatened
breach of the provisions or restrictions of Section 6 of this Agreement by
Employee, Employer shall be entitled, in addition to any other remedies which
may be available to it, to institute and maintain proceedings at law or in
equity, to recover damages, obtain specific performance or a temporary or
permanent injunction, without the necessity of establishing the likelihood of
irreparable injury or proving damages and without being required to post bond or
other security.
9.2 Modification of Restrictions; Full Restriction
Period. If the Restriction Period, the Restriction Area or the scope of activity
restricted in Article 6 should be adjudged unreasonable in any proceeding, then
the Restriction Period shall be reduced by such number of months, the
Restriction Area shall be reduced by the elimination of such portion thereof or
the scope of the restricted activity shall be modified, or any or all of the
foregoing, so that such restrictions may be enforced in such area and for such
time as is adjudged to be reasonable. If Employee violates any of the
restrictions contained in Article 6, the Restriction Period shall not run in
favor of Employee from the time of commencement of any such violation until such
time as such violation shall be cured by Employee to the reasonable satisfaction
of Employer.
9.3 Arbitration. Except for the provisions of Sections
9.1 and 9.2 above, any controversy, dispute, or difference arising out of or
relative to this Agreement or the breach thereof shall be determined by
arbitration in New York City before three arbitrators. The arbitration shall be
governed by the Federal Arbitration Act and administered by the American
Arbitration Association under its Commercial Arbitration Rules, provided that
persons eligible to be selected as arbitrators shall be limited to
attorneys-at-law who have practiced law for at least 15 years as an attorney in
New York specializing in either general commercial litigation or general
corporate and commercial matters. A demand for arbitration under this provision
shall be made in writing to the other party within sixty (60) days of the date
the party demanding arbitration knew or should have known of the event giving
rise to the claim, but in no event more than two (2) years after the event
giving rise to the claim, or the claim shall be forever barred. The parties
agree that judgment upon any award rendered may be entered in any court having
jurisdiction thereof as an enforceable judgment or decree.
7
10. Consideration for Restrictive Covenants. Employee acknowledges
that the execution of this Agreement and compliance with it by Employer shall
constitute fair and adequate consideration for Employee's compliance with the
restrictive covenants contained in the respective sections of this Agreement.
11. Miscellaneous.
-------------
11.1 Governing Law. This Agreement, its interpretation,
performance and enforcement, and the rights and remedies of the parties hereto,
shall be governed and construed by the laws of the State of New York applicable
to contracts to be performed wholly within New York, without regard to
principles of conflicts of laws and without the aid of any canon, custom or rule
of law requiring construction against the drafter.
11.2 Waiver. A waiver by any party of any condition or the
breach of any term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
not be deemed or construed as a further or continuing waiver of any such
condition or the breach of any other term, covenant, representation, or warranty
set forth in this Agreement.
11.3 Additional Restrictions. The restrictions contained
in this Agreement are cumulative with, and not in replacement of, any other
restrictions to which Employee may otherwise be subject.
11.4 Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior agreements (including, without limitation, the Original
Employment Agreement, which is hereby terminated and of no further force or
effect), and contemporaneous understandings, inducements or conditions, express
or implied, written or oral, between the parties with respect to the subject
matter hereof. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
11.5 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by courier service, by telecopy, by telegram or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 11.5):
(a) if to Employer:
CoActive Marketing Group, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: President
8
(b) if to Employee:
00 Xxxxx Xxxx
Xxxxxxxxxxx Xxxxx, Xxx Xxxx 00000
11.6 Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
11.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
11.8 Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
11.9 Amendment or Termination. No agreement shall be
effective to change, modify, waive, release, amend, terminate, discharge or
effect an abandonment of this Agreement, in whole or in part, unless such
agreement is in writing, refers expressly to this Agreement and is signed by the
party against whom enforcement of the change, modification, waiver, release,
amendment, termination, discharge or effectuation of the abandonment is sought.
9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
COACTIVE MARKETING GROUP, INC.
By: /s/ XXXXXXX XXXXXXX
-------------------------------------
Xxxxxxx Xxxxxxx, President and
Chief Executive Officer
/s/ XXXXX XXXXXX
-----------------------------------------
Xxxxx Xxxxxx
10
