EMPLOYMENT AGREEMENT
Exhibit 10.2 -
Employment Agreement for Xxxxx X. Xxxxx
THIS EMPLOYMENT AGREEMENT (the
“Agreement”) is between Creative Management Group, Inc., a Delaware company (the
“Company”) at 0000 Xxxxxxxx Xxxx. 0xx. Xxxxx,
Xxxxx Xxxxxxx 00000, and Xxxxx X. Xxxxx, an individual at 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000 (the “Employee”).
WITNESSETH:
WHEREAS, it is the desire of the
Company to offer the Employee employment with the Company upon the terms and
subject to the conditions set forth herein; and
WHEREAS, it is the desire of the
Employee to accept the Company’s offer of employment with the Company upon the
terms and subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the
premises and mutual covenants, conditions and agreements contained herein and
for such other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, each intending to be legally
bound hereby, agree as follows:
1. Employment. The
Company hereby agrees to employ the Employee and the Employee hereby agrees to
be employed by the Company upon the terms and subject to the conditions set
forth herein for the period of employment as set forth in Section 2 hereof (the
“Period of Employment”).
2. Term; Period of
Employment. Subject to extension or termination as hereinafter provided,
the Period of Employment hereunder shall be from January 1, 2008 the date hereof
(the “Effective Date”), and through the second anniversary of the Effective
Date. Thereafter, the Period of Employment may be extended for successive
periods at the option of the Company upon delivery of written notice by the
Company to the Employee, subject to acceptance by the Employee, not less than
ninety (90) days prior to the expiration of the Period of Employment. The phrase
“Period of Employment” as used herein shall, unless otherwise indicated: (a)
specifically include any extensions permitted hereunder or provided herein,
except as otherwise noted; and (b) be deemed to have terminated as of the date
of any notice provided to the Employee or the Company, as applicable, pursuant
to Section 9 hereof, notwithstanding the Company’s obligation to pay the
Employee pursuant to Subsections 9(b) and 9(c) hereof.
3. Office and
Duties. During the Period of Employment:
(a) the
Employee shall be employed as Chief Operating Officer to assist the Board of
Directors of the Company (the “Board”) in the areas of Acquisitions, Finance,
Budgets, Corporate Contracts, monitoring Company SEC Lawyers as mutually agreed
and General Administration duties governing this area of expertise.. The
Employee shall have the authority, duties and responsibilities reasonably
prescribed by the Board in accordance with the Company Agreement, as the same
may be adopted and amended from time to time. The Employee will serve on the
Company Corporate Policy Committee (the “CPC”).
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(b) the
Employee’s office shall: (i) be located in New York, New York and/or
at the Company’s offices in Miami Florida, in the United States, and/or
(ii) be located in the United Kingdom as designated by the Board. The
Employee shall report directly to the Chief Executive Officer and Chairman or a
committee or representative thereof, as designated by the Board;
and
(c) the
Employee shall devote substantially all of his time to the business and affairs
of the Company except for vacations, illness or incapacity, as hereinafter set
forth. In consideration of his employment hereunder, the Employee agrees that he
shall not, directly or indirectly, individually or as a member of any
partnership or joint venture, or as an officer, director, employee or agent of
any other person, firm, corporation, business organization or other entity,
engage in any trade or business activity or pursuit for his own account or for,
or on behalf of, any other person, firm, corporation, business organization or
other entity, irrespective of whether the same materially competes, conflicts or
interferes with that of the Company or the performance of the Employee’s
obligations hereunder. Notwithstanding the foregoing, nothing contained herein
shall be construed to prevent Employee from: (i) investing in the stock of any
corporation which does not compete with the Company, which is listed on a
national securities exchange or traded in the over-the-counter market if the
Employee does not and will not as a result of such investment own more than five
percent (5%) of the stock of such corporation; or (ii) engaging in personal
business ventures to which the Employee devotes time outside of the time
required to be devoted to the business of the Company hereunder.
The Employee represents and warrants
that the Employee is not party to any agreement which provides for his
employment with or the rendering of his services to any other individual or
entity whatsoever. Further, the Employee represents and warrants that he is not
party to any agreement which conflicts with or contradicts any provision hereof
or otherwise restricts in any way: (i) his ability to perform his obligations
hereunder; or (ii) his right to compete with a previous employer or such
employer’s business.
4. Compensation. In
exchange for the services rendered by the Employee pursuant hereto in any
capacity during the Period of Employment, including services rendered to the
Company or any affiliate, subsidiary or division thereof, the Employee shall be
compensated as follows:
(a) Salary. The
Company shall pay the Employee compensation equal to two hundred thousand
dollars ($200,000.00) per annum (the “Annual Salary”) at a rate of sixteen
thousand six hundred sixty six dollars and sixty six cents ($16,666.66) per
month (each monthly amount, as the same may be increased or decreased from time
to time by virtue of the adjustments set forth herein below, shall be defined as
the “Monthly Compensation”). Such salary shall be payable as follows: As of
January 1, 2008, Employee will receive twelve thousand dollars ($12,000.00) per
month as the “Monthly Compensation” up to the closing of the public offering
(which the closing of public funding transaction is anticipated in the first
quarter of 2008 and subject to SEC Rules, Regulations and approvals on a best
efforts basis and not guaranteed by Company) and thereafter at closing of the
public offering, 100% of Employee Compensation or sixteen thousand six hundred
sixty six dollars and sixty six cents ($16,666,66) per month (each monthly
amount, as the same may be increased or decreased over the “Monthly
Compensation” in accordance with the customary payroll practices of
the Company. The Annual Salary of the Employee shall be increased or decreased
on the anniversary of the Effective date as the Company board of compensation
evaluates the performance of Employee. Thereafter, the Annual Salary shall be
reviewed by the Board annually on each anniversary of the Effective
Date.
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(b) Bonus and Warrants Employee
Plan. The Company may pay the Employee bonuses of up to 30% of Employee
salary annually if, in the sole judgment of the Board of Directors, the earnings
of the Company and the services of the Employee merit such bonuses. Said bonuses
may be paid in cash, stock, warrants or options, at the discretion of the
Company. The Company may also provide warrants in an Employee pool to Employee
for stock in the Company, as determined by the Board of Directors and Company
investment bankers. Employee will, upon signing this agreement, receive an
additional 500,000 shares of stock in the company. Said shares shall
carry a restriction against transfer for a period of not less than one year from
date of issue. Employee accepts these 500,000 shares and will abide
by all vesting regulations for all Senior Management as may be set or
adopted by the Board of Directors as well as all rules and
regulations as may be imposed by the securities laws of the United States or
other governmental authority.
(c) Withholding and Employment
Tax. Payment of all compensation hereunder shall be subject to customary
withholding tax and other employment taxes as may be required with respect to
compensation paid by an employer/corporation to an employee.
5. Business
Expenses. Upon
execution hereof the Company shall: (a) pay or reimburse the Employee for all
reasonable travel or other expenses incurred by the Employee in connection with
the performance of his duties under this Agreement, provided that the same are
previously authorized by the Company, in accordance with such procedures as the
Company may from time to time establish and as required to preserve any
deductions for federal income taxation purposes to which the Company may be
entitled; and (b) pay the Employee $200 per month as an automobile allowance
and, in addition thereto, reimburse the Employee for all reasonable expenses
related to maintenance of such an automobile including but not limited to,
ordinary and necessary repairs, registration, insurance and fuel.
6. Vacation. The
Employee shall be entitled to annual vacation in an amount substantially the
same as currently being provided by the Company to similarly titled
employees.
7. Death and Disability.
In the event of the Employee’s Disability (as hereinafter defined), the Company
shall provide the Employee with the disability insurance benefits as
as may be adopted by the “CPC”. In the event of the Employee’s death, the
obligation of the Company to make payments pursuant to Section 4 hereof shall
cease as of the date of death and the Company shall pay to the estate of the
Employee any amount due to the Employee under Sections 4 and 5 which has accrued
up to the date of death.
8. Other
Benefits. The Employee shall be entitled to participate in
fringe benefit, deferred compensation and option plans or programs of the
Company, if any, to the extent that his position, tenure, salary, age, health
and other qualifications make him eligible to participate, subject to the rules
and regulations applicable thereto of the “CPC”. Such additional benefits shall
include, but not be limited to, paid sick leave and individual health insurance
(all in accordance with the policies of the Company) and professional dues and
association memberships. Except as specifically set forth herein, the terms of
and participation by the Employee in any deferred compensation plan or program
shall be determined by the Company in its sole discretion. The Company shall
provide the Employee with indemnification, paying legal fees as authorized by
Employee and insurance as stated in the “CPC”.
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9. Termination of
Employment. Notwithstanding any other provision of this
Agreement, employment hereunder may be terminated:
(a) by
the Company, in the event of the Employee’s death or Disability (as hereinafter
defined) or for Just Cause (as hereinafter defined). “Just Cause” shall mean:
(i) the Employee’s indictment for, conviction of or the entering into of a plea
of guilty to a crime involving a felonious act or acts, including dishonesty,
fraud or moral turpitude by the Employee; (ii) the Employee’s willful
misconduct, gross negligence or dishonesty in the performance by the Employee of
his duties; and (iii) the Employee’s breach of Sections 10 or 11 hereof. The
Employee shall be deemed to have a “Disability” for purposes of this Agreement
if he is unable to perform, by reason of physical or mental incapacity, a
material portion of his duties or obligations under this Agreement for a period
of one hundred and fifty (150) consecutive days or a total of one hundred and
eighty (180) days, whether consecutive or not, in any 365-day period. The Board
shall determine whether and when the Disability of the Employee has occurred or
when the Employee shall be subject to a Just Cause determination. Based upon the
determination of the Board, the Company shall by written notice to the Employee
given within thirty (30) days after discovery of the occurrence of an event or
circumstance which constitutes “Just Cause,” specify the event or circumstance
giving rise to the Company’s exercise of its right hereunder. Employee has
disclosed to Company that Employee filed for bankruptcy protection. Company will
not consider this Just Cause or material breach for termination. With respect to
Just Cause arising under Section 9(a)(i), the Employee’s employment hereunder
shall be deemed terminated as of the date of such notice and, with respect to
Just Cause arising under Section 9(a)(ii), the Company shall provide the
Employee with thirty (30) days written notice of such violation and the Employee
shall be given reasonable opportunity during such thirty (30) day period to cure
the subject violation;
(b) by
the Company, other than pursuant to Section 9(a) above, in its sole and absolute
discretion, provided that, in such event,
the Company shall, as liquidated damages or severance pay, or both, pay the
Employee an amount equal to the Employee’s then Monthly Compensation multiplied
by the sum of the number of months remaining during the Period of Employment
(the "Termination Formula"); or
(c) by
the Employee: (i) upon any material violation of any material provision of this
Agreement by the Company, which violation remains unremedied for a period of
thirty (30) days after written notice of the same is delivered to the Company by
the Employee;
In the event that this Agreement is
terminated pursuant to Sections 9(b) or 9(c), the Employee shall be entitled to
continue to participate, at the Employee’s expense, per COBRA. in any health
insurance plan of the Company then in place for such period as the Employee is
entitled to receive severance payment hereunder.
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10. Non-Competition. In
consideration of the Company’s agreement to compensate the Employee as set forth
herein, the Employee agrees that, during the Period of Employment and for twelve
(12) months following the date of termination:
(a) the
Employee shall not, directly or indirectly, individually or as a member of any
partnership or joint venture, or as an officer, director, stockholder, employee
or agent of any other person, firm, corporation, business organization or other
entity, participate in, engage in, solicit or have any financial or other
interest in any activity or any business or other enterprise in any fields which
at the time of termination is competitive with the business or is in
substantially the same business as the Company or any affiliate, subsidiary or
division thereof (unless the Board shall have authorized such activity and the
Company shall have consented thereto in writing), as an individual or as a
member of any partnership or joint venture, or as an officer, director,
stockholder, investor, employee or agent of any other person, firm, corporation,
business organization or other entity; and
(b) the
Employee shall not: (i) solicit or induce any employee of the Company to
terminate his employment or otherwise leave the Company’s employ or hire any
such employee (unless the Board shall have authorized such employment and the
Company shall have consented thereto in writing); or (ii) contact or solicit any
clients or customers of the Company, either as an individual or as a member of
any partnership or joint venture, or as an officer, director, stockholder,
investor, employee or agent of any other person, firm, corporation, business
organization or other entity.
11. Confidential
Information. The parties hereto recognize that it is fundamental to the
business and operation of the Company, its affiliates, subsidiaries and
divisions thereof to preserve the specialized knowledge, trade secrets, and
confidential information of the foregoing concerning the field of advertising,
marketing and sports/entertainment management. The strength and good-will of the
Company is derived from the specialized knowledge, trade secrets, and
confidential information generated from experience through the activities
undertaken by the Company, its affiliates, subsidiaries and divisions thereof.
The disclosure of any of such information and the knowledge thereof on the part
of competitors would be beneficial to such competitors and detrimental to the
Company, its affiliates, subsidiaries and divisions thereof, as would the
disclosure of information about the marketing practices, pricing practices,
costs, profit margins, design specifications, analytical techniques, concepts,
ideas, process developments (whether or not patentable), customer and client
agreements, vendor and supplier agreements and similar items or technologies. By
reason of his being an employee of the Company, in the course of his employment,
the Employee has or shall have access to, and has obtained or shall obtain,
specialized knowledge, trade secrets and confidential information such as that
described herein about the business and operation of the Company, its
affiliates, subsidiaries and divisions thereof. Therefore, the Employee hereby
agrees as follows, recognizing and acknowledging that the Company is relying on
the following in entering into this Agreement:
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(a) The
Employee hereby sells, transfers and assigns to the Company, or to any person or
entity designated by the Company, any and all right, title and interest of the
Employee in and to all creations, designs, inventions, ideas, disclosures and
improvements, whether patented or unpatented, and copyrightable material, made
or conceived by the Employee solely or jointly, in whole or in part, during the
term hereof (commencing with the date of the Employee’s employment with the
Company) which: (i) relate to methods, apparatus, designs, products, processes
or devices created, promoted, marketed, distributed, sold, leased, used,
developed, relied upon or otherwise provided by the Company or any affiliate,
subsidiary or division thereof; or (ii) otherwise relate to or pertain to the
business, operations or affairs of the Company or any affiliate, subsidiary or
division thereof. Whether during the Period of Employment or thereafter, the
Employee shall execute and deliver to the Company such formal transfers and
assignments and such other papers and documents as may be required of the
Employee to permit the Company or any person or entity designated by the Company
to file, enforce and prosecute the patent applications relating to any of the
foregoing and, as to copyrightable material, to obtain copyright thereon;
and
(b) Notwithstanding
any earlier termination, the Employee shall, except as otherwise required or
compelled by law, keep secret and retain in strict confidence, and shall not
use, disclose to others, or publish any information, other than information
which is in the public domain or becomes publicly available through no wrongful
act on the part of the Employee, which information shall be deemed not to be
confidential information, relating to the business, operation or other affairs
of the Company, its affiliates, subsidiaries and divisions thereof including but
not limited to confidential information concerning the design and marketing
practices, pricing practices, costs, profit margins, products, methods,
guidelines, procedures, engineering designs and standards, design
specifications, analytical techniques, technical information, customer, client,
vendor or supplier information, employee information, and any and all other
confidential information acquired by him in the course of his past or future
services for the Company or any affiliate, subsidiary or division thereof. The
Employee shall hold as the Company’s property all notes, memoranda, books,
records, papers, letters, formulas and other data and all copies thereof and
therefrom in any way relating to the business, operation or other affairs of the
Company, its affiliates, subsidiaries and divisions thereof whether made by him
or otherwise coming into his possession. Upon termination of his employment or
upon the demand of the Company, at any time, the Employee shall deliver the same
to the Company within five (5) business days of such termination or
demand.
12. Reasonableness of
Restrictions. The Employee hereby agrees that the restrictions in this
Agreement, including without limitation, those relating to the duration of the
provisions hereof and the territory to which such restrictions apply, are
necessary and fundamental to the protection of the business and operation of the
Company, its affiliates, subsidiaries and divisions thereof and are reasonable
and valid. In addition, the Employee acknowledges that he has agreed
to such restrictions voluntarily.
13. Reformation of Certain
Provisions. In the event that a court of competent
jurisdiction determines that the non-compete or the confidentiality provisions
hereof are unreasonably broad or otherwise unenforceable because of the length
of their respective terms or the breadth of their territorial scope, or for any
other reason, the parties hereto agree that such court may reform the terms
and/or scope of such covenants so that the same are reasonable and, as reformed,
shall be enforceable.
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14. Remedies. Subject
to Section 15 below, in the event of a breach of any of the provisions of this
Agreement, the non-breaching party shall provide written notice of such breach
to the breaching party. The breaching party shall have thirty (30) days after
receipt of such notice in which to cure its breach. If, on the thirty-first
(3lst) day after receipt of such notice, the breaching party shall have failed
to cure such breach, the non-breaching party thereafter shall be entitled to
seek damages. It is acknowledged that this Agreement is of a unique nature and
of extraordinary value and of such a character that a breach hereof by the
Employee shall result in irreparable damage and injury to the Company for which
the Company may not have any adequate remedy at law. Therefore, if on the
thirty-first (31st) day after receipt of such notice, the breaching party shall
have failed to cure such breach, the non-breaching party shall also be entitled
to seek a decree of specific performance against the breaching party, or such
other relief by way of restraining order, injunction or otherwise as may be
appropriate to ensure compliance with this Agreement. The remedies provided by
this section are non-exclusive and the pursuit of such remedies shall not in any
way limit any other remedy available to the parties with respect to this
Agreement, including, without limitation, any remedy available at law or equity
with respect to any anticipatory or threatened breach of the provisions
hereof.
15. Certain Provisions; Specific
Performance. In the event of a breach by the Employee of the
non-competition or confidentiality provisions hereof, such breach shall not be
subject to any cure provision hereof and the Company shall be entitled to seek
immediate injunctive relief and a decree of specific performance against the
Employee. Such remedy is non-exclusive and shall be in addition to any other
remedy to which the Company or any affiliate, subsidiary or division thereof may
be entitled.
16. Consolidation; Merger; Sale
of Assets. Nothing in this Agreement shall preclude the
Company from combining, consolidating or merging with or into, transferring all
or substantially all of its assets to, or entering into a partnership or joint
venture with, another corporation or other entity, or electing any other kind of
corporate combination, provided that, the corporation resulting from or
surviving such combination, consolidation or merger, or to which such assets are
transferred, or such partnership or joint venture (each a “Successor in
Interest”) assumes this Agreement and all obligations and undertakings of the
Company hereunder. Upon such a consolidation, merger, transfer of assets or
formation of such partnership or joint venture, this Agreement shall inure to
the benefit of, be assumed by, and be binding upon such Successor in
Interest. The term “Company,” as used in this Agreement, shall be
deemed to include such Successor in Interest and this Agreement shall continue
in full force and effect and shall entitle the Employee and his heirs,
beneficiaries and representatives to exactly the same compensation, benefits,
perquisites, payments and other rights as would have been their entitlement had
such combination, consolidation, merger, transfer of assets or formation of such
partnership or joint venture not occurred.
17. Survival. Sections
10 through 15 shall survive the termination for any reason of this Agreement
(whether such termination is by the Company, by the Employee, upon the
expiration of this Agreement by its terms or otherwise).
18. Severability. The
provisions of this Agreement shall be considered severable in the event that any
of such provisions are held by a court of competent jurisdiction to be invalid,
void or otherwise unenforceable. Such invalid, void or otherwise unenforceable
provisions shall be automatically replaced by other provisions which are valid
and enforceable and which are as similar as possible in term and intent to those
provisions deemed to be invalid, void or otherwise unenforceable.
Notwithstanding the foregoing, the remaining provisions hereof shall remain
enforceable to the fullest extent permitted by law.
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19. Entire Agreement;
Amendment. This Agreement contains the entire agreement
between the Company and the Employee with respect to the subject matter hereof.
This Agreement may not be amended, changed, modified or discharged, nor may any
provision hereof be waived, except by an instrument in writing, executed by or
on behalf of the party against whom enforcement of any amendment, waiver,
change, modification or discharge is sought. No course of conduct or dealing
shall be construed to modify, amend or otherwise affect any of the provisions
hereof.
20. Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if physically delivered,
delivered by express mail or other expedited service or upon receipt if mailed,
postage prepaid, via first class mail as follows:
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(a) To
the Company:
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Creative
Management Group, Inc..
0000
Xxxxxxxx Xxxx., 0xx
Xx.
Xxxxx,
Xxxxxxx 00000
Xxxx
Xxxxxx, Chief Executive Officer
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(b) To
the Employee:
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Xxxxx
X. Xxxxx
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
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(c) With
an additional copy
by like means to each
of:
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CMG
Agency Attn: Legal.
0000
Xxxxxxxx Xxxx., 0xx
Xx
Xxxxx,
Xxxxxxx 00000
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and/or to
such other persons and addresses as any party hereto shall have specified in
writing to the other.
21. Assignability. This
Agreement shall not be assignable by the Employee, but shall be binding upon and
shall inure to the benefit of his heirs, executors, administrators and legal
representatives. This Agreement shall be assignable by the Company to any
affiliate, subsidiary or division thereof and to any successor in
interest.
22. Governing Law. This
Agreement shall be governed by and construed under the laws of the State of
Florida and the parties agree that the courts of the State of Florida shall have
exclusive jurisdiction over the parties and subject matter of this agreement and
that venue of any proceeding to enforce or interpret this agreement shall lie
with the County, Circuit or other courts of Miami-Dade County, Florida , without
regard to the principles of conflicts of laws thereof.
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23. Waiver and Further
Agreement. Any waiver of any breach of any terms or conditions
of this Agreement shall not operate as a waiver of any other breach of such
terms or conditions or any other term or condition hereof nor shall any failure
to enforce any provision hereof operate as a waiver of such provision or of any
other provision hereof. Each of the parties hereto agrees to execute all such
further instruments and documents and to take all such further action as the
other party may reasonably require in order to effectuate the terms and purposes
of this Agreement.
24. Headings of No
Effect. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
25. Indemnification. To
the fullest extent allowed, and in the manner provided, by Delaware law, the
Company shall indemnify the Employee and hold the Employee harmless from and
against any claims arising out of the Employee's performance of his services
hereunder as permitted by the Certificate of Formation of the
Company.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
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CREATIVE
MANAGEMENT GROUP, INC..
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By:
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/s/
Xxxx Xxxxxx
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Xxxx
Xxxxxx, Chief Executive Officer
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THE
EMPLOYEE
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By:
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/s/
Xxxxx X. Xxxxx
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Xxxxx X.
Xxxxx
