EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, effective as of July 21, 2003 between NATIONAL
MANAGEMENT CONSULTING, INC., a Delaware corporation, having a place of business
at 000 Xxxxxxx Xxxxxx, 0xx xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Employer"), and
XXXXX XXX-XXXXX, an individual with a place of business located at 1120 Avenue
of the Americas, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 ("Employee").
W I T N E S S E T H :
WHEREAS, the Employee is presently employed as Chief Operating Officer by
Tele-V, Inc., a New York corporation and its subsidiaries and affiliates (the
"Tele Entities"); and
WHEREAS, Employer is acquiring the Tele Entities pursuant to a definitive
acquisition agreement with Tele-V, Inc. and its principal officer, director and
shareholder dated as of July 9, 2003 (the "Tele Acquisition");
WHEREAS, Employer desires to employ the Employee in accordance with the
terms of this Agreement, and the Employee desires to be so employed by Employer.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee and Employee hereby accepts
employment with Employer upon the terms and conditions set forth herein.
2. TERM.
2.1. The term of Employee's employment hereunder shall commence
effective as of July 21, 2003 (the "Commencement Date") and shall terminate (the
"Termination Date") on the earliest of:
(a) July 21, 2005;
(b) The death of Employee;
(c) The disability of Employee. Disability, for the purposes of this
Section 2.1.(c), shall mean any physical or mental illness or injury as a result
of which Employee remains absent from work or cannot adequately perform his
duties hereunder for one hundred thirty five (135) days (whether or not
continuous) or ninety (90) consecutive days during any period of three hundred
sixty (360) consecutive days. The disability shall be deemed to have occurred on
the one hundred thirty fifth (135th) or ninetieth (90th) day, as the case may
be, day of Employee's absence or lack of adequate performance;
(d) Upon notice by Employer to Employee of the termination of
Employee's employment for cause. "Cause" shall mean: (i) Employee's conviction
of a felony; (ii) Employee's material breach of any of his obligations under
this Agreement; (iii) Employee's gross negligence with
respect to his duties or gross misfeasance or malfeasance of office; (iv)
Employee's voluntary termination of this Agreement and/or termination of
employment with Employer; (v) Employee's commission of a material act of
dishonesty related to Employer's business or its relationships with any of its
employees, suppliers, contractors or customers; (vi) Employee's refusal or
willful failure to furnish information concerning Employer's affairs as
reasonably requested by or under the authority of the Board of Directors, or
Employee's willful and material falsification of such information or Employee's
willful failure to carry out directives from the Chief Executive Officer or the
Board of Directors of the Employer; provided, however, that prior to terminating
this Agreement for cause pursuant to (ii), (iii) and (vi) (with respect to
failure to furnish information or failure to carry out directives only),
Employer will give Employee written notice of such cause and fifteen (15) days
from delivery of the notice in which to cure such cause;
(e) upon notice by Employer to Employee of the termination of
Employee's employment without cause or if Employer provides to Employee notice
that the Agreement will not be renewed for any Renewal Term in accordance with
the last paragraph of this section 2.1.
The term of this Agreement shall be renewed for up to three successive one
year terms beyond July 21, 2005 (each one year extension, a "Renewal Term")
unless the Employer provides prior written notice to the Employee that this
Agreement shall not be renewed at least sixty (60) days prior to the expiration
of the then existing term. All the terms and conditions of this Agreement shall
continue and remain in full force and effect during each Renewal Term.
2.2. Upon termination of this Agreement, Employer's obligations
hereunder shall cease; PROVIDED, HOWEVER, that in the event of termination
pursuant to Section 2.1. (a) or 2.1.(b), 2.1.(c) or 2.1(e), Employer shall
continue to pay to Employee or Employee's estate, as the case may be, after such
termination,(i) Employee's salary and all other benefits made available to the
Employee immediately prior to such termination, including but not limited to
vacation, leave and holiday benefits, if any, and all other benefits described
in Section 4 hereof for the remainder of the then term of this Agreement
(including any Renewal Term then in effect) plus six months thereafter and
Employee shall be entitled to all vested options through the Termination Date
plus any remaining unvested options as provided for in Section 4.5 below shall
be deemed vested as of the Termination Date. Notwithstanding the foregoing, in
the event that the Employee resigns his employment hereunder, Employer shall not
be entitled to an additional six months of salary nor any other benefits
described in Section 4 hereof made available to Employee immediately prior to
such resignation and Employee shall forfeit options as provided in Section 4.5
below and provided further that in the event that the termination of this
Agreement is as a result of its natural expiration, either at the end of the
original term or any Renewal Term, the Employee shall only be entitled to three
months salary and all other benefits made available to Employee prior to such
termination as described in Section 4. Employer shall be entitled to enforce the
terms of Sections 7 and 8 hereof notwithstanding the termination of Employee's
employment pursuant hereto. Payment by Employer to Employee pursuant to this
Section 2.2 subsequent to termination of Employee's employment shall constitute
satisfaction of all obligations of Employer to Employee hereunder. Any payments
of salary required to be paid to the Employee hereunder shall be paid in the
same installments as paid to the Employee prior to the Termination Date or
according to the then general payroll practices of Employer, but in no event
less frequently than monthly.
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3. BASIC COMPENSATION.
3.1. COMPENSATION.
For all services to be rendered by Employee hereunder and in
consideration of all of the covenants set forth in this Agreement, and subject
to the performance of the services required to be performed by Employee
hereunder, Employer shall pay to Employee a salary at the annual rate of One
Hundred Thousand Dollars ($100,000), which shall be payable in accordance with
the general payroll practices of Employer, but in no event less frequently than
monthly.
3.2. In addition to his salary, Employee shall be eligible for bonus
compensation in respect of Employer's fiscal year end ("FYE") September 30, 2004
and September 30, 2005 as follows (the Board of Directors shall determine
employee's bonus for any Renewal Term in its sole discretion):
FYE EBITDA THRESHOLD PERCENTAGE OF ANNUAL SALARY
--- ---------------- ---------------------------
2004 > $4,000,000 25%
-
> $5,000,000 25% (for an aggregate of 50%)
-
2005 > $12,000,000 25%
-
> $15,000,000 25% (for an aggregate of 50%)
-
(a) The bonus will be a percentage of Employee's annual rate
of salary in the year the bonus was earned. The determination of earnings before
interest, taxes, depreciation and amortization ("EBITDA") for any fiscal year
will be made by Employer or Employer's regular accountants within 45 days after
the end of the respective fiscal year, subject to a reasonable extension for
good cause shown. The EBITDA figures shall include the performance of Employer's
subsidiaries and affiliates.
(b) In order to be eligible for a bonus for any fiscal year,
Employee must be employed by Employer throughout that entire fiscal year.
Employee acknowledges that this Section 3 does not confer any right to
employment with Employer, and that termination of this Agreement is governed by
Section 2 hereof.
(c) All bonuses payable to Employee pursuant to this Section
3.2 shall be paid to Employee as soon as practicable after the end of the fiscal
year but, in any event, promptly after receipt by Employer from its independent
accounting firm of its annual financial statements.
3.3. Employer shall be entitled to deduct applicable withholding and
other payroll taxes and the like from all amounts payable to Employee under this
Agreement before remitting the same to Employee.
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4. BENEFITS.
4.1. Employee shall be entitled to participate, to the extent of his
eligibility therefore, in such pension, profit-sharing, health, disability,
vacation and other employee benefit programs as are generally provided from time
to time by Employer to all of its employees.
4.2. Nothing contained in this Agreement shall be construed to require
Employer to create or continue any programs or prevent Employer from modifying
or terminating any programs.
4.3. Employer shall furnish Employee with such working facilities and
other services that Employer deems suitable to Employee's position and duties.
4.4. Employer shall reimburse Employee, upon receipt of proper
vouchers or receipts therefor, for all customary business expenses incurred by
Employee in the performance of his duties hereunder. All expenses in excess of
$1,000 require Employer's prior written consent.
4.5. Employer shall grant Employee an option to purchase up to two
hundred fifty thousand (250,000) shares of restricted common stock of National
at an exercise price of $1.50 per share, exercisable for a three year term from
the date of the vesting on the following vesting schedule (collectively, the
"National Options"):
(a) 50,000 of the National Options shall become exercisable upon
the execution of this Agreement; and
(b) 50,000 options of the National Options shall become
exercisable on each of the six, twelve, eighteen and twenty four
months anniversary of the execution of this Agreement; provided,
however, that (i) if Employee resigns or his employment is
terminated for cause on or before July 21, 2005, such National
Options shall be cancelled immediately (and all National Options
which were not vested prior to the date of such resignation or
termination will be immediately cancelled upon such resignation
or termination), and (ii) if Employer terminates Employee's
employment without cause or Employee's employment with Employer
does not continue (for any reason) subsequent to the expiration
of this Agreement, (A) the options that have not yet vested as of
the date of such termination or expiration shall be accelerated
and become immediately exercisable, and (B) all of such National
Options shall terminate 90 days from the date of such termination
or expiration.
4.6 Employer shall pay for Employee's expenses related to the lease
and insurance of such leased car in the form of lease payments not to exceed
$600 per month plus gas and normal maintenance but not including repairs during
the term of this Agreement, including any Renewal Term.
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5. DUTIES.
5.1. During the term of Employee's employment hereunder, Employee
agrees to serve as the Chief Operating Officer of Employer, including Employer's
subsidiaries and affiliates and shall perform such duties and services to
Employer consistent with the position in which Employee is serving with
responsibilities as may be determined from time to time by Employer. Employee
shall report to the Chief Executive Officer and President and the Board of
Directors of Employer and to such other executive officers of Employer as the
Board of Directors shall determine from time to time. Employee agrees that in
the performance of Employee's duties hereunder Employee will act only in good
faith and in the best interest of Employer. Employee further agrees that
Employee shall work in the New York City offices of Employer or at such other
location within a 50 mile radius of New York City. Employee further agrees that
Employer, in its sole discretion, may change Employee's title and/or duties,
provided that such new title and/or duties shall be executive in nature and
shall not diminish the responsibilities of the Employee and provided further
that Employee shall be entitled to all of the payments and other benefits set
forth in Section 2.2 and Section 4 hereunder.
6. EXTENT OF SERVICES. During the period of his employment hereunder,
Employee shall serve Employer faithfully and to the best of his ability and
shall devote his best efforts and entire business time, attention, energies and
skill to the business and affairs of Employer and its affiliates. Employee shall
be expected to work full time during normal business hours and, when necessary,
on additional assignments and projects consistent with his duties hereunder.
7. SECRECY AND NONDISCLOSURE.
7.1. Without the prior written consent of Employer in each instance,
and in further consideration of the employment of Employee hereunder, Employee
agrees to treat as secret and confidential all of the Trade Secrets (as
hereinafter defined) of Employer, and Employee agrees further not to disclose,
use, publish, or in any other manner reveal, directly or indirectly, at any time
during or after the term of this Agreement, any Trade Secret, except as may be
necessary to perform Employee's services hereunder or except as required by law
(including pursuant to an order of a court or arbitration panel) in which case
Employee shall provide Employer with written notice of such requirement by law
no less than five days prior to any such disclosure.
7.2. "Trade Secrets", as used in this Agreement, shall mean any and
all information regarding the business of Employer and any Subsidiary or
Affiliate or Parent (as hereinafter defined) of Employer, including, but not
limited to, information regarding operations, systems, technology, services,
know-how, supplier lists, customer lists, customer accounts, financial
information, costing data, and marketing plans, to the extent not generally
known in the Direct Response (as defined in Section 8.4 below) industry or not
otherwise disclosed by Employer to the public.
7.3. "Affiliates", as used in this Agreement, shall mean any person,
firm or entity that, directly or indirectly, is controlled by or is under common
control with Employer. In this definition, the term "control" shall mean the
ownership of 15% or more of the beneficial interest in the firm or entity
referred to. "Subsidiary" shall mean wholly as well as partly-owned
subsidiaries. "Parent" shall mean Tele and National and their successors and
assigns.
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8. COVENANTS.
8.1. NON-COMPETITION.
(a) Employee agrees that during Employee's employment with Employer,
and for the period of time commencing with the Termination Date and ending on
the last day in respect of which Employee is entitled to severance pay (or, in
the case of termination for cause or resignation, ending on the six month
anniversary of the Termination Date), Employee shall not, directly or
indirectly, for his own account or as an employee, officer, director, partner,
joint venturer, shareholder, investor or otherwise, within the United States of
America (Employer's distribution and sales region), either engage in any phase
of any business or enterprise similar to that of Employer or in competition with
Employer or compete with Employer in any Direct Response related business in
which Employer is currently engaged or which it is currently actively developing
or which it shall have developed as of the Termination Date; PROVIDED, HOWEVER,
that nothing in this Section 8.1(a) shall be construed to prevent the Employee
from making any investments in the securities of any business enterprise whether
or not engaged in competition with the Employer or any of its Subsidiaries or
Affiliates, to the extent that such securities are actively traded on a national
securities exchange or the NASDAQ system in the United States or on any foreign
exchange and represent, at the time of acquisition, not more than five percent
(5%) of the aggregate equity of such business enterprise.
(b) Employee agrees that during the period of his employment with
Employer, Employee shall not, directly or indirectly, employ or solicit the
employment or engagement by himself or others of any employees of Employer or of
any independent contractors or suppliers servicing Employer.
(c) Employee agrees that for a period of twelve (12) months
immediately following the termination of his employment with Employer, Employee
shall not, directly or indirectly, employ or solicit the employment or
engagement by himself or others of any employees of Employer or of any
independent contractors or suppliers servicing Employer; PROVIDED, HOWEVER, that
this Section 8.1.(c) shall apply only with respect to such employment or
solicitation of employment in a business or venture related to the Direct
Response industry.
(d) The existence of any claim or cause of action by Employee against
Employer shall not constitute a defense to the enforcement by Employer of the
covenants contained in this section, but such claim or cause of action shall be
litigated separately.
8.2. SOLICITATION OF CUSTOMERS OF EMPLOYER.
(a) Employee agrees that during the period of his employment with
Employer, Employee shall not, directly or indirectly, for himself, or as an
agent, employee or consultant of another person, firm or corporation, knowingly
canvass or solicit business from any of Employer's customers.
(b) Employee agrees that for a period of nine (9) months immediately
following his employment with Employer, Employee shall not, directly or
indirectly, for himself, or as agent, employee or consultant of another person,
firm or corporation, knowingly canvass or
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solicit business from any of Employer's customers; PROVIDED, HOWEVER, that this
Section 8.2(b) shall apply only with respect to such canvassing or solicitation
of business which business involves the Direct Response industry.
8.3. INVENTIONS AND DISCOVERIES.
(a) Employee shall promptly and fully disclose to the Employer, and
with all necessary detail for a complete understanding of the same, all
developments, know-how, discoveries, inventions, improvements, concepts, ideas,
writings, formulae, processes and methods (whether copyrightable, patentable or
otherwise) made, received, conceived, acquired or written by Employee (whether
or not at the request or upon the suggestion of the Employer) during the period
of his employment with the Employer or any if its affiliates, solely or jointly
with others, in or relating to any activities of the Employer or any of its
affiliates (collectively the "Subject Matter").
(b) Employee hereby assigns and transfers, and agrees to assign and
transfer, to the Employer, all his rights, title and interest in and to the
Subject Matter which constitutes work-for-hire and expressly waives any moral
rights or "droit morale" in and to any Subject Matter and further agrees to
deliver to the Employer any and all drawings, notes, software, code,
specifications and data relating to the Subject Matter. Employee shall assist
the Employer in obtaining such copyrights or patents during the term of this
agreement, and to testify in any prosecution or litigation involving any of the
Subject Matter.
8.4. DEFINITIONS. For purposes of this Section 8, (i) businesses or
enterprises "similar to" or "in competition with" Employer shall mean those
engaged, in whole or in part, in the business of distributing and selling
collectibles and other consumer products through direct response marketing,
television infomercials and retail channels (collectively, "Direct Response"),
and (ii) Employer shall mean Employer and any subsidiaries and affiliates or the
parent of Employer.
8.5. REASONABLENESS OF RESTRICTION. Employee acknowledges that the
restrictions specified under Section 8 hereof are reasonable, in view of the
nature of the business in which Employer is engaged and Employee's special and
unique skills, reputation and knowledge of Employer's operations. Employee
further acknowledges that his service, if used by a competitor, could cause
significant harm to Employer.
8.6. MODIFICATION OF RESTRICTIONS. Notwithstanding anything contained
in Section 8 to the contrary, if the restrictions specified under Section 8
hereof should be determined to be unreasonable in any judicial proceeding, then
the period of time and area of the restriction shall be reduced so that this
Agreement may be enforced in such area and during such period of time as shall
be determined to be reasonable.
9. CONSENT TO EQUITABLE RELIEF. Employee consents and agrees that if
Employee violates or threatens to violate any of the provisions contained in
Sections 7 or 8 of this Agreement, Employer shall, in addition to such other
remedies as it may have at law or in equity, be entitled to an injunction to be
issued by a court or arbitrator of competent jurisdiction restraining and
prohibiting Employee from committing or continuing any violation of such
provisions. If the scope of any restriction contained in this Agreement is too
broad to permit
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enforcement to its fullest extent, then such restriction shall be enforced to
the maximum extent permitted by law.
10. REPRESENTATIONS OF EMPLOYEE. Employee hereby represents and
warrants to Employer that he is not subject to any contract or restriction with
any person or entity that would be violated by his execution of this Agreement,
the performance of his obligations hereunder or the carrying out of his duties
hereunder.
11. NOTICE. For the purposes of this agreement, notices and all other
communications provided for in this agreement shall be in writing and shall be
deemed to have been duly given when delivered, two (2) business days after
delivery to a nationally recognized overnight courier service for next day
priority delivery or three (3) business days after having been deposited in the
mails by United States registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Employer: National Management Consulting, Inc.
000 Xxxxxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att: Xxxxxx X. Xxxxxxxx
With a copy to: Xxxx X'Xxxxxx, Esq.
c/o Adelphia Capital LLC
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Employee: Xxxxx Xxx-Xxxxx
Tele-V, Inc.
1120 Avenue of the Americas, Xxx. 0000
Xxx Xxxx, Xxx Xxxx 00000
With a copy to: Xxxxx Xxxxxxx, Esq.
Jenkens Xxxxxxxxx Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
12. WAIVER OF BREACH. The waiver by either party of a breach of any
provision hereof shall not operate or be construed to operate as a waiver by
such party of any subsequent breach by the other party of any provision hereof.
13. BENEFITS AND BURDENS. The rights and obligations of Employer
hereunder shall inure to the benefit of and shall be binding upon the successors
and assigns of Employer. The
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rights of Employee hereunder shall inure to the benefit of his heirs and his
personal representatives.
14. ENTIRE AGREEMENT, MODIFICATION AND CONSTRUCTION.
14.1. This Agreement contains the entire agreement between
Employer and Employee, and supersedes and replaces any and all prior agreements
between the parties concerning the subject matter hereof.
14.2. The terms and conditions hereof may be change only by an
agreement in writing signed by Employer and Employee.
14.3. This Agreement shall be governed by, construed and enforced
under the laws of the State of New York without giving effect to the conflicts
or choice of law provisions thereof. Any dispute arising under or related to
this Agreement may only be maintained in the State or Federal courts of the
State of New York, New York County and Employer and Employee waive any defense
of lack of personal jurisdiction or forum non conveniens or related
[REST OF PAGE LEFT INTENTIONALLY BLANK]
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[SIGNATURE PAGE TO XXXXX-XXX-XXXXX EMPLOYMENT AGREEMENT]
defense to the bringing of any action, suit or proceeding in the State or
Federal courts of the State of New York.
15. SEVERABILITY. If any term or provision of this Agreement or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
16. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
18. EMPLOYEE'S REVIEW OF THIS AGREEMENT. Employee acknowledges that he
has (i) carefully read this Agreement, (ii) had an opportunity to consult with
independent counsel with respect to this Agreement, and (iii) entered into this
Agreement at his own free will.
IN WITNESS WHEREOF, Employer and Employee have executed this
Employment Agreement on July 21, 2003.
EMPLOYER:
NATIONAL MANAGEMENT
CONSULTING, INC.
BY:/S/XXXXXX X. XXXXXXXX
NAME: XXXXXX X. XXXXXXXX
TITLE: PRESIDENT AND CHAIRMAN
EMPLOYEE:
XXXXX XXX-XXXXX
/S/XXXXX XXX-XXXXX
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