Exhibit 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") made and entered as of November 18,
2004, by end among Branded Media Corporation (the "Company"), a Nevada
corporation, and Xxxxxx X. Xxxxxx (the "Executive").
BACKGROUND
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The parties desire to enter into an employment agreement and to set forth
herein the terms and conditions of the Executive's employment by the Company.
Accordingly, in consideration of the mutual covenants and agreements set forth
herein and the mutual benefits to be derived here from, and intending to be
legally bound hereby, the Company and the Executive agree as follows:
1. Employment.
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(a) Duties. The Company shall employ the Executive, on the terms set
form in this Agreement, as General counsel. The Executive accepts such
employment with the Company and the Executive shall perform and fulfill
such duties as are reasonable and necessary for such position and will
devote his efforts to the performance and fulfillment of his duties and to
the advancement of the interests of the Company, subject only to the
direction, approval, control and directives of the Board of Directors of
the Company (the "Board"); provided, however, that the Executive may make
passive investments in other business ventures so long as such other
ventures are not competitive with the business of the Company.
(b) Place of Performance. In connection with her employment by the
Company, the Executive shall be based in the borough of Manhattan, except
for required travel on Company business.
2. Term.
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(a) Commencement. The Executive's employment under this Agreement
shall be for a four-year term (the "Term") commencing on the later of (i)
November 18, 2004 or (ii) the date which is five (5) business days from the
satisfaction by the Company of the conditions set forth in Section 2(b)
below (the "Commencement Date"; "Commencement Date" shall also refer to the
anniversary date for calendar year purposes in determining Executive's
annual increase for purposes of Section 3(a) of this Agreement), and shall
continue uninterrupted for the Term.
3. Compensation.
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(a) Base Salary. During the term, the Executive shall be entitled to
receive an annual salary (the "Base Salary") as follows:
(1) for the year ending Commencement Date, 2005, $225,000;
(2) for the year ending Commencement Date, 2006, $275,000;
(3) for the year ending Commencement Date, 2007, $325,000;
(4) for the year ending Commencement Date, 2008, $375,000;
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which shall be the base salary (the "Base Salary") for the remaining
Term, payable in installments at such times as the Company customarily
pays its other senior executive employees (but in any event no less often
than monthly).
(b) In the event of a change in control such as would require the
Company to file a Form 8-K with the Securities and Exchange Commission if
the Company was a reporting company, the Executive shall be entitled to (i)
a lump sum payment equal to the Base Salary, with minimum ten percent (10%)
increases each year, for the remaining Term, plus a, lump sum bonus equal
to five times the largest bonus paid to Executive under this Agreement and
(ii) immediate acceleration of any and all unvested Company stock options
(which provision shall be reflected in the grant of Company stock options
to Executive.)
(d) Bonus. Executive shall receive an annual bonus in accordance with
a Company Bonus plan adopted by the Board, provided, however, that the
annual bonus in any given year shall be no less than ten (10%) of
Executive's Base Salary with respect to such year (the "Minimum Bonus").
The annual bonus shall be paid no later than January 15 with respect to the
immediately previous calendar year, or part thereof.
4. Health Insurance and Other Benefits.
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During the Term, the Executive shall be entitled to all employee benefits
offered by the Company to its senior executives and key management
employees, including, without limitation, all pension, profit sharing,
retirement, stock option, salary continuation, deferred compensation,
disability insurance, hospitalization insurance major medical insurance,
medical reimbursement survivor income, life insurance or any other benefit
plan or arrangement established and maintained by the Company, subject to
the rules and regulations then in effect regarding participation therein.
The Company shall implement a benefits plan within one (1) month from
Commencement Date which, as it pertains to Executive, shall include,
without limitation, health and medical insurance, dental insurance, and
short-term and long-term disability insurance. Within one (1) month of the
Commencement Date, the Company shall have procured and funded for Executive
a life insurance policy, in form and substance satisfactory to Executive,
acting reasonably, in the amount of one million dollars ($1,000,000), with
the beneficiary to be named by Executive.
5. Reimbursement of Expenses.
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The Executive shall be reimbursed for all items of travel, entertainment
and miscellaneous expenses which the Executive reasonably incurs in
connection with the performance of her duties hereunder, provided that the
Executive submit to the Company such statements and other evidence
supporting said expenses as the Company may reasonably require. Executive
shall be entitled to business class travel and accommodations when
traveling for Company business, as well as car service to and from all
airports.
6. Grant of Common Stock Purchase Warrant.
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Upon the execution of this Agreement, the Company shall grant to
Executive, a Common Stock Purchase Warrant to purchase One Million Five
Hundred Thousand (1,500,000) shares of the Company's common stock at a
price of $.01 per share. The form of warrant is attached to this Agreement
as Exhibit "A".
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7. Employee Incentive Stock Option Plan.
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The Executive will also be eligible to participate in the Company's
Employee Incentive Stock Option Plan when approved by the Board, with
vesting on a monthly basis over no greater than a two year period, as well
as one hundred (100%) acceleration of any and all unvested Company stock
options upon a change of control, as set forth in Section 3(b) (ii) above.
8. Vacations.
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The Executive shall be entitled to the number of paid vacation days in
each calendar year determined by the Company from time to time for its
senior executive officers, but not less than six (6) weeks in any calendar
year (prorated in any calendar year during which the Executive is employed
hereunder for less than the entire year in accordance with the number of
days in such calendar year during which he is so employed), with up to four
(4) weeks allowed to be carried over in any given calendar year, prorated
as applicable on the same basis as set forth above. The Executive shall
also be entitled to all paid holidays given by the Company to its senior
executive officers.
9. Termination of Employment.
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(a) Death or Total Disability. In the event of the death of the
Executive during the Term, this Agreement shall terminate as of the date of
the Executive's death. Salary for the remaining Term shall be paid to
Executive's beneficiary or estate, and all health, medical and dental
insurance benefits for Executive's family shall be continued for at least
two years following the Executive's death, as well as payment in respect of
accrued but unused vacation and reimbursement of any outstanding expenses.
The event of the Total Disability (as that term is defined below) of the
Executive for any consecutive twelve months during the Term, the Company
shall have the right to terminate this Agreement by giving the Executive
thirty (30) days prior written notice thereof, and upon the expiration of
such thirty (30) day period, the Executive's employment under this
Agreement shall terminate. In the event of such termination, the salary for
the remaining Term shall be paid to Executive. If the Executive shall
resume her duties within thirty (30) days after receipt of such a notice of
termination, this Agreement shall continue in full force and effect. Upon
termination of this Agreement under this Section 9(a), the Company shall
have no further obligations or liabilities under this Agreement, except to
pay to the Executive's estate or the Executive, as the case may be, the
portion of salary that remains unpaid for the Term, including applicable
increases, Minimum Bonus for each calendar year or part thereof, and
continuation of benefits, as well as payment in respect of accrued but
unused vacation and reimbursement of any outstanding expenses, as forth
herein.
The term "Total Disability," as used herein, shall mean a mental or
physical condition which in the reasonable opinion of an independent
medical doctor selected by the Company and approved by Executive or, if
Executive is mentally incapacitated, by Executive's duly appointed
guardian, in each case acting reasonably, renders the Executive unable or
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incompetent to carry out the material duties and responsibilities of the
Executive under this Agreement at the time the disabling condition was
incurred. If the Executive is covered under any policy of disability
insurance under paragraph 4, the definition of Total Disability hereunder
shall be the definition of that term in such policy.
(b) Termination for Cause. The Executive's services under this
Agreement may be terminated for cause where the Executive engages in the
following conduct: (a) embezzlement, intoxication or illegal drug use which
materially interferes with job performance on an ongoing basis, wrongful
disclosure of Company's confidential information which directly results in
material harm to the Company, gross negligence in performance of duties,
conviction of a felony, receipt of any rebate, kickback or other
remuneration or consideration from any party that conducts business with
Company other than reasonable and customary incidentals for a chief
executive such as meals, tickets to live events, invites to
parties/benefits, promotional trip, etc.; (b) material breach of this
Agreement; or, (c) failure to perform competently, in the Board's sole
discretion, the customary duties of Chief Executive Officer, provided,
however, that in the case of clauses (b) and (c) Executive shall have been
afforded an opportunity to address the Board directly and answer any
allegations, criticisms or other questions which form the basis for
termination for cause hereunder; and, provided, further, that if the basis
for termination for cause hereunder is capable of being cured, Executive
shall be afforded a reasonable and good faith opportunity to cure. In such
circumstances, Executive shall be entitled to severance pay in the amount
of the annual salary earned in the full calendar year immediately preceding
termination. Payment in such circumstance shall be made in equal monthly
installments beginning fifteen (15) days from date of termination;
provided, however, that the Company shall be required to post a letter of
credit in form and substance reasonably satisfactory to the Executive and
issued by a bank with a credit rating no less than "A", in the absence of
which payment shall be made in a lump sum on the date of termination.
(c) Termination without Cause. The Company may unilaterally terminate
this Agreement for any reason in its sole discretion in the absence of a
Termination for Cause. In such circumstances, Executive shall be entitled
to receive all compensation and benefits payable to Executive pursuant to
this Agreement through the end of the Term, including Base Salary, Minimum
Bonus, health, medical and dental benefits (i.e., the Company shall make
COBRA payments on behalf of the Executive through the end of the Term), as
well as payment in respect of accrued but unused vacation and reimbursement
of any outstanding expenses. In addition, any and all unvested Company
stock options shall immediately vest and be exercisable, and Executive
shall have no less than eighteen (18) months following termination to elect
whether or not to exercise any and all of such stock options.
(d) Resignation for Good Reason. The Executive may resign from time to
time and at any time, upon not less than one (1) month written notice to
the Board, for Good Reason. In such circumstances, the Executive shall be
entitled to receive all compensation and benefits payable to Executive
pursuant to this Agreement through the end of the Term, including Base
Salary, Minimum Bonus, health, medical and dental benefits (i. e., the
Company shall make COBRA payments on behalf of the Executive through the
end of the Term), as well as payment in respect of accrued but unused
vacation and reimbursement of any outstanding expenses. In addition, any
and all unvested Company stock options shall immediately vest and be
exercisable, and Executive shall have no less than eighteen (18) months
following termination to elect whether or not to exercise any and all of
such stock options.
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"Good Reason" shall mean (i) a reduction in, or the failure to pay,
the Executive's Base Salary or Minimum Bonus, as each is then in effect,
(ii) the relocation of the Executive's principal place of employment to a
location outside the borough of Manhattan, (iii) material reduction in the
Executive's duties or responsibilities, (iv) reduction in title, (v) change
in reporting (i.e., if Executive should be required to report to any
person/body other than directly to the Board) or (vi) a material breach by
the company or any or its affiliates of any other provision of this
Agreement in each case which failure is not cured within fifteen (15) days
from receipt of written notice thereof.
10. No Mitigation.
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The Executive shall not be required to mitigate the amount of any payment
or benefit provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this
Agreement be reduced by any compensation earned by the Executive as the
result of her employment by another employer.
11. Restrictive Covenant.
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(a) Competition. Executive undertakes and agrees that until six (6)
months after termination of this Agreement for any reason other than for
Cause, death or Total Disability, or resignation by the Executive for Good
Reason, she will not compete or participate as a director, officer,
employee, consultant agent, consultant, representative or otherwise, or as
a stockholder, partner or joint venturer, or have any direct or indirect
financial interest, including, without limitation, the interest of a
creditor, in any business that is competitive with the business of the
Company or any of its wholly-owned subsidiaries.
(b) Trade Secrets. During the Term hereof and after termination for
any reason Executive shall not disclose, divulge, copy or otherwise use any
trade secret of the Company or its subsidiaries, it being acknowledged that
all such information and materials compiled or obtained by or disclosed to
Executive while employed by the Company hereunder or otherwise are
confidential and the exclusive property of the Company and, if applicable,
its wholly-owned subsidiaries.
(c) Injunctive Relief. The parties hereto agree that the remedy at law
for any breach of the provisions of this paragraph 11 will be inadequate
and that the Company shall be entitled to injunctive relief. Such
injunctive relief shall not be exclusive, but shall be in addition to any
other rights and remedies Company might have for such breach.
(d) Scope of Covenant. Should the duration, geographical area or range
or proscribed activities contained in subparagraph (a) above be held
unreasonable by any court of competent jurisdiction, then such duration,
geographical area or range of proscribed activities shall be modified to
such degree as to make it or them reasonable and enforceable.
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12. Indemnity.
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The Company shall indemnify and hold the Executive harmless to the maximum
extent permitted by law against any claim, action, demand, loss, damage,
cost, expense, liability or penalty arising out of any act, failure to act,
omission or decision by her while performing services as an officer,
director or employee of the Company, other as act, omission or decision by
the Executive which constitutes an act of gross negligence or willful
misconduct. To the extent permitted by law, the Company shall pay all
attorney's fees, expenses and costs actually incurred by the Executive in
connection with the defense of any of the claims referenced herein.
13. Miscellaneous.
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(a) Notices. Any notice, demand or communication required or permitted
under this Agreement shall be in writing and shall either be hand-delivered
to the other party or mailed to the addresses set forth below by registered
or certified mail, return receipt requested, or sent by overnight express
mail or courier or facsimile to such address, if a party has a facsimile
machine. Notice shall be deemed to have been given and received when so
hand-delivered or after three business days when so deposited in the U.S.
Mail, or when transmitted and received by facsimile or sent by express mail
properly addressed to the other party. The addresses are:
To the Company:
Xxxxxx X. Xxxxxx
Branded Media Corporation
000 Xxxxxxx Xxxxxx - Xxxxxxxxx
Xxx Xxxx, XX 00000
To the Executive:
Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx - Xxxxxxxxx
Xxx Xxxx, XX 00000
The foregoing addresses may be changed at any time by written notice given
in the manner herein provided.
(b) Integration: Modification. This Agreement constitutes the entire
understanding and agreement between the Company and the Executive regarding
its subject matter and supersedes all prior negotiations and agreements,
whether oral or written, between them with respect to its subject matter.
This Agreement may not be modified except by a written agreement signed by
the Executive and a duly authorized officer of the Company.
(c) Enforceability. If any provision of this Agreement shall be
invalid or unenforceable, in whole or in part, such provision shall be
deemed to be modified or restricted to the extent and in the manner
necessary to render the same valid and enforceable, or shall be deemed
excises from this Agreement, as the case may require, and this Agreement
shall be construed and enforced to the maximum extent permitted by law as
if such provision had been originally incorporated herein as so modified or
restricted, or as if such provision had not been originally incorporated
herein, as the case maybe.
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(d) Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties, including and their respective heirs,
executors, successors and assigns, except that this Agreement may not be
assigned by the Executive.
(e) Waiver of Breach. No waiver by either party of any condition or of
the breach by the other of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances
shall be deemed or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other condition, or the breach of
any other term or covenant set forth in this Agreement. Moreover, the
failure of either party to exercise any right hereunder shall not bar the
later exercise thereof.
(f) Governing Law and Interpretation. This Agreement shall be governed
by the internal laws of the New York. Each of the parties agrees that he or
it, as me case may be, shall deal fairly and in good faith with the other
party in performing, observing and complying with the covenants, promises,
duties, obligations, terms and conditions to be performed, observed or
complied with by him or it, as the case may be, hereunder, and that this
Agreement shall be interpreted, construed and enforced in accordance with
the foregoing covenant notwithstanding any law to the contrary.
(g) Headings. The headings of the various sections and paragraphs have
been included herein for convenience only and shall not be considered in
interpreting this Agreement.
(h) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed by the Executive
and on behalf of the Company by its duly authorized officer(s) on the date first
above written.
Branded Media Corporation
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Director
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Director
ACKNOWLEDGED AND AGREED:
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Executive
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