EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 2nd day of November 2002 by and between
MediaBay, Inc., a Florida corporation, with offices at 0 Xxxxxxxxx Xxxxxx, Xxxxx
000, Xxxxx Xxxxxx, Xxx Xxxxxx 00000 (the "Company"), and Xxxxxx Xxxxxxx (the
"Executive").
W I T N E S S E T H:
WHEREAS, the Company recognizes the Executive's substantial contribution
to the growth and success of the Company and desires to provide for his
continued employment by reinforcing and encouraging his continued attention and
dedication to the Company; and
WHEREAS, the Executive is willing to commit himself to continue to serve
as Chairman of the Company on the terms and conditions herein provided.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, in consideration of
the Executive's services and value to the Company over and beyond his
obligations as an employee, and intending to be legally bound hereby, the
parties agree as follows:
1. Recitals. The Whereas clauses recited above are hereby incorporated by
reference as though they were fully set forth herein.
2. Employment. The Company shall employ the Executive and the Executive
shall serve the Company, on the terms and conditions set forth herein.
3. Term. The commencement of the term of the Executive's employment by the
Company as provided in paragraph 2 is retroactive to October 22, 2002 (the
expiration date of the January 2, 2002 employment agreement between the Company
and the Executive) and ends on January 15, 2004: provided, however that the
Executive may terminate his employment upon prior written notice to the Company
and, subject, however, to the other termination provisions contained herein.
4. Position and Duties. (a) The Executive shall be employed by the Company
as its Chairman. Subject to the direction and control of the Board of Directors,
the Executive shall have general strategic oversight of the business of the
Company. The Executive shall not be required to spend any fixed amount of time
in connection with his performance of his duties.
5. Compensation and Related Matters.
(a) Salary. During the term of this Agreement, the Company shall pay
to the Executive, as basic compensation for his services, an initial annual
salary of $100,000 in equal monthly installments during the term of this
Agreement; thereafter at any time during the term of this Agreement the Board of
Directors may increase, but not decrease such amount. In addition the Executive
shall be entitled to participate in the Company's incentive stock option
plans and may receive a performance-based bonus, to be determined by the Board
of Directors. The Executive's salary and bonus shall be reconsidered at least
once each fiscal year of the Company and shall not necessarily be limited to
such increases granted other officers.
(b) Expenses. The Executive shall be entitled to receive prompt
reimbursement for all reasonable travel and business expenses in connection with
services performed hereunder in accordance with normal Company policy, as the
same may be determined from time to time.
(c) Insurance and Employee Benefits. The Executive shall be entitled
to receive insurance and employee benefits applicable to all officers of the
Company.
6. Termination by the Company. The Executive's employment hereunder may be
terminated by the Company without any breach of this Agreement only under the
circumstances described below.
(a) Death. The Executive's employment hereunder shall terminate upon
his death.
(b) Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, as determined by a physician mutually chosen by the
Executive and the Company, the Executive shall have been absent from his duties
hereunder for a consecutive period of one hundred eighty (180) days and after
notice of termination is given (which may be given before or after the end of
such 180 day period but which will in no event be effective until, at the
earliest, the day following the one hundred eightieth (180th) day of the period)
shall not have returned to the performance of his duties hereunder, as that
concept is contemplated in this Agreement, within thirty (30) days after the
notice of termination is given, the Company may terminate the Executive's
employment hereunder.
(c) Cause. The Company may terminate the Executive's employment
under this Agreement at any time for cause. For purposes of this Agreement, the
term "cause" shall include one or more of the following: (i) willful misconduct
and continued failure by the Executive in the performance of his duties, as
contemplated in this Agreement, as Chairman (other than through disability as
defined in paragraph 6(b), above), or (ii) conviction of a crime involving moral
turpitude, theft, embezzlement or continuing alcohol or drug abuse to the extent
that he is unable to perform the duties of his office. The termination shall be
evidenced by written notice thereof to the Executive, which shall specify the
cause for termination.
(d) Without Cause. In addition to any other rights the Company has
to terminate the Executive's employment under this Agreement, the Company may,
at any time, by a vote of not less than sixty percent (60%) of the directors
then in office (excluding the vote of the Executive if he is also a director),
terminate the Executive without cause upon prior written notice to the Executive
setting forth the reasons, if any, for the termination. For purposes of this
Agreement, the term "without cause" shall mean termination by the Company on any
grounds other than those set forth in paragraphs 6(a), (b) or (c) hereof.
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(e) Severance Pay. In the event that the Company has terminated the
Executive's employment under this Agreement "without cause" within six (6)
months following a "Change of Control" (as defined below), then the Executive
will be entitled to receive severance pay equal to the greater of Two Hundred
Thousand and 00/100 U.S. Dollars ($200,000.00) or two (2) times the total
compensation received by the Executive from the Company during the twelve (12)
months prior to the date of termination. In addition, in the event there is a
"Change of Control" (as defined below), the Executive will have six (6) months
following the event which constituted the "Change of Control" to elect to resign
(unless in connection with such event the Executive was terminated) at which
time the Executive will then receive the aforementioned severance pay.
(f) Change of Control. For purposes of this Agreement, a "Change of
Control" shall be deemed to occur, unless previously consented to in writing by
the Executive, upon (i) the actual acquisition or the execution of an agreement
to acquire twenty percent (20%) or more of the voting securities of the Company
by any person or entity not affiliated with the Executive (other than pursuant
to a bona fide underwriting agreement relating to a public distribution of
securities of the Company), (ii) the commencement of a tender or exchange offer
for more than twenty percent (20%) of the voting securities of the Company by
any person or entity not affiliated with the Executive, (iii) the commencement
of a proxy contest against the management for the election of a majority of the
Board of Directors of the Company if the group conducting the proxy contest
owns, has or gains the power to vote at least twenty percent (20%) of the voting
securities of the Company, (iv) a vote by the Board of Directors to merge,
consolidate, sell all or substantially all of the assets of the Company to any
person or entity not affiliated with the Executive, or (v) the election of
directors constituting a majority of the Board of Directors who have not been
nominated or approved by the Executive.
(g) The Executive shall not be required to mitigate the amount of
any payment provided for in this paragraph 6 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this paragraph 6
be reduced by any compensation earned by the Executive as the result of
employment by another employer or business or by profits earned by the Executive
from any other source at any time before and after the date of termination. The
amounts payable to the Executive under this Agreement shall not be treated as
damages, but as severance pay to which the Executive is entitled by reason of
his employment and the circumstances contemplated by this Agreement.
(h) The severance pay which the Executive will be entitled to
receive as a result of the termination of his employment under this Agreement,
shall not be the Executive's exclusive remedy in the event of such termination,
and the Executive will continue to be entitled to all other damages to which the
Executive may be entitled as a result to the termination of his employment under
this Agreement, including all legal fees and expenses incurred by him in
contesting or disputing any such termination or in seeking to obtain or enforce
any right or benefit provided by this Agreement.
7. Non-Competition Covenant. The Executive hereby covenants and agrees
that he will not serve as an officer of or perform any equivalent functions for
any other audio book company during the term of his employment under this
Agreement.
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Nothing in the immediately preceding sentence is intended to be construed
as otherwise preventing the Executive from (i) engaging in other business
activities, (ii) holding positions in charitable organizations, (iii)
purchasing, holding or owning interests in other entities and/or serving as a
director and/or officer of other corporations, or serving as a manager of
limited liability companies or a general partner of partnerships, or (iv) having
any other interest in other businesses. In addition, during the term of this
Agreement and for a period of two (2) years immediately following the
termination of his employment, whether said termination is occasioned by the
Company, the Executive or a mutual agreement of the parties, the Executive shall
not, for himself or on behalf of any other person, persons, firm, partnership,
corporation or company, engage or participate in any activities which are in
direct conflict with the interests of the Company or solicit or attempt to
solicit the business or patronage of any person, firm, corporation, company or
partnership, which had previously been a customer of the Company, for the
purpose of selling products and services similar to those provided by the
Company.
8. Indemnification. The Company will enter into an indemnification
agreement with the Executive in the form of Exhibit A hereto in connection with
the defense or investigation thereof.
9. Binding Agreement. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. In addition, this Agreement and the
obligations and rights of the Company hereunder shall be binding on any person,
firm or corporation which is a successor-in-interest to the Company.
10. Notice. For the purpose of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally, or by private
overnight courier or mail service, postage prepaid or (unless otherwise
specified) mailed by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: Xxxxxx Xxxxxxx
c/o The Xxxxxxx Company, Inc.
0000 Xxxxxxxxx Xxxx., X.X. - Xxxxx 000
Xxxx Xxxxx, XX 00000
(000) 000-0000
If to the Company: MediaBay, Inc.
0 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
(000) 000-0000
or to such other address as the parties may furnish to each other in writing.
Copies of all notices, demands and communications shall be sent to the home
addresses of all members of the Board of Directors of the Company.
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11. Miscellaneous.
(a) No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by the parties hereto, provided, however, that this Agreement may be
modified, waived or discharged by mutual agreement in writing.
(b) No delay, waiver, omission or forbearance (whether by conduct or
otherwise) by any party hereto at any time to exercise any right, option, duty
or power arising out of breach or default by the other party of any of the
terms, conditions or provisions of this Agreement to be performed by such other
party shall constitute a waiver by such party or a waiver of such party's rights
to enforce any right, option or power as against the other party or as to
subsequent breach or default by such other party, and no explicit waiver shall
constitute a waiver of similar or dissimilar terms, provisions or conditions at
the same time or at any prior or subsequent time.
(c) In the event of a dispute between the Executive and the Company
concerning any of the provisions of this Agreement or the enforcement of the
terms hereof, should the Executive prevail in any settlement or final,
unappealable judgment of a court of competent jurisdiction, the Company shall
pay the Executive's costs incurred therein, including reasonable attorneys'
fees.
12. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Florida and any action brought by either party shall be
commenced in the courts of the State of Florida. The Executive and the Company
hereby irrevocably and unconditionally consent to submit to the exclusive
jurisdiction of the courts of the State of Florida and the United States of
America located in Palm Beach County, Florida for any and all actions, suits or
proceedings arising out of or resulting from or relating to this Agreement and
the transactions contemplated hereby and the parties agree not to commence any
action, suit or proceeding relating thereto except in such courts. The parties
hereby irrevocably and unconditionally waive any objection to the laying of
venue of any such action, suit or proceeding arising out of, resulting from or
relating to this Agreement or the transactions contemplated hereby in such
courts and hereby further irrevocably and unconditionally waive and agree not to
plead or claim in any such court that such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.
13. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. Entire Agreement. This Agreement contains the entire understanding of
the Company and the Executive with respect to his employment by the Company.
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This Agreement supersedes all prior agreements and understandings whether
written or oral between the Executive and the Company, and there are no
restrictions, agreements, promises, warranties or covenants other than those
stated in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
shown below effective as of the date first written above.
"COMPANY"
Date Signed: November 15, 2002 MEDIABAY, INC., a Florida corporation
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx,
Chief Financial Officer and Executive
Vice President
"EXECUTIVE"
Date Signed: November 15, 2002 /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
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