EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (this "Agreement") is made and
entered into as of this 8th day of March 2007, by and between MPLC, Inc. a
Delaware corporation (the "COMPANY") and Xxxxx Xxxxxx ("EXECUTIVE").
1. ENGAGEMENT AND DUTIES.
1.1 Upon the terms and subject to the conditions set forth in
this Agreement, the Company hereby engages and employs Executive as
Chief Marketing Officer. Executive hereby accepts such engagement and
employment.
1.2 Executive will have access to certain confidential
information and may, during the course of his employment, develop
certain information which will be the property of the Company.
Executive will be required to sign the Company's "Proprietary
Information and Assignment of Inventions Agreement" as a condition of
his employment under this Agreement.
1.3 Executive's duties and responsibilities shall be as
follows: those duties and responsibilities customarily vested in the
office of Chief Marketing Officer of a corporation in the business
currently conducted by the Company, subject to the supervision,
direction and control of the Chief Executive Officer and Board of
Directors (the "BOARD") of the Company. In addition, Executive's duties
shall include those duties and services for the Company and its
subsidiaries and affiliates as the Chief Executive Officer or Board
shall from time to time reasonably direct. Executive shall report
directly to the Company's Chief Executive Officer.
1.4 Executive agrees to devote his primary business time,
energies, skills, efforts and attention to his duties hereunder, and
will not, without the prior written consent of the Company, which
consent will not be unreasonably withheld, render any material services
to any other business concern. Executive will use his best efforts and
abilities faithfully and diligently to promote the Company's business
interests.
1.5 Except for routine travel incident to the business of the
Company, Executive shall perform his duties and obligations under this
Agreement principally from an office provided by the Company in Orange
County, California, or such other location in Orange County or Los
Angeles County, as the Board may from time to time determine.
2. TERM OF EMPLOYMENT. Executive's employment pursuant to this Agreement
shall commence on the date of this Agreement ("START DATE") and shall terminate
on the earliest to occur of the following:
(a) the close of business on June 1, 2008;
(b) the death of Executive;
(c) delivery to Executive of written notice of termination by the
Company if Executive shall suffer a "permanent disability," which for
purposes of this Agreement shall mean a physical or mental disability
which renders Executive, in the reasonable judgment of the Board,
unable to perform his duties and obligations under this Agreement for
90 days in any 12-month period;
(d) notice to Executive of termination by the Company for Cause.
For
purposes of this Agreement, Cause means: (ii) any material breach of
any of the terms of this Agreement; (ii) any act or omission knowingly
undertaken or omitted by Executive with the intent of causing damage to
the Company, its properties, assets or business, goodwill, or its
stockholders, officers, directors or employees; (ii) commission of any
material act of dishonesty, fraud, misrepresentation, misappropriation,
embezzlement, or other act of moral turpitude; (iii) Executive's
consistent failure to perform his normal duties or any obligation under
any provision of this Agreement, in either case, as directed by the
Board; (iv) conviction of, or pleading nolo contendere to (A) any crime
or offense involving monies or other property of the Company; (B) any
felony offense; or (C) any crime of moral turpitude; or (v) the chronic
or habitual use or consumption of drugs or alcoholic beverages; or
(e) notice to Executive of termination by the Company "without
cause."
After the expiration of the Employment term under Section 2(a), if
Executive continues to be employed by the Company, such employment shall be
terminable "at will" by either the Company or Executive and the terms and
conditions of this Agreement shall continue to apply; provided, however, that if
the Company terminates Executive's "at will" employment without Cause, then the
severance amount set forth in Section 3.1 payable to Executive as a result of
such termination shall be equal to one month's pay at Executive's then-current
base salary and such amount shall be paid in a lump sum within 20 calendar days
of the date of Executive's termination.
In the event Executive is terminated for Cause pursuant to section
2(d), the Executive shall only receive his base salary though the termination
date and shall not be entitled to any additional compensation, including salary,
bonus or commissions.
3. COMPENSATION; EXECUTIVE BENEFIT PLANS.
3.1 BASE SALARY. Commencing on the Start Date, the Company
shall pay Executive an annual base salary of $225,000. Executive's
annual base salary will be increased to $250,000 on June 1, 2007 as
previously agreed in Executive's prior employment agreement with the
Company. Executive's base salary shall be payable in installments in
the same manner and at the same times the Company pays base salaries to
other executives of the Company. In the event that Executive's
employment is terminated pursuant to Section 2(e), above (i.e., without
cause), the Company shall continue to pay Executive's then-current base
salary and the Bonus described in Section 3.2 below as severance pay
for the balance of the initial term hereof, and Executive shall retain
only those Options described in Section 3.3, below, that have vested
prior to the effective date of such termination.
3.2 BONUS. Commencing for fiscal year 2007, the Executive
shall be entitled to participate in the Company's Management Incentive
Program, pursuant to which the Company will set aside in a fund (the
"MIP FUND") each fiscal year for payment to Executive and such other
members of management as determined by the Board, an amount based upon
of the Company's EBIT for such fiscal year. The portion of the MIP Fund
payable to Executive (the "EBIT BONUS"), if any, will be determined by
the Board in its sole discretion. For purposes hereof, "EBIT" shall
mean earnings before interest and taxes, calculated based on the
Company's audited consolidated financial statements for the applicable
fiscal year prepared in accordance with generally accepted accounting
principles in the United States. The EBIT
2
Bonus, if any, shall be payable in cash or cash equivalent on April 15 of the
year immediately following the fiscal year for which such EBIT Bonus is
calculated; provided that Executive must be employed by the Company on such
payment date in order to be entitled to and receive any such EBIT Bonus payment.
3.3 STOCK OPTIONS; CANCELLATION OF PRIOR GRANTS; LOCK-UP.
Subject to approval by the Company's Board of Directors, you will be
granted an option to purchase up to 37,500 shares of the Company's
Common Stock (the "OPTIONS") at an exercise price of $6.00 per share
(such share number and exercise price calculated on a post 300 to 1
stock split currently being effected by the Company). The Options will
be governed by and granted pursuant to a separate stock option
agreement., The Options will be subject to vesting so long as you
continue to be employed by the Company, according to the schedule set
forth in the stock option agreement. All options to purchase shares of
the equity securities of New Motion, Inc. which have previously been
granted to you are hereby cancelled effectively immediately and without
any further action of the Executive or the Company. In addition,
Executive shall enter into a lock-up agreement, in form and substance
reasonably satisfactory to the Company, agreeing not to sell or
otherwise transfer any shares of Common Stock Executive now owns or
hereafter acquires for a period of two years from the date of this
Agreement.
3.4 VACATION. You will receive three weeks paid vacation. All
vacation shall be paid and earned in accordance with the Company's
vacation policy.
3.5 OTHER BENEFITS. During the term of his employment
hereunder, Executive and family shall be eligible to participate in all
operative employee benefit and welfare plans of the Company then in
effect from time to time and in respect of which all executives of the
Company generally are entitled to participate ("COMPANY EXECUTIVE
BENEFIT PLANS"), including, to the extent then in effect, auto
allowances, group life, medical, disability and other insurance plans,
all on the same basis applicable to employees of the Company whose
level of management and authority is comparable to that of Executive.
The costs of which shall be borne by the Company.
3.6 The Company reserves the right to modify, suspend, or
discontinue any and all of the above-mentioned plans, practices,
policies and programs at any time as long as such action is taken
generally with respect to other similarly situated executives of the
Company.
3.7 The Company may deduct from any compensation payable to
Executive the minimum amounts sufficient to cover applicable federal,
state and/or local income tax withholding, old-age and survivors' and
other social security payments, state disability and other insurance
premiums and payments. This shall also apply to bonus payments where
Executive elects to receive stock instead of cash, except that
Executive shall provide the funds necessary for the Company to comply
with its withholding obligations. This may be accomplished either by
depositing such funds with the Company or the Company is authorized to
offset the amounts required for withholding from Executive's Base
Salary.
4. EXPENSES.
3
4.1 GENERALLY. Executive shall be entitled to reimbursement
from the Company for the reasonable costs and expenses which he incurs
in connection with the performance of his duties and obligations under
this Agreement in a manner consistent with the Company's practices and
policies as adopted or approved from time to time, by the Board for
executive officers generally.
4.2 TRAVEL. All travel requests must be approved in advance by
the Company's Chief Executive Officer. The Company will reimburse
Executive for expenses reasonably incurred by him for business travel,
including transportation, lodging and reasonable entertainment
expenses, pursuant to the Company's Travel Policy.
4.3 VEHICLE. The Company will reimburse Executive for
automobile expenses for one vehicle, including lease or finance
payments, gasoline, insurance, maintenance, repairs and all other
reasonable costs associated with the vehicle, up to a maximum
reimbursement of $1,200 per month.
4.4 MOBILE TELEPHONE/PDA. The Company will reimburse Executive
for the monthly fees associated with a mobile telephone and Blackberry
service, up to a maximum of $300 per month.
5. DISPUTE RESOLUTION.
5.1 AGREEMENT TO ARBITRATE. Executive and the Company agree to
arbitrate before a neutral arbitrator any and all disputes or claims
arising from or relating to Executive's recruitment to or employment
with the Company, or the termination of that employment, including
claims against any current or former agent or employee of the Company,
whether the disputes or claims arise in tort, contract, or pursuant to
a statute, regulation, or ordinance now in existence or which may in
the future be enacted or recognized, including, but not limited to, the
following claims:
o claims for fraud, promissory estoppel, fraudulent inducement
of contract or breach of contract or contractual obligation,
whether such alleged contract or obligation be oral, written,
or express or implied by fact or law;
o claims for wrongful termination of employment, violation of
public policy and constructive discharge, infliction of
emotional distress, misrepresentation, interference with
contract or prospective economic advantage, defamation, unfair
business practices, and any other tort or tort-like causes of
action relating to or arising from the employment relationship
or the formation or termination thereof;
o claims of discrimination, harassment, or retaliation under any
and all federal, state, or municipal statutes, regulations, or
ordinances that prohibit discrimination, harassment, or
retaliation in employment, as well as claims for violation of
any other federal, state, or municipal statute, regulation, or
ordinance, except as set forth herein; and
o claims for non-payment or incorrect payment of wages,
commissions, bonuses, severance, employee fringe benefits,
stock options and the like, whether such claims be pursuant to
alleged express or implied contract or obligation, equity, the
California Labor Code, the Fair Labor Standards Act, the
Employee Retirement
4
Income Securities Act, and any other federal, state, or
municipal laws concerning wages, compensation or employee
benefits.
5.2 CLAIMS EXCLUDED FROM ARBITRATION. The Company and
Executive understand and agree that arbitration of the disputes and
claims covered by this Agreement shall be the sole and exclusive
mechanism for resolving any and all existing and future disputes or
claims arising out of Executive's recruitment to or employment with the
Company or the termination thereof. The Company and Executive further
understand and agree that the following disputes and claims are not
covered by this Agreement and shall therefore be resolved as permitted
or required by the law then in effect:
o claims for workers' compensation benefits, unemployment
insurance, or state or federal disability insurance;
o claims for injunctive and/or other equitable relief; and
o any other dispute or claim that has been expressly excluded
from arbitration by law.
Also, nothing in this section should be interpreted as restricting or
prohibiting Executive from filing a charge or complaint with a federal,
state, or local administrative agency charged with investigating and/or
prosecuting complaints under any applicable federal, state or municipal
law or regulation. Any dispute or claim that is not resolved through
the federal, state, or local agency must be submitted to arbitration in
accordance with this section.
5.3 WAIVER OF COURT OR JURY TRIAL. Executive and the Company
understand and agree that the arbitration of disputes and claims under
this section shall be instead of a trial before a court or jury or a
hearing before a government agency. Executive and the Company
understand and agree that, by signing this Agreement, Executive and the
Company are expressly waiving any and all rights to a trial before a
court or jury or before a government agency regarding any disputes and
claims which we now have or which we may in the future have that are
subject to arbitration under this section.
5.4 ARBITRATION PROCEDURES. The arbitrator shall issue a
written award that sets forth the essential findings and conclusions on
which the award is based. The arbitrator shall have the authority to
award any relief authorized by law in connection with the asserted
claims or disputes. The arbitrator's award shall be final and binding
on both the Company and Executive and it shall provide the exclusive
remedy(ies) for resolving any and all disputes and claims subject to
arbitration under this section. The arbitrator's award shall be subject
to correction, confirmation, or vacation, as provided by California
Code of Civil Procedure Section 1285.8 et seq and any applicable
California case law setting forth the standard of judicial review of
arbitration awards.
The arbitration shall be conducted in accordance with the
National Rules for the Resolution of Employment Disputes of the
American Arbitration Association; provided, however, that the
Arbitrator shall allow the discovery authorized by California Code of
Civil Procedure section 1283.05 or any other discovery required by
California law. Also, to the extent that any of the National Rules for
the Resolution of Employment Disputes or anything in this
5
Agreement conflicts with any arbitration procedures required by
California law, the arbitration procedures required by California law
shall govern.
5.5 PLACE OF ARBITRATION. The arbitration shall take place in
Orange County, California, or, at the Executive's option, the county in
which the Executive resides at the time the arbitrable dispute(s) or
claim(s) arose, or in any county in which venue would have been proper
if Executive were free to bring the dispute(s) or claim(s) in court.
5.6 GOVERNING LAW. This Agreement and its validity,
construction and performance shall be governed by the laws of the State
of California, without reference to rules relating to conflicts of law.
Any dispute(s) and claim(s) to be arbitrated under this section shall
be governed by the laws of the State of California, without reference
to rules relating to conflicts of law.
5.7 COSTS OF ARBITRATION. The Company will bear the
arbitrator's fee and any other type of expense or cost that the
employee would not be required to bear if he or she were free to bring
the dispute(s) or claim(s) in court as well as any other expense or
cost that is unique to arbitration. The Company and Executive shall
each bear their own attorneys' fees incurred in connection with the
arbitration, and the arbitrator will not have authority to award
attorneys' fees unless a statute or contract at issue in the dispute
authorizes the award of attorneys' fees to the prevailing party, in
which case the arbitrator shall have the authority to make an award of
attorneys' fees as required or permitted by applicable law. If there is
a dispute as to whether the Company or Executive is the prevailing
party in the arbitration, the arbitrator will decide this issue.
5.8 KNOWING WAIVER. Executive has been advised to consult with
an attorney of his our own choosing before signing this Agreement, and
has had an opportunity to do so. Executive agrees that he has read this
section carefully and understands that by signing this Agreement, he is
waiving all rights to a trial or hearing before a court or jury of any
and all disputes and claims regarding Executive's employment with the
Company or the recruitment to or termination thereof (except as
otherwise stated herein).
6. MISCELLANEOUS.
6.1 NOTICES. All notices, requests and other communications
(collectively, "Notices") given pursuant to this Agreement shall be in
writing, and shall be delivered by personal service or by United States
first class, registered or certified mail (return receipt requested),
postage prepaid, addressed to the party at the address set forth below:
If to Company: New Motion, Inc
00 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx XX 00000
000-000-0000 (phone)
000-000-0000 (fax)
Attn: Chief Executive Officer
6
If to Executive: Xxxxx Xxxxxx
00 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx XX 00000
Any Notice shall be deemed duly given when received by the addressee
thereof, provided that any Notice sent by registered or certified mail
shall be deemed to have been duly given three days from date of deposit
in the United States mails, unless sooner received. Either party may
from time to time change its address for further Notices hereunder by
giving notice to the other party in the manner prescribed in this
section.
6.2 ENTIRE AGREEMENT. This Agreement contains the sole and
entire Agreement and understanding of the parties with respect to the
entire subject matter of this Agreement, and any and all prior
discussions, negotiations, commitments and understandings, whether oral
or otherwise, related to the subject matter of this Agreement,
including that certain Executive Employment Agreement, dated October 1,
2005, between Executive and New Motion, Inc., are hereby superseded and
merged herein. No representations, oral or otherwise, express or
implied, other than those contained in this Agreement have been relied
upon by any party to this Agreement.
6.3 SEVERABILITY. The Company and Executive believe the
covenants contained in this Agreement are reasonable and fair in all
respects, and are necessary to protect the interests of the Company and
Executive. However, in case any one or more of the provisions or parts
of a provision contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect in any
jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other provision or part of a provision of this Agreement or
any other jurisdiction, but this Agreement shall be reformed and
construed in any such jurisdiction as if such invalid, illegal or
unenforceable provision or part of a provision had never been contained
herein and such provision or part shall be reformed so that it would be
valid, legal and enforceable to the maximum extent permitted in such
jurisdiction.
6.4 NEUTRAL INTERPRETATION. This Agreement constitutes the
product of the negotiation of the parties hereto and the enforcement
hereof shall be interpreted in a neutral manner, and not more strongly
for or against either party based upon the source of the draftsmanship
hereof.
6.5 CAPTIONS. The various captions of this Agreement are for
reference only and shall not be considered or referred to in resolving
questions of interpretation of this Agreement.
6.6 INDEMNIFICATION. The Company shall provide indemnification
for its directors and officers (which shall include Executive) to the
maximum extent allowed by the Company's Articles of Incorporation,
by-laws or Section 145 of the Delaware General Corporation Law.
6.7 BUSINESS DAY. If the last day permissible for delivery of
any Notice under any provision of this Agreement, or for the
performance of any obligation under this Agreement, shall be other than
a business day, such last day for such Notice or performance shall be
7
extended to the next following business day (provided, however, under
no circumstances shall this provision be construed to extend the date
of termination of this Agreement).
6.8 MISCELLANEOUS This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. The
section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of
this Agreement. This Agreement embodies the entire Agreement and
understanding of the parties hereto in respect of the subject matter
contained herein and may not be modified orally, but only by a writing
subscribed by the party charged therewith. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other
than those expressly set forth or referred to herein. This Agreement
supersedes all prior Agreements and understandings (whether oral or
written) between the parties with respect to such subject matter.
In witness whereof, the parties have executed this Agreement as of the
date first set forth above.
Company: MPLC, INC.
By: /s/ Xxxxxx Xxxx By: /s/ Xxxxx Xxxxxx
---------------------------- ------------------------
Xxxxxx Xxxx, Xxxxx Xxxxxx
Chief Executive Officer
8
