EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into as of the 6th day of June 2005, 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 X.
Xxxxxxx, residing at c/o Safer Xxxxxxx, 437 Madison Avenue, 20th Floor, New
York, New York 10022 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the spoken audio business including
audiobooks, old-time radio shows and downloadable spoken audio products; and
WHEREAS, the Company desires to employ the Executive and the Executive
is willing to commit himself to serve and to establish a minimum period during
which he will serve 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 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 employment of the Executive by the Company as provided in
paragraph 2 shall commence on June 6, 2005 and end on the first (1st)
anniversary of such commencement (the "Initial Term"), and shall be
automatically extended for successive one year terms (each such extension is an
"Extended Term" and, together with the Initial Term, the "Term"),unless the
Executive notifies the Company in writing of his intention not to renew the Term
and subject, however, to the other termination provisions contained herein.
(4) Position and Duties. The Executive shall be employed by the Company
as Chairman. His power and authority shall be and remain subject to the
direction and control of the Board of Directors. The Executive shall perform the
duties and responsibilities and have the powers of Chairman, as set forth in the
Company's By-laws. During the Term, the Executive shall devote a substantial
portion of his time to matters relating to the operation of Company's and its
subsidiaries' business and affairs.
(5) Compensation and Related Matters.
(a) Base Compensation. During the term of this Agreement, the
Company shall pay to the Executive, as compensation for his services, an annual
fee of $120,000 ("Base Compensation") payable in bi-monthly installments.
(b) Bonuses, Options and Awards. The Executive shall be
entitled to receive such bonuses, stock option grants and other stock-based
awards as recommended by the Compensation Committee of the Board of Directors
and offered by the Board of Directors.
(c) Expenses. The Executive shall 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.
(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. In the event of the Executive's death during the
term of this Agreement, all obligations of the parties hereunder shall terminate
immediately, and the Company shall pay to the Executive's legal representatives
the Base Compensation (and any earned bonuses) due the Executive through the day
on which Executive's death shall have occurred.
(b) Disability. Subject to applicable state and federal law,
the Company shall at all times have the right, upon written notice to the
Executive, to terminate this Agreement based on the Executive's Disability (as
defined below). Upon any termination pursuant to this Section, the Company shall
pay to the Executive any unpaid Base Compensation through the effective date of
termination specified in such notice. The Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however, to the
provisions hereof). Termination by the Company of the Executive's employment
based on "Disability" shall mean termination because the Executive is unable to
perform the essential functions of Executive's position with or without
accommodation due to a disability (as such term is defined in the Americans with
Disabilities Act) for six (6) consecutive months. This definition shall be
interpreted and applied consistent with the Americans with Disabilities Act, the
Family and Medical Leave Act and other applicable law.
(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, (ii) continued failure by the Executive to perform his
duties as Chairman, (iii) conviction of a crime or alcohol or drug abuse, or
(iv) the Executive's breach of this Agreement. The termination shall be
evidenced by written notice thereof to the Executive. Upon termination by the
Company for Cause, the Company shall pay the Executive the pro rata portion of
the Base Compensation through the date of termination and any reimbursable
expenses owed to him.
(d) Without Cause. In addition to any other rights the Company
has to terminate the Executive's employment under this Agreement, the Company
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may, at any time, by a vote of not less than a majority of the directors then in
office (excluding the vote of the Executive if he is also a director), terminate
the Executive without cause upon thirty (30) days' 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.
(e) Payment Upon Termination Without Cause. If the Executive
is terminated "without cause" during the Term, he shall receive a severance
payment equal to the Base Compensation payable in bi-monthly installments. If
the Term is not extended after the Initial Term or any Extended Term as a result
of the Executive delivering written notice in accordance with Section 3 above,
and/or any reason other than termination by the Executive pursuant to Section 7
below, the Executive shall receive a severance payment equal to 50% of the Base
Compensation, payable in bi-monthly installments.
(7) Executive Termination. The Executive may terminate his employment
hereunder for any reason upon thirty (30) days prior written notice to the
Company. Upon termination by the Executive, the Company shall pay to the
Executive the pro rata portion of the Base Compensation through the date of
termination.
(8) Non-Competition and Confidentiality Covenant.
(a) During the term of this Agreement and for a period of one
(1) year 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 or indirect 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.
(b) The Executive acknowledges and agrees that: all mailing
lists; customer, member and prospect names; license or arrangement; front-end
and back-end marketing performance; financial statements; operating system,
database and other computer software, specific to the Company; and all
information which is known by the Executive to be subject to a confidentiality
agreement or obligation of confidentiality, even without a confidentiality
agreement between the Company and another person or party, shall be maintained
by the Executive in a confidential manner and the Executive agrees that the
Executive will not use such information to the detriment of the Company or
disclose such information to any third party, except as may be necessary in the
course of performing the Executive's job responsibilities. The Executive further
agrees that these obligations of confidentiality with respect to such
information shall continue after the Executive ceases to be employed by the
Company. Disclosure of the aforementioned information shall not be prohibited if
such disclosure is directly pursuant to a valid and existing order of a court or
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other governmental body or agency within the United States; provided, however,
that (i) the Executive shall first have given prompt notice to the Company of
any such possible or prospective order (or proceeding pursuant to which any such
order may result), (ii) the Company shall have been afforded a reasonable
opportunity to review such disclosure and to prevent or limit any such
disclosure, and (iii) the Executive shall, if requested by the Company and at
the Company's cost and expense, use his best efforts to prevent or limit any
such disclosure by means of a protective order or a request for confidential
treatment.
(c) During the Term and thereafter, the Executive shall not
directly or indirectly disparage the commercial, business or financial
representation of the Company or any of its officers, directors, employees or
affiliates.
(i) The parties hereto hereby acknowledge and agree that
(A) the Company would be irreparably injured in the event of a breach by the
Executive of any of his obligations under this Section 8, (B) monetary damages
would not be an adequate remedy for any such breach, and (C) the Company shall
be entitled to injunctive relief, in addition to any other remedy which it may
have, in the event of any such breach.
(ii) Each of the rights and remedies enumerated in Section
8 shall be independent of the other, and shall be severally enforceable, and all
of such rights and remedies shall be in addition to, and not in lieu of, any
other rights and remedies available to the Company under law or in equity.
(iii) If any provision contained in this Section 8 is found
to be unenforceable by reason of the extent, duration or scope thereof, or
otherwise, then the court making such determination shall have the right to
reduce such extent, duration, scope or other provision and in its reduced form
any such restriction shall thereafter be enforceable as contemplated hereby.
(iv) It is the intent of the parties hereto that the
covenants contained in this Section 8 shall be enforced to the fullest extent
permissible under the laws and public policies of each jurisdiction in which
enforcement is sought (the Executive hereby acknowledging that said restrictions
are reasonably necessary for the protection of the Company). Accordingly, it is
hereby agreed that if any of the provisions of this Section 8 shall be
adjudicated to be invalid or unenforceable for any reason whatsoever, said
provision shall be (only with respect to the operation thereof in the particular
jurisdiction in which such adjudication is made) construed by limiting and
reducing it so as to be enforceable to the extent permissible, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of said provision in any other jurisdiction.
(v) The Executive's obligations under this Section 8 shall
survive the termination of this Agreement for any reason whatsoever.
(9) Indemnification. The Company shall indemnify and hold harmless the
Executive to the fullest extent permitted by the Florida Business Corporation
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Act, the federal securities laws, the Xxxxxxxx-Xxxxx Act of 2002 and the
Company's Articles of Incorporation and By-laws, each as amended from time to
time, for all amounts (including without limitation, judgments, fines,
settlement payments, expenses and attorney's fees) incurred or paid by the
Executive in connection with any action, suit, investigation or proceeding
arising out of or relating to the performance by the Executive of services for,
or the acting by the Executive as a director, officer or employee of the
Company, or any other person or enterprise at the Company's request. If any
claim is asserted or other matter arises with respect to which the Executive
believes in good faith the Executive is entitled to indemnification as
contemplated hereby, the Company shall have the right to assume the defense or
investigation of such Claim or matter. The Executive shall reimburse the Company
for any amounts advanced to the Executive, plus simple interest thereon at the
then current Prime Rate as in effect from time to time, compounded annually, if
the Executive shall be found, as finally judicially determined by a court of
competent jurisdiction, not to have been entitled to indemnification hereunder.
To the fullest extent permitted by the Florida Business Corporation Act, the
federal securities laws, the Xxxxxxxx-Xxxxx Act of 2002 and the Company's
Articles of Incorporation and By-laws, each as amended from time to time, the
Company shall advance and pay the expenses (including attorneys' fees and
disbursements) incurred by the Executive in defending any proceeding in advance
of its final disposition. If a claim by the Executive for indemnification or
payment of expenses under this Section 9 is not paid in full after a written
claim therefor has been received by the Company, the Executive may file suit to
recover the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim, including
reasonable attorneys' fees; in any such action, the Company shall have the
burden of proving that the Executive is not entitled to the requested
indemnification or payment of expenses under applicable law. This Section 9
shall survive the termination of this Agreement.
(10) 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.
(11) 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: To the address at the head of this Agreement
If to the Company: MediaBay, Inc.
0 Xxxxxxxxx Xxxxxx - Xxxxx 000
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
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
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addresses of all members of the Board of Directors of the Company.
(12) 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.
(13) Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New Jersey (except that Section 9 shall be
governed by and construed in accordance with the Florida Corporation Business
Act) and any action brought by either party shall be commenced in the state or
federal courts of the State of New Jersey. The Executive and the Company hereby
irrevocably and unconditionally consent to submit to the exclusive jurisdiction
of the state or federal courts of the State of New Jersey 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.
(14) 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.
(15) 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. Facsimile signatures shall
be effective and binding as original signatures.
(16) Entire Agreement. This Agreement contains the entire understanding
of the Company and the Executive with respect to his employment by the Company.
This Agreement supersedes all prior agreements and understandings whether
written or oral between the Executive and the Company, including the employment
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agreement dated as of August 12, 2004 by and between the Company and the
Executive, other than any option agreements between the Company and the
Executive relating to the grant of stock options by the Company to the Executive
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: June 6, 2005 MEDIABAY, INC., a Florida corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
"EXECUTIVE"
Date Signed: June 6, 2005 /s/ Xxxxxx Xxxxxxx
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Xxxxxx X. Xxxxxxx
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