Exhibit 10.20
EXECUTION COPY
THIS EMPLOYMENT AGREEMENT is
entered into as of the [8] day of September 2008.
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BETWEEN:
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TOUCHTUNES
MUSIC CORPORATION, a
Delaware corporation, with an office at 740 Broadway, Suite 1102,
New York, New York;
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(hereinafter
referred to as the “ Corporation ”)
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AND:
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MR. ROBERT
WEINSCHENK, residing at
4316 Rio Robles Drive, Austin, TX 78746;
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(hereinafter
referred to as the “ Executive ”)
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IT IS AGREED AS
FOLLOWS:
WHEREAS the Corporation has entered into an Agreement
and Plan of Merger, dated as of August 26, 2008 (the “
Merger Agreement ”), by and between the Corporation,
National Broadcast Media Corp., d/b/a Barfly Interactive Networks
(“ Barfly ”), NMB Merger Sub, Inc., a
wholly-owned subsidiary of the Corporation, and James C. Weaver as
Shareholders’ Representative;
WHEREAS the Corporation wishes to employ Executive, and
Executive wishes to be employed by the Corporation.
WHEREAS separate and apart from the Corporation’s
employment of Executive, the Merger Agreement provides for the
exchange of Executive’s ownership interest in Barfly for an
ownership interest in the Corporation;
NOW THEREFORE
in consideration of the mutual
covenants and agreements here contained and for other good and
valuable consideration, the parties hereto agree as
follows:
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1.1
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The Corporation
hereby agrees to employ Executive, and Executive hereby accepts
employment with the Corporation, upon the terms set forth in this
Agreement, on an “at-will” basis. This Agreement shall
not be construed as an agreement, either expressed or implied, to
employ Executive for any stated term. The employment relationship
shall be freely terminable for any reason by either party at any
time, subject to Section 9. This Agreement shall become
effective on the date on which Executive’s employment with
the Corporation begins, which the parties agree shall be
[ ].
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2.1.
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The Corporation
hereby confirms having agreed to engage Executive as a Senior Vice
President of the Corporation for Barfly operations.
Executive’s duties, responsibilities and authority shall be
substantially similar to his duties, responsibilities and authority
for the operations of Barfly prior to the Merger (as such term is
defined in the Merger Agreement), recognizing that his position and
title, however, will be as a Senior Vice President of the
Corporation. In such capacity, Executive shall perform such duties
and exercise such powers pertaining to such role for the
Corporation and its affiliates as determined by the Board of
Directors of the Corporation after the Closing (as defined in the
Merger Agreement).
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2.2.
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By his
acceptance hereof, Executive agrees to devote substantially all of
his working time, attention and skill to the Corporation and to
make every reasonable effort necessary to promote the success of
the Corporation’s business and perform adequately the duties
that are assigned to him. Executive agrees to abide by the rules,
regulations, instructions, personnel practices and policies of the
Corporation and any changes therein which may be adopted from time
to time by the Corporation.
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3.1.
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Executive shall
report directly to the President and Chief Executive Officer of the
Corporation or such other person as designated by the Corporation
from time to time.
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4.1.
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The annual base
salary payable to Executive for his services hereunder shall be
U.S. $275,000 exclusive of bonuses, benefits and other
compensation. The Executive’s base salary will be payable in
periodic installments in accordance with the Corporation usual
practice for its executives pursuant to the provisions of this
Section 4, less any deductions or withholdings required by
law.
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The Corporation shall provide
Executive with employee benefits comparable to those provided by
the Corporation from time to time to other senior executives of the
Corporation.
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5.1.
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Executive shall be eligible to
earn an annual bonus, with the target bonus equal to 50% of his
base salary. Such bonus shall be prorated for 2008. Such bonus will
be based upon the achievement of performance objectives recommended
by the President and Chief Executive Officer of the Corporation and
approved by the compensation committee of the Corporation. Any such
bonus shall be payable within the guidelines set by the
compensation committee of the Corporation, and in no event later
than 2- 1 / 2 months after the year in which
the right to the bonus vests.
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6.1.
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Executive shall
be entitled to four (4) weeks of paid vacation per fiscal year
of the Corporation. Should Executive decide not to or be unable
because of his duties under this Agreement to take all the vacation
to which he is entitled in any fiscal year, Executive shall be
entitled to take up to one (1) week of such vacation in the
next following fiscal year.
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7.1.
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Executive shall
be reimbursed for all reasonable travel and other out-of-pocket
expenses incurred by Executive from time to time in connection with
carrying out his duties hereunder. For all such expenses, Executive
shall furnish to the Corporation supporting evidence for expenses
in respect of which Executive seeks reimbursement.
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7.2.
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The Corporation
shall also reimburse Executive for reasonable cost of training and
professional development.
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7.3.
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The Corporation
shall provide Executive with adequate support and equipment to
perform his duties.
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8.1.
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This Agreement
may be terminated, except for any continuing obligations hereunder
set forth in Section 8.2:
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a. At any time, for Cause, by
written notice from the Corporation to Executive. For purposes of
this Agreement, “ Cause ” means cause for
dismissal without either notice or payment in lieu of notice for
reasons of fraud, embezzlement, gross negligence, willful and
reckless disregard or gross dereliction of duty, incapacity or
refusal to perform employment functions due to drug use or alcohol
addiction, conviction of a felony, or serious breach of duty not
corrected within thirty (30) days of notice to that effect and
discriminatory employment practices governed by statute.
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b. At any time, for Good Reason, by
written notice from Executive to the Corporation. For purposes of
this Agreement, “Good Reason” means if: (i) the
Corporation fails to pay Executive any compensation or benefits due
under this Agreement and such failure is not be remedied within ten
(10) days after receipt of written notice from Executive
specifying such failure; (ii) the Corporation materially
breaches any other material provision of this Agreement and such
breach is not remedied within 30 days after receipt by the
Corporation of written notice from Executive specifying such
breach; (iii) the Corporation requires Executive to relocate
his principal place of employment to a location that is more than
25 miles from its current location; (iv) the Corporation
reduces Executive’s base salary or (v) there is any
diminution in Executive’s position, authority or
duties.
c. Upon thirty (30) days’
notice in writing from Executive to the Corporation, specifying his
intention to resign, in which event the Corporation shall only be
obliged to pay Executive his annual base salary hereunder for such
remaining part of the period specified in the notice from
Executive, other than accrued vacation and any other amounts or
benefits to which Executive was entitled as of and through the
termination date, and the Corporation shall have no further
obligations.
d. Immediately upon the death or
permanent disability of Executive. Executive shall be deemed to
have become permanently disabled in the event of any mental
incapacity or physical disability of such severity that Executive
shall have been unable to attend to any normal duties with the
Corporation for more than nine (9) consecutive months in any
year or for twelve (12) months out of any period of
twenty-four (24) consecutive months during the employment
period.
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8.2.
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In the event of
termination of Executive’s employment by the Corporation
without Cause or Executive’s termination for Good Reason, the
Corporation shall, subject to the Executive’s execution and
delivery to the Corporation of a release and covenant not to sue in
substantially the form attached hereto as Exhibit A, pay Executive,
for a period of six (6) months after the date of termination
of Executive’s employment, Executive’s base salary as
in effect on the date of termination, with such amount payable in
accordance with normal and then current payroll practices of the
Corporation. In the event of a termination of Executive’s
employment other than as set forth in the foregoing sentence,
Executive shall not be entitled to any payments following
termination, other than accrued salary, accrued vacation and any
other amounts or benefits to which Executive was entitled as of and
through the termination date.
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9.1.
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This Agreement
shall be interpreted to ensure that the payments made to Executive
are exempt from, or comply with, Section 409A of the Internal
Revenue Code, as amended (the “ Code ”). This
Agreement shall be deemed amended to the extent necessary to avoid
imposition of any additional tax or accelerated income recognition
prior to actual payment to or receipt by Executive of amounts or
benefits hereunder pursuant to Section 409A of the Code and
any temporary, proposed or final Treasury Regulations and guidance
promulgated thereunder, and the parties agree to cooperate with
each other and to take reasonably necessary steps in this regard;
provided however that no deemed amendment shall occur to the extent
it would effect a material decrease in the value of benefits
provided to Executive hereunder, in which case the parties shall
cooperate in good faith to reform this Agreement both to preserve
the value of the benefits intended to be provided to Executive
hereunder and to avoid imposition of any additional tax or
accelerated income recognition as a result of application of
Section 409A. However, nothing in this Agreement imposes on
the Corporation or any other entity or individual any tax liability
of Executive, including any tax or penalties due under
Section 409A of the Code. To the extent required by
Section 409A of the Code, the reimbursement described in
Section 8 will not be paid later than December 31 of the
second calendar year following the year in which Executive
terminates employment.
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9.2.
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The payments described in
Section 8.2 (payment in the event of termination of
Executive’s employment by the Corporation without Cause or
Executive’s termination for Good Reason) (“Severance
Payment”) shall be made only upon a separation from service,
within the meaning of Section 409A of the Code. Severance
Payments shall not be made unless Executive executes the release
and covenant not to sue described in Section 8.2, and such
release has become irrevocable, by the 60th day following
Executive’s
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separation from service.
Severance Payments otherwise due within the first 60 days following
separation from service shall, instead, be paid on the 60th day
following separation from service (or, if not a business day, on
the first business day thereafter), even if the release and
covenant not to sue becomes irrevocable before that date, except
that payment shall be made when the release and covenant not to sue
becomes irrevocable (or, if later, on the first business day on or
after the 30th day following separation from service) if such
earlier date falls within the same calendar year as the first
business day on or after the 60th day following separation form
service.
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10.1.
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Except to
perform his duties under the Agreement, Executive shall not,
directly or indirectly, without the specific prior written consent
of the Corporation, at any time after the date hereof, divulge to
any business, enterprise, person, firm, corporation, partnership,
association or other entity, or use for Executive’s own
benefit, (i) any confidential information concerning the
businesses, affairs, customers, suppliers or clients of the
Corporation Group, including, without limitation, any trade secret
(process, plan, form, marketing strategy, etc.), all computer
programs in any form (diskette, hard disk, tape, printed circuit,
etc.), all access codes to computer programs together with any
plan, sketch, diagram, card, contract, bid, price list and client
list relative to the Corporation Group’s business, or
(ii) any non-public data or statistical information of the
Corporation Group, whether created or developed by the Corporation
Group or on its behalf or with respect to which Executive may have
knowledge or access (including, without limitation, any of the
foregoing created or developed by Executive), it being the intent
of the Corporation Group and Executive to restrict Executive from
disseminating or using any data or information that is at the time
of such use or dissemination unpublished and not readily available
or generally known to persons involved or engaged in businesses of
the type engaged in from time to time by the Corporation Group (the
“ Confidential Information ”). For purposes of
this Employment Agreement, Confidential Information shall not be
deemed to include:
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a.
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Information
that, at the time of disclosure under this Employment Agreement or
during Executive’s employment, is in the public domain or
that, after disclosure under this Employment Agreement or in
connection with Executive’s employment, becomes part of the
public domain by publication or otherwise through no action or
fault of Executive or any other party subject to an obligation of
confidentiality;
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b.
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Information
that Executive discloses to his legal counsel, tax advisor, or
accountant (“Executive’s advisors”); provided
Executive’s advisors agree to comply with this
Section 10;
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c.
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Information
that the Corporation authorizes Executive to disclose in writing;
or
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d.
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Information
that Executive is required to disclose pursuant to a final court
order; provided, that Executive has used reasonable efforts to
advise the Corporation Group prior to the issuance of such court
order that Confidential Information has been requested to enable
the Corporation Group an opportunity to contest prior to any such
disclosure.
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For purposes of this Agreement,
“ Corporation Group ” means TouchTunes
Corporation and its subsidiaries and affiliates.
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10.2.
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This
undertaking to respect the confidentiality of the Confidential
Information and to not make use of or disclose or discuss it to or
with any person shall continue to have full effect notwithstanding
the termination of Executive’s employment with the
Corporation for a period of two (2) years following the date
of such termination.
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11.1.
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Executive
agrees that he shall not, during his employment and for a period of
twelve (12) months following the termination of his
employment, on his own behalf or on behalf of any person, whether
directly or indirectly, in any capacity whatsoever, alone, through
or in connection with any person, employ, offer employment to or
solicit the employment or the engagement of or otherwise entice
away from the employment of the Corporation Group, any individual
who is employed by the Corporation Group at the time of the
termination of Executive’s employment or who was employed by
the Corporation Group in the six (6) month period preceding
the termination of Executive’s employment.
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12.1.
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Executive agrees that during the
Employment Term and for a period of twelve (12) months after
Executive ceases to be employed by the Corporation, Executive shall
not, directly or indirectly, for Executive’s own account or
as an employee, officer, director, partner, joint venture,
shareholder, investor, consultant or otherwise (except as an
investor in a corporation whose stock is publicly traded and in
which Executive holds less than 5% of the outstanding shares)
engage in (i) (a) computer, video,
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personal digital assistant or
cell phone interactive applications, (b) short message
services (SMS) or point to point messaging services, or
(c) digital signage or advertising and promotion, in the case
of clause (a), (b) or (c), in (1) any restaurant or bar
establishment, or (2) any establishment within a specific
sub-sector of the retail or entertainment industries if the
Corporation Group installs one or more of its products in such
sub-sector (“Covered Establishments”), (ii) any
business that develops, manufactures, or sells digital jukeboxes
other than digital jukeboxes that utilize compact discs as the
music source, (iii) any business that develops, manufactures,
or sells to Covered Establishments interactive video multi-game
amusement-only entertainment devices (other than devices marketed
for personal use at home and in other non-public places) located on
countertops and operated with a touch screen that operate wired or
wirelessly, and directly or indirectly, accept payment via coins,
paper money tokens, credit cards or other payment systems and may
or may not be connected to a jukebox, or (iv) any other
business or enterprise worldwide that competes with the business of
the Corporation Group or that competes with any proposed business
of the Corporation Group for which the Corporation has developed
specific plans and is actively pursuing such plans during
Executive’s employment with Corporation.
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13.
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Intellectual
Property
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13.1.
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or the purposes
of this Agreement, the term “ Inventions ” means
ideas, designs, concepts, techniques, inventions and discoveries,
whether or not patentable or protectable by copyright and whether
or not reduced to practice, including but not limited to devices,
processes, drawings, works of authorship, computer programs,
methods and formulas together with any improvement thereon or
thereto, derivative works therefrom and know-how related thereto
made, developed or conceived by Executive while at the employment
of the Corporation during working hours using the
Corporation’s data or facilities and which relates to the
Corporation’s areas of business.
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13.2.
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Executive shall
assign and hereby does assign all Inventions to the Corporation.
Executive shall disclose all Inventions in writing to the
Corporation, shall assist the Corporation in preparing patent or
copyright applications for Inventions, and execute said
applications and all other documents required to obtain patents or
copyrights for those Inventions and/or to vest title thereto in the
Corporation, at the Corporation’s expense, but for no
additional consideration to Executive. In the event that the
Corporation requires assistance under this Section after
termination of employment, Executive shall provide such assistance
at the cost and expense of the Corporation.
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13.3.
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During the term
of this Agreement or after termination, on request of the
Corporation and at the cost and expense of the Corpora
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