EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE
EMPLOYMENT AGREEMENT
(this "Agreement") is made and
entered into
and is effective as of the 27th day of December, 2004 (the
"Effective Date"),
between Onstream Media Corporation, a Florida corporation,
whose principal
place of business is
1291 S.W. 29th
Avenue, Pompano Beach,
Florida 33069 (the
"Company")
and Clifford
Friedland,
an individual whose
address is 7500 Miami View Drive, North Bay Village, Miami, Florida 33141 (the
"Executive").
RECITALS
A. The Company is a Florida corporation and is principally
engaged in
the business of providing managed services including webcasting, digital asset
management,
collaboration and
video and audio transport, storage and encoding
(the "Business").
B. The Company
presently employs the Executive and desires to continue
to employ the Executive and the Executive desires to continue in the employ
of
the Company.
C. The Company has
established a valuable
reputation and
goodwill in
the Business.
D. The Executive,
by virtue of the
Executive's
employment
with the
Company has become familiar with and possessed with the manner,
methods, trade
secrets and other confidential information pertaining to the
Company's business,
including the Company's client base.
E. Any and all options
granted to Executive
preceding this
Agreement
shall continue
and not expire as a result of any
options issued under this
Agreement.
NOW, THEREFORE, in
consideration of the mutual agreements herein made,
the Company and the Executive do hereby agree as follows:
1. Recitals.
The above recitals are true, correct, and are herein
incorporated by reference.
2. Employment.
The Company hereby employs the Executive, and the
Executive hereby accepts employment, upon the terms and conditions
hereinafter
set forth.
3. Authority and Power During Employment Period.
a. Duties and Responsibilities. During the term of this
Agreement, the
Executive shall serve as a Senior Vice President, Business
Development, of the
Company. It is further the intention of the parties that at
all times during the
"Term," as hereinafter
defined, of the Agreement, the
Executive shall serve
as a member of the Board of Directors of the Company, in
accordance with the
Bylaws of the Company.
It is further the
intention of the
parties that at all
times during the
"Term," as hereinafter
defined, of the
Agreement, the
Executive shall serve as a member of the
Board of Directors of
the Company, in accordance with the Bylaws of the Company.
b. Time Devoted.
Throughout the term of
the Agreement,
the
Executive shall devote
substantially all of
the Executive's
business time and
attention to the
business and affairs of the Company consistent with the
Executive's senior
executive position
with the Company,
except for reasonable
vacations and except
for illness or
incapacity, but
nothing in the
Agreement
shall preclude the Executive from engaging in personal business including as a
member of the board of directors of related companies, charitable and community
affairs, provided
that such activities do not interfere with the regular
performance of the Executive's duties and responsibilities under
this Agreement.
In the event Executive
shall, at any time,
not be on the Board of Directors of
the Company and
serving as Chairman
of such Board,
it shall be presumed
(if
Executive so elects) that the Executive has been terminated other
than for cause
and Executive
shall have all of the
rights specified
in Section 6(h) of
this
Agreement just as if the Executive had been terminated "Without
Cause."
<PAGE>
4. Term. The Term of employment hereunder will commence on the
date as
set forth above and terminate four (4) years from the Effective
Date, and such
term shall
automatically
be extended for successive one (1) year terms
thereafter unless (a)
the parties mutually
agree in writing to
alter or amend
the terms of the Agreement; or (b) one or both of the parties
exercises their
right, pursuant to Section 6 herein, to terminate this employment
relationship.
For purposes of this Agreement, the Term (the "Term") shall
include the initial
term and all renewals thereof.
5. Compensation and Benefits.
a. Salary.
The Executive shall be paid a base salary (the
"Base Salary"), payable bi-weekly, at an annual rate of no less
than One Hundred
Sixty Three Thousand
Dollars ($163,000.00) for the first year, with annual
incremental increases of ten (10%) percent per year.
b. Performance Based
Bonus. As additional
compensation, the
Executive shall be
entitled to receive a bonus ("Bonus") for each fiscal year
during the Term of the Executive's employment by the Company in an
amount equal
to one percent (1%) of Earnings of the Company Before Income Tax, Depreciation
and Amortization
(EBITDA) in excess of the EBITDA for the previous fiscal year.
The base year for the Bonus shall commence fiscal 2003. The Bonus shall be
payable within thirty (30) days of the determination of the amount
of the Bonus;
provided that at the Executive's sole discretion, to elect to take his bonus in
cash or in restricted common stock of the Company, based upon an amount of such
restricted common
stock which shall be equal to Seventy-Five (75%) of the fair
market value of the
Company's common
stock, which fair market value shall
be
equal to the average of the closing price for the five (5) prior
trading days
immediately prior to the determination of such Bonus.
c. Executive
Benefits. The Executive shall be entitled to
participate in all
benefit programs of the Company currently existing or
hereafter made
available to executives and/or other salaried employees,
including, but not
limited to, pension and other retirement plans, group life
insurance,
hospitalization,
surgical and major medical coverage, sick leave,
disability and salary
continuation, vacation
and holidays, cellular
telephone
and all related costs
and expenses,
long-term disability, and other fringe
benefits. In addition the executive will be entitled to receive
$1500 monthly as
part of a deferred compensation plan for the executive's
retirement.
d. Vacation.
During each fiscal year of the Company, the
Executive shall be
entitled to reasonable
vacation time and to utilize such
vacation as the Executive shall determine; provided however, that the
Executive
shall evidence
reasonable
judgment
with regard to appropriate vacation
scheduling.
Notwithstanding the foregoing, Executive shall be entitled to
four
(4) weeks vacation per
year, with unused
vacation accruing to the following
year.
e. Business
Expense Reimbursement. During the Term of
employment, the
Executive shall be entitled to receive proper reimbursement for
all reasonable,
out-of-pocket expenses incurred by the Executive (in accordance
with the policies
and procedures established by the Company for its senior
executive officers) in
performing services
hereunder,
provided the
Executive
properly accounts therefor.
f. Automobile
Expenses.
The Company shall provide the
Executive with an
automobile
allowance not to exceed $1,000 per month. The
Company shall pay all insurance premiums and maintenance for the
automobile that
is the subject of the automobile allowance.
g. Memberships, Dues and Charitable Contributions. The Company
shall provide
to the Executive, in the Executive's sole discretion (i) a
membership in a social, charitable or religious organization or club, which
membership shall be
either in the name of the Executive or in the name of the
Company, as determined by the Executive; or (ii) an equivalent dollar
amount of
charitable donations
or contributions
shall be made,
which amounts and
which
charities shall be determined in the sole discretion of the
Executive;
provided
that such Membership,
Dues and Charitable
Contributions shall
not exceed Five
Thousand Dollars ($5,000) per year.
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<PAGE>
h. Place of Employment - Moving Allowance. This Agreement is
entered into on the basis that the principal place of business of the
Company,
and the location from which Executive is to be based for the
performance of his
services hereunder,
is Pompano Beach,
Florida. In the event that the Company
shall change the location of Company's principal office, or otherwise require
Executive to be based and/or to operate from another location which
is more than
fifty (50)
miles further from Executive's then-current residence to the
Company's current
headquarters office at 1291 S.W. 29th Avenue, Pompano Beach,
Florida 33069, Company
shall reimburse
Executive for all moving and relocation
expenses paid or incurred in connection with Executive's relocation to a new
residence closer to Company's new principal office.
6. Consequences of Termination of Employment.
a. Death. In the event
of the death of the
Executive during
the Term, salary shall be paid to the Executive's designated
beneficiary, or, in
the absence of such designation, to the estate or other legal
representative of
the Executive for a period of one (1) year from and after the date
of death. The
Company shall also be obligated to pay to the Executive's estate or heirs, as
the case may be, such
amount of Bonus
based upon (i) the
formula set forth in
Section 5(b) of this Agreement, and (ii) the greater of (a) the
Bonus earned or
accrued for such fiscal year annualized for a 12-month period,
or (b) the Bonus
for the prior year multiplied times two. Other death benefits will
be determined
in accordance with the terms of the Company's benefit programs and
plans.
b. Disability.
(1) In the event of the Executive's disability, as
hereinafter defined, the Executive shall be entitled to
compensation in
accordance with the
Company's disability compensation practice for
senior executives,
including
any separate arrangement or policy
covering the Executive, but in all events the Executive
shall continue
to receive the Executive's salary for a period, at the annual rate in
effect immediately prior to the commencement of disability, of not
less
than 180 days from the date on which the disability has been deemed to
occur as hereinafter
provided below. Any
amounts provided for in this
Section 6(b) shall not be offset by other long-term disability
benefits
provided to the Executive by the Company.
(2) "Disability," for the purposes of this Agreement,
shall be deemed to have occurred in the event (A) the Executive is
unable by reason of sickness or accident to perform the Executive's
duties under
this Agreement for an aggregate of 180 days in any
twelve-month period or
(B) the Executive has
a guardian of the person
or estate appointed by a court of competent jurisdiction. Termination
due to disability
shall be deemed to
have occurred upon the first day
of the month following
the determination
of disability as
defined in
the preceding sentence.
Anything herein to the contrary notwithstanding, if,
following a termination of employment hereunder due to disability as
provided in the preceding paragraph, the Executive becomes
reemployed,
whether as an
Executive or a
consultant to the
Company, any
salary,
annual incentive
payments or other
benefits earned by the Executive
from such reemployment shall offset any salary continuation due to the
Executive hereunder commencing with the date of re-employment.
c. Termination by the Company for Cause.
(1) Nothing herein
shall prevent the Company from
terminating
Employment for
"Cause," as hereinafter defined. The
Executive shall
continue to receive
salary only for the period ending
twenty (20) days after
the date of such
termination plus any
accrued
Bonus
through such date of termination. Any rights and benefits the
Executive may
have in respect of any other compensation shall be
determined in
accordance
with the terms of such
other compensation
arrangements or such plans or programs.
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<PAGE>
(2) "Cause" shall mean
and include those
actions or
events specified below in subsections (A) through (E) to the extent
the
same occur, or the events constituting the same take place,
subsequent
to the date of execution of this Agreement: (A) Committing or
participating in
an injurious act of fraud, gross neglect or
embezzlement against
the Company; (B)
committing or
participating in
any other injurious act or omission wantonly, willfully,
recklessly or
in a manner which was grossly negligent against the Company,
monetarily
or otherwise; (C)
engaging in a criminal
enterprise involving
moral
turpitude; (D) conviction of an act or acts constituting a felony
under
the laws of the United States or any state thereof; or (E) any
assignment of this
Agreement by the
Executive in violation of Section
14 of this Agreement.
No actions, events or circumstances occurring or
taking place at any time prior to the date of this Agreement shall in
any event constitute
or provide any basis for any termination of this
Agreement for Cause;
(3) Notwithstanding
anything else
contained in this
Agreement, this
Agreement will not be
deemed to have been
terminated
for Cause unless
and until there shall have been delivered to the
Executive a notice of termination stating that the Executive
committed
one of the types of conduct set forth in this Section 6(c)
contained in
this Agreement and specifying the particulars thereof and the
Executive
shall be given a
thirty (30) day
period to cure such conduct, if
possible.
d. Termination
by the Company Other than for Cause. The
foregoing notwithstanding, the Company may terminate the
Executive's employment
for whatever reason it deems appropriate; provided, however, that in the event
such termination is
not based on Cause, as provided in Section 6(c) above, the
Company may terminate this Agreement upon giving three (3) months'
prior written
notice. During such
three (3) month
period, the Executive
shall continue to
perform the Executive's duties pursuant to this Agreement, and the
Company shall
continue to
compensate
the Executive in accordance with this Agreement.
Subsequent to such 3
month period,
the Executive shall be entitled to all
Compensation and Benefits as set forth in Subsection 6(h) of this
Agreement.
e. Voluntary
Termination.
In the event the Executive
terminates the Executive's employment on the Executive's own
volition (except as
provided in Section 6(f) and/or Section 6(g)) prior to the expiration of the
Term of this Agreement, including any renewals thereof,
such termination
shall
constitute a voluntary
termination
and in such event the
Executive shall be
limited to the same
rights and
benefits as provided in connection with a
termination for Cause as provided in Section 6(c).
f. Constructive Termination of Employment. If the Executive so
elects, a termination by the Company other than for Cause shall be
deemed to
have occurred upon the occurrence of one or more of the following
events without
the express written consent of the Executive. In such event, the
Executive shall
be entitled to all
Compensation and Benefits as set forth in Subsection 6(h) of
this Agreement:
(1) a significant
change in the
nature or scope of
the authorities, powers, functions, duties or responsibilities
attached
to Executive's position as described in Section 3; or
(2) Change in the Executive's principal office to a
location outside of Broward County or Palm Beach County; or
(3) any reduction in
the Executive's
salary or any
change in the method
of calculating
Executive's
Bonus Compensation
hereunder; or
(4) a material breach of the Agreement by the
Company; or
(5) a material reduction of the Executive's benefits
under any employee benefit plan, program or arrangement (for
Executive
individually or as part of a group) of the Company as then in
effect or
as in effect on the effective date of the Agreement,
which reduction
shall not be
effectuated
for similarly situated employees of the
Company; or
4
<PAGE>
(6) failure
by a successor company to assume the
obligations under the Agreement.
Anything herein to the
contrary notwithstanding, the Executive shall give
written notice to the
Board of Directors
of the Company that the Executive
believes an e
