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THIS
EMPLOYMENT AGREEMENT is made and entered into as of this 23rd
day of June, 2008, by and between OPTIONS MEDIA GROUP
HOLDINGS, INC., a Nevada corporation with offices at 240 Old
Federal Highway, Suite 100 Hallandale, Florida 33009 (the
“ Corporation
”), and Scott Frohman, an individual residing at 347 N.
New River Drive East, Apt. 3001, Fort Lauderdale,
FL 33301 (the “ Executive
”), under the following circumstances:
A. The
Corporation desires to secure the services of the Executive
upon the terms and conditions hereinafter set forth;
and
B. The
Executive desires to render services to the Corporation upon
the terms and conditions hereinafter set forth.
NOW,
THEREFORE, the parties mutually agree as follows:
1.
Employment. The Corporation hereby employs the Executive and
the Executive hereby accepts employment as an executive of the
Corporation, subject to the terms and conditions set forth in this
Agreement.
2.
Duties. The Executive shall serve as the Chief Executive
Officer of the Corporation with such duties, responsibilities and
authority as are commensurate and consistent with his position, as
may be, from time to time, assigned to him by the Board of
Directors of the Corporation. The Executive shall report directly
to the Board of Directors of the Corporation. During the term of
this Agreement, the Executive shall devote his full business time
and efforts to the performance of his duties hereunder unless
otherwise authorized by the Board of Directors. Notwithstanding the
foregoing, the expenditure of reasonable amounts of time by the
Executive for the making of passive personal investments, the
conduct of private business affairs and charitable and professional
activities shall be allowed, provided such activities do not
materially interfere with the services required to be rendered to
the Corporation hereunder and do not violate the restrictive
covenants set forth in Section 9
below.
3.
Term of Employment. The term of the Executive’s
employment hereunder, unless sooner terminated as provided herein
(the “ Initial Term
”), shall be for a period of two (2) years commencing on the
date hereof (the “ Commencement
Date ”). The term of this Agreement shall
automatically be extended for additional terms of one year each
(each a “ Renewal Term
”) unless either party gives prior written notice of
non-renewal to the other party no later than sixty (60) days prior
to the expiration of the Initial Term (“ Non-Renewal
Notice ”), or the then current Renewal Term, as the
case may be. For purposes of this Agreement, the Initial Term and
any Renewal Term are hereinafter collectively referred to as the
“ Term
.”
4.
Compensation of Executive .
(a)
The
Corporation shall pay the Executive as compensation for his
services hereunder, in equal semi-monthly or bi-weekly installments
during the Term, the sum of (i) Fifteen Thousand Dollars ($15,000)
per month for each of the first six months of the Term, (ii) Twenty
Thousand Dollars ($20,000) per month for each of the second six
months of the Term, and (iii) Twenty Five Thousand Dollars
($25,000) per month for each month of the Term thereafter (the
“ Base Salary
”), less such deductions as shall be required to be withheld
by applicable law and regulations. The Corporation shall review the
Base Salary on an annual basis and has the right but not the
obligation to increase it, but has no right to decrease the Base
Salary.
(b)
In
addition to the Base Salary set forth in Section 4(a) above, the
Executive shall be entitled to such bonus compensation (in cash,
capital stock or other property) as a majority of the members of
the Board of Directors of the Corporation may determine from time
to time in their sole discretion.
(c)
The
Corporation shall pay or reimburse the Executive for all reasonable
out-of-pocket expenses actually incurred or paid by the Executive
in the course of his employment, consistent with the
Corporation’s policy for reimbursement of expenses from time
to time.
(d)
The
Executive shall be entitled to participate in such pension, profit
sharing, group insurance, hospitalization, and group health and
benefit plans and all other benefits and plans as the Corporation
provides to its senior executives (the “ Benefit Plans
”).
(e)
Upon
the execution hereof, the Corporation shall grant the Executive (i)
2,500,000 shares of restricted stock under the Corporation’s
2008 Stock Incentive Plan (the “ 2008 Plan
”) that shall not be subject to any vesting period and (ii)
options to purchase an aggregate of 2,250,000 shares of the
Corporation’s common stock (“ Options
”) under the Plan. The per share exercise price of
the Options shall be $0.30, which represents the fair market value
per share of the Corporation’s common stock on the date of
grant. The term of the Option shall be ten years from the date of
grant. One twenty-fourth (4.167%) of the Options shall become
exercisable on each monthly anniversary of the date of
grant.
5.
Termination.
(a)
This
Agreement and the Executive’s employment hereunder shall
terminate upon the happening of any of the following
events:
(i)
upon
the Executive’s death;
(ii)
upon
the Executive’s “Total Disability” (as herein
defined);
(iii)
upon
the expiration of the Initial Term of this Agreement or any Renewal
Term thereof, if either party has provided a timely notice of
non-renewal in accordance with Section 3, above;
(iv)
at
the Corporation’s option, upon sixty (60) days prior written
notice to the Executive if without cause;
(v)
at
the Executive’s option, upon thirty (30) days prior written
notice to the Corporation;
(vi)
at
the Executive’s option, in the event of an act by the
Corporation, defined in Section 5(c), below, as constituting
“Good Reason” for termination by the Executive;
and
(vii)
at
the Corporation’s option, in the event of an act by the
Executive, defined in Section 5(d), below, as constituting
“Cause” for termination by the
Corporation.
(b)
For
purposes of this Agreement, the Executive shall be deemed to be
suffering from a “ Total
Disability ” if the Executive has failed to perform
his regular and customary duties to the Corporation for a period of
180 days out of any 360-day period and if before the Executive has
become “Rehabilitated” (as herein defined) a majority
of the members of the Board of Directors of the Corporation,
exclusive of the Executive, vote to determine that the Executive is
mentally or physically incapable or unable to continue to perform
such regular and customary duties of employment. As used herein,
the term “ Rehabilitated
” shall mean such time as the Executive is willing, able and
commences to devote his time and energies to the affairs of the
Corporation to the extent and in the manner that he did so prior to
his Disability.
(c)
For
purposes of this Agreement, the term “ Good Reason
” shall mean that the Executive has resigned due to the
failure of the Corporation to meet any of its obligations to the
Executive under this or any other agreement between the Corporation
and the Executive, and failure to cure the same within thirty (30)
days following Executive’s delivery of notice specifying the
breach(es) by the Corporation.
(d)
For
purposes of this Agreement, the term “ Cause ”
shall mean material, gross and willful misconduct on the part of
the Executive in connection with his employment duties hereunder or
commission of a felony or act of dishonesty resulting in material
harm to the Corporation by the Executive.
6.
Effects of Termination .
(a)
Upon
termination of the Executive’s employment pursuant to Section
5(a)(i), the Executive’s estate or beneficiaries shall be
entitled to the following severance benefits: (i) three (3)
months’ Base Salary at the then current rate, payable in a
lump sum, less withholding of applicable taxes; and (ii) continued
provision for a period of one (1) year following the
Executive’s death of benefits under Benefit Plans extended
from time to time by the Corporation to its senior
executives.
(b)
Upon
termination of the Executive’s employment pursuant to Section
5(a)(ii), the Executive shall be entitled to the following
severance benefits: (i) eighteen (18) months’ Base Salary at
the then current rate, to be paid from the dat
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