Exhibit 10.1
EMPLOYMENT
AGREEMENT
This Employment Agreement (this
“ Agreement ”) is made and entered into
as of September 17, 2009, by and between MDI, Inc., a
Delaware corporation (the “ Company ”),
and Rod Wallace, an individual (the “ Executive
”).
RECITALS
WHEREAS, the Company desires to hire Executive and
Executive desires to become employed by the Company through a
Canadian subsidiary to be formed or another Canadian entity
outsourced by the Company for such purpose. For purposes hereof,
the Company shall refer to the Company and its Canadian subsidiary
or other Canadian entity used for such purpose; and
WHEREAS, the Company and Executive have determined that
it is in their respective best interests to enter into this
Agreement on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE,
in consideration of the premises and
the mutual covenants and promises contained herein, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as
follows:
1.
EMPLOYMENT TERMS AND
DUTIES
1.1
Employment
. The Company hereby
employs Executive, and Executive hereby accepts employment by the
Company, upon the terms and conditions set forth in this
Agreement.
1.2
Duties . Executive shall serve
as Chief Technology Officer from his home office in Ontario, Canada
and shall report directly to the Chief Executive officer (the
“ CEO
”).
Executive shall have the authority, and perform the duties
customarily associated with his title and office together with such
additional duties of a senior executive nature and commensurate
with his title as may from time to time be assigned by the Chief
Executive Officer. Executive shall devote his full working
time and efforts to the performance of his duties and the
furtherance of the interests of the Company and shall not be
otherwise employed. Notwithstanding the above, Executive may
serve as a director or trustee of other organizations, or engage in
charitable, civic, and/or governmental activities provided that
such service and activities do not prevent Executive from
performing the duties required of Executive under this Agreement
and further provided that Executive obtains written consent for all
such activities from the Company, which consent will not be
unreasonably withheld. Executive may engage in personal
activities, including, without limitation, personal investments,
provided that such activities do not interfere with
Executive’s performance of duties hereunder and/or the
provisions of Executive’s written agreements with the
Company.
1.3
Term . The Term shall
commence on October 1, 2009 (the “
Start Date
”) and,
unless earlier terminated pursuant to the Agreement, shall continue
until the date that is one (1) year following the Start Date
(the “ Initial
Term ”).
The Term shall be
automatically extended at the end of the Initial Term or any
Renewal Term (as defined below) for an additional term of one
(1) year (a “ Renewal Term ”), unless either the
Company or Executive provides notice to the other party at least
thirty (30) days prior to the termination date of the Initial Term
or the applicable Renewal Term of such party’s desire not to
extend the Term. In such event of non renewal by the Company
(“ Termination for
Non-Renewal ”), the termination
payment provisions under section 1.4.6 hereof shall apply in the
same manner as a termination without Cause or for Good
Reason.
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1.4
Termination
1.4.1
Termination Due to
Death . Executive’s
employment hereunder shall terminate immediately upon the death of
Executive.
1.4.2
Termination Due to
Disability . Executive’s
employment shall be terminable by the Company or Executive by not
less than thirty (30) days’ written notice in the event of
Executive’s Disability. The term “
Disability
” shall
mean any illness, disability or incapacity of Executive that
prevents him from substantially performing his regular duties for
the Company for a period of three (3) consecutive months or
four (4) months, even though not consecutive, in any twelve
(12) month period. The determination of the existence of a
Disability shall be made by a physician selected by the Company and
Executive; provided that if Executive disagrees with the
determination made by such physician he may, within 15 days after
such determination, appoint a physician for such purpose, and such
physician and a physician appointed by the Company shall jointly
select a third physician (who has no prior knowledge of Executive)
to make such determination. Executive hereby agrees to
cooperate with any physical examinations reasonably required by
such physician(s) for the purpose of such
determination.
1.4.3
Termination by the
Company . The Company may
terminate the employment of Executive without Cause in accordance
with Section 1.3. The Company may terminate the
employment of the Executive for Cause, provided that the Company,
as applicable, shall notify Executive in writing setting forth in
reasonable detail the basis for the proposed termination and
Executive shall have the opportunity to be heard by the Board of
Directors (represented by counsel at Executive’s own
expenese) prior to his employment termination date as set forth in
the Notice of Termination. The term “
Cause ” shall mean
(i) a breach by Executive of any of the material terms of this
Agreement in each case which breach, if subject to cure, is not
cured within 15 days following notice from the Company thereof,
(ii) the commission of any act of fraud, embezzlement or
dishonesty by the Executive which was intended to result in
substantial gain or personal enrichment of the Executive at the
expense of the Company, (iii) any unauthorized use or
disclosure by the Executive of confidential information or trade
secrets of the Company (or any parent or subsidiary) or any breach
of the Executive’s proprietary information agreement with the
Company (or any parent or subsidiary), (iv) the
Executive’s violation of a federal or state law or regulation
applicable to the Company’s business which violation was or
is reasonably likely to be injurious to the Company, (v) any
material dereliction of the Executive’s duties continuing for
15 days after notice thereof from the Company, or (vi) any
other intentional misconduct by such person adversely affecting the
business or affairs of the Company (or any parent or subsidiary) in
a material manner. The foregoing definition shall not in any
way preclude or restrict the right of the Company (or any parent or
subsidiary) to discharge or dismiss the Executive in the service of
the Company (or any parent or subsidiary) for any other acts or
omissions in accordance with the terms hereof, but such other acts
or omissions shall not be deemed, for purposes of this Agreement,
to constitute grounds for termination for Cause.
1.4.4
Termination by the
Executive . Executive may
terminate his employment at any time, for Good Reason or without
Good Reason, upon a Notice of Termination. Executive may
terminate Executive’s employment for Good Reason; provided,
however, that such a termination will not constitute a termination
for Good Reason if the Company remedies the circumstances
underlying the Good Reason determination within fifteen (15)
business days following receipt of notice from Executive. A
termination for “ Good
Reason ” shall mean
(i) Executive’s voluntary resignation following
(A) a change in his position with the Company which materially
reduces his duties and responsibilities or the level of management
to which he reports, other than changes in responsibilities
resulting from the Executive’s misconduct which shall not
constitute Good Reason, (B) a reduction in his level of
compensation (including Base Salary, fringe benefits and Yearly
Bonus under any corporate-performance based bonus or incentive
programs) by more than ten percent (10%), other than a reduction
which, by resolution of the Board of Directors of the Company, is
applicable to all executive officers of the Company generally for a
period of
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no more than three
(3) months, (C) a relocation of such individual’s
place of employment from his home office in Ontario, provided and
only if such change, reduction or relocation is effected by the
Company without the Executive’s written consent, (D) the
Company requires that the Executive work for greater than 182 days
per calendar year outside Canada, without providing sufficient
gross-up of compensation to account for triggered excessive tax
liabilities incurred by the Executive or if such work creates other
adverse consequences to the Executive under government regulation
in Ontario and Canada where same can not be satisfied by
alternative compensation, or (E) a breach by the Company of
any of the material terms of this Agreement including non-renewal
hereof, in each case which breach is subject to cure, is not cured
within fifteen (15) days following notification from the
Executive.
1.4.5
Notice . The term
“ Notice of
Termination ” shall mean at least
30 days’ written notice of termination of Executive’s
employment hereunder, during which period Executive’s
employment and performance of services will continue; provided,
however, that the Company may, upon notice to Executive and without
reducing Executive’s compensation during such period
(including the vesting of any equity), excuse Executive from any or
all of his duties during such period. The effective date of
the termination of Executive’s employment hereunder shall be
the date on which such 30-day period expires.
1.4.6
Termination Payments
. In the
event of termination of the employment of Executive, all
compensation and benefits set forth in Section 1.5 of this
Agreement shall terminate except as specifically provided in this
Section 1.4.
(i)
Termination
for Cause . If the Board
terminates Executive’s employment for Cause, the Company
shall pay or provide to Executive all accrued but unpaid Base
Salary and Prior Bonus earned or accrued through the date of
termination and any benefits referred to in Section 1.5 below,
including accrued but unused vacation (collectively, the
“ Accrued
Obligations ”).
(ii)
Effect of
Termination Without Cause or for Good Reason
. In the
event that Executive’s employment is terminated by the
Company without Cause, or Executive resigns his employment for Good
Reason, then, subject to Executive’s execution and
non-revocation of a release of all claims mutually acceptable to
Executive and Company in a form prepared by the Company and
reasonably acceptable to Executive within ten (10) days of the
termination of his employment (the “ Release ”), Executive shall be
entitled to the following lump sum payments and employee benefits
(but no others) within ten (10) days of termination:
(A) Executive’s Base Salary for nine (9) months
following the date of termination (or, if applicable, the date the
Agreement expires without renewal for a Renewal Term); (B) a
Yearly Bonus, prorated based on the number of days of
Executive’s service during such fiscal year to the extent the
goals establ
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