Exhibit 10.3
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT, dated as of
October 1, 2009 (the “ Agreement ”), by
DubLi Group, a group of consolidated companies including CG
Holdings Limited, a Cyprus corporation, DUBLICOM Limited, a Cyprus
Corporation, DUBLI NETWORK Limited, a BVI Corporation, Lenox
Resources LLC, a Delaware company, Lenox Logistik und Service GmbH
a German Limited corporation, DubLi Properties LLC, a Delaware
company and DubLi.com LLC, a Delaware company (the “
Company ”), and Andreas Kusche (the “
Executive ”).
WHEREAS, the Company desires to
employ the Executive as its Head of Legal Affairs (Head of Legal
Department) and to utilize his management services as indicated
herein, and the Executive has agreed to provide such management
services to the Company; and
WHEREAS, the Executive desires to
accept the Company’s offer of employment.
NOW, THEREFORE, in consideration of
the mutual covenants contained herein and other valid
consideration, the sufficiency of which is acknowledged, the
parties hereto agree as follows:
1.1
Term . The Company agrees to employ the Executive, and the
Executive agrees to be employed by the Company pursuant to this
Agreement, for a period commencing on October 1, 2009 (such date,
the “ Effective Date ”), and ending not earlier
than the third (3rd) anniversary of the Effective Date (the “
Term ”); provided, however, that on the third (3rd)
anniversary of the Effective Date, the Term shall automatically be
extended for one (1) year unless ninety (90) days’
written notice of non-renewal is given by the Executive or the
Company to the other party.
1.2
Duties . During the Term, the Executive shall serve as Head
of Legal Department of the Company and in such other positions as
an officer or director of the Company or its affiliates as the
Executive and the Board of Directors of the Company (the “
Board ”) shall mutually agree from time to time. In
addition, the Executive shall serve as a member of the Board during
the Term. The Executive shall perform such duties, functions and
responsibilities commensurate with the Executive’s positions
as reasonably directed by the Board.
1.3
Exclusivity . During the Term, the Executive shall devote
his full time and attention to the business and affairs of the
Company, shall faithfully serve the Company, and shall in all
material respects conform to and comply with the lawful and
reasonable directions and instructions given to him by the Board,
consistent with Section 1.2 hereof. During the Term, the
Executive shall use his best efforts to promote and serve the
interests of the Company and shall not engage in any other business
activity, whether or not such activity shall be engaged in for
pecuniary profit, except that the Executive may sit on the boards
of other companies with the consent of the Board, which shall not
be unreasonably withheld.
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2.1
Salary . As compensation for the performance of the
Executive’s services hereunder, during the Term, the Company
shall pay to the Executive a salary at a monthly rate of Seven
Thousand Five Hundred Euros (EUR 7,500) payable monthly in advance.
The Base Salary shall be reviewed annually and may be adjusted
upward by the Board (or a committee thereof) at its discretion,
based on competitive data and the Executive’s performance. No
increase in Base Salary shall limit or reduce any other right or
obligation to the Executive under this Agreement and the Base
Salary shall not be reduced at any time (including after any such
increase).
2.2
Annual Bonus . Beginning with the fiscal year that
commenced on October 1, 2009, for each completed fiscal year during
the Term the Executive shall be eligible to receive additional cash
incentive compensation pursuant to the annual bonus plan of the
Company in effect at such time (the “ Annual Bonus
”). The minimum Annual Bonus shall be 15% of the
Executive’s Base Salary as in effect at the beginning of such
fiscal year with the actual Annual Bonus to be based upon such
individual and/or Company performance criteria established for each
such fiscal year by the Board in consultation with the Executive.
In addition, the Executive shall be eligible to participate in
distributions from the quarterly Executive Bonus plan as determined
from time to time by its Board of Directors.
2.3
Equity; Stock Purchase . The Executive shall be eligible to
participate in any Company stock purchase plan and to be considered
by the Board (or, if there is one, the Compensation Committee of
the Board) for grants or awards of stock, stock options or warrants
under any Company stock incentive or similar plan from time-to-time
in effect. The Executive shall receive a minimum of 200,000
membership interests in DubLi.com LLC on October 1, 2009 and one
hundred thousand (150,000) shares of MediaNet Group after the
Merger (see Section 9.4) on October 1, 2010 and one hundred
thousand (150,000) shares of MediaNet Group on October 1,
2011.
2.4
Employee Benefits . During the Term, the Executive shall be
eligible to participate in such health and other group insurance
and other employee benefit plans and programs of the Company and
its affiliates as in effect from time to time on the same basis as
other senior executives of the Company and/or, from time to time,
as determined by the Board of Directors. The company will at least
procure medical insurance for the Executive, his marriage partner
and his children.
2.5
Vacation . During the Term, the Executive shall be entitled
to paid vacation in accordance with the Company’s vacation
policy as in effect from time to time, commencing with six weeks
per year, which may not be accumulated if not used.
2.6
Business Expenses . The Company shall pay or reimburse the
Executive for all commercially reasonable business out-of-pocket
expenses that the Executive incurs during the Term in performing
his duties under this Agreement upon presentation of documentation
and in accordance with the expense reimbursement policy of the
Company as approved by the Board (or a committee thereof) and in
effect from time to time.
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2.7
Automotive Allowance . During the Term, the Executive shall
be provided with a minimum automobile allowance of Eight Hundred
Euros (EUR 800). In addition the Company shall maintain insurance
(or reimburse the Executive) on any vehicle provided.
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3.
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Termination of
Employment .
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3.1
Generally . The agreement is not terminable during the term
of three years after the effective date. The Company may terminate
the agreement only for Cause. The Executive may terminate the
Executive’s employment for any reason during the extension
Term after three years from the effective date, for any reason in
each case at any time upon not less than one hundred twenty
(120) days’ notice to the Company. Upon the termination
of the Executive’s employment with the Company for any
reason, the Executive shall be entitled to any Base Salary earned
but unpaid through the date of termination, any earned but unpaid
Annual Bonus for completed fiscal years, any unreimbursed expenses
in accordance with Section 2.6 hereof and, to the extent not
theretofore paid or provided, any other amounts or benefits
required to be paid or provided under any plan, program, policy or
practice or other contract or agreement of the Company and its
affiliates through the date of termination of employment
(collectively, the “ Accrued Amounts
”).
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3.2
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Certain Terminations .
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a.
Termination by the Company other than for Cause or Disability;
Termination by the Executive for Good Reason . If the
Executive’s employment is terminated according to Section 3.1
hereof by the Executive for Good Reason (as defined herein), the
Executive shall be entitled to: (i) the Accrued Amounts,
(ii) a pro-rata bonus for the fiscal year of termination,
based on actual performance through the end of the applicable
fiscal year and the number of days that have elapsed in the fiscal
year through the date of termination (a “ Pro-Rata
Bonus ”), (iii) payment of an amount equal to the
sum of 1/12 of Base Salary and 1/12 of the target Annual Bonus each
month for eighteen (18) months following termination (the
“ Severance Payments ”) and
(iv) continuation of medical benefits on the same terms as
active senior executives for eighteen (18) months following
termination (“ Medical Continuation ”). In
addition, all of the Options granted pursuant to Section 2.3
that are unvested at the time of such termination will become fully
vested at termination under this Section 3.2.a (“ Option
Vesting ”). Receipt of the Severance Payments, Medical
Continuation and Option Vesting shall be conditioned on the
Executive’s continued compliance with his obligations under
Section 4 of this Agreement. In the event that the Executive
breaches any of the material covenants set forth in Section 4
of this Agreement, the Executive shall immediately return to the
Company any portion of the Severance Payments that have been paid
to the Executive pursuant to this Section 3.2(a) and any
shares or other amounts received in respect of the Options that
became vested pursuant to this Section 3.2(a), and the Medical
Continuation shall immediately terminate. Subject to
Section 3.2(c), the Company will commence payment of the
Severance Payments as soon as practicable following the
effectiveness of the Release. The Pro-Rata Bonus will be paid at
the time the Company ordinarily pays incentive bonuses to its
executives with respect to the fiscal year in which the termination
occurs.
b.
Termination upon Death or Disability . If the
Executive’s employment is terminated due to the
Executive’s death or Disability, the Executive (or the
Executive’s estate, if applicable) will receive (i) the
Accrued Amounts, (ii) a Pro-Rata Bonus and (iii) Option
Vesting.
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c.
Section 409A Specified Employee . Notwithstanding anything
to the contrary contained herein, if the Executive is a
“specified employee” for purposes of Section 409A
of the Internal Revenue Code (the “ Code ”) and
regulations and other interpretive guidance issued thereunder
(“ Section 409A ”), the Company shall not
commence payment of the Severance Payments to the Executive until
one (1) day after the day which is six (6) months after
the Executive’s termination date (the “ Delay
Period ”), with the first (1st) payment equaling the
total of all payment that would have been paid during the Delay
Period but for the application of Section 409A to such
payments. For purposes of this Agreement, the Executive’s
employment with the Company shall be considered to have terminated
when the Executive incurs a “separation from service”
with the Company within the meaning of Section 409A(a)(2)(A)(i) of
the Code, and applicable administrative guidance issued
thereunder.
d.
Exclusive Remedy . The foregoing payments upon termination
of the Executive’s employment shall constitute the exclusive
severance payments due the Executive upon a termination of his
employment under this Agreement. The Executive acknowledges that
the Medical Continuation is in full satisfaction of the
Company’s obligation under COBRA.
3.3
Resignation from All Positions . Upon the termination of the
Executive’s employment with the Company for any reason, the
Executive shall be deemed to have resigned, as of the date of such
termination, from all positions he then holds as an officer,
director, employee and member of the Board (and any committee
thereof) and the board of directors (and any committee thereof) of
any of the Company’s affiliates and, if requested by the
Company or its successors, shall deliver a written notice or
notices of such resignations.
3.4
Cooperation . Following the termination of the
Executive’s employment with the Company for any reason, the
Executive agrees to cooperate with the Company upon reasonable
request of the Board and to be reasonably available to the Company
with respect to matters arising out of the Executive’s
services to the Company and its subsidiaries and affiliates. The
Company shall pay the Executive a reasonable fee for any such
services and promptly reimburse the Executive for expenses
reasonably incurred in connection with such matters.
4.
Unauthorized Disclosure; Non-Competition; Non-Solicitation;
Interference with Business Relationships; Proprietary Rights
.
4.1
Unauthorized Disclosure . The Executive agrees and
understands that in the Executive’s position with the
Company, the Executive will be exposed to and will receive
information relating to the confidential affairs of the Company and
its affiliates, including, without limitation, technical
information, intellectual property, business and marketing plans,
strategies, customer information, software, other information
concerning the products, promotions, development, financing,
expansion plans, business policies and practices of the Company and
its affiliates and other forms of information considered by the
Company and its affiliates to be confidential or in the nature of
trade secrets (including, without limitation, ideas, research and
development, know-how, formulas, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost
information and business and marketing plans and proposals)
(collectively, the “ Confidential Information
”). The Executive agrees that at all times during the
Executive’s employment with the Company and thereafter, the
Executive shall not disclose such Confidential Information, either
directly or indirectly, to any
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individual, corporation,
partnership, limited liability company, association, trust or other
entity or organization, including a government or political
subdivision or an agency or instrumentality thereof (each a “
Person ”) other than in connection with the
Executive’s employment with the Company without the prior
written consent of the Company and shall not use or attempt to use
any such information in any manner other than in connection
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