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Exhibit 10.30
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 20th
day of
June, 2006, by and between Costar Video Systems, LLC, a Delaware
limited
liability company (the "Company"), and James Pritchett (the
"Executive").
W I T N E S S E T H :
WHEREAS, Southern Imaging, Inc., a Texas corporation ("Southern
Imaging"),
and its Affiliates (including Video Solutions Technology Center,
Inc., a Nevada
corporation ("Video Solutions") are engaged in the business of
designing,
developing, sourcing, selling and distributing, video and imaging
products and
accessories (the "Business");
WHEREAS, the Company intends to acquire substantially all of the
assets
and certain of the liabilities of Southern Imaging and its
Affiliates pursuant
to the Asset Purchase Agreement, dated as of the date hereof (the
"Asset
Purchase Agreement"), by and among the Company, Video Solutions
Technology
Center, LLC, Southern Imaging and Video Solutions;
WHEREAS, Executive is currently employed as the Vice President,
Sales of
Southern Imaging;
WHEREAS, the Company wishes to ensure that it will continue to have
the
benefits of Executive's services after the closing (the "Closing")
of the
transactions contemplated by the Asset Purchase Agreement on the
terms and
conditions hereinafter set forth, and therefore desires to enter
into this
Agreement with Executive, to be effective upon the Closing;
WHEREAS, the Company and Executive acknowledge and agree that
the
retention of Executive's services and Executive's agreement to
enter into and
adhere to the noncompetition, nonsolicitation and nondisclosure of
proprietary
information provisions contained in this Agreement are material
conditions to
the Company entering into the Asset Purchase Agreement and
consummating the
transactions contemplated thereby; and
WHEREAS, Executive desires to work for the Company on the terms
and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter
contained and other good and valuable consideration, the receipt
and sufficiency
of which are hereby acknowledged, the parties hereto, intending to
be legally
bound hereby, agree as follows:
1. Employment; Term. The Company hereby employs Executive, and
Executive
hereby accepts employment with the Company, in accordance with and
subject to
the
<PAGE>
terms and conditions set forth herein. The term of this Agreement
shall commence
upon the Closing (the "Effective Date") and shall continue for a
period of
thirty-six (36) months (the "Initial Term"), unless earlier
terminated in
accordance with Section 6 hereof. The Initial Term may be extended
for
subsequent twelve (12) month periods upon mutual agreement of the
Company and
Executive at any time prior to the end of the then-current term, it
being
understood and agreed that the Company shall endeavor to provide
the Executive
with at least six (6) months notice of its desire to extend the
agreement and
that the Executive will endeavor to agree or disagree to extend the
agreement
within 30 days thereafter. The Initial Term, as it may be adjusted
or extended
pursuant to the terms and conditions hereof, may be referred to
herein as the
"Term").
2. Employment.
(a) The Company hereby agrees to employ Executive as its
President,
and Chief Operating Officer for Sales for the Term. Executive
agrees to serve in
such capacity with the duties and responsibilities reasonably
requested by the
Company consistent with such position in a company of the size and
nature of the
Company. During the Term, Executive shall report to the Chief
Executive Officer
of the Company, or his designee.
(b) Executive shall perform his duties with diligence and
faithfulness to the best of his abilities and shall devote his full
business
time (excluding periods of vacation and sick leave), attention and
energy to
such duties.
3. Compensation. The Company shall pay Executive a base salary (the
"Base
Salary") of One Hundred Fifty Thousand Dollars ($150,000) per
annum, payable at
least semi-monthly, in accordance with the Company's then existing
payroll
practices and subject to all legally required or customary
withholdings and
other applicable taxes.
4. Incentive Payment.
(a) Provided that the Executive's employment under this Agreement
is
not terminated pursuant to the provisions of Section 6(a), (b), (d)
or (e) prior
to the end of the calendar year for each of the Bonus Eligible
Years (as
hereinafter defined), the Executive shall be eligible to receive
from the
Company as additional compensation an incentive payment (the
"Incentive
Payment") pursuant to and subject to the terms of this Section
4.
(b) Calculation of Incentive Payment.
(i) For each of the Bonus Eligible Years, the Incentive
Payment shall equal 40% of the Annual Available Bonus Pool
calculated in
accordance with the provisions set forth on Schedule A hereto.
(ii) For the avoidance of doubt, the parties acknowledge that
the Incentive Payment shall never be less than zero.
(c) Annual EBITDA Statement. The Company shall prepare or cause
to
be prepared, (i) audited consolidated financial statements of the
Company for
such Bonus Eligible Year, (ii) a statement which shall explain in
reasonable
detail the calculations of Annual
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EBITDA and the Incentive Payment (the "Incentive Payment
Statement") and (iii)
reasonable supporting documentation sufficiently detailed to enable
Executive to
verify in all material respects the calculations of Annual EBITDA
and the
Incentive Payment, and deliver or cause to be delivered each of the
forgoing to
Executive promptly after the audited consolidated financial
statements of the
Company for such Bonus Eligible Year have been completed.
(d) Payment of Incentive Payment. The Incentive Payment shall
be
paid by the Company to the Executive in cash no later than 35 days
after the
issuance of the audited financial statements of the Company for
each Bonus
Eligible Year.
(e) Definitions. The following terms used in this Agreement
shall
have the meanings indicated:
(i) "Affiliate" with respect to any Person shall mean any
other Person which, directly or indirectly, is in control of, is
controlled by
or is under common control with such specified Person. For the
purposes of this
definition, "control," when used with respect to any Person, means
the power to
direct the management and policies of such Person, directly or
indirectly,
whether through the ownership of voting securities, by contract or
otherwise.
(ii) "Annual EBITDA" shall mean the EBITDA of the Company
during each of the Bonus Eligible Years.
(iii) "Bonus Eligible Years" shall mean the 2006, 2007, 2008
and 2009 calendar years.
(iv) "EBITDA of the Company" shall mean the consolidated net
income of the Company before interest, income taxes, depreciation
and
amortization. For purposes hereof the EBITDA for the year ended
December 31,
2006, shall be equal to the sum of (i) the EBITDA of Southern
Imaging and Video
Solutions for the period commencing on January 1, 2006 and ending
on the Closing
and (ii) the EBITDA of the Company for the period from and after
the Closing and
ending on December 31, 2006.
(v) "GAAP" shall mean United States generally accepted
accounting principles in effect on the date hereof applied on a
consistent
basis.
(vi) "Person" shall mean an individual, partnership, venture,
unincorporated association, organization, syndicate, corporation,
limited
liability company, or other entity, trust, trustee, executor,
administrator or
other legal or personal representative or any government or any
agency or
political subdivision thereof.
5. Benefits.
(a) The Company agrees to reimburse Executive for all reasonable
and
necessary documented out-of-pocket travel and other business
expenses incurred
by Executive in connection with the performance of his duties under
this
Agreement in accordance with the Company's corporate policy
regarding such
expenses as it may be amended from time to time. Such
reimbursements shall be
made by the Company within a reasonable amount of time after
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submission by Executive of vouchers in accordance with the
Company's then
applicable policies and procedures. It is understood and agreed
between the
parties that (i) the Executive shall only be required to travel for
reasonable
business purposes and (ii) the Executive shall only be entitled to
reimbursement
of travel and business expenses incurred in connection with
business activities
and prospects that are in accordance with the Company's business
plan, as
approved by Dynabazaar, Inc., the Company's parent
("Dynabazaar").
(b) Executive shall be entitled to participate in any and all
medical insurance, group health, dental and vision care programs,
disability
insurance, pension, and other benefit plans which are made
generally available
by the Company to its senior executives, as the same may be amended
or modified
from time to time. The Company may at any time amend or terminate
its benefit
plans or programs, subject to the written consent of Dynabazaar,
provided,
however, that the Company shall not terminate any health plan or
program
provided to the Executive during the Term unless it shall provide
the Executive
with comparable benefits under a replacement plan or program.
(c) Executive shall be entitled to an annual paid vacation in
accordance with the Company's vacation policy applicable to senior
executives,
but in no event less than three (3) weeks per calendar year. Paid
vacation may
not be accrued from year-to-year.
6. Termination. Executive's employment hereunder may be terminated
prior
to the end of the Term under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate
upon
Executive's death.
(b) Total Disability. The Company may terminate Executive's
employment hereunder at any time after Executive becomes "Totally
Disabled." For
purposes of this Agreement, Executive shall be "Totally Disabled"
upon the
earlier of (i) the date Executive becomes entitled to receive
disability
benefits under the Company's long-term disability plan, if any, or
(ii)
Executive's inability to perform the duties and responsibilities
contemplated
under this Agreement for a period of more than 90 consecutive days,
or 120 days
in any 365-day period, due to physical or mental incapacity or
impairment. Such
termination shall become effective five days after the Company
gives notice of
such termination to Executive, or to his spouse or legal
representative, in
accordance with Section 10 hereof.
(c) Termination by the Company without Cause. The Company may
terminate Executive's employment hereunder without Cause (as
hereinafter
defined) at any time after providing written notice to
Executive.
(d) Termination by the Company for Cause. The Company may
terminate
Executive's employment hereunder for Cause at any time after
providing written
notice to Executive. For purposes of this Agreement, the term
"Cause" shall mean
any of the following: (i) Executive's willful or intentional
failure or refusal
to perform or observe any of his duties, responsibilities or
obligations set
forth in, or as contemplated under, this Agreement, unless such
failure or
refusal is susceptible to cure and is corrected within thirty (30)
days
following written notice by the Company or Dynabazaar specifying
the details
thereof; (ii) acts
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or omissions by Executive involving Executive's gross negligence
related to the
discharge of his duties; (iii) any act or failure to act involving
fraud, a
material, knowing or intentional misrepresentation, theft,
embezzlement,
dishonesty or moral turpitude; (iv) conviction of (or a plea of
nolo contendere
to) an offense which is a felony in the jurisdiction involved or
which is a
misdemeanor in the jurisdiction involved but which involves an act
set forth in
Section 6(d)(iii) above; (v) any willful or intentional act or
omission which
could reasonably be expected to materially injure the reputation,
business or
business relationships of the Company, or Executive's reputation or
business
relationships; or (vi) Executive's willful or intentional failure
to comply with
any reasonable request or direction of the Company not contrary to
the
provisions of this Agreement, unless such failure to comply is
susceptible to
cure and is corrected within thirty (30) days following written
notice by the
Company or Dynabazaar specifying the details thereof.
(e) Termination by Executive for Good Reason. Executive may
terminate his employment hereunder at any time if Executive has
"Good Reason"
and gives written notice thereof to the Company within 30 days
after the
occurrence of such Good Reason. For purposes of this Agreement, the
term "Good
Reason" shall mean: (i) a material reduction in Executive's salary
or other
benefits, except to the extent permitted pursuant to the terms of
this
Agreement; or (ii) a material breach by the Company of any material
provision of
this Agreement; which, in each case, is not cured by the Company
within 30 days
after the Company receives written notice thereof from
Executive.
7. Compensation Following Termination Prior to the End of the
Initial
Term. In the event that Executive's employment hereunder is
terminated prior to
the end of the Initial Term, Executive shall be entitled only to
the following
compensation and benefits upon such termination:
(a) Termination by Reason of Death or Total Disability, by the
Company for Cause, or by Executive other than for Good Reason. In
the event that
Executive's employment is terminated prior to the expiration of the
Term by
reason of Executive's death or Total Disability, or termination by
the Company
for Cause, or termination by Executive other than for Good Reason,
respectively,
the Company shall pay the following amounts to Executive (or
Executive's spouse
or estate, as the case may be):
i. any accrued but unpaid Base Salary (as determined pursuant
to
Section 3 hereof) for services rendered to the date of
termination,
which amount shall be paid to the Executive within thirty (30)
days
following the date of termination;
ii. any accrued but unpaid expenses required to be reimbursed
pursuant
to Section 5(a) hereof, which amount shall be paid to the
Executive
within thirty (30) days following the date of termination;
iii. any accrued but unpaid vacation time pursuant to Section
5(c)
hereof, which amount shall be paid to the Executive within
thirty
(30) days following the date of termination; and
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iv. for each full Bonus Eligible Year worked by the Executive for
the
Company, any incentive payment due and payable pursuant to Section
4
hereof in accordance with the provisions thereof.
Except as otherwise specifically provided herein, in the event
Executive's
employment is terminated pursuant to this Section 7(a), the
benefits to which
Executive and/or his family may be entitled upon such termination
pursuant to
the plans, programs and arrangements referred to in Section 5(b)
hereof shall be
determined and paid in accordance with the terms of such plans,
programs and
arrangements.
(b) Termination by the Company Without Cause. In the event that
Executive's employment is terminated by the Company without Cause,
the Company
shall pay the following amounts to Executive:
i. any accrued but unpaid Base Salary (as determined pursuant
to
Section 3 hereof) for services rendered to the date of
termination,
which amount shall be paid to the Executive within thirty (30)
days
following the date of termination;
ii. any accrued but unpaid expenses required to be reimbursed
pursuant
to Section 5(a) hereof, which amount shall be paid to the
Executive
within thirty (30) days following the date of termination;
iii. any accrued but unpaid vacation time pursuant to Section
5(c)
hereof, which amount shall be paid to the Executive within
thirty
(30) days following the date of termination;
iv. the Executive's Base Salary (as determined pursuant to Section
3(a)
hereof) for a period of six (6) months following the termination
of
Executive's employment, to be paid in accordance with the
Company's
standard payroll practices then in effect; and
v. for each full Bonus Elig
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