EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive Employment Agreement (this
"Agreement") is made and entered into as of this 1st day of October
2005, by and between New Motion, Inc. a Delaware corporation (the
"Company") and Brian Singleton
("Executive").
1.
Engagement and
Duties.
1.1 Upon the terms and subject to the conditions
set forth in this Agreement, the Company hereby engages and employs
Executive as Senior Vice President of Operations. Executive hereby
accepts such engagement and employment.
1.2 Executive will have access to certain
confidential information and may, during the course of his
employment, develop certain information which will be the property
of the Company. Executive will be required to sign the Company's
"Proprietary Information and Assignment of Inventions Agreement" as
a condition of his employment under this Agreement.
1.3 Executive's duties and responsibilities
shall be as follows: the efficient running of the daily marketing
campaigns as well as overall identification and analysis of
potential new business opportunities or technologies, subject to
the supervision, direction and control of the Board of Directors
(the "Board") of the Company. In addition, Executive's duties shall
include those duties and services for the Company and its
affiliates as the Board shall from time to time reasonably direct.
Executive shall report directly to the Chief Executive Officer of
the Company.
1.4 Executive agrees to devote his primary
business time, energies, skills, efforts and attention to his
duties hereunder, and will not, without the prior written consent
of the Company, which consent will not be unreasonably withheld,
render any material services to any other business concern.
Executive will use his best efforts and abilities faithfully and
diligently to promote the Company's business interests.
1.5 Except for routine travel incident to the
business of the Company, Executive shall perform his duties and
obligations under this Agreement principally from an office
provided by the Company in Orange County, California, or such other
location in Orange County or Los Angeles County, as the Board may
from time to time determine.
2.
Term of
Employment. Executive's employment pursuant to this
Agreement shall commence on June 2nd, 2005 ("Start Date") and shall
terminate on the earliest to occur of the following:
(a) the close of business on the second anniversary
of the Start Date;
(b) the death of Executive;
(c) delivery to Executive of written notice of
termination by the Company if Executive shall suffer a "permanent
disability," which for purposes of this Agreement shall mean a
physical or mental disability which renders Executive, in the
reasonable judgment of the Board, unable to perform his duties and
obligations under this Agreement for 90 days in any 12-month
period;
(d) notice to Executive of termination by the
Company for Cause. For purposes of this Agreement, Cause means:
(ii) any material breach of any of the terms of this Agreement;
(ii) any act or omission knowingly undertaken or omitted by
Executive with the intent of causing damage to the Company, its
properties, assets or business, goodwill, or its stockholders,
officers, directors or employees; (ii) commission of any material
act of dishonesty, fraud, misrepresentation, misappropriation,
embezzlement, or other act of moral turpitude; (iii) Executive's
consistent failure to perform his normal duties or any obligation
under any provision of this Agreement, in either case, as directed
by the Chief Executive Officer and/or the Board; (iv)
conviction of, or pleading nolo
contendere to (A) any crime or offense involving monies or other
property of the Company; (B) any felony offense; or (C) any crime
of moral turpitude; or (v) the chronic or habitual use or consumption of
drugs or alcoholic beverages; or
(e) notice to Executive of termination by the
Company "without cause."
After the
expiration of the Employment term under Section 2(a), if Executive
continues to be employed by the Company, such employment shall be
terminable "at will" by either the Company or Executive and the
terms and conditions of this Agreement shall continue to apply;
provided, however, that if the Company terminates Executive's "at
will" employment without Cause, then the severance amount set forth
in Section 3.1 payable to Executive as a result of such termination
shall be equal to one month's pay at Executive's then-current base
salary and such amount shall be paid in a lump sum within 20
calendar days of the date of Executive's termination.
In the event Executive is terminated for Cause
pursuant to section 2(d), the Executive shall only receive his base
salary though the termination date and shall not be entitled to any
additional compensation, including salary, bonus or
commissions.
3.
Compensation; Executive Benefit Plans.
3.1 Base Salary. Commencing on the Start
Date, the Company shall pay Executive an annual base salary of
$96,000. Executive's annual base salary will be increased to
$120,000 on the first anniversary of the Start Date. Executive's
base salary shall be payable in installments throughout the year in
the same manner and at the same times the Company pays base
salaries to other executives of the Company. In the event that
Executive's employment is terminated pursuant to Section 2(e),
above (i.e., without cause), the Company shall continue to pay
Executive's then-current base salary and the Bonus described in
Section 3.2 below as severance pay for the balance of the initial
term hereof, and Executive shall retain only those Options
described in Section 3.3, below, that have vested prior to the
effective date of such termination.
3.2 Bonus. Executive will also be eligible to receive a
bonus, capped at $120,000 per year (the "Bonus") at the times and
in the amounts set forth below:
The Bonus will be paid in cash pursuant to the
schedule below and will accrue on each monthly anniversary of the
Start Date for a period of twenty four months (the "Bonus Period").
At the end of each calendar month following the Start Date,
Executive shall accrue a bonus of 1% of the Company's then
completed month's net profits, as determined in accordance with
generally accepted accounting principals ("GAAP"). The accrued
bonus for each monthly period shall be payable under this paragraph
within 30 days after the end of each calendar quarter in the Bonus
Period and upon completion of the un-audited interim financial
statements of the Company (or its successor) for each such calendar
quarter for which a Bonus is payable hereunder (the "Bonus Payment
Date"). The Bonus for any month in the Bonus Period which is less
than a full month, shall be prorated for the applicable month. All
bonus calculations shall be made by the Company, whose
determination shall be final and binding on Executive and the
Company absent manifest error.
In the event of an adjustment to the financial
statements used above, occasioned by results of the actual year end
audit, the Executive and the Company shall make an adjusting
payment (in cash, or stock if the stock election has been made) to
one another, as necessary, to reflect any change to the financial
information used to calculate the bonus payable
hereunder.
3.3 Stock Options. Subject to
approval by the Company's Board of Directors, you will be granted
an option to purchase up to 75,000 shares of the Company's Common
Stock (the "Options") at an exercise valued at the fair market
value of the stock as of the Value Determination Date (defined
below). For purposes hereof, if the Company is a private company,
the fair market value of the stock as of the last day in the
applicable quarterly period (the "Value Determination Date") shall
be determined in good faith by the Board of Directors of the
Company. If the Company is public at that time, the fair market
value of the stock on the Value Determination Date shall be the
average closing price of the stock on the market on which it is
then being traded for the 20 trading days immediately preceding the
Value Determination Date. The Options will be governed by and
granted pursuant to a separate Stock Option Agreement. The Options
will be subject to vesting so long as you continue to be employed
by the Company, according to the following schedule set forth in
the Stock Option Agreement.
3.4 Vacation. You will receive two
weeks paid vacation, one week will vest immediately upon the Start
Date and you shall accrue the other week. During the second year of
your employment, you will receive three weeks paid vacation, which
shall begin to accrue as of the first day of your second year of
employment. All vacation shall be paid and earned in accordance
with the Company's vacation policy.
3.5 Other Benefits. During the term
of his employment hereunder, Executive shall be eligible to
participate in all operative employee benefit and welfare plans of
the Company then in effect from time to time and in respect of
which all executives of the Company generally are entitled to
participate ("Company Executive Benefit Plans"), including, to the
extent then in effect, auto allowances, group life, medical,
disability and other insurance plans, all on the same basis
applicable to employees of the Company whose level of management
and authority is comparable to that of Executive.
3.6 The Company reserves the right to
modify, suspend, or discontinue any and all of the above-mentioned
plans, practices,